EXECUTION COPY
Exhibit 10.20
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CM CAPITAL CORPORATION
as Company,
CORE-XXXX INTERNATIONAL, INC.
as Servicer,
THE CHASE MANHATTAN BANK,
as Funding Agent,
PARK AVENUE RECEIVABLES CORPORATION,
as Initial Purchaser
THE CHASE MANHATTAN BANK,
as an APA Bank
and
THE CHASE MANHATTAN BANK,
as Trustee
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SERIES 1998-2 SUPPLEMENT
Dated as of April 1, 1998
to
POOLING AGREEMENT
Dated as of April 1, 1998
------------------------
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; PURCHASE AND SALE
OF THE VFC CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.1. Designation . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.2. The Series 1998-2 Interests . . . . . . . . . . . . . . 23
SECTION 2.3. Purchases of Interests in the VFC Certificates. . . . . 24
SECTION 2.4. Delivery. . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.5. Procedure for Initial Issuance and for Increasing the
Series 1998-2 Invested Amount . . . . . . . . . . . . 25
SECTION 2.6. Sale by the Initial Purchaser of its Series 1998-2
Purchaser Invested Amount to the APA Banks. . . . . . 27
SECTION 2.7. Procedure for Decreasing the Series 1998-2 Invested
Amount; Optional Termination. . . . . . . . . . . . . 29
SECTION 2.8. Reductions of the Commitments . . . . . . . . . . . . . 31
SECTION 2.9. Interest; Fees. . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.10. Indemnification by the Company and the Servicer . . . . 32
ARTICLE III
ARTICLE III OF THE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3A.2. Establishment of Trust Accounts. . . . . . . . . . . . 33
SECTION 3A.3. Daily Allocations. . . . . . . . . . . . . . . . . . . 35
SECTION 3A.4. Determination of Interest. . . . . . . . . . . . . . . 36
SECTION 3A.5. Determination of Series 1998-2 Monthly Principal . . . 38
SECTION 3A.6. Applications . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IV
DISTRIBUTIONS AND REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4A.1. Distributions. . . . . . . . . . . . . . . . . . . . . 41
SECTION 4A.2. Daily Reports. . . . . . . . . . . . . . . . . . . . . 41
SECTION 4A.3. Statements and Notices . . . . . . . . . . . . . . . . 41
ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS . . . . . . . . . . . . . . . . . . . 42
SECTION 5.1. Additional Early Amortization Events. . . . . . . . . . 42
ARTICLE VI
SERVICING FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.1. Servicing Compensation. . . . . . . . . . . . . . . . . 45
ARTICLE VII
CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.1. Illegality. . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.2. Increased Costs . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.4. Break Funding Payments. . . . . . . . . . . . . . . . . 48
SECTION 7.5. Alternate Rate of Interest. . . . . . . . . . . . . . . 49
SECTION 7.6. Mitigation Obligations. . . . . . . . . . . . . . . . . 49
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES, COVENANTS. . . . . . . . . . . . . . . . . 50
SECTION 8.1. Representations and Warranties of the Company and the
Servicer . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.2. Covenants of the Company and the Servicer . . . . . . . 51
SECTION 8.3. Covenants of the Servicer . . . . . . . . . . . . . . . 52
SECTION 8.4. Obligations Unaffected. . . . . . . . . . . . . . . . . 52
ARTICLE IX
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.1. Conditions Precedent to Effectiveness of Supplement . . 52
ARTICLE X
THE FUNDING AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.2. Delegation of Duties . . . . . . . . . . . . . . . . . 56
SECTION 10.3. Exculpatory Provisions . . . . . . . . . . . . . . . . 56
SECTION 10.4. Reliance by Funding Agent. . . . . . . . . . . . . . . 57
SECTION 10.5. Notice of Servicer Default or Early Amortization Event
or Potential Early Amortization Event. . . . . . . . 57
SECTION 10.6. Non-Reliance on the Funding Agent and Other
Purchasers . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.7. Indemnification. . . . . . . . . . . . . . . . . . . . 58
SECTION 10.8. The Funding Agent in Its Individual Capacity . . . . . 59
SECTION 10.9. Successor Funding Agent. . . . . . . . . . . . . . . . 59
ARTICLE XI
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.1. Ratification of Agreement. . . . . . . . . . . . . . . 59
SECTION 11.2. Governing Law. . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.3. Further Assurances . . . . . . . . . . . . . . . . . . 60
SECTION 11.4. Payments . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.5. Costs and Expenses . . . . . . . . . . . . . . . . . . 60
SECTION 11.6. No Waiver; Cumulative Remedies . . . . . . . . . . . . 60
SECTION 11.7. Amendments . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.8. Severability . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.9. Notices. . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.10. Successors and Assigns. . . . . . . . . . . . . . . . 62
SECTION 11.11. Participations; Assignments . . . . . . . . . . . . . 63
SECTION 11.12. Adjustments; Set-off. . . . . . . . . . . . . . . . . 65
SECTION 11.13. Counterparts. . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.14. No Bankruptcy Petition. . . . . . . . . . . . . . . . 65
SECTION 11.15. Limitation on Addition and Termination of Sellers . . 67
ARTICLE XII
FINAL DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 12.1. Certain Distributions. . . . . . . . . . . . . . . . . 68
EXHIBITS
Exhibit A Form of VFC Certificate, Series 1998-2
Exhibit B [Reserved]
Exhibit C Form of Commitment Transfer Supplement
Exhibit D Form of Daily Report
Exhibit E Form of Monthly Settlement Statement
Exhibit F Form of Notice of Increase
Exhibit G Form of Participation Certification
Exhibit H Form of UCC Certificate
SCHEDULES
Schedule 1 Commitments
Schedule 2 Trust Accounts
SERIES 1998-2 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"),
Park Avenue Receivables Corporation, a Delaware corporation (including its
successors and assigns and excluding, however, the APA Banks as assignees
pursuant to Section 2.6, the "INITIAL PURCHASERS"), the several banks or
financial institutions parties to this Supplement as of the Issuance Date and
the other banks or financial institutions from time to time parties hereto
pursuant to Section 11.11(b) (collectively, the "APA BANKS"; each,
individually, an "APA BANK"), The Chase Manhattan Bank, a New York banking
corporation ("CHASE"), in its capacity as Funding Agent (the "FUNDING
AGENT"), and The Chase Manhattan Bank, 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 April 1, 1998 (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, the Trustee, the Funding Agent,
the Initial Purchaser and the APA Banks 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 1998-2 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:
2
"ABR": shall mean, for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Reference Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "REFERENCE RATE" shall
mean the rate of interest per annum publicly announced (or, if not
announced publicly, quoted internally) from time to time by the Funding
Agent as its reference rate in effect at its principal office in New
York, New York; "BASE CD RATE" shall mean the sum of (a) the product of
(i) the Three-Month Secondary CD Rate and (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "THREE-MONTH SECONDARY CD
RATE" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if
such day shall not be a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of
the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of
the secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not be
a Business Day, on the next preceding Business Day) by the Funding Agent
from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "FEDERAL FUNDS EFFECTIVE RATE"
shall mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Funding Agent
from three federal funds brokers of recognized standing selected by it.
Any change in the ABR due to a change in the Reference Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such
change in the Reference Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"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 succeeding Distribution Date.
"ACCRUED EXPENSE AMOUNT" shall mean, for each Business Day during an
Accrual Period, the sum of (i) the Daily Interest Deposit for such Business
Day, (ii) the Daily Commitment Fee Deposit for such Business Day, (iii) the
Daily Facility Fee Deposit for such Business Day, (iv) the Daily Servicing
Fee Deposit for such Business Day and (v) all Program Costs which have
accrued since the preceding Business Day.
3
"ACQUIRING APA BANK" shall have the meaning assigned in subsection
11.11(b).
"ADDITIONAL INTEREST" shall have the meaning assigned in subsection
3A.4(b).
"ADJUSTED LIQUIDITY PRICE" shall mean, in determining the Purchase
Price of the Initial Purchaser's Series 1998-2 Purchaser Invested Amount on
the APA Bank Purchase Date, an amount equal to:
PI [OC + (NDR/1.04)]
where:
PI = the Invested Percentage on the APA Bank Purchase
Date;
OC = the sum of (i) any and all amounts due and owing
to the Company in respect of Seller Repurchase
Payments and Seller Adjustment Payments pursuant
to the Transaction Documents and (ii) (without
duplication) any and all amounts due and owing to
the Trust as Transfer Deposit Amounts pursuant to
Section 2.5(b) of the Pooling Agreement on the APA
Bank Purchase Date; and
NDR = the aggregate outstanding Principal Amount of all
Receivables that are not aged more than 91 days
past due PLUS any Receivable which becomes a
Charged-Off Receivable prior to 91 days past due
as of the APA Bank Purchase Date PLUS the
Aggregate Uncleared Funds Amount.
Each of the foregoing shall be determined from the most recent Daily Report
received from the Servicer.
"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 third prior
Settlement Period (excluding the Settlement Period ended on such day).
4
"AGGREGATE COMMITMENT AMOUNT" shall mean, with respect to any day, the
aggregate amount of the Commitments of all APA Banks on such day, as
reduced from time to time pursuant to Section 2.8.
"APA BANKS" shall have the meaning specified in the recitals hereto.
"APA BANK PURCHASE DATE" shall mean either the date of the Purchase
or, if the APA Banks fund the Series 1998-2 Invested Amount on the Issuance
Date pursuant to Section 2.3, the Issuance Date.
"APPLICABLE MARGIN" shall mean on any date of determination (i) for
each Eurodollar Tranche, 2.00% per annum and (ii) for each Floating
Tranche, 1.00% per annum; PROVIDED, HOWEVER that, after the occurrence of a
PARCO Wind-Down Event described in clause (i) of the definition thereof or
an Early Amortization Event, the Applicable Margin shall mean on any date
of determination for each Eurodollar Tranche or the Floating Tranche, the
applicable rate per annum set forth below under the caption "Eurodollar
Spread" or "Floating Rate Spread," as the case may be, based upon the
"Leverage Ratio" (as determined in accordance with, the Credit Agreement,
as in effect on the date hereof) as of the most recent determination date
(it being understood and agreed for purposes of this proviso that until the
delivery of the financial statements of Core-Xxxx pursuant to Section 6.1
of the Credit Agreement for the first full fiscal quarter commencing after
March 31, 1998, the Applicable Margin shall be the applicable rate per
annum set forth below in Category 1):
Leverage Eurodollar Floating Rate
CATEGORY RATIO SPREAD SPREAD
-------- -------- ---------- --------
Category 1 greater than 5.00 to 1.00 2.50% 1.50%
Category 2 greater than 4.25 to 1.00
and less than or equal to
5.00 to 1.00 2.00% 1.00%
Category 3 greater than 3.50 to 1.00
and less than or equal to
4.25 to 1.00 1.75% 0.75%
Category 4 greater than 3.00 to 1.00
and less than or equal to
3.50 to 1.00 1.50% 0.50%
Category 5 less than or equal to
3.00 to 1.00 1.25% 0.25%
"ARTICLE VII COSTS" shall mean any amounts due pursuant to Article
VII.
5
"ASSIGNMENT/PARTICIPATION CERTIFICATION" shall mean an assignment or
participation certification, as the case may be, in substantially the form
of Exhibit G hereto.
"AVAILABLE PRICING AMOUNT" shall mean, on any Business Day, the sum of
(i) the Unallocated Balance PLUS (ii) the Increase, if any, on such date.
"BASE DAILY INTEREST EXPENSE" shall mean (i) for any day prior to the
APA Bank Purchase Date in any Accrual Period, the product of (A) the Series
1998-2 Invested Amount divided by 360 and (B) the CP Rate for such day and
(ii) for the APA Bank Purchase Date and any day thereafter in any Accrual
Period, the sum of (A) the product of (x) the sum of (a) the portion of the
Series 1998-2 Invested Amount (calculated with respect to all APA Banks
without regard to clauses (d) and (e) of the definition of Series 1998-2
Purchaser Invested Amount) allocable to the Floating Tranche on such day
and (b) for any day during the period from and including the APA Bank
Purchase Date to but excluding the Distribution Date immediately succeeding
the APA Bank Purchase Date, divided by 365 (or 366, as the case may be) and
(y) the ABR plus the Applicable Margin in effect on such day, (B) the
product of (x) the portion of the Series 1998-2 Invested Amount (calculated
with respect to all Purchasers without regard to clauses (d) and (e) of the
definition of Series 1998-2 Purchaser Invested Amount) allocable to
Eurodollar Tranches on such day divided by 360 and (y) the weighted average
Eurodollar Rate plus the Applicable Margin on such day in effect with
respect thereto and (C) on the APA Bank Purchase Date, the Unaccrued
Discount Payment Amount; PROVIDED, HOWEVER, that for any such day during
the continuance of an Early Amortization Period, the "Base Daily Interest
Expense" for such day shall be equal to the greater of (i) the sum of the
amounts calculated pursuant to clause (ii) above and (ii) the product of
(x) the Series 1998-2 Invested Amount on such day divided by 365 (or 366,
as the case may be) and (y) the ABR plus the Applicable Margin in effect on
such day plus 2.0%.
"BENEFITTED PURCHASER" shall have the meaning assigned in Section
11.12.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States or any successor thereto.
"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 (a) the product of (i)
2.00 TIMES Days Sales Outstanding as of such day and (ii) 1.3 TIMES a rate
per annum equal to the ABR plus the Applicable Margin as of such earlier
Settlement Report Date, DIVIDED BY (b) 365 (or 366, as the case may be).
6
"C/D ASSESSMENT RATE" shall mean for any day pertaining to a Floating
Tranche, the net annual assessment rate (rounded upwards, if necessary, to
the next 1/100 of 1%) in effect on such day that is payable by a member of
the Bank Insurance Fund classified as "well-capitalized" and within
supervisory subgroup "B" (or a comparable successor risk classification)
within the meaning of 12 C.F.R. Part 327 (or any successor provision) to
the Federal Deposit Insurance Corporation for insurance by such Corporation
of time deposits made in dollars at the offices of such member in the
United States; PROVIDED that if, as a result of any change in any law, rule
or regulation, it is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as shall be
determined by the Funding Agent to be representative of the cost of such
insurance to the APA Banks.
"C/D RESERVE PERCENTAGE" for any day pertaining to a Floating Tranche,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new negotiable non-personal time deposits in Dollars of over
$100,000 having a maturity of 30 days or more.
"CERTIFICATE RATE" shall mean, on any date of determination, the
weighted average (weighted based on the respective outstanding amounts of
the Floating Tranche and each Eurodollar Tranche) of the ABR in effect on
such day and the Eurodollar Rates in effect on such day PLUS, in each case,
the respective Applicable Margins.
"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.
"CHANGE IN LAW" shall mean (a) the adoption of any law, rule or
regulation after the Issuance Date , (b) any change in law, rule or
regulation or in the interpretation or application thereof by any
Governmental Authority after the Issuance Date or (c) compliance by any
Purchaser with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the
Issuance Date.
"CHASE" shall have the meaning specified in the preamble hereto.
"CLEAN-UP CALL AMOUNT" shall mean the Clean-Up Call Percentage of the
maximum Series 1998-2 Invested Amount at any time during the Series 1998-2
Revolving Period.
"CLEAN-UP CALL PERCENTAGE" shall mean 10%.
7
"COMMERCIAL PAPER" shall mean the short-term promissory notes of the
Initial Purchaser issued in the United States commercial paper market.
"COMMITMENT" shall mean, as to any APA Bank, its obligation to
purchase a VFC Certificate on the Issuance Date, to acquire the Initial
Purchaser's VFC Certificate and to maintain and, subject to certain
conditions, increase, its Series 1998-2 Purchaser Invested Amount, in each
case, in an aggregate amount not to exceed at any one time outstanding the
amount set forth opposite such APA Bank's name on Schedule 1 under the
caption "Commitment", as such amount may be reduced from time to time as
provided herein; collectively, as to all APA Banks, the "COMMITMENTS".
"COMMITMENT FEE" shall have the meaning assigned in subsection 2.9(b).
"COMMITMENT FEE RATE" shall have the meaning assigned in the Fee
Letter.
"COMMITMENT PERCENTAGE" shall mean, as to any APA Bank and as of any
date, the percentage equivalent of a fraction, the numerator of which is
such APA Bank's Commitment as set forth on Schedule 1 and the denominator
of which is the Aggregate Commitment Amount as of such date.
"COMMITMENT PERIOD" shall mean the period commencing on the Issuance
Date and terminating on the Commitment Termination Date.
"COMMITMENT REDUCTION" shall have the meaning assigned in
subsection 2.8(a).
"COMMITMENT TERMINATION DATE" shall mean the earliest to occur of (i)
the date on which all amounts due and owing to PARCO in respect of the VFC
have been indefeasibly paid in full, (ii) the date on which the Aggregate
Commitment Amount has been reduced to zero pursuant to Section 2.8 of this
Supplement, (iii) the next Business Day following the commencement of an
Early Amortization Period and (iv) April 1, 2003 (as may be extended for an
additional 364 days from time to time in writing by PARCO, the Funding
Agent and the APA Banks).
"COMMITMENT TRANSFER SUPPLEMENT" shall have the meaning assigned in
subsection 11.11(b).
"CORE-XXXX" shall have the meaning specified in the preamble hereto.
"CP RATE" shall mean for any day the weighted average of the interest
rates (or if issued at a discount, the weighted average of the rates, after
converting to interest-bearing equivalents) on all outstanding Commercial
Paper issued by the Initial Purchaser to fund the Initial Purchaser's
Series 1998-2 Purchaser Invested Amount.
8
"CP RATE PERIOD" shall mean, with respect to any CP Tranche, a period
of days not to exceed 90 days commencing on a Business Day selected in
accordance with subsection 3A.4(c); provided that if a CP Rate Period would
end on a day that is not a Business Day, such CP Rate Period shall end on
the next succeeding Business Day.
"CP TRANCHE" shall mean a portion of the Series 1998-2 Invested Amount
for which the Series 1998-2 Monthly Interest is calculated by reference to
a particular Discount and a particular CP Rate Period.
"CREDIT AGREEMENT" shall mean the Amended and Restated Credit
Agreement, dated as of April 1, 1998, among Core-Xxxx, the several lenders
from time to time parties thereto, and The Chase Manhattan Bank, as
Administrative Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
"DAILY COMMITMENT FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Commitment Fee Expense for each day
since the preceding Business Day PLUS (ii) the aggregate amount of all
previously accrued Daily Commitment Fee Expense that has not yet been
deposited in the Series 1998-2 Non-Principal Collection Sub-subaccount.
"DAILY COMMITMENT FEE EXPENSE" shall mean, (i) during the Series
1998-2 Revolving Period, for any day in any Accrual Period, the product
of (A) the excess of the Aggregate Commitment Amount over the aggregate
Series 1998-2 Purchaser Invested Amounts of the APA Banks on such day
multiplied by (B) the Commitment Fee Rate divided by 360, (ii) during
the Series 1998-2 Amortization Period, for any day prior to the APA Bank
Purchase Date in any Accrual Period, the product of (A) the Series
1998-2 Invested Amount on such day multiplied by (B) the Commitment Fee
Rate divided by 360 and (iii) during the Series 1998-2 Amortization
Period, for the APA Bank Purchase Date or any day thereafter in any
Accrual Period, zero.
"DAILY FACILITY FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Facility Fee Expense for each day
since the preceding Business Day PLUS (ii) the aggregate amount of all
previously accrued Daily Facility Fee Expense that has not yet been
deposited in the Series 1998-2 Non-Principal Collection Sub-subaccount.
"DAILY FACILITY FEE EXPENSE" shall mean, (i) for any day in any
Accrual Period prior to the APA Bank Purchase Date, the product of (A) (1)
for any day prior to the date on which the Series 1998-2 Amortization
Period commences, the Aggregate Commitment Amount on such day and (2) for
any day on which the Series 0000-0 Xxxxxxxxxxxx Period commences and for
any day thereafter, the Series 1998-2 Invested Amount on such day, in each
case, multiplied by (B) the Facility Fee Rate divided by
9
360 and (ii) for the APA Bank Purchase Date or any day thereafter in any
Accrual Period, zero.
"DAILY INTEREST DEPOSIT" shall mean, for any Business Day, an amount
equal to (i) the amount of Daily Interest Expense for each day since the
preceding Business Day PLUS (ii) the aggregate amount of all previously
accrued Daily Interest Expense that has not yet been deposited in the
Series 1998-2 Non-Principal Collection Sub-subaccount PLUS (iii) the
aggregate amount of all Additional Interest for each day since the
preceding Business Day.
"DAILY INTEREST EXPENSE" shall mean, for any Business Day, an amount
equal to (i) the amount of accrued and unpaid Base Daily Interest Expense
in respect of such day PLUS (ii) the aggregate amount of all previously
accrued and unpaid Base Daily Interest Expense PLUS (iii) the aggregate
amount of all accrued and unpaid Additional Interest.
"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 D.
"DAILY SERVICING FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Servicing Fee Expense for each day
since the preceding Business Day PLUS (ii) the aggregate amount of all
previously accrued Daily Servicing Fee Expense that has not yet been
deposited in the Series 1998-2 Non-Principal Collection Sub-subaccount.
"DAILY SERVICING FEE EXPENSE" shall mean, for any day in any Accrual
Period the Series 1998-2 Interests' PRO RATA portion (determined in
accordance with Section 6.1) of the Servicing Fee accruing for such day.
"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.
"DECREASE" shall have the meaning assigned in Section 2.7.
"DEFAULTING APA BANK" shall have the meaning assigned in subsection
2.6(c).
"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
10
period it takes the Sellers to recognize a Dilution Adjustment, and (ii)
for each six-month period (beginning and ending on a 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 two 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 is 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" 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 as follows:
11
DRR = [(c * d) + [(e-d) * (e/d)]] * f
Where:
DRR = Dilution Reserve Ratio;
c = 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.
"DISCOUNT" shall mean, with respect to any Commercial Paper, the
interest or discount component thereof.
"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.
"EFFECTIVE DATE" shall have the meaning assigned in Section 9.1.
"ELIGIBLE ASSIGNEE" shall mean any financial institution that is a
United States Person (within the meaning of Section 7701(a)(30) of the
Internal Revenue Code) and that has a short term debt rating of at least
A-1 from S&P and P-1 from Moody's.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day pertaining to a
Eurodollar Tranche, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal, special
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of the Federal Reserve System.
12
"EURODOLLAR BASE RATE" shall mean, with respect to each day during
each Eurodollar Period pertaining to a Eurodollar Tranche, the rate per
annum determined by the Funding Agent to the rate of interest per annum
(rounded upward if necessary to the nearest 1/16 of 1%) notified to the
Funding Agent by Chase as the rate of interest at which Dollar deposits in
the approximate amount of the portion of the Series 1998-2 Invested Amount
allocable to such Eurodollar Tranche as of such day and having a maturity
comparable to the Eurodollar Period applicable to such Eurodollar Tranche
would be offered to prime banks in the London interbank market at their
request at or about 11:00 a.m. (London time) on the second Business Day
prior to the commencement of such Eurodollar Period.
"EURODOLLAR PERIOD" shall mean, with respect to any Eurodollar
Tranche:
(a) initially, the period commencing on the Issuance Date
or conversion date, as the case may be, with respect to such
Eurodollar Tranche and ending one month thereafter (or such other
period which is acceptable to the Purchasers and which in no event
will be less than 15 days); and
(b) thereafter, each period commencing on the last day of the
immediately preceding Eurodollar Period applicable to such Eurodollar
Tranche and ending one month thereafter (or such other period which is
acceptable to the Purchasers and which in no event will be less than
15 days);
PROVIDED THAT all Eurodollar Periods must end on the next Distribution Date
and all of the foregoing provisions relating to Eurodollar Periods are
subject to the following:
(1) if any Eurodollar Period would otherwise end on a day that
is not a Business Day, such Eurodollar Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Eurodollar Period into another calendar month, in
which event such Eurodollar Period shall end on the immediately
preceding Business Day;
(2) any Eurodollar Period that would otherwise extend beyond the
Scheduled Revolving Termination Date shall end on the Scheduled
Revolving Termination Date; and
(3) any Eurodollar Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Eurodollar
Period) shall end on the last Business Day of the calendar month at
the end of such Eurodollar Period.
13
"EURODOLLAR RATE" shall mean, with respect to each day during each
Eurodollar Period pertaining to a portion of the Series 1998-2 Invested
Amount allocated to a Eurodollar Tranche, a rate per annum determined for
such day in accordance with the following formula (rounded upwards, if
necessary, to the nearest 1/100th of 1%):
EURODOLLAR BASE RATE
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE" shall mean a portion of the Series 1998-2
Invested Amount for which the Series 1998-2 Monthly Interest is calculated
by reference to a Eurodollar Rate determined by reference to a particular
Eurodollar Period.
"EXCLUDED TAXES" shall mean, with respect to the Funding Agent, any
Purchaser or any other recipient of any payment to be made by or on account
of any increased obligation of the Company hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in
the case of any APA Bank, in which its applicable lending office is located
and (b) any branch profits imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which the Company is
located.
"FACILITY FEE" shall have the meaning assigned in subsection 2.9(c).
"FACILITY FEE RATE" shall have the meaning assigned in the Fee Letter.
"FEE LETTER" shall mean, collectively, those certain Fee Letters,
dated as of the date hereof, among the Company, the Servicer, the Funding
Agent and the Initial Purchaser and acknowledged by the Trustee.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Funding Agent from three federal funds brokers
of recognized standing selected by it.
"FLOATING TRANCHE" shall mean, on or after the APA Bank Purchase Date,
that portion of the Series 1998-2 Invested Amount not allocated to a
Eurodollar Tranche for which the Series 1998-2 Monthly Interest is
calculated by reference to the ABR.
"FUNDING AGENT" shall have the meaning specified in the recitals
hereto.
14
"INCREASE" shall have the meaning assigned in subsection 2.5(a).
"INCREASE AMOUNT" shall have the meaning assigned in
subsection 2.5(a).
"INCREASE DATE" shall have the meaning assigned in subsection 2.5(a).
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INITIAL PURCHASER" shall have the meaning specified in the recitals
hereto.
"INITIAL SERIES 1998-2 INVESTED AMOUNT" shall have the meaning
assigned in subsection 2.5(a).
"INTEREST SHORTFALL" shall have the meaning assigned in
subsection 3A.4(b).
"INVESTED PERCENTAGE" shall mean, with respect to any Business Day (i)
during the Series 1998-2 Revolving Period, the percentage equivalent of a
fraction, the numerator of which is the Series 1998-2 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 1998-2
Amortization Period, the percentage equivalent of a fraction, the numerator
of which is the Series 1998-2 Allocated Receivables Amount as of the end of
the last Business Day of the Series 1998-2 Revolving Period (PROVIDED THAT
if during the Series 1998-2 Amortization Period, the amortization periods
of all other Outstanding Series which were outstanding prior to the
commencement of the Series 1998-2 Amortization Period commence, then, from
and after the date the last of such Series commences its Amortization
Period, the numerator shall be the Series 1998-2 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" 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 as follows:
15
LRR = [(a * b)/c] * d * e
Where:
LRR = Loss Reserve Ratio;
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;
and
d = 2.0
e = Payment Terms Factor
"MAJORITY PURCHASERS" shall mean, (i) on any day prior to the APA Bank
Purchase Date, the Initial Purchaser and the Required APA Banks and (ii) on
the APA Bank Purchase Date and any day thereafter, the Required APA Banks.
"MAXIMUM COMMITMENT AMOUNT" shall mean $30,000,000.
"MINIMUM RATIO" shall mean 13%.
"MONTHLY INTEREST PAYMENT" shall have the meaning assigned in
subsection 3A.6(a).
"MOODY'S" shall mean Xxxxx'x Investors Service or any successor
thereto.
"NON-DEFAULTING APA BANK" shall have the meaning assigned in
subsection 2.6(c).
"OPTIONAL TERMINATION DATE" shall have the meaning assigned in
subsection 2.7(d).
"OPTIONAL TERMINATION NOTICE" shall have the meaning assigned in
subsection 2.7(d).
16
"OTHER TAXES" shall mean any and all current or future stamp or
documentary taxes or other excise or property taxes, charges or similar
levies arising from any payment made under the Transaction Documents or
from the execution, delivery or enforcement of, or otherwise with respect
to, any Transaction Document.
"PARCO INSOLVENCY EVENT" shall mean the occurrence of any one or more
of the following: (i) any proceeding shall have been instituted by the
Initial Purchaser seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of any order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its
property, or (ii) any proceeding of the type described in the foregoing
clause (i) shall be instituted against the Initial Purchaser and shall have
remained undismissed for a period of sixty (60) consecutive days, or an
order granting relief requested in any such proceeding shall be entered.
"PARCO RESIDUAL AMOUNT" shall have the meaning assigned in subsection
2.6(e).
"PARCO WIND-DOWN EVENT" shall mean the occurrence of any of the
following events:
(i) on the fifteenth Business Day prior to the Scheduled
Revolving Termination Date, the Commitments of the APA Banks
have not been extended for at least an additional 364 days;
(ii) the providers of the Initial Purchaser's program liquidity
and/or letter of credit facilities shall have given notice
that an event of default has occurred and is continuing
under their respective agreements with the Initial Purchaser
or shall have given notice that their commitments shall not
be extended thereunder;
(iii) the Initial Purchaser has notified the Funding Agent, the
Company and Trustee that it has elected not to fund the
Initial Series 1998-2 Invested Amount or an Increase
pursuant to subsection 2.5(b);
(iv) the Commercial Paper shall not be rated at least A-1 by S&P
and P-1 by Moody's, respectively; and
(v) an Early Amortization Period has commenced.
"PARTICIPANTS" shall have the meaning assigned in subsection 11.11(a).
17
"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.
"POTENTIAL PARCO WIND-DOWN EVENT" shall mean any event or
circumstance that with notice, the lapse of time, or both, would become
a PARCO Wind-Down Event.
"PROGRAM COSTS" shall mean, for any Business Day, the sum of (i) the
product of (A) 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 the issuance of the Series
1998-2 Interests) and (B) a fraction, the numerator of which is the
Aggregate Commitment Amount on such Business Day and the denominator of
which is the sum of (x) the Aggregate Invested Amounts on such Business Day
(other than the Series 1998-2 Invested Amount and the Invested Amount in
respect of any variable funding certificate of any other Outstanding
Series) and (y) the Aggregate Commitment Amount on such Business Day plus
the aggregate Commitment amount for any variable funding certificate of any
other Outstanding Series, and (ii) all unpaid fees and expenses due and
payable to any Rating Agencies rating the VFC Certificates; PROVIDED,
HOWEVER, that the amount of Program Costs payable pursuant to Section
3A.6(b)(iv) shall not exceed $100,000 in the aggregate in any fiscal year
of the Servicer.
"PURCHASE" shall mean the assignment by the Initial Purchaser to the
APA Banks of the Initial Purchaser's Series 1998-2 Purchaser Invested
Amount pursuant to Section 2.6.
"PURCHASE PRICE" shall mean, on the APA Bank Purchase Date, an amount
equal to the lesser of (i) the Initial Purchaser's Series 1998-2 Purchaser
Invested Amount (calculated without regard to clauses (d) and (e) of the
definition of Series 1998-2 Invested Amount) and (ii) the Adjusted
Liquidity Price on such date, in each
18
case as increased by the sum of (1) all accrued and unpaid Discount on
all outstanding Commercial Paper issued to fund the Initial Purchaser's
Series 1998-2 Purchaser Invested Amount from the issuance date(s) thereof
to but excluding the APA Bank Purchase Date PLUS (2) the aggregate
Discount to accrue on all outstanding Commercial Paper issued to fund the
Initial Purchaser's Series 1998-2 Purchaser Invested Amount from and
including the APA Bank Purchase Date, to and excluding the maturity date
of each CP Tranche.
"PURCHASE PRICE DEFICIT" shall have the meaning assigned in
subsection 2.6(c).
"PURCHASER" shall mean, prior to the APA Bank Purchase Date, the
Initial Purchaser and, on and after the APA Bank Purchase Date, the APA
Banks and each Acquiring APA Bank.
"RATING AGENCY" and "RATING AGENCIES" shall mean Moody's, S&P or any
other nationally recognized statistical rating organization from which a
rating for the Commercial Paper was requested by the Initial Purchaser and
is currently in effect.
"RATING AGENCY CONDITION" shall mean, with respect to any action, that
(i) each Rating Agency shall have been given 10 days' (or such shorter
period as shall be acceptable to each Rating Agency) prior notice thereof
and that each of the Rating Agencies shall have notified the Initial
Purchaser and the Funding Agent in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Commercial
Paper and (ii) the Required APA Banks shall have given their prior written
consent to such action.
"RECORD DATE" shall mean the first Business Day prior to each
Distribution Date.
"REDUCTION PERCENTAGE" shall mean the percentage equivalent of a
fraction, the numerator of which is the PARCO Residual Amount and the
denominator of which is the sum of the PARCO Residual Amount and the
Adjusted Liquidity Price on the APA Bank Purchase Date.
"REFERENCE RATE" shall have the meaning assigned in the definition of
ABR herein.
"REGISTER" shall mean a register maintained by the Funding Agent for
recording transfers of the Commitments.
"REQUIRED APA BANKS" shall mean APA Banks having Commitment
Percentages in the aggregate at least equal to 66-2/3% or, if the
Commitments have been terminated, holding at least 66-2/3% of the
outstanding Series 1998-1 Invested
19
Amount; PROVIDED that the Commitment of any Defaulting APA Bank that has
not paid all amounts due and owing by it in respect of the purchase it
was obligated to make shall not be included in the Aggregate Commitment
Amount for purposes of this definition.
"SALE NOTICE" shall mean an irrevocable written notice given by an
authorized signatory or authorized officer of the Initial Purchaser (or on
behalf of the Initial Purchaser by Chase, in its capacity as the Initial
Purchaser's administrative agent) to the Funding Agent committing to sell,
assign and transfer to the APA Banks, the Initial Purchaser's Series 1998-2
Purchaser Invested Amount, which notice shall designate (i) the APA Bank
Purchase Date, (ii) the Initial Purchaser's Series 0000-0 Xxxxxxxxx
Xxxxxxxx Xxxxxx, (xxx) the Purchase Price (including a calculation of the
Purchase Price), (iv) that no PARCO Insolvency Event has occurred and
(v) wire transfer instructions specifying the account(s) into which the
proceeds of the Purchase Price shall be deposited.
"SCHEDULED REVOLVING TERMINATION DATE" shall mean the last day of the
Settlement Period ending in January 2003.
"SERIES 1998-2" shall mean Series 1998-2, the Principal Terms of which
are set forth in this Supplement.
"SERIES 1998-2 ACCRUED INTEREST SUB-SUBACCOUNT" shall have the meaning
assigned in subsection 3A.2(a).
"SERIES 1998-2 ADJUSTED INVESTED AMOUNT" shall mean, as of any date
of determination, (i) the Series 1998-2 Invested Amount on such date,
MINUS (ii) the amount on deposit in the Series 1998-2 Principal
Collection Sub-subaccount on such date.
"SERIES 1998-2 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 1998-2.
"SERIES 1998-2 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 1998-2.
"SERIES 1998-2 ALLOCATED RECEIVABLES AMOUNT" shall mean, on any date
of determination, the lower of (i) the Series 1998-2 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 1998-2
20
Target Receivables Amount on such day and the denominator of which is the
Aggregate Target Receivables Amount on such day.
"SERIES 1998-2 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 (i) the date when
the Series 1998-2 Invested Amount shall have been reduced to zero and all
accrued interest and other amounts owing on the VFC Certificates and to the
Funding Agent and the Purchasers hereunder shall have been paid in full and
(ii) the Series 1998-2 Termination Date.
"SERIES 1998-2 COLLECTION SUBACCOUNT" shall have the meaning assigned
in subsection 3A.2(a).
"SERIES 1998-2 INTERESTS" shall mean, collectively, the VFC
Certificates and the Series 1998-2 Subordinated Interest.
"SERIES 1998-2 INVESTED AMOUNT" shall mean, as of any date of
determination, the sum of the Series 1998-2 Purchaser Invested Amounts of
all Purchasers on such date.
"SERIES 1998-2 MONTHLY INTEREST" shall have the meaning assigned in
subsection 3A.4(a).
"SERIES 1998-2 MONTHLY PRINCIPAL PAYMENT" shall have the meaning
assigned in Section 3A.5.
"SERIES 1998-2 MONTHLY SERVICING FEE" shall have the meaning assigned
in Section 6.1.
"SERIES 1998-2 NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in subsection 3A.2(a).
"SERIES 1998-2 PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in subsection 3A.2(a).
"SERIES 1998-2 PURCHASER INVESTED AMOUNT" shall mean, with respect to
the Initial Purchaser on the Issuance Date or, if the Initial Purchaser
shall not fund the Initial Series 1998-2 Invested Amount, any APA Bank, an
amount equal to the Initial Series 1998-2 Invested Amount or such APA
Bank's Commitment Percentage of the Initial Series 1998-2 Invested Amount,
and with respect to the Initial Purchaser or any other Purchaser on any
date of determination thereafter, an amount equal to (a) the
21
Initial Purchaser's or such other Purchaser's Series 1998-2 Purchaser
Invested Amount on the immediately preceding Business Day (or, with
respect to the day as of which such other Purchaser acquires an interest
in the Series 1998-2 Invested Amount, whether pursuant to Section 2.6, by
executing a counterpart hereof, a Commitment Transfer Supplement or
otherwise, the portion of the transferor's Series 1998-2 Purchaser
Invested Amount being purchased), PLUS (b) the amount of any increases in
such Purchaser's Series 1998-2 Purchaser Invested Amount pursuant to
Section 2.5 made on such day, MINUS (c) the amount of any distributions
to such Purchaser in respect of principal received and applied on such
day MINUS (d) the aggregate Series 1998-2 Allocable Charged-Off Amount
applied to such Purchaser on or prior to such date pursuant to subsection
3A.5(b)(ii) PLUS (e) (but only to the extent of any unreimbursed
reductions made pursuant to clause (d) above) the aggregate Series 1998-2
Allocable Recoveries Amount applied to such Purchaser on or prior to such
date pursuant to subsection 3A.5(c)(i).
"SERIES 1998-2 RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
greater of (i) the sum of the Loss Reserve Ratio and the Dilution Reserve
Ratio and (ii) the Minimum Ratio, in each case, then in effect.
"SERIES 1998-2 REQUIRED RESERVES" shall mean, (x) as of any date of
determination during the Series 1998-2 Revolving Period, an amount equal to
the sum of:
(a) an amount equal to the product of (A) the Series 1998-2
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 Series 1998-2 Ratio, and the denominator of
which is one MINUS the Series 1998-2 Ratio;
(b) the product of (i) the Series 1998-2 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 in effect for the Accrual Period in which such day
falls, and the denominator of which is one MINUS the Series 1998-2
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 1998-2 Invested Amount on such day, and the
denominator of which is the sum of the Aggregate Invested Amount on
such day (after giving effect to any increase or decrease thereof 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
Series 1998-2 Ratio;
22
and (y) on any date of determination during the Series 1998-2 Amortization
Period, an amount equal to the Series 1998-2 Required Reserves on the last
Business Day of the Series 1998-2 Revolving Period; PROVIDED, in the case
of this clause (y), that such 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 1998-2 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 Commitment Termination Date.
"SERIES 1998-2 SUBORDINATED INTEREST AMOUNT" shall mean, for any date
of determination, an amount equal to (i) the Series 1998-2 Allocated
Receivables Amount MINUS (ii) the Series 1998-2 Adjusted Invested Amount.
"SERIES 1998-2 SUBORDINATED INTEREST REDUCTION AMOUNT" shall have the
meaning assigned in subsection 2.7(b).
"SERIES 1998-2 SUBORDINATED INTEREST" shall have the meaning assigned
in subsection 2.2(b).
"SERIES 1998-2 TARGET RECEIVABLES AMOUNT" shall mean, on any date of
determination, the sum of (i) the Series 1998-2 Adjusted Invested Amount on
such day and (ii) the Series 1998-2 Required Reserves for such day.
"SERIES 1998-2 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) 2.0 TIMES Days Sales Outstanding as of
such earlier Settlement Report Date, DIVIDED BY (ii) 360.
"TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"TRANSACTION PARTIES" shall have the meaning assigned in subsection
2.6(d).
"TRANSFER ISSUANCE DATE" shall mean the date on which a Commitment
Transfer Supplement becomes effective pursuant to the terms of such
Commitment Transfer Supplement.
23
"TRANSFEREE" shall have the meaning assigned in subsection 11.10(f).
"TRUST ACCOUNTS" shall have the meaning assigned in
subsection 3A.2(a).
"UCC CERTIFICATE" shall mean a certificate substantially in the form
of Exhibit H to this Supplement.
"UNACCRUED DISCOUNT PAYMENT AMOUNT" shall mean the portion of the
Purchase Price determined in accordance with clause (2) of the definition
thereof.
"UNALLOCATED BALANCE" shall mean, as of (i) any Business Day prior to
the APA Bank Purchase Date, the portion of the Series 1998-2 Invested
Amount allocated to any CP Tranche the CP Rate Period in respect of which
expires on such Business Day and (ii) the APA Bank Purchase Date or any
Business Day thereafter, the sum of (A) the portion of the Series 1998-2
Invested Amount for which interest is then being calculated by reference to
the ABR and (B) the portion of the Series 1998-2 Invested Amount allocated
to any Eurodollar Tranche the Eurodollar Period in respect of which expires
on such Business Day.
"VFC CERTIFICATE" shall mean a VFC Certificate, Series 1998-2,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"VFC CERTIFICATEHOLDERS" shall mean the Purchasers.
"VFC CERTIFICATEHOLDERS' INTEREST" shall have the meaning assigned in
subsection 2.2(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 defined in the
Agreement, each capitalized term used or defined herein shall relate only to the
Series 1998-2 Interests and no other Series of Investor Certificates issued by
the Trust.
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ARTICLE II
DESIGNATION OF CERTIFICATES; PURCHASE AND SALE
OF THE VFC CERTIFICATES
SECTION II.1. DESIGNATION. The Certificates and interests created
and authorized pursuant to the Agreement and this Supplement shall be divided
into two Classes, which shall be designated respectively as (i) the "VFC
Certificates, Series 1998-2" and (ii) an interest designated as the "Series
1998-2 Subordinated Interest."
SECTION II.2. THE SERIES 1998-2 INTERESTS. (a) The VFC 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 and (ii) all other funds on deposit
in the Series Collection Subaccounts and any subaccounts thereof (collectively,
the "VFC CERTIFICATEHOLDERS' INTEREST").
(b) The "SERIES 1998-2 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 VFC
Certificateholders' Interest and not required to be distributed to or for the
benefit of the Purchasers. The Exchangeable Company Interest and any other
Series of Investor Certificates outstanding shall represent the ownership
interest in the remainder of the Trust not allocated pursuant hereto to the
VFC Certificateholders' Interest or the Series 1998-2 Subordinated Interest.
(c) The VFC Certificates shall be substantially in the form of
Exhibit A 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. PURCHASES OF INTERESTS IN THE VFC CERTIFICATES. (a)
INITIAL PURCHASE. Subject to the terms and conditions of this Supplement,
including delivery of notice in accordance with Section 2.4, (i) on the
Issuance Date, (A) the Initial Purchaser may, in its sole discretion,
purchase a VFC Certificate in an amount equal to the Initial Series 1998-2
Invested Amount or (B) if the Initial Purchaser shall have notified the
Funding Agent that it has elected not to purchase a VFC Certificate on the
Issuance Date, each APA Bank hereby severally agrees to purchase on the
Issuance Date a VFC Certificate in an amount equal to such APA Bank's
Commitment Percentage of the Initial Series 1998-2 Invested Amount and (ii)
thereafter, (A) if the Initial Purchaser shall have purchased a VFC
Certificate on the Issuance Date, the Initial Purchaser may, in its sole
discretion, maintain its VFC Certificate, subject to increase or decrease
during the Series 1998-2 Revolving Period, in accordance with the provisions
of this Supplement and (B) if the APA Banks shall have purchased VFC
Certificates on the Issuance Date or, in any case, on or after the APA Bank
Purchase Date, the APA Banks hereby severally agree to maintain their
respective VFC
25
Certificates, subject to increase or decrease during the Series 1998-2
Revolving Period, in accordance with the provisions of this Supplement. The
Company hereby agrees to maintain ownership of the Series 1998-2 Subordinated
Interest, subject to increase or decrease during the Series 1998-2 Revolving
Period, in accordance with the provisions of this Supplement. Payments by
the Initial Purchaser or the APA Banks, as the case may be, in respect of the
VFC Certificates shall be made in immediately available funds on the Issuance
Date to the Funding Agent for payment to the Company.
(b) SUBSEQUENT PURCHASES. Subject to the terms and conditions of
this Supplement, each Acquiring APA Bank hereby severally agrees to maintain
its VFC Certificate, subject to increase or decrease during the Series 1998-2
Revolving Period, in accordance with the provisions of this Supplement.
(c) MAXIMUM SERIES 1998-2 PURCHASER INVESTED AMOUNT.
Notwithstanding anything to the contrary contained in this Supplement, at no
time shall the Series 1998-2 Purchaser Invested Amount (calculated without
regard to clauses (d) and (e) of the definition thereof) of any APA Bank
exceed such APA Bank's Commitment at such time.
SECTION II.4. DELIVERY. 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 (i) the VFC
Certificates in such names and such denominations and deliver such VFC
Certificates to the Funding Agent, on behalf of the Initial Purchaser, or the
APA Banks, as the case may be, in accordance with such written directions.
The VFC Certificates shall be issued in minimum denominations of $1,000,000
and in integral multiples of $100,000 in excess thereof. The Trustee shall
xxxx on its books the actual Series 1998-2 Invested Amount and Series 1998-2
Subordinated Interest Amount outstanding on any date of determination, which,
absent manifest error, shall constitute PRIMA FACIE evidence of the
outstanding Series 1998-2 Invested Amount and Series 1998-2 Subordinated
Interest Amount from time to time.
SECTION II.5. PROCEDURE FOR INITIAL ISSUANCE AND FOR INCREASING
THE SERIES 1998-2 INVESTED AMOUNT. (a) Subject to subsection 2.5(c), (i) on
the Business Day designated in writing as provided herein (the "ISSUANCE
DATE"), the Initial Purchaser may agree, in its sole discretion, and each APA
Bank hereby agrees to purchase a VFC Certificate in accordance with Section
2.3 and (ii) on any Business Day during the Commitment Period, the Initial
Purchaser may agree, in its sole discretion, and each APA Bank hereby agrees
that the Series 1998-2 Invested Amount may be increased by increasing such
Purchaser's Series 1998-2 Purchaser Invested Amount (an "INCREASE"), upon the
request of the Servicer or the Company on behalf of the Trust (each date on
which an increase in the Series 1998-2 Invested Amount occurs hereunder being
herein referred to as the "INCREASE DATE" applicable to such Increase);
PROVIDED, HOWEVER, that the Servicer or the Company, as the case may be,
shall have given the Funding Agent (with a copy to the Trustee) irrevocable
written notice
26
(effective upon receipt), substantially in the form of Exhibit F hereto, of
such request no later than (i) 1:00 p.m., New York City time, two Business
Days prior to the Issuance Date or such Increase Date, as the case may be, in
the case of any Increase Date occurring prior to the APA Bank Purchase Date
or (ii) (x) if the Initial Series 1998-2 Invested Amount or Increase Amount
is to be priced solely with reference to the ABR, on or prior to 12:00 noon,
New York City time, on the Issuance Date or such Increase Date, as the case
may be, or (y) if all or a portion of the Initial Series 1998-2 Invested
Amount or Increase Amount is to be allocated to a Eurodollar Tranche, 1:00
p.m., New York City time, three Business Days prior to the Issuance Date or
such Increase Date, as the case may be, in the case of any Increase Date
occurring on or after the APA Bank Purchase Date; PROVIDED, FURTHER, that the
provisions of this subsection shall not restrict the allocations of
Collections pursuant to Article III. Such notice shall state (x) the
Issuance Date or the Increase Date, as the case may be, (y) the initial
invested amount (the "INITIAL SERIES 1998-2 INVESTED AMOUNT"), or the
proposed amount of such Increase (the "INCREASE AMOUNT"), as the case may be,
and (z) on and after the APA Bank Purchase Date, what portions thereof will
be allocated to a Eurodollar Tranche and the Floating Tranche.
(b) If, prior to the APA Bank Purchase Date, the Initial Purchaser
elects not to fund any portion of a requested Increase, the Initial Purchaser
shall notify the Funding Agent thereof and deliver a Sale Notice in
accordance with Section 2.6 and each APA Bank shall purchase its Commitment
Percentage of the Initial Purchaser's Series 1998-2 Purchaser Invested Amount
in accordance with Section 2.6 and fund such Increase in an amount equal to
its Commitment Percentage of such Increase; PROVIDED, HOWEVER that an APA
Bank shall not be obligated to fund any portion of an Increase that would
cause its Series 1998-2 Purchaser Invested Amount to exceed its Commitment.
(c) The Purchasers shall not be required to make the initial
purchase of VFC Certificates on the Issuance Date or to increase their
respective Series 1998-2 Purchaser Invested Amounts on any Increase Date
hereunder unless:
(i) the related aggregate initial purchase amount or Increase
Amount is equal to $1,000,000 or an integral multiple of $100,000 in excess
thereof;
(ii) after giving effect to the initial purchase amount or
Increase Amount, (A) the Series 1998-2 Invested Amount would not exceed the
Maximum Commitment Amount on the Issuance Date or such Increase Date, as
the case may be, and (B) the Series 1998-2 Allocated Receivables Amount
would not be less than the Series 1998-2 Target Receivables Amount on the
Issuance Date or such Increase Date, as the case may be;
(iii) no Early Amortization Event or Potential Early Amortization
Event shall have occurred and be continuing;
27
(iv) in the case of any funding by the Initial Purchaser, no
PARCO Wind-Down Event or Potential PARCO Wind-Down Event shall have
occurred and be continuing; and
(v) all of the representations and warranties made by each of
the Company, the Servicer, each Sub-Servicer and each Seller (other than
representations and warranties referred to in Section 2.06 of the
Receivables Sale Agreement) in each Transaction Document to which it is a
party are true and correct in all material respects on and as of the
Issuance Date or such Increase Date, as the case may be, as if made on and
as of such date (except to the extent such representations and warranties
are expressly made as of another date).
The Company's acceptance of funds in connection with (x) the Purchasers'
initial purchase of VFC Certificates on the Issuance Date and (y) each
Increase occurring on any Increase Date shall constitute a representation and
warranty by the Company to the Purchasers as of the Issuance Date or such
Increase Date (except to the extent such representations and warranties are
expressly made as of another date or relate to particular receivables), as
the case may be, that all of the conditions contained in this subsection
2.5(c) have been satisfied.
(d) After receipt by the Funding Agent of the notice required by
subsection 2.5(a) from the Servicer or the Company on behalf of the Trust,
the Funding Agent shall, so long as the conditions set forth in subsections
2.5(a) and (c) are satisfied, promptly provide telephonic notice (i) prior to
the APA Bank Purchase Date, to the Initial Purchaser, and (ii) on and after
the APA Bank Purchase Date, to each APA Bank, of the Increase Date and of the
portion of the Increase Amount allocable to such APA Bank (which shall equal
such APA Bank's Commitment Percentage of the Increase Amount). If the
Initial Purchaser elects to fund an Increase, the Initial Purchaser agrees to
pay in immediately available funds the amount of such Increase on the related
Increase Date to the Funding Agent for payment to the Trust for deposit in
the Series 1998-2 Principal Collection Sub-subaccount. On or after the APA
Bank Purchase Date, each APA Bank agrees to pay in immediately available
funds such APA Bank's Commitment Percentage of each Increase on the related
Increase Date to the Funding Agent for payment to the Trust for deposit in
the Series 1998-2 Principal Collection Sub-subaccount.
SECTION II.6. SALE BY THE INITIAL PURCHASER OF ITS SERIES 1998-2
PURCHASER INVESTED AMOUNT TO THE APA BANKS. (a) On any date during the
Commitment Period, the Initial Purchaser may, in its own discretion, and the
Initial Purchaser shall upon the occurrence of a PARCO Wind-Down Event, in
each case, by delivering a Sale Notice to the Funding Agent, the Company and
the Trustee, sell to the APA Banks (in accordance with their respective
Commitment Percentages) and each APA Bank hereby agrees to purchase its
Commitment Percentage of all right, title and interest of the Initial
Purchaser in its Series 1998-2 Purchaser Invested Amount. Any Sale Notice
shall be delivered by the Initial Purchaser to the Funding Agent, the Company
and the Trustee prior to 12:30 p.m., New York
28
City time, on the APA Bank Purchase Date and shall constitute an irrevocable
offer by the Initial Purchaser to sell 100% of its Series 1998-2 Purchaser
Invested Amount at the Purchase Price. Any Sale Notice shall be deemed to be
a representation and warranty by the Initial Purchaser that no PARCO
Insolvency Event shall have occurred and be continuing. Each APA Bank hereby
agrees to purchase from the Initial Purchaser such APA Bank's Commitment
Percentage of the Initial Purchaser's Series 1998-2 Purchaser Invested Amount
for a purchase price equal to such APA Bank's Commitment Percentage of the
Purchase Price on the APA Bank Purchase Date (which date, subject to
subsection 2.6(b), may be the same as the date of the Sale Notice).
Notwithstanding anything to the contrary set forth in this Supplement, no APA
Bank shall have any obligation to purchase the Initial Purchaser's Series
1998-2 Purchaser Invested Amount if, on such Purchase Date, any PARCO
Insolvency Event shall have occurred and be continuing.
(b) If, at or prior to 12:30 p.m., New York City time, on any
Business Day, the Initial Purchaser delivers the Sale Notice to the Funding
Agent specifying that the APA Bank Purchase Date shall be the same date as
the date of the Sale Notice, the Funding Agent shall, by no later than 1:00
p.m., New York City time, notify (by telecopy or by telephone call promptly
confirmed in writing by telecopy) each APA Bank of the receipt and content of
the Sale Notice. Each APA Bank shall purchase its Commitment Percentage of
the Initial Purchaser's VFC Certificate by depositing its Commitment
Percentage of the Purchase Price in immediately available funds into the
account(s) specified by the Initial Purchaser in the Sale Notice no later
than 2:00 p.m., New York City time. If the Initial Purchaser delivers the
Sale Notice to the Funding Agent after 12:30 p.m., New York City time, on any
Business Day or the Initial Purchaser delivers the Sale Notice to the Funding
Agent specifying that the APA Bank Purchase Date shall be a date other than
the date of the Sale Notice, the Funding Agent shall promptly advise (by
telecopy or by telephone call promptly confirmed in writing by telecopy) each
APA Bank of the receipt and content of the Sale Notice. Notwithstanding the
fact that the APA Bank Purchase Date may occur on a date which is later than
the date on which the Sale Notice is delivered to the Funding Agent, the
several obligations of each APA Bank to make such purchase and to make
payment of the amounts required to be paid by it pursuant to subsection
2.6(a) shall arise immediately upon receipt by the Funding Agent of the Sale
Notice. Upon payment of the Purchase Price as provided herein and delivery
to the Trustee by the Funding Agent of the Initial Purchaser's VFC
Certificate, 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, a new VFC Certificate in the name of
each APA Bank and in a denomination equal to such APA Bank's Commitment
Percentage as set forth in such written direction and shall deliver such VFC
Certificate to each such APA Bank in accordance with such written direction.
(c) If, by 2:00 p.m., New York City time, one or more APA Banks
(each, a "DEFAULTING APA BANK," and each APA Bank other than the Defaulting
APA Bank being referred to as a "NON-DEFAULTING APA BANK") fails to make its
Commitment Percentage of the Purchase Price available to the Funding Agent
pursuant to subsection 2.6(b) (the aggregate
29
amount not so made available to the Funding Agent being herein called the
"PURCHASE PRICE DEFICIT"), then the Funding Agent shall, by no later than
2:30 p.m., New York City time, instruct each Non-Defaulting APA Bank to pay,
by no later than 3:00 p.m., New York City time, in immediately available
funds, to the account designated by the Funding Agent, an amount equal to the
lesser of (x) such Non-Defaulting APA Bank's proportionate share (based upon
the relative Commitments of the Non-Defaulting APA Banks) of the Purchase
Price Deficit and (y) its unused Commitment. A Defaulting APA Bank shall
forthwith, upon demand, pay to the Funding Agent for the ratable benefit of
the Non-Defaulting APA Banks all amounts paid by each Non-Defaulting APA Bank
on behalf of such Defaulting APA Bank, together with interest thereon, for
each day from the date a payment was made by a Non-Defaulting APA Bank until
the date such Non-Defaulting APA Bank has been paid such amounts in full, at
a rate per annum equal to the sum of the Federal Funds Effective Rate plus
2%. In addition, without prejudice to any other rights that the Initial
Purchaser may have under applicable law, each Defaulting APA Bank shall pay
to the Initial Purchaser forthwith upon demand, the difference between the
Defaulting APA Bank's unpaid Commitment Percentage of the Purchase Price and
the amount paid with respect thereto by the Non-Defaulting APA Banks,
together with interest thereon, for each day from the date of the Funding
Agent's request for such Defaulting APA Bank's Commitment Percentage of the
Purchase Price pursuant to Section 2.6(b) until the date the requisite amount
is paid to the Initial Purchaser in full, at a rate per annum equal to the
sum of the Federal Funds Effective Rate plus 2%.
(d) The transfer of the Initial Purchaser's VFC Certificate
pursuant to this Section 2.6 shall be without recourse or warranty, express
or implied, except that the Initial Purchasers represent that such VFC
Certificate is free and clear of adverse claims created by or arising as a
result of claims against the Initial Purchaser. By executing and delivering
a Sale Notice pursuant to Section 2.6(a),(i) the Initial Purchaser makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
VFC Certificate or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the VFC Certificate, or any other
agreement, instrument or other document furnished pursuant thereto or in
connection therewith, including without limitation any Transaction Document,
and (ii) the Initial Purchaser makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Trust, the Trustee, the Servicer, each Sub-Servicer, each Seller or any
Obligor (collectively, the "TRANSACTION PARTIES") or the Funding Agent, or
the performance or observance by the Transaction Parties of any of their
respective obligations under the VFC Certificate or the Transaction Documents.
(e) If the Adjusted Liquidity Price on the APA Bank Purchase Date
is less than the Series 1998-2 Invested Amount on the APA Bank Purchase Date
(the amount of such insufficiency, the "PARCO RESIDUAL AMOUNT"), each APA
Bank agrees that (i) on each Distribution Date after the APA Bank Purchase
Date on which interest is distributed to VFC Certificateholders pursuant to
subsection 3A.6(a), the Funding Agent shall distribute to the
30
Initial Purchaser its Reduction Percentage of such interest payments and (ii)
on each Distribution Date after the APA Purchase Date on which amounts in
reduction of the Series 1998-2 Invested Amount are distributed to VFC
Certificateholders pursuant to Section 2.7 or subsection 3A.6(c), the Funding
Agent shall distribute to the Initial Purchaser its Reduction Percentage of
such amounts.
SECTION II.7. PROCEDURE FOR DECREASING THE SERIES 1998-2 INVESTED
AMOUNT; OPTIONAL TERMINATION. (a) On any Business Day during the Series
1998-2 Revolving Period or the Series 1998-2 Amortization Period (except for
Distribution Dates during the Series 1998-2 Amortization Period (which shall
be governed by subsection 3A.6(c))), upon the written request of the Servicer
or the Company on behalf of the Trust, the Series 1998-2 Invested Amount may
be reduced (a "DECREASE") by the distribution by the Trustee to the Funding
Agent for the PRO RATA benefit of the Purchasers in accordance with their
respective Series 1998-2 Purchaser Invested Amount of funds on deposit in the
Series 1998-2 Principal Collection Sub-subaccount on such day in an amount
not to exceed the amount of such funds on deposit on such day; PROVIDED that
the Servicer shall have given the Funding Agent (with a copy to the Trustee)
irrevocable written notice (effective upon receipt), prior to 1:00 p.m., New
York City time, (i)on the second Business Day prior to such Decrease, in the
case of any Decrease occurring prior to the APA Bank Purchase Date and
(ii)(A) if the Decrease relates solely to a Floating Tranche, on the Business
Day of such Decrease or (B) if all or any portion of the Decrease relates to
a Eurodollar Tranche, on the Business Day that is three Business Days prior
to such Decrease, and which notice shall state the amount of such Decrease;
PROVIDED, FURTHER, that (x) such Decrease shall be in an amount equal to
$1,000,000 and integral multiples of $100,000 in excess thereof or if the
Series 1998-2 Invested Amount is less than $1,000,000 then such Decrease
shall equal the Series 1998-2 Invested Amount, and (y) prior to the APA Bank
Purchase Date, such Decrease shall be in an amount no greater than the
Unallocated Balance on such day.
(b) Simultaneously with any such Decrease during the Series 1998-2
Revolving Period, the Series 1998-2 Subordinated Interest Amount shall be
reduced by an amount (the "SERIES 1998-2 SUBORDINATED INTEREST REDUCTION
AMOUNT") such that the Series 1998-2 Subordinated Interest Amount shall equal
the Series 1998-2 Required Reserves after giving effect to such Decrease.
During the Series 1998-2 Revolving Period, after the distribution described
in subsection (a) above has been made, and the Series 1998-2 Subordinated
Interest Amount shall have been reduced by the Series 1998-2 Subordinated
Interest Reduction Amount, a distribution shall be made to the owner of the
Series 1998-2 Subordinated Interest out of remaining funds on deposit in the
Series 1998-2 Principal Collection Sub-subaccount in an amount equal to the
lesser of (x) the Series 1998-2 Subordinated Interest Reduction Amount and
(y) the amount of such remaining funds on deposit in the Series 1998-2
Principal Collection Sub-subaccount.
(c) On or after the APA Bank Purchase Date, any reduction in the
Series 1998-2 Invested Amount on any Business Day shall be allocated first to
reduce the
31
Unallocated Balance and then to reduce the portion of the Series 1998-2
Invested Amount allocated to Eurodollar Tranches in such order as the Company
may select in order to minimize costs payable pursuant to Section 7.4.
(d)(i) On any Business Day unless the Scheduled Revolving
Termination Date, an Early Amortization Event or a Potential Early
Amortization Event shall have occurred and be continuing, the Company shall
have the right to deliver an irrevocable written notice (an "OPTIONAL
TERMINATION NOTICE") to the Trustee, the Servicer and the Rating Agencies in
which the Company declares that the Series 1998-2 Revolving Period shall
terminate on the date (the "OPTIONAL TERMINATION DATE") set forth in such
notice (which date, in any event, shall be the last day of a Settlement
Period which is not less than 10 days from the date on which such notice is
delivered).
(ii) From and after the Optional Termination Date, the Series
1998-2 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
Purchasers and each Rating Agency.
SECTION II.8. REDUCTIONS OF THE COMMITMENTS. (a) On any Business Day
during the Series 1998-2 Revolving Period, the Company, on behalf of the Trust,
may, upon three Business Days' prior written notice to the Funding Agent
(effective upon receipt) (with copies to the Servicer and the Trustee) reduce or
terminate the Commitments (a "COMMITMENT REDUCTION") in an aggregate amount
equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof;
PROVIDED that no such termination or reduction shall be permitted if, after
giving effect thereto and to any reduction in the Series 1998-2 Invested Amount
on such date, the Series 1998-2 Invested Amount would exceed the Aggregate
Commitment Amount then in effect. Each APA Banks's Commitment shall be reduced
by such APA Bank's Commitment Percentage of the amount of such Commitment
Reduction.
(b) Once reduced, the Commitments may not be subsequently
reinstated. Upon effectiveness of any such reduction, the Funding Agent shall
prepare a revised Schedule 1 to reflect the reduced Commitment of each APA
Bank and Schedule 1 of this Supplement shall be deemed to be automatically
superseded by such revised Schedule 1. The Funding Agent shall distribute
such revised Schedule 1 to the Company, the Servicer, the Trustee and each
APA Bank.
SECTION II.9. INTEREST; FEES. (a) Interest shall be payable on
the VFC Certificates on each Distribution Date pursuant to subsection 3A.6(a).
(b) The Trustee (acting at the written direction of the Servicer
upon which the Trustee may conclusively rely) shall distribute pursuant to
subsection 3A.6(b), from amounts on deposit in the Series 1998-2
Non-Principal Collection Sub-subaccount, to the Funding Agent, for the PRO
RATA account of the APA Banks in accordance with their respective
32
Commitment Percentages, on each Distribution Date, a commitment fee with
respect to each Accrual Period ending on such date (the "COMMITMENT FEE") (i)
during the Series 1998-2 Revolving Period at the Commitment Fee Rate of the
average daily excess of the Aggregate Commitment Amount OVER the average
aggregate Series 1998-2 Purchaser Invested Amounts of the APA Banks during
such Accrual Period and (ii) during the Series 1998-2 Amortization Period at
the Commitment Fee Rate of the average daily Series 1998-2 Invested Amount
during such Accrual Period; PROVIDED HOWEVER, that no Commitment Fee will be
payable hereunder for any Accrual Period or portion thereof during the Series
1998-2 Amortization Period that commences on or after the APA Bank Purchase
Date . The Commitment Fee shall be payable (i) monthly in arrears on each
Distribution Date and (ii) on the Commitment Termination Date. To the extent
that funds on deposit in the Series 1998-2 Non-Principal Collection
Sub-subaccount at any such date are insufficient to pay the Commitment Fee
due on such date, the Servicer shall so notify the Company and the Company
shall immediately pay the Funding Agent the amount of any such deficiency.
(c) The Trustee (acting at the written direction of the Servicer upon
which the Trustee may conclusively rely) shall distribute pursuant to subsection
3A.6(b), from amounts on deposit in the Series 1998-2 Non-Principal Collection
Sub-subaccount, to the Funding Agent, for the account of the Initial Purchaser,
on each Distribution Date prior to the APA Bank Purchase Date and on the
Distribution Date immediately succeeding the APA Bank Purchase Date, a facility
fee (the "FACILITY FEE") with respect to each Accrual Period ending on such date
(or, in the case of the Distribution Date immediately succeeding the APA Bank
Purchase Date, the period from and including the immediately preceding
Distribution Date to but excluding the APA Bank Purchase Date) (i) during the
Series 1998-2 Revolving Period, at the Facility Fee Rate of the average daily
Aggregate Commitment Amount during such period and (ii) during the Series 1998-2
Amortization Period, at the Facility Fee Rate of the average daily Series 1998-2
Invested Amount during such period. The Facility Fee shall be payable (i)
monthly in arrears on each Distribution Date prior to the APA Bank Purchase Date
and (ii) on the Distribution Date immediately succeeding the APA Bank
Purchase Date. To the extent that funds on deposit in the Series 1998-2
Non-Principal Collection Sub-subaccount at any such date are insufficient to
pay the Facility Fee due on such date, the Servicer shall so notify the
Company and the Company shall immediately pay the Funding Agent the amount of
any such deficiency.
(d) Calculations of per annum rates and fees under this Supplement
shall be made on the basis of a 360- (or 365-/366-, in the case of interest
on the Floating Tranche based on the ABR) day year with respect to Commitment
Fees, Facility Fees and interest rates. Each determination of the Eurodollar
Rate by the Funding Agent shall be conclusive and binding upon each of the
parties hereto in the absence of manifest error.
SECTION II.10. INDEMNIFICATION BY THE COMPANY AND THE SERVICER.
(a) The Company agrees to indemnify and hold harmless the Funding Agent, each
Purchaser and each of their respective officers, directors, agents and
employees (each, a "COMPANY INDEMNIFIED
32
PERSON") from and against any loss, liability, expense, damage or injury
suffered or sustained by (a "CLAIM") such Company indemnified person by
reason of (i) any acts, omissions or alleged acts or omissions arising out
of, or relating to, activities of the Company pursuant to any Pooling and
Servicing Agreement or the other Transaction Documents to which it is a
party, (ii) a breach of any representation or warranty made or deemed made by
the Company (or any of its officers) in any Pooling and Servicing Agreement
or other Transaction Documents or (iii) a failure by the Company to comply
with any applicable law or regulation or to perform its covenants,
agreements, duties or obligations required to be performed or observed by it
in accordance with the provisions of any Pooling and Servicing Agreement or
the other Transaction Documents, including, but not limited to, any judgment,
award, settlement, reasonable attorneys' fees and other reasonable costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim, except to the extent such loss, liability,
expense, damage or injury (A) resulted from the gross negligence, bad faith
or wilful misconduct of such Company indemnified person or its officers,
directors, agents, principals, employees or employers, (B) resulted solely
from a default by an Obligor with respect to any Receivable or (C) include
any income or franchise taxes imposed on (or measured by) any Company
indemnified person's net income; PROVIDED that any payments made by the
Company pursuant to this subsection shall be made solely from funds available
to the Company which are not otherwise required to be applied to the payment
of any amounts (other than amounts payable to the Company) pursuant to any
Pooling and Servicing Agreements, shall be non-recourse other than with
respect to such funds, and shall not constitute a claim against the Company
to the extent that insufficient funds exist to make such payment.
(b) The Servicer agrees to indemnify and hold harmless the Funding
Agent, each Purchaser and each of their respective officers, directors, agents
and employees (each, a "SERVICER INDEMNIFIED PERSON") from and against any Claim
by reason of (i) any Claims by third parties against any Seller indemnified
person resulting from any acts, omissions or alleged acts or omissions arising
out of, or relating to, activities of the Servicer pursuant to any Pooling and
Servicing Agreement or the other Transaction Documents to which it is a party,
(ii) a breach of any representation or warranty made or deemed made by the
Servicer (or any of its officers) in any Pooling and Servicing Agreement or
other Transaction Document or (iii) a failure by the Servicer to comply with
any applicable law or regulation or to perform its covenants, agreements,
duties or obligations required to be performed or observed by it in
accordance with the provisions of any Pooling and Servicing Agreement or the
other Transaction Documents, including, but not limited to, any judgment,
award, settlement, reasonable attorneys' fees and other reasonable costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim, except to the extent such loss, liability,
expense, damage or injury resulted from the gross negligence, bad faith or
wilful misconduct of such Servicer indemnified person or its officers,
directors, agents, principals, employees or employers.
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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 Series
1998-2 Interests:
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 Purchasers and (ii) in the
case of clauses (A) and (B) below, for the benefit, subject to the prior and
senior interest of the Purchasers, of the owner of the Series 1998-2
Subordinated Interest, (A) a subaccount of the Collection Account (the
"SERIES 1998-2 COLLECTION SUBACCOUNT"), which subaccount is the Series
Collection Subaccount with respect to Series 1998-2; (B) two subaccounts of
the Series 1998-2 Collection Subaccount: (1) the Series 1998-2 Principal
Collection Sub-subaccount and (2) the Series 1998-2 Non-Principal Collection
Sub-subaccount (respectively, the "SERIES 1998-2 PRINCIPAL COLLECTION
SUB-SUBACCOUNT" and the "SERIES 1998-2 NON-PRINCIPAL COLLECTION
SUB-SUBACCOUNT") and (C) a subaccount of the Series 1998-2 Non-Principal
Collection Sub-subaccount (the "SERIES 1998-2 ACCRUED INTEREST
SUB-SUBACCOUNT"; all accounts established pursuant to this subsection 3A.2(a)
and listed on Schedule 2, 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) and (ii) above. The Trustee 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) and (ii) above.
(b) All Eligible Investments in the Trust Accounts shall be held by
the Trustee, on behalf of the Certificateholders, for the exclusive benefit of
the Purchasers and, subject to the prior interest of the Purchasers, the owner
of the Series 1998-2 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. In the absence of written
direction from the Company all funds held in any Trust Account will remain
uninvested. 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 1998-2 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 1998-2
Revolving Period, on or prior to the next Business Day and (ii) in the case
of any such
35
investment made during the Series 1998-2 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 1998-2 Non-Principal
Collection Sub-subaccount and the Series 1998-2 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 1998-2 Accrued Interest Sub-subaccount shall be
deposited in the Series 1998-2 Non-Principal Collection Sub-subaccount and
(y) all interest and investment earnings (net of losses and investment
expenses) on funds deposited in the Series 1998-2 Principal Collection
Sub-subaccount shall be deposited in the Series 1998-2 Non-Principal
Collection Sub-subaccount. In the absence of written direction from the
Company all funds held in any Trust Account will remain uninvested.
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
Series 1998-2 Interests 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) on each Business Day, an amount equal to the Accrued Expense
Amount for such day (or, during the Series 1998-2 Revolving Period, such
greater amount as the Company may request in writing) shall be transferred
from the Series 1998-2 Collection Subaccount to the Series 1998-2
Non-Principal Collection Sub-subaccount;
(ii) any remaining funds on deposit in the Series 1998-2
Collection Subaccount shall be transferred by the Trustee to the Series
1998-2 Principal Collection Sub-subaccount.
(b)(i) On each Business Day during the Series 1998-2 Revolving Period
(including Distribution Dates), after giving effect to (x) all allocations of
Aggregate Daily Collections on such Business Day and (y) any deposit resulting
from an Increase, if any, pursuant to subsection 2.5(c) on such Business Day,
amounts on deposit in the Series 1998-2 Principal 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 the Daily Report; PROVIDED
that such distribution shall be made only if no Early Amortization Event or
Potential Early Amortization Event relating to an Early Amortization Event
set forth in 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
36
Section 5.1 of this Supplement has occurred and is continuing and only to the
extent that, if after giving effect to such distribution, the Series 1998-2
Target Receivables Amount would not exceed the Series 1998-2 Allocated
Receivables Amount; PROVIDED FURTHER that if the Company or the Servicer, on
behalf of the Company, shall have given the Funding Agent irrevocable written
notice (effective upon receipt) at least two Business Days prior to such day,
in the case of any notice given prior to the APA Bank Purchase Date, on such
day, in the case of any notice given on or after the APA Bank Purchase Date
with respect to the Floating Tranche, or at least three Business Days prior
to such day, in the case of any notice given on or after the APA Bank
Purchase Date with respect to the Eurodollar Tranche, the Company or the
Servicer may instruct the Trustee in writing (specifying the related amount)
to withdraw all or a portion of such amounts on deposit in the Series 1998-2
Principal Collection Sub-subaccount and apply such withdrawn amounts toward
the reduction of the Series 1998-2 Invested Amount and the Series 1998-2
Subordinated Interest Amount in accordance with Section 2.6. 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 1998-2 Amortization
Period (including Distribution Dates), funds deposited in the Series 1998-2
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). Except as set forth in subsection
3A.6(c), no amounts on deposit in the Series 1998-2 Principal Collection
Sub-subaccount shall be distributed by the Trustee to the Company or the
owner of the Series 1998-2 Subordinated Interest during the Series 1998-2
Amortization Period.
(c) On each Business Day, an amount equal to the Daily Interest
Deposit for such day shall be transferred by the Trustee from the Series
1998-2 Non-Principal Collection Sub-subaccount to the Series 1998-2 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, 2.7, 7.2 and 9.1 of the Agreement.
SECTION 3A.4. DETERMINATION OF INTEREST. (a) (i) The amount of
interest distributable with respect to the VFC Certificates ("SERIES 1998-2
MONTHLY INTEREST") on each Distribution Date shall be the amount of Daily
Interest Expense accrued during the Accrual Period ending on such
Distribution Date.
(ii) If a change in the CP Rate, the weighted average Eurodollar
Rate or the ABR on or after any Settlement Report Date results in a change
in Series 1998-2 Monthly Interest for the Accrual Period ending on the
Distribution Date immediately succeeding such Settlement Report Date, the
Servicer shall amend the Settlement Statement to reflect the adjustment in
the Series 1998-2 Monthly Interest for such
37
Accrual Period caused by such change and any consequent adjustments and the
Servicer shall also provide written notification to the Trustee of any such
change. Any amendment to the Settlement Statement pursuant to this
subsection 3A.4(a)(ii) shall be completed by 1:00 p.m. on the day preceding
the next Distribution Date.
(b) On each Distribution Date, the Servicer shall determine the
excess, if any (the "INTEREST SHORTFALL"), of (i) the Series 1998-2 Monthly
Interest for the Accrual Period ending on such Distribution Date OVER (ii)
the amount which will be available to be distributed to the Purchasers on
such Distribution Date in respect thereof pursuant to this Supplement. If
the Interest Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("ADDITIONAL INTEREST") equal to the product of
(A) the number of days until such Interest Shortfall shall be repaid DIVIDED
BY 365 (or 366, as the case may be), (B) the ABR PLUS 2.0% and (C) such
Interest Shortfall (or the portion thereof which has not been paid to the
Purchasers) shall be payable as provided herein with respect to the VFC
Certificates on each Distribution Date following such Distribution Date, to
but excluding the Distribution Date on which such Interest Shortfall is paid
to the VFC Certificateholders.
(c) On any Business Day, the Company may, subject to subsection
3A.4(e), elect to allocate all or any portion of the Available Pricing Amount
(i), prior to the APA Bank Purchase Date, to one or more CP Tranches with CP
Rate Periods commencing on such Business Day by giving the Funding Agent
irrevocable written or telephonic (confirmed in writing) notice thereof,
which notice must be received by the Funding Agent prior to 1:00 p.m., New
York City time, two Business Days prior to such Business Day or (ii) on or
after the APA Bank Purchase Date, to one or more Eurodollar Tranches with
Eurodollar Periods commencing on such Business Day by giving the Funding
Agent irrevocable written or telephonic (confirmed in writing) notice
thereof, which notice must be received by the Funding Agent prior to 1:00
p.m., New York City time, three Business Days prior to such Business Day.
Such notice shall specify (i) the applicable Business Day, (ii) the CP Rate
Period for each CP Tranche or the Eurodollar Period for each Eurodollar
Tranche, as the case may be, to which a portion of the Available Pricing
Amount is to be allocated and (iii) the portion of the Available Pricing
Amount being allocated to each such CP Tranche or Eurodollar Tranche, as the
case may be. On or after the APA Bank Purchase Date, the Funding Agent shall
notify each APA Bank of the contents of each such notice promptly upon
receipt thereof. Prior to the APA Bank Purchase Date, the Company shall
allocate the Series 1998-2 Invested Amount so that the aggregate amounts
allocated to outstanding CP Rate Periods at all times equal the Series 1998-2
Invested Amount.
(d) Any reduction in the Series 1998-2 Invested Amount on any
Business Day shall be allocated in the following order of priority:
FIRST, to reduce the Unallocated Balance, as appropriate; and
38
SECOND, to reduce the portion of the Series 1998-2 Invested Amount
allocated to Eurodollar Tranches in such order as the Company may select in
order to minimize costs payable pursuant to Section 7.4.
(e) Notwithstanding anything to the contrary contained in this
Section 3A.4, (i) prior to the APA Bank Purchase Date, (A) the Initial
Purchaser shall approve the length of each CP Rate Period and the portion of
the Series 1998-2 Invested Amount allocated to such CP Rate Period, (B) the
Initial Purchaser may select, in its sole discretion, any new CP Rate Period
if (x) the Company fails to provide notice of a new CP Rate Period on a
timely basis or (y) the Funding Agent, on behalf of the Initial Purchaser,
determines, in its sole discretion, that the CP Rate Period requested by the
Company is unavailable or for any reason commercially undesirable, (C) the
portion of the Series 1998-2 Invested Amount allocable to each CP Tranche
must be in an amount equal to $1,000,000 or an integral multiple of $100,000
in excess thereof and (D) no more than ten CP Tranches shall be outstanding
at any one time and (ii) on and after the APA Bank Purchase Date, (A) the
portion of the Series 1998-2 Invested Amount allocable to each Eurodollar
Tranche must be in an amount equal to $500,000 or an integral multiple of
$500,000 in excess thereof, (B) no more than five Eurodollar Tranches shall
be outstanding at any one time, (C) after the occurrence and during the
continuance of any Early Amortization Event or Potential Early Amortization
Event relating to an Early Amortization Event set forth in subsections (a),
(d) (but only with respect to a Servicer Default set forth in subsection
6.1(e) of the Servicing Agreement), (g) or (j) of Section 5.1 of this
Supplement, the Company may not elect to allocate any portion of the
Available Pricing Amount to a Eurodollar Tranche and (D) after the end of the
Series 1998-2 Revolving Period, the Company may not select any Eurodollar
Period that does not end on or prior to the next succeeding Distribution Date.
SECTION 3A.5. DETERMINATION OF SERIES 1998-2 MONTHLY PRINCIPAL.
(a) PAYMENTS OF SERIES 1998-2 PRINCIPAL. The amount (the "SERIES 1998-2
MONTHLY PRINCIPAL PAYMENT") distributable from the Series 1998-2 Principal
Collection Sub-subaccount on each Distribution Date during the Series 1998-2
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 1998-2 Monthly Principal Payment on any Distribution Date shall
not exceed the Series 1998-2 Invested Amount on such Distribution Date after
giving effect to the reductions and increases pursuant to paragraphs (b) and
(c) below. In addition, on the last day of any Eurodollar Period that is not
a Distribution Date, the Trustee, at the written direction of the Servicer,
shall distribute from amounts on deposit in the Series 1998-2 Accrued
Interest Sub-subaccount an amount equal to the interest due on the Eurodollar
Tranche on the last day of such Eurodollar Period.
(b) REDUCTIONS TO SERIES 1998-2 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 1998-2 Allocable Charged-Off
Amount is greater than zero for the related Settlement Period, the Trustee shall
(in accordance with written directions from
39
the Servicer, upon which the Trustee may conclusively rely) make the
following allocations of such amounts in the following order of priority:
(i) the Series 1998-2 Required Reserves shall be reduced (but not
below zero) by an amount equal to the Series 1998-2 Allocable Charged-Off
Amount (which shall also be reduced by the amount so applied); and
(ii) then, to the extent that the Series 1998-2 Allocable
Charged-Off Amount is greater than zero following the application in
clause (i) above, the Series 1998-2 Invested Amount shall be reduced
(but not below zero) by such remaining Series 1998-2 Allocable
Charged-Off Amount (which shall also be reduced by the amount so
applied).
(c) INCREASES TO SERIES 1998-2 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 1998-2 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 allocations (after giving
effect to the applications in paragraph (b) of such amount in the following
order of priority):
(i) the Series 1998-2 Invested Amount shall be increased (but only
to the extent of any previous reductions of the Series 1998-2 Invested
Amount pursuant to subsection 3A.5(b)(ii)) by the amount of the Series
1998-2 Allocable Recoveries Amount (which shall also be reduced by the
amount so applied);
(ii) then, to the extent that the Series 1998-2 Allocable
Recoveries Amount is greater than zero following the applications in
clause (i) above, the Series 1998-2 Required Reserves shall be increased
(but only to the extent of any previous reductions of the Series 1998-2
Required Reserves pursuant to subsection 3A.5(b)(i)) by such remaining
Series 1998-2 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 to the Purchasers, from amounts on deposit in the
Series 1998-2 Accrued Interest Sub-subaccount, an amount equal to the Series
1998-2 Monthly Interest payable on such Distribution Date (such amount, the
"MONTHLY INTEREST PAYMENT"), PLUS the amount of any Monthly Interest Payment
previously due but not distributed to the Purchasers on a prior Distribution
Date, PLUS the amount of any Additional Interest for such Distribution Date and
any Additional Interest previously due but not distributed to the Purchasers on
a prior Distribution Date.
40
(b) On each Distribution Date, the Trustee shall apply funds on
deposit in the Series 1998-2 Non-Principal Collection Sub-subaccount in the
following order of priority to the extent funds are available:
(i) an amount equal to the Series 1998-2 Monthly Servicing Fee
for the Accrual Period ending on such Distribution Date shall be withdrawn
from the Series 1998-2 Non-Principal Collection Sub-subaccount by the
Trustee and paid to the Servicer or, if Core-Xxxx or any Affiliate
thereof is not the Servicer, an amount equal to the Series 1998-2 Monthly
Servicing Fee shall be paid to the Person acting as Successor Servicer
(less, in each case, any amounts payable to the Trustee pursuant to
Section 8.5 of the Agreement, which shall be paid to the Trustee);
(ii) an amount equal to the Facility Fee for the Accrual Period
ending on such Distribution Date shall be withdrawn from the Series 1998-2
Non-Principal Collection Sub-subaccount by the Trustee and paid to the
Funding Agent, for the account of the Initial Purchaser;
(iii) an amount equal to the Commitment Fee for the Accrual Period
ending on such Distribution Date shall be withdrawn from the Series 1998-2
Non-Principal Collection Sub-subaccount by the Trustee and paid to the
Funding Agent, for the PRO RATA account of the APA Banks, in accordance
with their respective Commitment Percentages; and
(iv) an amount equal to any unpaid Program Costs due and
payable shall be withdrawn from the Series 1998-2 Non-Principal
Collection Sub-subaccount by the Trustee and paid to the Persons owed
such amounts.
Any remaining amounts on deposit in the Series 1998-2 Non-Principal Collection
Sub-subaccount (in excess of the Accrued Expense Amount as of such day) not
allocated pursuant to clauses (i) through (v) above shall be paid to the owner
of the Series 1998-2 Subordinated Interest; PROVIDED, HOWEVER, that during the
Series 1998-2 Amortization Period, such remaining amounts shall be deposited in
the Series 1998-2 Principal Collection Sub-subaccount for distribution in
accordance with subsection 3A.6(c).
(c) During the Series 1998-2 Amortization Period, the Trustee shall
apply, on each Distribution Date, amounts on deposit in the Series 1998-2
Principal Collection Sub-subaccount in the following order of priority:
(i) an amount equal to the Series 1998-2 Monthly Principal Payment
for such Distribution Date shall be distributed from the Series 1998-2
Principal Collection Sub-subaccount to the Purchasers; and
41
(ii) if, following the repayment in full of the Series 1998-2
Invested Amount, any amounts are owed to the Trustee, the Purchasers or any
other Person hereunder, such amounts shall be transferred from the Series
1998-2 Principal Collection Sub-subaccount and paid to the Trustee, the
Purchasers or such other Person; and
(iii) following the repayment in full of the Series 1998-2 Invested
Amount and of all of the amounts set forth in clause (ii), the remaining
amount on deposit in the Series 1998-2 Principal Collection Sub-subaccount
on such Distribution Date, if any, shall be distributed to the owner of the
Series 1998-2 Subordinated Interest.
Further, on any other Business Day during the Series 1998-2
Amortization Period, funds may be distributed from the Series 1998-2 Principal
Collection Sub-subaccount to the Purchasers in accordance with Section 2.7(a) of
this Supplement.
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 VFC Certificates:
SECTION 4A.1. DISTRIBUTIONS. (a) On each Distribution Date, the
Trustee shall distribute to each Purchaser its applicable pro rata share (based
on each such Purchaser's Series 1998-2 Invested Amount) of the amount to be
distributed to the Purchasers pursuant to Article III.
(b) All allocations and distributions hereunder shall be in accordance
with the Daily Report and the Monthly Settlement Statement and shall be made in
accordance with the provisions of Section 11.4 hereof and subject to Section
3.1(g) of the Agreement.
SECTION 4A.2. DAILY REPORTS. The Servicer shall provide the Funding
Agent and the Trustee with a Daily Report in accordance with subsection 4.1(a)
of the Servicing Agreement. The Funding Agent shall make copies of the Daily
Report available to the Purchasers at their reasonable request at the Funding
Agent's office in New York, New York.
SECTION 4A.3. STATEMENTS AND NOTICES. (a) MONTHLY SETTLEMENT
STATEMENTS. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and the Funding Agent (commencing with the Settlement Report Date
occurring on May 15, 1998) a Monthly Settlement Statement in the Form of Exhibit
E setting forth, among other things, the Loss Reserve Ratio, the Dilution
Reserve Ratio, the Minimum Ratio, the Carrying Cost Reserve Ratio, the Servicing
Reserve Ratio and the components of the calculation thereof, the Series
42
1998-2 Monthly Interest, the Additional Interest, the Series 1998-2 Monthly
Servicing Fee, the Commitment Fee and the Series 1998-2 Monthly Principal
Payment, each as recalculated for the period until the next succeeding
Settlement Report Date. The Funding Agent shall forward a copy of each
Monthly Settlement Statement to any Purchaser upon request by such Purchaser.
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 CERTIFICATEHOLDERS' 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 Purchaser, 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 Purchaser, 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 Purchasers to prepare
their tax returns. 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 or the Funding
Agent and to the Purchasers, 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 1998-2, the Company or the
Servicer, as the case may be, shall give prompt written notice thereof to the
Trustee and the Funding Agent. As promptly as reasonably practicable after
its receipt of notice of the occurrence of an Early Amortization Event with
respect to Series 1998-2, 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) to the Funding Agent, who in
turn shall give notice to each Purchaser. In addition, on the Business Day
preceding each day on which a distribution of principal is to be made during
the Series 1998-2 Amortization Period, the Servicer shall direct the Funding
Agent to send notice to each Purchaser, which notice shall set forth the
amount of principal to be distributed on the related date to the Purchasers
with respect to the outstanding VFC Certificates.
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
43
applicable thereto) or any one of the following events (each, an "EARLY
AMORTIZATION EVENT") shall occur during the Series 1998-2 Revolving Period
with respect to the Series 1998-2 Interests:
(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 VFC Certificates or the Commitment Fee
within two Business Days of the date such interest or Commitment Fee is
due, (ii) failure on the part of the Servicer to direct any payment or
deposit to be made in respect of principal owing on any VFC 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 to duly observe or perform
in any material respect any of the covenants or agreements of the Company
set forth in Sections 2.7(b) or (l) or Section 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
the Funding Agent or Purchasers representing 25% or more of the Series
1998-2 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
Purchasers (i) proves to have been incorrect in any material respect when
made or when deemed made and (ii) continues to be incorrect until 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 Purchasers representing 25% or more of the Series
1998-2 Invested Amount to the Company and the Trustee; PROVIDED, HOWEVER,
that an Early Amortization Event with respect to the Series 1998-2
Interests 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 provisions of any Pooling and Servicing Agreement
within ten Business Days of the day on which the Company was obligated to
do so;
44
(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) shall have occurred with respect to Core-Xxxx and be continuing
under the Receivables Sale Agreement;
(f) a Change in Control shall have occurred;
(g) the Series 1998-2 Allocated Receivables Amount shall be less than
the Series 1998-2 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 either thereof shall so
assert; or
(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) Core-Xxxx or any of its Subsidiaries shall default in the
observance or performance of any agreement or condition relating to any of
its outstanding Indebtedness (including, without limitation, Indebtedness
outstanding under the Credit Agreement) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which
45
default or other event or condition is to cause such Indebtedness to
become due prior to its stated maturity; PROVIDED, HOWEVER, that no Early
Amortization Event shall be deemed to occur under this paragraph unless
the aggregate amount of Indebtedness in respect of which any default or
other event or condition referred to in this paragraph shall have
occurred shall be equal to at least $5,000,000;
(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;
(m) the Trust shall issue any Series of Investor Certificates other
than the VFC Certificates or the Series 1998-1 Certificates; or
(n) one or more judgments or decrees shall be entered against the
Servicer or the Company involving in the aggregate a liability (not paid or
fully covered by insurance) of $1,000,000 or more and such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof.
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, and
paragraph (m) above, automatically without any notice or action on the part of
the Trustee or Purchasers, 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 Required APA Banks 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 1998-2 (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 1998-2 Allocated Receivables Amount shall no longer be less than the
Series 1998-2 Target Receivables Amount and (ii) so long as the Series 1998-2
Allocated Receivables Amount continues to be equal to or greater than the Series
1998-2 Target Receivables Amount, the Majority Purchasers shall have waived the
occurrence of such event.
46
ARTICLE VI
SERVICING FEE
SECTION VI.1. SERVICING COMPENSATION. A monthly servicing fee (the
"SERIES 1998-2 MONTHLY SERVICING FEE") shall be payable to the Servicer on each
Distribution Date for the 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 daily average Aggregate Commitment Amount for such Settlement Period and the
denominator of which is the sum of (i) the Aggregate Invested Amounts (other
than the Series 1998-2 Invested Amount and the Invested Amount in respect of any
variable funding certificate of any other Outstanding Series) on the first day
of such Settlement Period and (ii) the Aggregate Commitment Amount on the first
day of such Settlement Period plus the Aggregate Commitment amount for any
variable funding certificate of any other Outstanding Series.
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION VII.1. ILLEGALITY. Notwithstanding any other provision
herein, if, after the Issuance Date, the adoption of or any change in any
Requirement of Law or in the interpretation, administration or application
thereof shall make it unlawful for any APA Bank to make or maintain its
portion of the VFC Certificateholders' Interest in any Eurodollar Tranche and
such APA Bank shall notify in writing the Funding Agent, the Trustee and the
Company, then the portion of each Eurodollar Tranche applicable to such APA
Bank shall thereafter be calculated by reference to the ABR. If any such
change in the method of calculating interest occurs on a day which is not the
last day of the Eurodollar Period with respect to any Eurodollar Tranche, the
Company shall pay to the Funding Agent for the account of such APA Bank the
amounts, if any, as may be required pursuant to Section 7.4.
SECTION VII.2. INCREASED COSTS. (a) If any Change in Law (except
with respect to Taxes which shall be governed by Section 7.3) shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any APA Bank (except any such reserve
requirement reflected in the Eurodollar Rate); or
(ii) impose on any APA Bank or the London interbank market any
other condition affecting the Transaction Documents or the funding of
Eurodollar Tranches by such APA Bank;
47
and the result of any of the foregoing shall be to increase the cost to such APA
Bank of making, converting into, continuing or maintaining Eurodollar Tranches
(or maintaining its obligation to do so) or to reduce any amount received or
receivable by such APA Bank hereunder (whether principal, interest or
otherwise), then the Company will pay to such APA Bank such additional amount or
amounts as will compensate such APA Bank for such additional costs incurred or
reduction suffered.
(b) If any APA Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such APA Bank's capital or the capital of any corporation
controlling such APA Bank as a consequence of its obligations hereunder to a
level below that which such APA Bank or such corporation could have achieved
but for such Change in Law (taking into consideration such APA Bank's or such
corporation's policies with respect to capital adequacy), then from time to
time, the Company shall pay to such APA Bank such additional amount or
amounts as will compensate such APA Bank for any such reduction suffered.
(c) A certificate of an APA Bank setting forth the amount or amounts
necessary to compensate such APA Bank as specified in subsections (a) and (b)
of this Section 7.2 shall be delivered to the Company (with a copy to the
Funding Agent) and shall be conclusive absent manifest error. The agreements
in this Section shall survive the termination of this Supplement and the
Agreement and the payment of all amounts payable hereunder and thereunder.
(d) Failure or delay on the part of any APA Bank to demand
compensation pursuant to this Section 7.2 shall not constitute a waiver of
such APA Bank's right to demand such compensation; PROVIDED that the Company
shall not be required to compensate an APA Bank pursuant to this Section 7.2
for any increased costs or reductions incurred more than 270 days prior to
the date that such APA Bank notifies the Company of the Change in Law giving
rise to such increased costs or reductions and of such APA Bank's intention
to claim compensation therefor; PROVIDED FURTHER that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION VII.3. TAXES. (a) Any and all payments by or on account
of any obligation of the Company hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that
if the Company shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 7.3) the Funding
Agent or such APA Bank receives an amount equal to the sum that it would have
received had no such deductions been made, (ii) the Company shall make such
deductions and (iii) the Company shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
48
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Funding Agent and each APA Bank
within the later of 10 days after written demand therefor and the
Distribution Date next following such demand for the full amount of any
Indemnified Taxes or Other Taxes paid by the Funding Agent or such APA Bank
on or with respect to any payment by or on account of any obligation of the
Company hereunder or under any other Transaction Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 7.3) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Company by the Funding
Agent or an APA Bank shall be conclusive absent manifest error. Any payments
made by the Company pursuant to this subsection shall be made solely from
funds available to the Company which are not otherwise required to be applied
to the payment of any amounts (other than amounts payable to the Company)
pursuant to any Pooling and Servicing Agreements, shall be non-recourse other
than with respect to funds in excess of the funds needed to make such
payment, and shall not constitute a claim against the Company to the extent
that insufficient funds exist to make such payment. The agreements in
this subsection shall survive the termination of this Supplement and the
Agreement and the payment of all amounts payable hereunder and thereunder.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Funding Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Funding Agent.
(e) The Funding Agent and any APA Bank that is entitled to an
exemption from or reduction of an Indemnified Tax or Other Tax with respect
to payments made under this Supplement and the Agreement shall (but with
respect to any Indemnified Tax or Other Tax arising from a Change in Law,
only to the extent the Funding Agent or such APA Bank is legally able to do
so) deliver to the Company (with a copy to the Funding Agent) such properly
completed and executed documentation prescribed by applicable law and
reasonably requested by the Company on the later of (i) 30 Business Days
after such request is made and the applicable forms are provided to such APA
Bank or (ii) 30 Business Days before prescribed by applicable law as will
permit such payments to be made without withholding or with an exemption from
or reduction of Indemnified Taxes or Other Taxes.
(f) If the Funding Agent or an APA Bank (or a Transferee) receives
a refund solely in respect of Taxes or Other Taxes, it shall pay over such
refund to the Company to the extent that it has already received indemnity
payments or additional amounts pursuant to
49
this Section 7.3 with respect to such Taxes or Other Taxes giving rise to the
refund, net of all out-of-pocket expenses and without interest (other than
interest paid by the relevant Governmental Authority with respect to such
refund); PROVIDED, HOWEVER, that the Company shall, upon request of the
Funding Agent or such APA Bank (or Transferee), repay such refund (plus
interest or other charges imposed by the relevant Governmental Authority) to
the Funding Agent or such APA Bank (or Transferee) if the Funding Agent or
such APA Bank (or Transferee) is required to repay such refund to such
Governmental Authority. Nothing contained herein shall require the Funding
Agent or an APA Bank (or Transferee) to make its tax returns (or any other
information relating to its taxes which it deems confidential) available to
the Company or any other Person.
SECTION VII.4. BREAK FUNDING PAYMENTS. The Company agrees to
indemnify each APA Bank and to hold each APA Bank harmless from any loss or
expense which such APA Bank may sustain or incur as a consequence of (a)
default by the Company in making a borrowing of, conversion into or
continuation of a Eurodollar Tranche after the Company has given irrevocable
notice requesting the same in accordance with the provisions of this
Supplement, or (b) default by the Company in making any prepayment in
connection with a Decrease after the Company has given irrevocable notice
thereof in accordance with the provisions of Section 2.7 of this Supplement
or (c) the making of a prepayment of a Eurodollar Tranche prior to the
termination of the Eurodollar Period for such Eurodollar Tranche. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid or not
so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day
of the Eurodollar Period (or in the case of a failure to borrow, convert or
continue, the Eurodollar Period that would have commenced on the date of such
prepayment or of such failure) in each case at the Eurodollar Rate for such
Eurodollar Tranche provided for herein over (ii) the amount of interest (as
reasonably determined by such APA Bank) which would have accrued to such APA
Bank on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market; PROVIDED that any
payments made by the Company pursuant to this subsection shall be made solely
from funds available to the Company which are not otherwise required to be
applied to the payment of any amounts (other than amounts payable to the
Company) pursuant to any Pooling and Servicing Agreements, shall be
non-recourse other than with respect to funds in excess of the funds needed
to make such payment, and shall not constitute a claim against the Company to
the extent that insufficient funds exist to make such payment. This covenant
shall survive the termination of this Supplement and the Agreement and the
payment of all amounts payable hereunder and thereunder. A certificate as to
any additional amounts payable pursuant to the foregoing sentence submitted
by any APA Bank to the Company shall be conclusive absent manifest error.
SECTION VII.5. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Eurodollar Period:
50
(a) the Funding Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Eurodollar Period, or
(b) the Funding Agent is advised by the Majority Purchasers that the
Eurodollar Rate for such Eurodollar Period will not adequately and fairly
reflect the cost to such Purchasers of making or maintaining the Eurodollar
Tranches during such Eurodollar Period,
then the Funding Agent shall forthwith give telecopy or telephonic notice
thereof to the Company, the Trustee and the Purchasers, whereupon until the
Funding Agent notifies the Company and the Trustee that the circumstances
giving rise to such notice no longer exist, the Available Pricing Amount
shall not be allocated to any Eurodollar Tranche.
SECTION VII.6. MITIGATION OBLIGATIONS. (a) If any APA Bank requests
compensation under Section 7.2, or if the Company is required to pay any
additional amount to any APA Bank or any Governmental Authority for the account
of any APA Bank pursuant to Section 7.3, then such APA Bank shall use reasonable
efforts to designate a different lending office for funding or booking its
obligations under this Supplement and the Agreement or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such APA Bank, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 7.2 or 7.3, as the case
may be, in the future and (ii) would not subject such APA Bank to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
APA Bank. The Company hereby agrees to pay all reasonable costs and expenses
incurred by any APA Bank in connection with any such designation or assignment.
(b) If any APA Bank requests compensation under Section 7.2, or if
the Company is required to pay any additional amount to any APA Bank or any
Governmental Authority for the account of any APA Bank pursuant to Section
7.3, or if any APA Bank defaults in its obligations hereunder, then the
Company may, at its sole expense and effort, upon notice to such APA Bank and
the Funding Agent, require such APA Bank to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.11), all its interests, rights and obligations under this
Supplement to an assignee that shall assume such obligations (which assignee
may be another APA Bank, if an APA Bank accepts such assignment); PROVIDED
that (i) the Company shall have received the prior written consent of the
Funding Agent, which consent shall not unreasonably be withheld, (ii) such
APA Bank shall have received payment of an amount equal to its Series 1998-2
Purchaser Invested Amount, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of
such Series 1998-2 Purchaser Invested Amount and accrued interest and fees)
or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 7.2
or payments required to be made pursuant to Section 7.3, such assignment
51
will result in a reduction in such compensation or payments. An APA Bank
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such APA Bank or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES, COVENANTS
SECTION VIII.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE SERVICER. The Company and the Servicer each hereby represents and
warrants to the Trustee, the Funding Agent and each of the Purchasers 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 as of the date of each Increase.
SECTION VIII.2. COVENANTS OF THE COMPANY AND THE SERVICER. The
Company and the Servicer hereby agree, in addition to 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) within 60 days of 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) they shall afford the Funding Agent or any representatives of the
Funding Agent access to all records relating to the Receivables at any
reasonable time during regular business hours, upon reasonable prior notice
(and without prior notice if an Early Amortization Event has occurred),
according to the Servicer's normal security and confidentiality
requirements, for purposes of inspection and shall permit the
52
Funding Agent or any representative of the Funding Agent to visit any of
the Company's or the Servicer's, as the case may be, offices or
properties during regular business hours and as often as may reasonably
be desired to discuss the business, operations, properties, financial and
other conditions of the Company or the Servicer with their respective
officers and employees and with their independent certified public
accountants; PROVIDED that Funding Agent shall notify the Company or the
Servicer, as the case may be, prior to any contact with such accountants
and shall give the Company or the Servicer the opportunity to participate
in such discussions;
(d) neither the Company nor the Servicer shall take any action, nor
permit any Seller to take any action, requiring the satisfaction of the
Rating Agency Condition pursuant to any Transaction Document without the
prior written consent of the Majority Purchasers;
(e) it 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;
(f) it shall only direct investments in Eligible Investments which are
rated by Xxxxx'x and, for purposes of Xxxxx'x, references in the definition
of Eligible Investments to "one of the two highest rating category" shall
be deemed to read "the highest rating category".
SECTION VIII.3. COVENANTS OF THE SERVICER. The Servicer hereby
agrees that:
(a) it shall provide to the Funding Agent (i) no later than 45 days
after the Initial Closing Date and (ii) in the case of an addition of a
Seller, prior to the related Seller Addition Date (as defined in the
Receivables Sale Agreement), evidence that each Seller, or such Seller, as
the case may be, maintains disaster recovery systems and back-up computer and
other information management systems that are reasonably satisfactory to the
Funding Agent;
(b) it shall provide to the Funding Agent, simultaneously with
delivery to the Trustee or the Rating Agencies, all reports, notices,
certificates, statements and other documents required to be delivered to the
Trustee or the Rating Agencies pursuant to the Agreement, the Servicing
Agreement and the other Transaction Documents and furnish to the Funding
Agent promptly after receipt thereof a copy of each material notice, material
demand or other material communication (excluding routine communications)
received by or on behalf of the Company or the Servicer with respect to the
Transaction Documents; and
(c) it shall provide notice to the Funding Agent of the appointment
of a Successor Servicer pursuant to Section 6.2 of the Servicing Agreement.
53
SECTION VIII.4. OBLIGATIONS UNAFFECTED. The obligations of the
Company and the Servicer to the Funding Agent and the Purchasers under this
Supplement shall not be affected by reason of any invalidity, illegality or
irregularity of any of the Receivables or any sale of any of the Receivables.
ARTICLE IX
CONDITIONS PRECEDENT
SECTION IX.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SUPPLEMENT.
This Supplement shall become effective on the date (the "EFFECTIVE DATE") on
which the following conditions precedent have been satisfied:
(a) DOCUMENTS. The Funding Agent shall have received an original copy
for the Initial Purchaser and each APA Bank, each executed and delivered in
form and substance satisfactory to it of (i) the Agreement, executed by a
duly authorized officer of each of the Company, the Servicer and the
Trustee, (ii) this Supplement, executed by a duly authorized officer of
each of the Company, the Servicer, the Trustee, the Funding Agent, the
Initial Purchaser and the APA Banks and (iii) the other Transaction
Documents, each duly executed by the parties thereto.
(b) CORPORATE DOCUMENTS; CORPORATE PROCEEDINGS OF THE COMPANY AND
SERVICER. The Funding Agent shall have received, with a copy for the
Initial Purchaser and each APA Bank, from the Company, each Seller and the
Servicer, true and complete copies of:
(i) the certificate of incorporation, including all
amendments thereto, of such Person, certified as of a recent date by the
Secretary of State or other appropriate authority of the state of
incorporation, as the case may be, and a certificate of compliance, of
status or of good standing, as and to the extent applicable, of each
such Person as of a recent date, from the Secretary of State or other
appropriate authority of such jurisdiction;
(ii) a certificate of the Secretary of such Person, dated the
Effective Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws of such Person, as in effect on the
Effective Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto
is a true and complete copy of the resolutions, in form and substance
reasonably satisfactory to the Funding Agent, of the Board of
Directors of such Person or committees thereof authorizing the
execution, delivery and performance of the Transaction Documents to
which it is a party and the transactions contemplated thereby, and
that such resolutions
54
have not been amended, modified, revoked or rescinded and are in
full force and effect, (C) that the certificate of incorporation of
such Person has not been amended since the date of the last
amendment thereto shown on the certificate of good standing (or its
equivalent) furnished pursuant to clause (i) above and (D) as to
the incumbency and specimen signature of each officer executing any
Transaction Documents or any other document delivered in connection
herewith or therewith on behalf of such Person; and
(iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to clause (ii) above.
(c) GOOD STANDING CERTIFICATES. The Funding Agent shall have received
copies of certificates of compliance, of status or of good standing, dated
as of a recent date, from the Secretary of State or other appropriate
authority of such jurisdiction, with respect to the Company, the Servicer
and each Seller, in each State where the ownership, lease or operation of
property or the conduct of business requires it to qualify as a foreign
corporation, except where the failure to so qualify would not have a
material adverse effect on the business, operations, properties or
condition (financial or otherwise) of the Company, the Servicer or such
Seller, as the case may be.
(d) CONSENTS, LICENSES, APPROVALS, ETC. The Funding Agent shall have
received, with a counterpart for the Initial Purchaser and each APA Bank,
certificates dated the date hereof of a Responsible Officer of the Company,
the Servicer and each Seller either (i) attaching copies of all material
consents, licenses and approvals required in connection with the execution,
delivery and performance by the Company, the Servicer or such Seller, as
the case may be, of this Supplement or the Receivables Sale Agreement, as
the case may be, and the validity and enforceability of this Supplement and
the Agreement against the Company and the Servicer and the Receivables Sale
Agreement against such Seller, and such consents, licenses and approvals
shall be in full force and effect or (ii) stating that no such consents,
licenses or approvals are so required.
(e) NO LITIGATION. The Funding Agent shall have received confirmation
that there is no pending or, to their knowledge after due inquiry,
threatened action or proceeding affecting Core-Xxxx or any of its
Subsidiaries before any Governmental Authority that could reasonably
be expected to have a Material Adverse Effect with respect to Core-Xxxx
and its Subsidiaries taken as a whole.
(f) LIEN SEARCHES. The Funding Agent shall have received a written
search report listing all effective financing statements that name the
applicable Seller or the Company as debtor or assignor and that are filed
in the jurisdictions in which filings were made pursuant to paragraph (h)
below and in any other jurisdictions that
55
the Funding Agent determines are necessary or appropriate, together with
copies of such financing statements (none of which, except for those
described in paragraph (g) below shall cover any Receivables or
Receivables Property), and tax and judgment lien searches showing no such
liens that are not permitted by the Transaction Documents
(g) UCC CERTIFICATE. The Funding Agent shall have received from each
Seller and the Company a UCC Certificate, completed in a manner
satisfactory to the Funding Agent, duly executed by a Responsible Officer
of such Seller or the Company, as the case may be, and dated the Issuance
Date.
(h) FILINGS, REGISTRATIONS AND RECORDINGS. Any documents (including,
without limitation, financing statements) required to be filed in order (i)
to perfect the sale of the Receivables by each Seller to the Company
pursuant to the Receivables Sale Agreement and (ii) to create, in favor of
the Trustee, a perfected ownership/security interest in the Trust Assets
under the Agreement with respect to which an ownership/security interest
may be perfected by a filing under the UCC or other comparable statute,
shall, in each case, have been properly prepared and executed for immediate
filing in each office in each jurisdiction listed in the Agreement or the
Receivables Sale Agreement, as the case may be, and such filings are the
only filings required in order to perfect the sale of the Receivables to
the Company under the Receivables Sale Agreement or to the Trust, under the
Agreement, as the case may be, in the jurisdictions listed therein. The
Funding Agent shall have received evidence reasonably satisfactory to it of
each such filing, registration or recordation and reasonably satisfactory
evidence of the payment of any necessary fee, tax or expense relating
thereto.
(i) LEGAL OPINIONS. The Funding Agent shall have received, with a
counterpart for the Initial Purchaser and each APA Bank and the Trustee,
opinions of counsel to the Company and the Servicer, dated the Issuance
Date, as to corporate, tax, bankruptcy ("true sale" and "non-substantive
consolidation"), perfection and priority of security and/or ownership
interests and other matters in form and substance acceptable to the Funding
Agent and their counsel.
(j) FEES. The Funding Agent shall have received payment of all fees
and other amounts due and payable to it, the Initial Purchaser or the APA
Banks on or before the Effective Date, pursuant to the Fee Letter.
(k) ESTABLISHMENT OF ACCOUNTS. The Funding Agent (x) shall have
received evidence reasonably satisfactory to it that the Collection
Account, the Lockbox Accounts, the Eligible Segregated Account and all
other Trust Accounts shall have been established in accordance with the
terms and provisions of the Pooling and Servicing Agreements, and (y) shall
otherwise be satisfied with the arrangements for collection of the
Receivables pursuant thereto.
56
(l) POLICIES. The Funding Agent shall have received, with sufficient
copies for the Initial Purchaser and each APA Bank, a copy of the Policies
of each Seller, which shall be satisfactory in form and substance to the
Funding Agent.
(m) FINANCIAL STATEMENTS. The Funding Agent shall have received, with
a counterpart for the Initial Purchaser, each APA Bank and the Trustee, on
or prior to the Effective Date consolidated balance sheets, consolidated
statements of income, consolidated and consolidating statements of
shareholders' equity and consolidated statements of cash flows of Core-Xxxx
and its consolidated Subsidiaries as of and for the Fiscal Years ended
December 31, 1995, and December 31, 1996 and December 31, 1997, in each
case audited by and accompanied by the opinion of KPMG Peat Marwick LLP,
which shall be satisfactory in form and substance to the Funding Agent, the
Initial Purchaser and the Trustee.
(n) EXECUTION OF THE CREDIT AGREEMENT. The Credit Agreement shall
have been executed prior to or on the date hereof.
(o) INSURANCE. The Funding Agent shall have received, with a
counterpart for each Purchaser and the Trustee, on or prior to the
Effective Date a schedule listing all policies of product liability
insurance maintained by each Seller and certification by a Responsible
Officer of such Seller with respect thereto.
(p) BACK-UP SERVICING ARRANGEMENTS. The Funding Agent shall have
received evidence that each Seller maintains disaster recovery systems and
back-up computer and other information management systems that, in the
Funding Agent's reasonable judgment, are sufficient to protect such
Seller's business against material interruption or loss or destruction of
its primary computer and information management systems.
(q) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company and the Servicer in the Agreement and this
Supplement shall be true and correct in all material respects.
ARTICLE X
THE FUNDING AGENT
SECTION X.1. APPOINTMENT. Each Purchaser hereby irrevocably
designates and appoints the Funding Agent as the agent of such Purchaser
under this Supplement and each such Purchaser irrevocably authorizes the
Funding Agent, in such capacity, to take such action on its behalf under the
provisions of this Supplement and to exercise such powers and perform such
duties as are expressly delegated to the Funding Agent by the terms of this
Supplement, together with such other powers as are reasonably incidental
thereto.
57
Notwithstanding any provision to the contrary elsewhere in this Supplement,
the Funding Agent shall not have any duties or responsibilities except those
expressly set forth herein, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Supplement or otherwise exist against the
Funding Agent.
SECTION X.2. DELEGATION OF DUTIES. The Funding Agent may execute
any of its duties under this Supplement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel (who may be
counsel for the Company or the Servicer), independent public accountants and
other experts selected by it concerning all matters pertaining to such
duties. The Funding Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with reasonable
care.
SECTION X.3. EXCULPATORY PROVISIONS. Neither the Funding Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with the Agreement or this
Supplement (x) with the consent or at the request of the Majority Purchasers
or (y) in the absence of its own gross negligence or willful misconduct or
(ii) responsible in any manner to any of the Purchasers for any recitals,
statements, representations or warranties made by the Company or any officer
thereof contained in this Supplement or any other Transaction Document or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Funding Agent under or in connection with, this
Supplement or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Supplement
or any other Transaction Document or for any failure of the Company to
perform its obligations hereunder or thereunder. The Funding Agent shall not
be under any obligation to any Purchaser to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Supplement or any other Transaction Document, or to
inspect the properties, books or records of the Company.
SECTION X.4. RELIANCE BY FUNDING AGENT. The Funding Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
Certificate, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company or the Servicer), independent accountants and other experts selected
by the Funding Agent and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts. The Funding Agent may deem and treat the
payee of any Certificate as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Funding Agent. The Funding Agent shall be fully justified in
failing or refusing to take any action under this Supplement or any other
Transaction Document unless it shall first receive such advice or
58
concurrence of the Majority Purchasers as it deems appropriate or it shall
first be indemnified to its satisfaction by the Purchasers against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Funding Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this
Supplement and the other Transaction Documents in accordance with a request
of the Majority Purchasers, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Purchasers.
SECTION X.5. NOTICE OF SERVICER DEFAULT OR EARLY AMORTIZATION
EVENT OR POTENTIAL EARLY AMORTIZATION EVENT. The Funding Agent shall not be
deemed to have knowledge or notice of the occurrence of any Servicer Default
with respect to the Servicer or any Early Amortization Event or Potential
Early Amortization Event hereunder unless the Funding Agent has received
notice from a Purchaser, the Company or the Servicer referring to the
Agreement or this Supplement, describing such Servicer Default or Early
Amortization Event or Potential Early Amortization Event and stating that
such notice is a "notice of a Servicer Default with respect to the Servicer"
or a "notice of an Early Amortization Event or Potential Early Amortization
Event", as the case may be. In the event that the Funding Agent receives
such a notice, the Funding Agent shall give notice thereof to the Purchasers,
the Trustee, the Company and the Servicer. The Funding Agent shall take such
action with respect to such Servicer Default or Early Amortization Event or
Potential Early Amortization Event as shall be reasonably directed by the
Majority Purchasers, PROVIDED that unless and until the Funding Agent shall
have received such directions, the Funding Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Servicer Default or Early Amortization Event or Potential
Early Amortization Event as it shall deem advisable in the best interests of
the Purchasers.
SECTION X.6. NON-RELIANCE ON THE FUNDING AGENT AND OTHER
PURCHASERS. Each Purchaser expressly acknowledges that neither the Funding
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
it and that no act by the Funding Agent hereinafter taken, including any
review of the affairs of the Company, shall be deemed to constitute any
representation or warranty by the Funding Agent to any Purchaser. Each
Purchaser represents to the Funding Agent that it has, independently and
without reliance upon the Funding Agent or any other Purchaser, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and made
its own decision to enter into this Supplement. Each Purchaser also
represents that it will, independently and without reliance upon the Funding
Agent or any other Purchaser, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Supplement and the other Transaction Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Company. Except for notices, reports and other documents expressly
required to be
59
furnished to the Purchasers by the Funding Agent hereunder, the Funding Agent
shall not have any duty or responsibility to provide any Purchaser with any
credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of the
Company which may come into the possession of the Funding Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION X.7. INDEMNIFICATION. The Purchasers agree to indemnify
the Funding Agent in its capacity as such (to the extent not reimbursed by
the Company and the Servicer and without limiting the obligation of the
Company and the Servicer to do so), ratably according to their respective
Series 1998-2 Purchaser Invested Amounts in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time be
imposed on, incurred by or asserted against the Funding Agent in any way
relating to or arising out of the Commitments, this Supplement, any of the
other Transaction Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Funding Agent under or in connection with any
of the foregoing; PROVIDED that no Purchaser shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Funding Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of all amounts payable
hereunder.
SECTION X.8. THE FUNDING AGENT IN ITS INDIVIDUAL CAPACITY. The
Funding Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Company, the Servicer or
any of their Affiliates as though the Funding Agent were not the Funding
Agent hereunder. With respect to any VFC Certificate held by the Funding
Agent, the Funding Agent shall have the same rights and powers under this
Supplement and the other Transaction Documents as any Purchaser and may
exercise the same as though it were not the Funding Agent, and the terms "APA
Bank" and "Purchaser" shall include the Funding Agent in its individual
capacity.
SECTION X.9. SUCCESSOR FUNDING AGENT. The Funding Agent may
resign as Funding Agent upon 10 days' notice to the Purchaser and the
Company, such resignation not to be effective until a successor funding agent
is appointed. If the Funding Agent shall resign as Funding Agent under this
Supplement, then the Majority Purchasers shall appoint from among the
Purchasers a successor administrative agent for the Purchasers, which
successor administrative agent shall be approved by the Company and the
Servicer (which approval shall not be unreasonably withheld), whereupon such
successor administrative agent shall succeed to the rights, powers and duties
of the Funding Agent, and the term "Funding Agent" shall mean such successor
administrative agent effective upon such appointment and approval, and the
former Funding Agent's rights, powers and duties as Funding Agent shall be
terminated, without any other or further act or deed on the part of such
former Funding Agent
60
or any of the parties to this Supplement. After any retiring Funding Agent's
resignation as Funding Agent, the provisions of this Article 10 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it
was Funding Agent under this Supplement.
ARTICLE XI
MISCELLANEOUS
SECTION XI.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 XI.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 XI.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 Funding Agent or the Majority Purchasers more
fully to effect the purposes of this Supplement and the sale of the VFC
Certificates hereunder, including, without limitation, in the case of the
Company and the Servicer, the execution of any financing or registration
statements or similar documents or notices or continuation statements
relating to the Receivables and the other Trust Assets for filing or
registration under the provisions of the UCC or similar legislation of any
applicable jurisdiction.
SECTION XI.4. PAYMENTS. Each payment to be made hereunder shall
be made on the required payment date in lawful money of the United States and
in immediately available funds, if to the Purchasers, at the office of the
Funding Agent set forth in Section 11.9. Except in the circumstances
described in subsection 2.6(c), then on each Distribution Date, the Funding
Agent shall remit in like funds to each Purchaser its applicable PRO RATA
share (based on each such Purchaser's Series 1998-2 Purchaser Invested
Amount) of each such payment received by the Funding Agent for the account of
the Purchasers.
SECTION XI.5. COSTS AND EXPENSES. The Company agrees to pay all
reasonable out-of-pocket costs and expenses of the Funding Agent (including,
without limitation, reasonable fees and disbursements of one counsel to the
Funding Agent) in connection with (i) the preparation, execution and delivery
of this Supplement, the Agreement and the other Transaction Documents and
amendments or waivers of any such documents and
61
(ii) the enforcement by the Funding Agent of the obligations and liabilities
of the Company and the Servicer under the Agreement, this Supplement, the
other Transaction Documents or any related document; PROVIDED that any
payments made by the Company pursuant to this subsection shall be made solely
from funds available to the Company which are not otherwise required to be
applied to the payment of any amounts (other than amounts payable to the
Company) pursuant to any Pooling and Servicing Agreements, shall be
non-recourse other than with respect to funds in excess of the funds needed
to make such payment, and shall not constitute a claim against the Company to
the extent that insufficient proceeds exist to make such payment.
SECTION XI.6. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee, the Funding
Agent or any Purchaser, 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 XI.7. AMENDMENTS. (a) Subject to subsection (c) of this
Section 11.7, this Supplement may be amended in writing from time to time by
the Servicer, the Company and the Trustee, with the consent of the Funding
Agent but without the consent of any holder of any outstanding VFC
Certificate, to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein or to add
any other provisions to or change in any manner or eliminate any of the
provisions with respect to matters or questions raised under this Supplement
which shall not be inconsistent with the provisions of any Pooling and
Servicing Agreement; PROVIDED, HOWEVER, that such action shall not, as
evidenced by an Officer's Certificate or, to the extent in the reasonable
view of the Company, a question of law exists, an Opinion of Counsel
delivered to the Trustee, adversely affect in any material respect the
interests of the VFC Certificateholders. The Trustee may, but shall not be
obligated to, enter into any such amendment pursuant to this paragraph or
paragraph (b) below which affects the Trustee's rights, duties or immunities
under any Pooling and Servicing Agreement or otherwise.
(b) Subject to subsection (c) of this Section 11.7, this Supplement
may also be amended in writing from time to time by the Servicer, the Company
and the Trustee with the consent of the Majority Purchasers for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Supplement or of modifying in any manner the rights of
the VFC Certificateholders (including, without limitation, the acceleration
of the payment of sums payable to or for the account of the Purchasers under
any provision of this Supplement); PROVIDED, HOWEVER, that no such amendment
shall, unless signed or consented to in writing by all Purchasers, (i) extend
the time for payment, or reduce the amount, of any sum payable to or for the
account of any Purchaser under any provision of this Supplement or extend the
Series 1998-2 Termination Date, (ii) subject any Purchaser to
62
any additional obligation (including, without limitation, any change in the
determination of any amount payable by any Purchaser) or (iii) change the
Aggregate Commitment Amount, the amount of any interest or fees or the
percentage of Purchasers which shall be required for any action under this
subsection or any other provision of this Supplement.
(c) Any amendment hereof can be effected without the Funding
Agent's being party thereto; PROVIDED, HOWEVER, that no such amendment,
modification or waiver of this Supplement that affects rights or duties of
the Funding Agent shall be effective unless the Funding Agent shall have
given its prior written consent thereto.
(d) No amendment hereof shall be effective until the Rating Agency
Condition has been satisfied (unless Series 1998-2 has not been rated, in
which case this subsection 11.7(d) shall not apply).
SECTION XI.8. 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 XI.9. 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 the Funding Agent, the Initial
Purchaser, each APA Bank and the Rating Agencies (if the Series 1998-2 has
been rated), in writing, 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 facsimile notice, when received, (A) in the case of each APA Bank, at
its address set forth on Schedule 1 hereto, (B) addressed as follows in the
case of the Funding Agent and (C) addressed to the Rating Agencies (if the
Series 1998-2 has been rated) as notified by such Rating Agencies; or to such
other address as may be hereafter notified by the respective parties hereto:
Funding Agent: The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Fax: 000-000-0000
63
S&P: Standard & Poor's Ratings Service
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Surveillance Group
Fax: 000-000-0000
Moody's: Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxx
Fax: 000-000-0000
Initial Purchaser: Park Avenue Receivables Corporation
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Fax: 000-000-0000
SECTION XI.10. SUCCESSORS AND ASSIGNS. This Supplement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights under this Supplement without the prior written
consent of all of the Purchasers, the Initial Purchaser may not assign or
transfer any of its rights under this Supplement except as set forth in
Section 2.6 and each APA Bank may not assign or transfer any of its rights
under this Supplement except as set forth in Section 11.11.
SECTION XI.11. PARTICIPATIONS; ASSIGNMENTS. (a) Any APA Bank may,
in the ordinary course of its business and in accordance with applicable law,
at any time sell to one or more financial institutions or other entities
("PARTICIPANTS") participations in its VFC Certificate and its rights
hereunder pursuant to documentation in form and substance satisfactory to
such APA Bank and the Participant; PROVIDED, HOWEVER, that (i) in the event
of any such sale by an APA Bank to a Participant, (A) such APA Bank's
obligations under this Supplement shall remain unchanged, (B) such APA Bank
shall remain solely responsible for the performance thereof and (C) the
Company shall continue to deal solely and directly with such APA Bank in
connection with its rights and obligations under the Pooling and Servicing
Agreements, (ii) no APA Bank shall sell any participating interest under
which the Participant shall have rights to approve any amendment to, or any
consent or waiver with respect to, any Pooling and Servicing Agreement,
except to the extent that the approval of such amendment, consent or waiver
otherwise would require the unanimous consent of all APA Banks hereunder,
(iii) no sale by an APA Bank to a Participant shall be given effect if such
sale is not otherwise permitted under subsection 5.3(e) of the Agreement, and
(iv) each Participant shall, prior to becoming a Participant, execute and
deliver to the Funding Agent an
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Assignment/Participation Certification. The Company agrees that each APA
Bank is entitled, in its own name, to enforce for the benefit of, or as agent
for, any Participant any and all rights, claims and interest of such
Participant in respect of the Trust and the Company's obligations under this
Supplement. A Participant shall have the right to receive Article VII Costs
but only to the extent that the related selling APA Bank would have had such
right absent the sale of the related participation.
(b) Any APA Bank may, upon the satisfaction of all applicable
requirements under Section 5.3 of the Agreement, in the ordinary course of
its business and in accordance with applicable law, at any time sell all or
any part of its rights and obligations under this Supplement and the VFC
Certificate to (i) its Affiliates and to any other APA Bank and, (ii) upon
prior written notice to the Funding Agent and the Rating Agency, one or more
banks or other entities (an "ACQUIRING APA BANK"), in each case pursuant to a
commitment transfer supplement, substantially in the form of Exhibit C (the
"COMMITMENT TRANSFER SUPPLEMENT"), executed by such Acquiring APA Bank, such
assigning APA Bank and the Funding Agent (and, in the case of an Acquiring
APA Bank that is not then an existing APA Bank or an Affiliate thereof, by
the Company and the Servicer), and delivered to the Funding Agent for its
acceptance and recording in the Register. Notwithstanding the foregoing, no
APA Bank shall so sell its rights or obligations hereunder (other than to its
Affiliate or any other APA Bank) without the prior written consent of the
Company, which consent shall not be unreasonably withheld, and no APA Bank
shall sell its rights hereunder (w) if such sale is not otherwise permitted
under subsection 5.3(e) of the Agreement, (x) if such sale is for any amount
less than $5,000,000 (y) if such Acquiring APA Bank is not an Eligible
Assignee and (z) unless, prior to such sale, the purchaser of such rights
shall have executed and delivered to the Funding Agent and the Transfer Agent
and Registrar an Assignment/Participation Certification. Upon such execution,
delivery, acceptance and recording, (A) 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, a new VFC
Certificate in the name and the denomination determined pursuant to the
related Commitment Transfer Supplement and set forth in such written
direction and shall deliver such VFC Certificate to the Acquiring APA Bank in
accordance with such written direction, and (B) from and after the Transfer
Issuance Date determined pursuant to such Commitment Transfer Supplement, (I)
the Acquiring APA Bank thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and
obligations of an APA Bank hereunder with a Commitment as set forth therein
and (II) the transferor APA Bank thereunder shall, to the extent provided in
such Commitment Transfer Supplement, be released from its obligations under
this Supplement. Such Commitment Transfer Supplement shall be deemed to
amend this Supplement (including the Schedules attached hereto) to the
extent, and only to the extent, necessary to reflect the addition of such
Acquiring APA Bank as a "APA Bank" and the resulting adjustment of Commitment
Percentages arising from the purchase by such Acquiring APA Bank of all or a
portion of the rights and obligations of such transferor APA Bank under this
Supplement and the VFC Certificates.
65
(c) The Funding Agent shall maintain at its address referred to in
Section 11.9 a copy of each Commitment Transfer Supplement delivered to it.
(d) Upon its receipt of a Commitment Transfer Supplement executed
by a transferor APA Bank and an Acquiring APA Bank (and, in the case of a
Transferee that is not then an existing APA Bank or an Affiliate thereof, by
the Company and the Servicer) and a processing fee of $3,500, the Funding
Agent shall (i) promptly accept such Commitment Transfer Supplement and (ii)
on the Transfer Issuance Date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Initial Purchaser, the APA Banks, the
Servicer and the Company.
(e) The Company and the Servicer each authorizes each APA Bank to
disclose to any Participant or Acquiring APA Bank (each, a "TRANSFEREE") and
any prospective Transferee any and all financial information in such APA
Bank's possession concerning the Company, the Servicer or the Receivables
which has been delivered to such APA Bank by the Company or the Servicer
pursuant to this Supplement or which has been delivered to such APA Bank by
or on behalf of the Company in connection with such APA Bank's credit
evaluation of the Company, the Servicer, the Trust and the Trust Assets prior
to becoming a party to this Supplement; PROVIDED, HOWEVER, if any such
information is subject to a confidentiality agreement between such APA Bank
and the Company or the Servicer, the Transferee or prospective Transferee
shall have agreed to be bound by the terms and conditions of such
confidentiality agreement.
(f) Notwithstanding any other provisions herein, no transfer or
assignment of any interests or obligations of any APA Bank hereunder or any
grant of participations therein shall be permitted if such transfer,
assignment or grant would result in a prohibited transaction under Section
4975 of the Internal Revenue Code or Section 406 of ERISA or cause the Trust
Assets to be regarded as plan assets pursuant to 29 C.F.R. Section
2510.3-101.
SECTION XI.12. ADJUSTMENTS; SET-OFF. (a) If any Purchaser (a
"BENEFITTED PURCHASER") shall at any time receive in respect of its Series
1998-2 Invested Amount any distribution of principal, interest, Commitment
Fees or other fees, or any interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off or
otherwise) in a greater proportion than any such distribution received by any
other Purchaser, if any, in respect of such other Purchaser's Series 1998-2
Invested Amount, or interest thereon, such Benefitted Purchaser shall
purchase for cash from the other Purchasers such portion of each such other
Purchaser's interest in the VFC Certificates, or shall provide such other
Purchasers with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefitted Purchaser to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Purchasers; PROVIDED, HOWEVER, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Purchaser,
such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The Company
agrees that each Purchaser so
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purchasing a portion of the VFC Certificateholders' Interest may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Purchaser were the direct holder
of such portion.
(b) In addition to any rights and remedies of the Purchasers
provided by law, each Purchaser shall have the right, without prior notice to
the Company, any such notice being expressly waived by the Company to the
extent permitted by applicable law, upon any amount becoming due and payable
by the Company hereunder or under the VFC Certificates to set-off and
appropriate and apply against any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Purchaser to or for the credit or the account of the Company.
Each Purchaser agrees promptly to notify the Company and the Funding Agent
after any such set-off and application made by such Purchaser; PROVIDED that
the failure to give such notice shall not affect the validity of such set-off
and application.
SECTION XI.13. 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 XI.14. NO BANKRUPTCY PETITION. (a) The Funding Agent and
each Purchaser hereby covenants and agrees that, prior to the date which is
one year and one day after the later of (i) the last day of the Series 1998-2
Amortization Period and (ii) the last day of the amortization period of any
other Outstanding Series, it will not institute against, or join any other
Person in instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other similar
proceedings under any federal or state bankruptcy or similar law.
(b) The Company, the Servicer, the Trustee, the Funding Agent and
each APA Bank hereby covenants and agrees that, prior to the date which is
one year and one day after the payment in full of all outstanding Commercial
Paper, it will not institute against, or join any other Person in instituting
against, the Initial Purchaser any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other similar proceedings under any
federal or state bankruptcy or similar law.
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SECTION XI.15. 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 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.
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(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.
(b) Notwithstanding anything to the contrary contained in the
Receivables Sale Agreement, the Company shall not consent to any request made
pursuant to Section 9.13 thereof, nor shall any Seller which is the subject
of such request be terminated under 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)
has occurred and is continuing (both before and 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 or exceeds the
Aggregate Allocated Receivables Amount, each calculated after giving effect
to such termination and excluding all Receivables originated by the Seller to
be terminated).
(c) Upon the termination of a Seller pursuant to Section 9.13 of
the Receivables Sale Agreement and the foregoing paragraph (b), all
calculations for purposes of Series 1998-2 (including, without limitation,
for purposes of the PRO FORMA calculations pursuant to paragraph (b) above)
shall exclude in each case the Receivables originated by such terminated
Seller.]
ARTICLE XII
FINAL DISTRIBUTIONS
SECTION XII.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 1998-2
Non-Principal Collection Sub-subaccount and the Series 1998-2 Principal
Collection Sub-subaccount, the Trustee shall distribute such amounts pursuant
to Article III of this Supplement.
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(b) Notwithstanding anything to the contrary in this Supplement or
the Agreement, any distribution made pursuant to this Section shall be deemed
to be a final distribution pursuant to Section 9.3 of the Agreement with
respect to the VFC Certificates.
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IN WITNESS WHEREOF, the Company, the Servicer, the Trustee, the
Funding Agent and the Initial Purchasers have caused this Series 1998-2
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 & 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,
as Funding Agent
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
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
PARK AVENUE RECEIVABLES CORPORATION,
as the Initial Purchaser
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
71
THE CHASE MANHATTAN BANK, as an APA Bank
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
