EXECUTION COPY
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INDENTURE SUPPLEMENT
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APPLE RIDGE FUNDING LLC,
as Issuer,
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee,
and
THE BANK OF NEW YORK
as Paying Agent, Authentication Agent and
Transfer Agent and Registrar
SERIES 0000-0 XXXXXXXXX SUPPLEMENT
Dated as of April 25, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
CREATION OF THE SERIES 2000-1 NOTES
Section 1.01. Designation....................................................................................2
ARTICLE II
DEFINITIONS
Section 2.01. Definitions....................................................................................3
ARTICLE III
SERVICING FEE
Section 3.01. Servicing Fee.................................................................................14
ARTICLE IV
RIGHTS OF SERIES 2000-1
NOTEHOLDERS AND ALLOCATION AND
APPLICATION OF POOL COLLECTIONS
Section 4.01. Pool Collections and Allocations..............................................................15
Section 4.02. Determination of Monthly Interest.............................................................16
Section 4.03. Determination of Principal Distribution.......................................................17
Section 4.04. Determination of Liquidity Reserve Withdrawal Amount..........................................17
Section 4.05. Application of Series 2000-1 Collections......................................................17
Section 4.06. Claims upon the Policy; Policy Payments Account...............................................18
Section 4.07. Series 2000-1 Expense Subaccount..............................................................20
Section 4.08. Series 2000-1 Principal Subaccount............................................................21
Section 4.09. Liquidity Reserve Account.....................................................................22
Section 4.10. Determination of LIBOR........................................................................23
Section 4.11. Investment Instructions.......................................................................23
ARTICLE V
DELIVERY OF SERIES 2000-1 NOTES; DISTRIBUTIONS;
REPORTS TO SERIES 2000-1 NOTEHOLDERS
Section 5.01. Delivery and Payment for the Series 2000-1 Notes; Denominations..............................24
Section 5.02. Registration; Registration of Transfer and Exchange; Transfer Restrictions....................24
Section 5.03. Global Notes..................................................................................28
Section 5.04. Regulation S Global Notes.....................................................................28
Section 5.05. Special Transfer Provisions...................................................................30
Section 5.06. CUSIP Numbers.................................................................................31
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TABLE OF CONTENTS
(CONTINUED)
Section 5.07. Distributions.................................................................................32
Section 5.08. Reports and Statements to Series 2000-1 Noteholders..........................................32
ARTICLE VI
AMORTIZATION EVENTS
Section 6.01. Series 2000-1 Amortization Events.............................................................33
ARTICLE VII
OPTIONAL REDEMPTION OF SERIES 2000-1 NOTES
Section 7.01. Optional Redemption of Series 2000-1 Notes....................................................36
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Ratification of Agreement.....................................................................37
Section 8.02. Counterparts..................................................................................37
Section 8.03. Governing Law.................................................................................37
Section 8.04. Series Enhancer Deemed Series 2000-1 Noteholder...............................................37
Section 8.05. Subrogation...................................................................................37
Section 8.06. Certain Rights of the Series Enhancer.........................................................38
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EXHIBITS
EXHIBIT A-1 FORM OF RULE 144A GLOBAL NOTE
EXHIBIT A-2 FORM OF TEMPORARY REGULATION S GLOBAL NOTE
EXHIBIT A-3 FORM OF PERMANENT REGULATION S GLOBAL NOTE
EXHBIT B FORM OF MONTHLY PAYMENT INSTRUCTIONS AND NOTIFICATION TO THE INDENTURE TRUSTEE
EXHIBIT C FORM OF MONTHLY STATEMENT
EXHIBIT D FORM OF MONTHLY SERVICER'S CERTIFICATE
EXHIBIT E-1 FORM OF EUROCLEAR AND CLEARSTREAM BANKING
CERTIFICATES
EXHIBIT E-2 FORM OF CERTIFICATE TO BE GIVEN BY HOLDER OF BENEFICIAL INTEREST IN A TEMPORARY REGULATION S
GLOBAL NOTE
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SERIES 0000-0 XXXXXXXXX SUPPLEMENT, dated as of April 25, 2000 (as
amended, modified, restated or supplemented from time to time, the "INDENTURE
SUPPLEMENT"), by and between APPLE RIDGE FUNDING LLC, a limited liability
company organized under the laws of the State of Delaware, as Issuer (together
with its permitted successors and assigns, the "ISSUER"), BANK ONE, NATIONAL
ASSOCIATION, a national banking organization, as Indenture Trustee (together
with its permitted successors and assigns, the "INDENTURE TRUSTEE"), and THE
BANK OF NEW YORK, a New York state banking corporation, as paying agent,
authentication agent and transfer agent and registrar (together with its
permitted successors and assigns, "BNY").
Pursuant to Section 2.10 of the Master Indenture, dated as of April 25,
2000 (as amended, modified, restated or supplemented from time to time, the
"INDENTURE" and together with the Indenture Supplement, the "AGREEMENT"), by and
between the Issuer, the Indenture Trustee and BNY, the Issuer may issue one or
more Series of Notes the Principal Terms of which shall be set forth in an
indenture supplement to the Indenture. In accordance with the terms of the
Indenture, the Issuer hereby creates a Series of Notes and specifies the
Principal Terms of such Series of Notes in this Indenture Supplement.
GRANTING CLAUSES
The Issuer hereby Grants to the Indenture Trustee, for the benefit of
the Holders of the Series 2000-1 Notes, all of the Issuer's right, title and
interest, whether now owned or hereafter acquired, in, to and under: (i) the
Series 2000-1 Principal Subaccount, (ii) the Policy Payments Account, (iii) all
accounts, money, chattel paper, investment property, instruments, documents,
deposit accounts, certificates of deposit, letters of credit, advices of credit,
general intangibles and goods consisting of, arising from or relating to any of
the foregoing and (iv) all proceeds of the foregoing.
The Issuer hereby Grants to the Indenture Trustee, for the benefit of
the Holders of the Series 2000-1 Notes and the Series Enhancer, all of the
Issuer's right, title and interest, whether now owned or hereafter acquired, in,
to and under: (i) the Series 2000-1 Expense Subaccount, (ii) the Liquidity
Reserve Account, (iii) all accounts, money, chattel paper, investment property,
instruments, documents, deposit accounts, certificates of deposit, letters of
credit, advices of credit, general intangibles and goods consisting of, arising
from or relating to any of the foregoing and (iv) all proceeds of the foregoing.
ARTICLE I
Creation of the Series 2000-1 Notes
Section 1.01. Designation
(a) There is hereby created a Series of Notes to be issued pursuant to
the Indenture and this Indenture Supplement to be known as the "APPLE RIDGE
FUNDING LLC SECURED TERM NOTES, SERIES 2000-1" or the "SERIES 2000-1 NOTES."
(b) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Indenture, the terms and provisions of this Indenture Supplement shall be
controlling.
[END OF ARTICLE I]
2
ARTICLE II
Definitions
Section 2.01. Definitions.
(a) Whenever used in this Indenture Supplement, the following words and
phrases shall have the following meanings, and the definitions of such terms are
applicable to the singular as well as the plural forms of such terms and the
masculine as well as the feminine and neuter genders of such terms.
"ADDITIONAL INTEREST" shall have the meaning set forth in Section
4.02(b).
"AMORTIZATION EVENT" shall have the meaning set forth in Section 6.01.
"AMORTIZATION MONTHLY PRINCIPAL" shall have the meaning set forth in
Section 4.03.
"AMORTIZATION PERIOD" shall mean the period commencing at the earlier
to occur of (a) the close of business on January 31, 2005 and (b) the close of
business on the Business Day immediately preceding the day on which an
Amortization Event has occurred, and ending on the date on which (x) the Series
Outstanding Amount shall have been paid in full, together with all accrued
interest thereon, and (y) all amounts owed to the Series Enhancer under the
Insurance Agreement shall have been paid in full.
"APPLICABLE STRESS FACTOR" shall mean, as of any date of determination,
1.5; provided that (i) if the Default Ratio exceeded 5.0%, or the Three Month
Average Default Ratio exceeded 4.0%, for the Monthly Period preceding the first
day of the Interest Period in which such date occurs, then the Applicable Stress
Factor used in the calculation of the Loss Reserve Ratio shall be 2.5, or (ii)
if the Dilution Ratio exceeded 1.25%, or the Three Month Average Dilution Ratio
exceeded 0.75%, for the Monthly Period preceding the first day of the Interest
Period in which such date occurs, then the Applicable Stress Factor used in the
calculation of the Dilution Reserve Ratio shall be 2.5.
"APPRAISED VALUE HOME" shall mean a Home purchased by an Originator if
the owner of the Home is unsuccessful at contracting to sell the Home prior to
the purchase of the Home by the applicable Originator and as to which the
purchase price is generally determined by the average of two or more independent
appraisals.
"AVERAGE DAYS IN INVENTORY" shall mean, for any Monthly Period, the
average number of days the Homes have been owned by each Originator as of the
close of business on the last day of such Monthly Period.
"AVERAGE DAYS OUTSTANDING" shall mean, as of the end of any Monthly
Period, the sum of
(a) the product of (i) a fraction, the numerator of which is the
aggregate Unpaid Balance of Unsold Home Receivables (net of Advance Payments
relating thereto) as of the end
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of such Monthly Period and the denominator of which is the Aggregate Receivable
Balance as of the end of such Monthly Period, multiplied by (ii) the Average
Days in Inventory for such Monthly Period, plus
(b) the product of (i) a fraction, the numerator of which is the
aggregate Unpaid Balance of Billed Receivables and Unbilled Receivables (net of
Advance Payments relating thereto) as of the end of such Monthly Period, and the
denominator of which is the Aggregate Receivable Balance as of the end of such
Monthly Period, multiplied by (ii) the sum of (A) the average number of days as
of the end of such Monthly Period it took to xxxx Unbilled Receivables once they
became billable plus (B) the average number of days Billed Receivables have been
outstanding as of the end of such Monthly Period.
For the purposes of the foregoing calculation, Unbilled Receivables are
deemed to be billable (x) if the Receivable was previously an Unsold Home
Receivable, upon the subsequent sale of the Home by the applicable Originator
and (y) if such Receivable relates to services that are not related to Home
sales, upon disbursement.
"CUSTODIAN" shall mean the entity maintaining possession of the Global
Notes for the Clearing Agency.
"DEFAULT RATIO" shall mean, for any Monthly Period, the quotient,
expressed as a percentage, of (a) the sum of (i) the aggregate Unpaid Balance of
the Receivables that have become Defaulted Receivables in accordance with clause
(i) or (iii) of the definition of Defaulted Receivable during such Monthly
Period plus (ii) the Aggregate Employer Balance of each Employer whose
Receivables have become Defaulted Receivables in accordance with clause (ii) of
the definition of Defaulted Receivables during such Monthly Period, divided by
(b) the aggregate Unpaid Balance of the Billed Receivables generated during the
fifth Monthly Period preceding such Monthly Period.
"DILUTION RATIO" shall mean, for any Monthly Period, the quotient,
expressed as a percentage, of (a) the aggregate amount of reductions to the
Unpaid Balances of the Billed Receivables due to offsets, chargebacks, credits,
adjustments, rebates and other Originator Dilution Adjustments, Seller Dilution
Adjustments and Servicer Dilution Adjustments occurring during such Monthly
Period divided by (b) the aggregate Unpaid Balance of the Billed Receivables
generated during the fifth Monthly Period preceding such Monthly Period.
"DILUTION RESERVE RATIO" shall mean, as of any date of determination,
the product, expressed as a percentage, of
(a) the greater of:
(i) the product of (A) the Applicable Stress Factor multiplied
by (B) the average of the Dilution Ratios for the three Monthly Periods
preceding the first day of the Interest Period in which such date occurs and
(ii) the highest Dilution Ratio for any Monthly Period over
the 12 Monthly Periods preceding the first day of the Interest Period in
which such date occurs, multiplied by
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(b) a fraction, the numerator of which is the sum of:
(i) the aggregate Unpaid Balance of the Billed Receivables
generated over the five Monthly Periods preceding the first day of the
Interest Period in which such date occurs plus
(ii) the aggregate Unpaid Balance of the Unbilled Receivables
as of the end of the Monthly Period preceding the first day of the Interest
Period in which such date occurs, and the denominator of which is the
aggregate Unpaid Balance of the Billed Receivables as of the end of such
Monthly Period, multiplied by
(c) a fraction, the numerator of which is equal to the sum of:
(i) the aggregate Unpaid Balance of the Billed Receivables as
of the end of such Monthly Period plus
(ii) the aggregate Unpaid Balance of the Unbilled Receivables
as of the end of such Monthly Period plus
(iii) the greater of (A) the product of 3.5 multiplied by the
average of the Monthly Loss on Sale for such Monthly Period and the two
immediately preceding Monthly Periods and (B) 10% of the aggregate Unpaid
Balance of Unsold Home Receivables relating to Appraised Value Homes as of
the end of such Monthly Period, and the denominator of which is equal to the
aggregate Unpaid Balance of Eligible Receivables as of the end of such
Monthly Period minus the Aggregate Adjustment Amount on such date.
"DISTRIBUTION COMPLIANCE PERIOD" shall have the meaning set forth in
Rule 902 of Regulation S.
"DISTRIBUTION DATE" shall mean June 15, 2000 and the fifteenth day of
each calendar month thereafter, or if such fifteenth day is not a Business Day,
the next succeeding Business Day.
"DWAC" shall mean Deposit and Withdrawal At Custodian Service.
"FINAL STATED MATURITY DATE" shall mean the earlier of (a) the
Distribution Date occurring in March 2007 and (b) the Distribution Date
occurring in the 25th Monthly Period following the Monthly Period in which the
Amortization Period commenced.
"GUARANTEED DISTRIBUTION" shall mean (a) with respect to any
Distribution Date other than the Final Stated Maturity Date, the Monthly
Interest and (b) with respect to the Final Stated Maturity Date, the sum of (i)
the Series Outstanding Amount plus (ii) the Monthly Interest.
"GUARANTEED INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to
any Distribution Date, the excess of (a) the Monthly Interest payable on such
Distribution Date over (b) the sum of (i) the amount on deposit in the Series
2000-1 Expense Subaccount available for
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payment of such Monthly Interest plus (ii) the amount on deposit in the
Liquidity Reserve Account available for payment of such Monthly Interest.
"GUARANTEED PRINCIPAL DISTRIBUTION AMOUNT" shall mean, with respect to
the Distribution Date which is also the Final Stated Maturity Date, the excess
of (a) Series Outstanding Amount over (b) the sum of (i) the amount on deposit
in the Series 2000-1 Principal Subaccount, plus (ii) the amount on deposit in
the Liquidity Reserve Account available to be transferred to the Series 2000-1
Principal Subaccount pursuant to Section 4.05(a).
"INITIAL PURCHASERS" shall mean Xxxxxx Brothers Inc., Banc of America
Securities LLC, Banc One Capital Markets, Inc., Chase Securities Inc., First
Union Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital
(USA) Inc., collectively.
"INITIAL SERIES OUTSTANDING AMOUNT" shall mean, with respect to the
Series 2000-1 Notes, $400,000,000.
"INSURANCE AGREEMENT" shall mean the Insurance Agreement dated as of
the Series 2000-1 Closing Date by and between the Series Enhancer, the Indenture
Trustee, the Servicer, the Originators, the Transferor and the Issuer, which
shall constitute an "Enhancement Agreement" with respect to the Series 2000-1
Notes for all purposes under the Indenture.
"INSURANCE PREMIUM RATE" shall have the meaning set forth in the
Premium Letter Agreement.
"INTEREST PERIOD" shall mean, with respect to any Distribution Date,
the period beginning on and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the first Distribution
Date, beginning on and including the Series 2000-1 Closing Date) and ending on
and excluding such Distribution Date.
"INTEREST SHORTFALL" shall have the meaning set forth in Section
4.02(b).
"LIBOR" shall mean, for any Interest Period, as of any LIBOR
Determination Date, the London interbank offered rate for deposits in United
States dollars for a one-month period determined by the Paying Agent for each
Interest Period in accordance with the provisions of Section 4.10.
"LIBOR DETERMINATION DATE" shall mean the second London Business Day
prior to the commencement of the second and each subsequent Interest Period.
"LIQUIDITY RESERVE ACCOUNT" shall have the meaning set forth in Section
4.09(a).
"LIQUIDITY RESERVE ACCOUNT AMOUNT" shall mean, on any Business Day, the
amount on deposit in the Liquidity Reserve Account (including the principal
amount of any investments made with funds previously deposited in the Liquidity
Reserve Account and after giving effect to any deposits thereto and withdrawals
and releases therefrom on such Business Day).
6
"LIQUIDITY RESERVE WITHDRAWAL AMOUNT" shall have the meaning set forth
in Section 4.04.
"LONDON BUSINESS DAY" shall mean any Business Day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market and
banking institutions in London are not authorized or obligated by law or
regulation to close.
"LOSS RESERVE RATIO" shall mean, as of any date of determination, the
greatest of:
(a) the percentage equivalent of the product of:
(i) the Applicable Stress Factor, multiplied by
(ii) the highest Three Month Average Default Ratio for any
Monthly Period over the 12 Monthly Periods preceding the first day of the
Interest Period in which such date occurs, multiplied by
(iii) a fraction, the numerator of which is the sum of (A) the
aggregate Unpaid Balance of the Billed Receivables generated over the five
Monthly Periods preceding the first day of the Interest Period in which such
date occurs plus (B) the aggregate Unpaid Balance of the Unbilled
Receivables as of the end of the Monthly Period preceding the first day of
the Interest Period in which such date occurs, and the denominator of which
is the aggregate Unpaid Balance of the Billed Receivables as of the end of
such Monthly Period, multiplied by
(iv) a fraction, the numerator of which is equal to the sum of
(A) the aggregate Unpaid Balance of Billed Receivables as of the end of the
Monthly Period preceding the first day of the Interest Period in which such
date occurs plus (B) the aggregate Unpaid Balance of Unbilled Receivables as
of the end of such Monthly Period plus (C) the greater of (1) the product of
3.5 multiplied by the average of the Monthly Loss on Sale for such Monthly
Period and the two immediately preceding Monthly Periods and (2) 10% of the
aggregate Unpaid Balance of Unsold Home Receivables relating to Appraised
Value Homes as of the end of such Monthly Period, and the denominator of
which is equal to the aggregate Unpaid Balance of Eligible Receivables as of
the end of such Monthly Period minus the Aggregate Adjustment Amount on such
date;
(b) the product of (i) the Applicable Stress Factor multiplied by (ii)
the highest Default Ratio for any Monthly Period over the three Monthly
Periods preceding the first day of the Interest Period in which such date
occurs; and
(c) 2.5%.
"MONTHLY INSURANCE PREMIUM" shall mean for any Distribution Date, the
premium payable in respect of the Policy in accordance with the Insurance
Agreement and the Premium Letter Agreement.
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"MONTHLY LOSS ON SALE" shall equal, for any Monthly Period, for all
Homes sold during such Monthly Period, the aggregate of the amounts, if any, by
which the purchase price of each such Home paid by CMF or CMSC, as applicable,
exceeded the sale price for such Home received by the Servicer (the amount of
any such excess with respect to a Home being a "Loss"). The Monthly Loss on Sale
for any Monthly Period shall be based on the gross Losses for such Monthly
Period without regard to any gains on the sale of other Homes during such
Monthly Period.
"MONTHLY INTEREST" shall have the meaning set forth in Section 4.02(a).
"MONTHLY PERIOD" shall mean the period from and including the first day
of a calendar month to and including the last day of such calendar month (other
than the initial Monthly Period, which will commence on and include the Series
2000-1 Closing Date and end on and include May 31, 2000).
"MONTHLY SERVICING FEE" shall have the meaning set forth in Section
3.01.
"NET CREDIT LOSSES" shall mean, for any Monthly Period, an amount equal
to the excess, if any, of the estimated losses to be incurred in respect of all
Receivables written off by the Servicer in accordance with the Credit and
Collection Policy during such Monthly Period over an amount equal to all amounts
recovered during such Monthly Period in respect of Receivables written off by
the Servicer in accordance with the Credit and Collection Policy during prior
Monthly Periods, which amounts exceed the amounts that the Servicer estimated
would be recovered in respect of such Receivables.
"NON-U.S. CERTIFICATE" shall have the meaning set forth in Section
5.04(b).
"NOTE INTEREST RATE" shall mean, for each Interest Period (other than
the first Interest Period), a rate of 0.28% per annum in excess of LIBOR as
determined on the related LIBOR Determination Date. The Note Interest Rate for
the first Interest Period will equal 6.49% per annum.
"OFFERING MEMORANDUM" shall mean the Offering Memorandum relating to
the Series 2000-1 Notes dated April 12, 2000.
"PERMANENT REGULATION S GLOBAL NOTE" shall have the meaning set forth
in Section 5.04.
"POLICY" shall mean the financial guaranty insurance policy number
32011(1), dated as of the Series 2000-1 Closing Date, issued by the Series
Enhancer to the Indenture Trustee for the benefit of the Series 2000-1
Noteholders.
"POLICY PAYMENTS ACCOUNT" shall have the meaning set forth in Section
4.06(b).
"PREFERENCE CLAIM" shall have the meaning set forth in Section 4.06(d).
8
"PREMIUM LETTER AGREEMENT" shall mean the Premium Letter Agreement
dated as of the Series 2000-1 Closing Date between the Issuer, the Indenture
Trustee and the Series Enhancer.
"QIB" shall have the meaning set forth in Section 5.02(b).
"RATING AGENCY" shall mean each of Standard & Poor's Ratings Services
and Xxxxx'x Investors Service, Inc.
"REDEMPTION PRICE" shall mean, with respect to any Distribution Date,
after giving effect to any deposits and distributions otherwise to be made on
such Distribution Date, the sum of (i) the Series Outstanding Amount on such
Distribution Date plus (ii) Monthly Interest for such Distribution Date and any
Monthly Interest previously due but not distributed to the Series 2000-1
Noteholders plus (iii) any amounts due to the Series Enhancer pursuant to the
Insurance Agreement.
"REFERENCE BANKS" shall mean four major banks in the London interbank
market selected by the Paying Agent.
"REGULATION S" shall mean Regulation S under the Securities Act.
"REGULATION S CERTIFICATE" shall have the meaning set forth in Section
5.02(e).
"REGULATION S GLOBAL NOTE" shall mean each of the Temporary Regulation
S Global Note and the Permanent Regulation S Global Note.
"REIMBURSEMENT AMOUNT" shall mean, as of any date of determination, the
sum of (i) the aggregate amount due as of such date to the Series Enhancer
pursuant to the Insurance Agreement in respect of unreimbursed draws under the
Policy, including interest thereon determined in accordance with the Insurance
Agreement, and (ii) an amount equal to the aggregate of any other amounts due as
of such date to the Series Enhancer pursuant to the Insurance Agreement (other
than the Monthly Insurance Premium).
"RELEASE DATE" shall have the meaning set forth in Section 5.02(e).
"REQUIRED AMOUNT" shall mean, as of any date of determination, the sum
of (a) (i) the Monthly Interest to be distributed on the Distribution Date
falling in the Monthly Period succeeding the Monthly Period in which such date
occurs plus (ii) any Interest Shortfall previously accrued and not reimbursed
plus (iii) any Additional Interest previously accrued and not reimbursed, (b)
the sum of (i) the Monthly Insurance Premium to be distributed on such
Distribution Date plus (ii) any Monthly Insurance Premium previously accrued and
not paid, plus (c) the sum of (i) the Monthly Servicing Fee to be distributed on
such Distribution Date plus (ii) any Monthly Servicing Fee previously accrued
and not paid; provided that for the purpose of determining the Required Amount
for the allocation set forth in Section 4.01(c), (a) the Monthly Interest for
any day prior to the first day of the Interest Period commencing in such Monthly
Period shall equal the Monthly Interest as determined for the Interest Period
ending in such Monthly Period and (b) the Monthly Interest for any day on or
after the first day of the Interest Period commencing in such Monthly Period
shall equal such Monthly Interest as determined for
9
such Interest Period; provided further that for the purpose of determining the
Required Amount for the allocation set forth in Section 4.01(c), (a) the Monthly
Insurance Premium for any day prior to the first day of the Interest Period
commencing in such Monthly Period shall equal the Monthly Insurance Premium as
determined for the Interest Period ending in such Monthly Period and (b) the
Monthly Insurance Premium for any day on or after the first day of the Interest
Period in such Monthly Period shall equal the Monthly Insurance Premium as
determined for such Interest Period.
"REQUIRED LIQUIDITY RESERVE ACCOUNT AMOUNT" shall mean, as of any date
of determination during an Interest Period, an amount equal to 125% of the
Monthly Interest payable on the first day of such Interest Period; provided,
however, that during the initial Interest Period, the Required Liquidity Reserve
Account Amount will equal 125% of the interest that will accrue on the Series
2000-1 Notes during the first Interest Period.
"REQUIRED OVERCOLLATERALIZATION AMOUNT" shall mean, as of any date of
determination, the amount by which the Series 2000-1 Required Enhancement Amount
exceeds the sum of (a) the amount on deposit in the Liquidity Reserve Account on
such date plus (b) the amount on deposit in the Series 2000-1 Principal
Subaccount.
"REVOLVING PERIOD" shall mean the period beginning on the Series 2000-1
Closing Date and ending upon the commencement of the Amortization Period.
"RULE 144A" shall mean Rule 144A under the Securities Act.
"RULE 144A GLOBAL NOTE" shall have the meaning set forth in Section
5.03.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES ENHANCER" shall mean MBIA Insurance Corporation, a New York
domiciled insurance company, or any successor thereto.
"SERIES ENHANCER DEFAULT" shall mean (i) the failure of the Series
Enhancer to make a payment required under the Policy in accordance with the
terms thereof (and such failure continues unremedied for two Business Days),
(ii) the occurrence of an Insolvency Event with respect to the Series Enhancer
or (iii) the appointment of a receiver, conservator, liquidation or similar
official for the Series Enhancer or its property.
"SERIES ENHANCER DRAW AMOUNT" shall mean, for any Distribution Date, an
amount equal to the sum of (a) the Guaranteed Interest Distribution Amount plus
(b) if such Distribution Date is the Final Stated Maturity Date, the Guaranteed
Principal Distribution Amount.
"SERIES OUTSTANDING AMOUNT" shall mean, as of any date of
determination, an amount equal to the Initial Series Outstanding Amount minus
the amount of Amortization Monthly Principal previously paid to Series 2000-1
Noteholders (other than any such payment made from the proceeds of the Policy).
"SERIES PERCENTAGE" shall mean, with respect to any date of
determination, the
10
percentage equivalent (which percentage shall never exceed 100%) of a fraction
calculated as follows:
(a) during the Revolving Period, the numerator of the fraction will be
the Series 2000-1 Required Asset Amount as of the close of business on the
immediately preceding day, and the denominator of the fraction will be the
greater of (i) the Adjusted Aggregate Receivable Balance as of the close of
business on the immediately preceding day and (ii) the sum of the numerators
used to determine the Series Percentage for each Series of Notes (including the
Series 2000-1 Notes) Outstanding at the close of business on the immediately
preceding day; and
(b) during the Amortization Period, the numerator of the fraction will
be the Series 2000-1 Required Asset Amount as of the close of business on the
last day of the Revolving Period, and the denominator of the fraction will be
the sum of the numerators used to determine the Series Percentage for each
Series of Notes (including the Series 2000-1 Notes) Outstanding at the close of
business on the immediately preceding day.
"SERIES 2000-1" shall mean the Series of Notes the terms of
which are specified in this Indenture Supplement.
"SERIES 2000-1 ALLOCATED ADJUSTED AGGREGATE RECEIVABLE BALANCE" shall
mean, as of any date of determination, the lower of (a) the Series 2000-1
Required Asset Amount as of such date and (b) the product of (i) the Adjusted
Aggregate Receivable Balance as of such date multiplied by (ii) the percentage
equivalent of a fraction, the numerator of which is the Series 2000-1 Required
Asset Amount as of such date and the denominator of which is the sum of (x) the
Series 2000-1 Required Asset Amount as of such date plus (y) the aggregate
Required Asset Amount with respect to each other Series of Notes as of such
date.
"SERIES 2000-1 ASSET AMOUNT DEFICIENCY" shall occur if and to the
extent the Series 2000-1 Allocated Adjusted Aggregate Receivable Balance is less
than the Series 2000-1 Required Asset Amount as of such date.
"SERIES 2000-1 CLOSING DATE" shall mean April 25, 2000.
"SERIES 2000-1 COLLECTIONS" shall have the meaning set forth in Section
4.01(b).
"SERIES 2000-1 EXPENSE SUBACCOUNT" shall have the meaning set forth in
Section 4.07(a).
"SERIES 2000-1 NOTEHOLDER" shall mean the Person in whose name a Series
2000-1 Note is registered in the Note Register.
"SERIES 2000-1 NOTES" shall mean any one of the Notes executed by the
Issuer and authenticated by the Authentication Agent, substantially in the form
of Exhibit A.
"SERIES 2000-1 PRINCIPAL SUBACCOUNT" shall have the meaning set forth
in Section 4.08(a).
11
"SERIES 2000-1 REQUIRED ASSET AMOUNT" shall mean, as of any date of
determination, an amount equal to the sum of (a) the Series Outstanding Amount
plus (b) the Required Overcollateralization Amount.
"SERIES 2000-1 REQUIRED ENHANCEMENT AMOUNT" shall mean, as of any date
of determination, an amount equal to the sum of (a) the greater of (i) 7% of the
Series Outstanding Amount and (ii) an amount equal to the product of (A) the
Series Outstanding Amount multiplied by (B) the quotient of (1) the sum of (w)
the Loss Reserve Ratio plus (x) the Dilution Reserve Ratio plus (y) the Yield
Reserve Ratio plus (z) the Servicing Reserve Ratio divided by (2) one minus the
sum of (w) the Loss Reserve Ratio plus (x) the Dilution Reserve Ratio plus (y)
the Yield Reserve Ratio plus (z) the Servicing Reserve Ratio plus (b) the
excess, if any, of accrued and unpaid interest on the Series 2000-1 Notes over
the amount on deposit in the Liquidity Reserve Account; provided, however, that
after the declaration or occurrence of an Amortization Event, the Series 2000-1
Required Enhancement Amount shall equal the Series 2000-1 Required Enhancement
Amount in effect on the date of the declaration or occurrence of such
Amortization Event.
"SERVICING FEE" shall have the meaning set forth in the Transfer and
Servicing Agreement.
"SERVICING RESERVE RATIO" shall mean, as of any date of determination,
the quotient, expressed as a percentage, of (a) the product of (i) 1.5
multiplied by (ii) 0.75% multiplied by (iii) Average Days Outstanding as of the
end of the Monthly Period preceding the first day of the Interest Period in
which such date occurs, divided by (b) 360.
"TELERATE PAGE 3750" shall mean the display page currently so
designated on the Bridge Telerate Market Report (or such other page as may
replace that page in that service for the purpose of displaying comparable rates
or prices).
"TEMPORARY REGULATION S GLOBAL NOTE" shall have the meaning set forth
in Section 5.03.
"THREE MONTH AVERAGE DEFAULT RATIO" shall mean, for any Monthly Period,
the average of the Default Ratios for that Monthly Period and each of the two
immediately preceding Monthly Periods.
"THREE MONTH AVERAGE DILUTION RATIO" shall mean, for any Monthly
Period, the average of the Dilution Ratios for that Monthly Period and each of
the two immediately preceding Monthly Periods.
"YIELD RESERVE RATIO" shall mean, as of any date of determination
during an Interest Period, the quotient expressed as a percentage, of (a) the
product of (i) the sum of (A) the Insurance Premium Rate plus (B) the product of
(1) 1.5 multiplied by (2) the Note Interest Rate for the Interest Period in
which such date occurs multiplied by (ii) 1.5 multiplied by the Average Days
Outstanding as of the end of the Monthly Period preceding the first day of such
Interest Period divided by (b) 360.
12
(b) Each capitalized term defined herein shall relate to the Series
2000-1 Notes and no other Series of Notes issued by the Issuer, unless the
context otherwise requires. All capitalized terms used herein and not otherwise
defined herein have the meanings ascribed to them in the Indenture, the Transfer
and Servicing Agreement, the Receivables Purchase Agreement or the Purchase
Agreement.
(c) The words "HEREOF," "HEREIN" and "HEREUNDER" and words of similar
import when used in this Indenture Supplement shall refer to this Indenture
Supplement as a whole and not to any particular provision of this Indenture
Supplement; references to any Article, subsection, Section or Exhibit are
references to Articles, subsections, Sections and Exhibits in or to this
Indenture Supplement unless otherwise specified; and the term "INCLUDING" means
"INCLUDING WITHOUT LIMITATION."
[END OF ARTICLE II]
13
ARTICLE III
Servicing Fee
Section 3.01. Servicing Fee.
The Transfer and Servicing Agreement sets forth the full compensation
that the Servicer is entitled to receive for its servicing activities. The share
of the Servicing Fee allocable to the Series 2000-1 Noteholders with respect to
any Distribution Date (the "MONTHLY SERVICING FEE") shall be equal to the
product of (a) 0.75% multiplied by (b) the weighted average over the related
Monthly Period of the daily sums of the Aggregate Employer Balances for each
Employer under the Pool Relocation Agreements multiplied by (c) the average
Series Percentage during such Monthly Period. The remainder of the Servicing Fee
shall be paid by the noteholders of other Series (as provided in the Indenture
Supplement related to such other Series) or the Issuer and in no event shall the
Indenture Trustee or the Series 2000-1 Noteholders be liable for the share of
the Servicing Fee to be paid by the Noteholders of such other Series or the
Issuer. To the extent that the Monthly Servicing Fee is not paid in full
pursuant to the preceding provisions of this Section 3.01, and Section 4.05, it
shall be paid by the Issuer. The Monthly Servicing Fee shall be payable from
Series 2000-1 Collections pursuant to, and subject to the priority of payments
set forth in, Section 4.05.
[END OF ARTICLE III]
14
ARTICLE IV
Rights of Series 2000-1 Noteholders
and Allocation and Application of Pool Collections
Section 4.01. Pool Collections and Allocations.
(a) Allocation of Pool Collections. Funds on deposit in the Collection
Account in accordance with Section 8.04 of the Indenture shall be allocated and
distributed to Series 2000-1 as set forth in the Indenture and this Article IV.
(b) Allocation of Pool Collections to Series 2000-1. Prior to the close
of business on each Deposit Date, the Servicer shall allocate to Series 2000-1
an amount (such amount, the "SERIES 2000-1 COLLECTIONS") equal to the product of
(i) the amount of Collections deposited in the Collection Account on such
Deposit Date (less any amounts permitted to be withdrawn pursuant to Sections
3.02(c)(vi), 3.12 and 3.14(b) of the Transfer and Servicing Agreement)
multiplied by (ii) the Series Percentage for such Deposit Date.
(c) Allocation of Series 2000-1 Collections. Prior to the close of
business on each Deposit Date, the Servicer shall direct the Indenture Trustee
to allocate Series 2000-1 Collections in the amounts and according to the
priority set forth below pursuant to Section 8.04 of the Indenture:
(i) (A) If the amount of funds on deposit in the Series 2000-1
Expense Subaccount on such Deposit Date is less than the Required Amount for
such Deposit Date (excluding such amounts as were deposited in the Series
2000-1 Expense Subaccount during the preceding Monthly Period and are being
held for distribution on the next Distribution Date), from the Collection
Account to the Series 2000-1 Expense Subaccount an amount equal to the
lesser of (A) the amount of such deficiency or (B) the Series 2000-1
Collections on such Deposit Date;
(B) If the amount of funds on deposit in the Series 2000-1
Expense Subaccount on such Deposit Date (excluding such amounts as were
deposited in the Series 2000-1 Expense Subaccount during the preceding
Monthly Period and are being held for distribution on the next succeeding
Distribution Date) exceeds the Required Amount for such Deposit Date, from
the Series 2000-1 Expense Subaccount an amount equal to such excess TO BE
TREATED AS Series 2000-1 Collections for distribution in accordance with
this Section 4.01(c);
(ii) If the amount of funds on deposit in the Liquidity
Reserve Account on such Deposit Date is less than the Required Liquidity
Reserve Account Amount for such Deposit Date, from the Collection Account to
the Liquidity Reserve Account an amount equal to the lesser of (A) the
amount of such deficiency or (B) the Series 2000-1 Collections on such
Deposit Date (after giving effect to the transfer set forth in clause (i)(A)
above);
(iii) During the Revolving Period, and during the Amortization
Period after the Series 2000-1 Notes have been paid in full, to the Series
Enhancer, an amount
15
equal to any amounts owed to it pursuant to the Insurance Agreement (other
than as reimbursement for payments made by the Series Enhancer under the
Policy in respect of interest on the Series 2000-1 Notes);
(iv) (A) During the Revolving Period, all remaining Series
2000-1 Collections (A) if any other Series of Notes is in its Amortization
Period and the Indenture Supplement related to such amortizing Series of
Notes requires the Issuer to transfer such remaining Series 2000-1
Collections to pay the principal of such other Series of Notes, to the
applicable Series Account with respect to such amortizing Series of Notes;
provided that if more than one other Series of Notes is amortizing and the
related Indenture Supplement of each such amortizing Series of Notes
requires the Issuer to transfer such remaining Series 2000-1 Collections to
pay the principal of such other Series of Notes, pro rata to the applicable
Series Account of each such other amortizing Series of Notes based on their
respective Series Percentages;
(B) If no transfer of the remaining Series 2000-1
Collections is required pursuant to clause (A), all remaining Series 2000-1
Collections to the Issuer free and clear of the lien of the Indenture and
without compliance with Section 12.01(b) of the Indenture;
provided, however, with respect to clause (A) and (B), if a Series 0000-0
Xxxxx Amount Deficiency has occurred and is continuing, or if the
application of funds to the payment of the principal of another Series of
Notes or the release of funds to the Issuer would result in a Series 2000-1
Asset Amount Deficiency or would otherwise result in the occurrence of an
event that, with the passage of time or the giving of notice or both, would
become an Amortization Event, all remaining Series 2000-1 Collections shall
be transferred to the Series 2000-1 Principal Subaccount.
(v) During the Amortization Period, to the Series 2000-1
Principal Subaccount, the Series 2000-1 Collections on such Deposit Date
(after giving effect to the transfers set forth in clauses (i) and (ii)
above); provided, however, that the aggregate amount deposited into the
Series 2000-1 Principal Subaccount pursuant to this clause shall not exceed
the Series Outstanding Amount on the immediately preceding Distribution
Date.
(d) Prior to the close of business on each Deposit Date during the
Amortization Period, the Issuer shall deposit Collections allocated to other
Series in the Series 2000-1 Principal Subaccount to the extent those Collections
would otherwise have been released to the Issuer under the terms of the
Indenture Supplement related to such Series. If Series 2000-1 and any other
Series are simultaneously in their respective Amortization Periods, such
Collections shall be allocated ratably between each such amortizing Series of
Notes (including Series 2000-1) based on their respective Series Percentages.
Section 4.02. Determination of Monthly Interest.
(a) The amount of interest ("MONTHLY INTEREST") distributable from the
Series 2000-1 Expense Subaccount with respect to the Series 2000-1 Notes on any
Distribution Date
16
shall be an amount equal to the product of (i) a fraction, the numerator of
which is the actual number of days in the related Interest Period and the
denominator of which is 360, multiplied by (ii) the Note Interest Rate in effect
with respect to the related Interest Period and multiplied by (iii) the Series
Outstanding Amount as of the close of business on the last day of the related
Interest Period.
(b) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess (the "INTEREST SHORTFALL"), if any, of (x)
the Monthly Interest for such Distribution Date over (y) the aggregate amount of
funds allocated and available to pay such Monthly Interest on such Distribution
Date (excluding the proceeds of a draw under the Policy). If the Interest
Shortfall with respect to any Distribution Date is greater than zero, then on
each subsequent Distribution Date until such Interest Shortfall is fully paid,
an additional amount ("ADDITIONAL INTEREST") equal to the product of (i) (A) a
fraction, the numerator of which is the actual number of days in the related
Interest Period and the denominator of which is 360, multiplied by (B) the sum
of (x) the Note Interest Rate and (y) 2.0% per annum and (ii) such Interest
Shortfall (or the portion thereof that has not been paid to the Series 2000-1
Noteholders from funds other than the proceeds of a draw under the Policy) shall
be payable as provided herein with respect to the Series 2000-1 Notes.
Notwithstanding anything herein to the contrary, Additional Interest shall be
payable or distributed only to the extent permitted by applicable law.
Section 4.03. Determination of Principal Distribution. The amount
of principal distributable from the Series 2000-1 Principal Subaccount on each
Distribution Date (the "AMORTIZATION MONTHLY PRINCIPAL"), beginning with the
Distribution Date in the month following the month in which the Amortization
Period begins, shall equal the lesser of (i) the amount on deposit in the Series
2000-1 Principal Subaccount that was deposited therein during the preceding
Monthly Period (including amounts deposited in the Series 2000-1 Principal
Subaccount pursuant to Section 4.01(d)) for distribution on such Distribution
Date and (ii) the Series Outstanding Amount.
Section 4.04. Determination of Liquidity Reserve Withdrawal Amount.
On or before each Distribution Date, the Issuer shall determine or cause the
Servicer to determine the amount (the "LIQUIDITY RESERVE WITHDRAWAL AMOUNT"), if
any, by which the amount distributable pursuant to Section 4.05 on such
Distribution Date exceeds the amount deposited in the Series 2000-1 Expense
Subaccount during the related Monthly Period.
Section 4.05. Application of Series 2000-1 Collections. On each
Distribution Date or Deposit Date, as applicable, the Servicer shall instruct
the Indenture Trustee in writing to apply amounts on deposit in the Collection
Account (and any subaccount thereof) and the Liquidity Reserve Account as
follows:
(a) On each Distribution Date for which the Liquidity Reserve
Withdrawal Amount is greater than zero, to withdraw the lesser of (i) the
Liquidity Reserve Withdrawal Amount and (ii) amounts on deposit in the Liquidity
Reserve Account from the Liquidity Reserve Account and transfer such amount to
the Series 2000-1 Expense Subaccount for distribution in accordance with clause
(b) below. If funds remain on deposit in the Liquidity Reserve Account on the
Final Stated Maturity Date (after giving effect to withdrawal of the Liquidity
Reserve Withdrawal Amount, if any, on such date) and the Series Outstanding
Amount
17
exceeds the amount on deposit on the Series 2000-1 Principal Subaccount, to
withdraw an amount equal to the lesser of (x) such excess and (y) the amount on
deposit in the Liquidity Reserve Account from the Liquidity Reserve Account and
transfer such amount to the Series 2000-1 Principal Subaccount for distribution
in accordance with clause (c) below.
(b) On each Distribution Date, to transfer amounts on deposit in the
Series 2000-1 Expense Subaccount of the Collection Account in the following
order of priority:
(i) An amount equal to the sum of (A) Monthly Interest for
such Distribution Date plus (B) any Interest Shortfall previously accrued
and not reimbursed plus (c) any Additional Interest previously accrued and
not reimbursed shall be distributed to the Distribution Account for payment
to Series 2000-1 Noteholders on such Distribution Date pursuant to Section
5.07; provided that no Interest Shortfall or Additional Interest shall be
paid to the Series 2000-1 Noteholders to the extent that the Series 2000-1
Noteholders received timely payment of interest on the Series 2000-1 Notes
because of a payment by the Series Enhancer under the Policy;
(ii) If the Series Enhancer has made a payment under the
Policy to fund the payment of Monthly Interest on any Distribution Date, an
amount equal to the sum of (A) Interest Shortfall previously accrued and not
reimbursed plus (B) Additional Interest previously accrued and not
reimbursed which is related to such payment shall be distributed to the
Series Enhancer;
(iii) An amount equal to the sum of (A) the Monthly Insurance
Premium for such Distribution Date plus (B) any Monthly Insurance Premium
previously accrued and not reimbursed shall be distributed to the Series
Enhancer; and
(iv) An amount equal to the sum of (A) the Monthly Servicing
Fee for such Distribution Date plus (B) any Monthly Servicing Fee previously
accrued and not paid pursuant to this Section 4.05(b)(iv) shall be
distributed to the Servicer.
(c) On each Distribution Date during the Amortization Period, to
transfer an amount equal to the Amortization Monthly Principal for such
Distribution Date from the Series 2000-1 Principal Subaccount to the
Distribution Account for payment to the Series 2000-1 Noteholders on such
Distribution Date pursuant to Section 5.07.
Section 4.06. Claims upon the Policy; Policy Payments Account.
(a) If, by the close of business on the fourth Business Day prior to a
Distribution Date, the Servicer notifies the Indenture Trustee that on such
Distribution Date the funds that are or will be on deposit in the Series 2000-1
Expense Subaccount, Liquidity Reserve Account and the Series 2000-1 Principal
Subaccount on such Distribution Date that are available to pay the Guaranteed
Distribution on such day will be insufficient to pay such Guaranteed
Distribution on such Distribution Date, then the Indenture Trustee shall give
notice to the Series Enhancer by telephone or telecopy of the amount of such
insufficiency. Such notice shall be confirmed in writing in the form set forth
as Exhibit A to the Policy, to the Series Enhancer at or before 11:00 a.m., New
York City time, on the third Business Day prior to such Distribution Date.
Following receipt by the Series Enhancer of such notice in such form, the Series
Enhancer
18
will pay the Series Enhancer Draw Amount to the Indenture Trustee on the later
to occur of (i) 11:00 a.m., New York City time, on the third Business Day next
succeeding presentation to the Series Enhancer and (ii) 11:00 a.m., New York
City time, on the Distribution Date to which such deficiency relates, as
provided in the Policy.
(b) The Indenture Trustee shall establish a separate special purpose
trust account, which account shall be an Eligible Account, for the benefit of
the Series 2000-1 Noteholders (the "POLICY PAYMENTS ACCOUNT") over which the
Indenture Trustee shall have exclusive control and sole right of withdrawal. The
Indenture Trustee shall deposit the Series Enhancer Draw Amount in the Policy
Payments Account and distribute such amount only for purposes of payment to the
Series 2000-1 Noteholders of the Guaranteed Distribution for which a claim was
made, and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Indenture Trustee or the Issuer. The Series
Enhancer Draw Amount shall be transferred to the Distribution Account in
accordance with the next succeeding paragraph and disbursed by the Paying Agent
to the Series 2000-1 Noteholders in accordance with Section 5.07. It shall not
be necessary for such payments to be made by checks or wire transfers separate
from the checks or wire transfers used to pay the Guaranteed Distribution with
other funds available to make such payment. However, the amount of any payment
of Monthly Interest or of the Series Outstanding Amount to be paid from funds
transferred from the Policy Payments Account shall be noted as provided in
paragraph (c) below and in the statement to be furnished to the Series 2000-1
Noteholders pursuant to Section 5.08(a). Funds held in the Policy Payments
Account shall not be invested.
On any Distribution Date with respect to which a claim has been made
under the Policy, the Series Enhancer Draw Amount shall be withdrawn from the
Policy Payments Account and deposited in the Distribution Account and applied by
the Paying Agent, together with the other funds to be withdrawn from the
Collection Account pursuant to Section 4.05, directly to the payment in full of
the Guaranteed Distribution. Any funds remaining in the Policy Payments Account
on the first Business Day following a Distribution Date shall be remitted to the
Series Enhancer by the end of such Business Day pursuant to the instructions of
the Series Enhancer.
(c) The Indenture Trustee shall keep a complete and accurate record of
the amount of Monthly Interest and of the Series Outstanding Amount paid from
moneys received under the Policy. The Series Enhancer shall have the right to
inspect such records at reasonable times during normal business hours upon one
Business Day's prior notice to the Indenture Trustee.
(d) The Indenture Trustee shall promptly notify the Series Enhancer of
any proceeding or the institution of any action, of which a Responsible Officer
of the Indenture Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership or
similar law with respect to a proceeding against or by either Originator, the
Transferor, the Servicer, the Issuer or PHH (a "PREFERENCE CLAIM") of any
distribution made with respect to the Series 2000-1 Notes. Each Series 2000-1
Noteholder by its purchase of Series 2000-1 Notes, the Issuer and the Indenture
Trustee hereby agree that the Series Enhancer (so long as no Series Enhancer
Default exists) may at any time during the continuation of any proceeding
relating to a Preference Claim direct all matters relating to such
19
Preference Claim, including without limitation (i) the direction of any appeal
of any order relating to such Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition and
without limiting the foregoing, the Series Enhancer shall be subrogated to the
rights of the Issuer, the Indenture Trustee and each Series 2000-1 Noteholder in
the conduct of any such Preference Claim, including without limitation all
rights of any party to an adversary proceeding action with respect to any court
order issued in connection with any such Preference Claim.
(e) Anything in the Indenture, this Indenture Supplement or any other
Transaction Document to the contrary notwithstanding, any payment with respect
to amounts due in respect of the Series 2000-1 Notes that is made with monies
received pursuant to the terms of the Policy shall not be considered payment on
the Series 2000-1 Notes by the Issuer, shall not discharge any obligations of
the Issuer to make such payment and shall not result in payment of (or the
provision for the payment of) any amounts due in respect of Series 2000-1 Notes
for purposes of Section 4.01 of the Indenture. To the extent any Series 2000-1
Notes have been paid with the proceeds of the Policy, such Series 2000-1 Notes
shall continue to remain Outstanding for purposes of the Indenture and this
Indenture Supplement until the Series Enhancer has been paid as subrogee
hereunder, and the Series Enhancer shall be deemed to be the Holder thereof to
the extent of any payments thereon made by the Series Enhancer.
(f) The Indenture Trustee shall hold the Policy in trust solely for the
use and benefit of the Holders of the Series 2000-1 Notes.
(g) The Indenture Trustee agrees to furnish to the Series Enhancer upon
its reasonable request the Indenture Trustee's records evidencing the payment of
amounts due on the Series 2000-1 Notes that have been made by the Indenture
Trustee and subsequently recovered from Holders of Series 2000-1 Notes, and the
dates on which such payments were made.
(h) The Indenture Trustee shall be entitled to enforce on behalf of the
Holders of the Series 2000-1 Notes the obligations of the Series Enhancer under
the Policy. Notwithstanding any other provision of the Indenture, this Indenture
Supplement or any other Transaction Document to the contrary, the Holders of the
Series 2000-1 Notes are not entitled to make any claims under the Policy or
institute proceedings directly against the Series Enhancer.
(i) Upon the expiration of the Policy in accordance with the terms
thereof, the Indenture Trustee shall surrender the Policy to the Series Enhancer
for cancellation.
Section 4.07. Series 2000-1 Expense Subaccount.
(a) The Issuer, for the benefit of the Series 2000-1 Noteholders and
the Series Enhancer, shall establish and maintain with the Indenture Trustee or
its nominee in the name of the Indenture Trustee, the Series 2000-1 Expense
Subaccount, which shall be a subaccount of the Collection Account (the "SERIES
2000-1 EXPENSE SUBACCOUNT"). The Indenture Trustee shall possess all right,
title and interest in all monies, instruments, investment property and other
property credited from time to time to the Series 2000-1 Expense Subaccount (and
any subaccount thereof) and in all proceeds, earnings, income, revenue,
dividends and distributions
20
thereof for the benefit of the Series 2000-1 Noteholders and the Series
Enhancer. The Series 2000-1 Expense Subaccount shall be under the sole dominion
and control of the Indenture Trustee for the benefit of the Series 2000-1
Noteholders and the Series Enhancer. Pursuant to the authority granted to the
Servicer in Article III of the Transfer and Servicing Agreement, the Servicer
shall have the power, revocable by the Indenture Trustee, to instruct the
Indenture Trustee to make withdrawals and payments from the Series 2000-1
Expense Subaccount for the purposes of making the payments required under
Section 4.05.
(b) Funds on deposit in the Series 2000-1 Expense Subaccount shall be
invested in accordance with Section 4.01 of the Transfer and Servicing Agreement
and Section 6.13 of the Indenture. The Indenture Trustee shall bear no
responsibility or liability for any losses resulting from investment or
reinvestment of any funds in accordance with this Section 4.07(b) nor for the
selection of Eligible Investments, except with respect to investments on which
the institution acting as Indenture Trustee is an obligor.
Section 4.08. Series 2000-1 Principal Subaccount.
(a) The Issuer, for the benefit of the Noteholders, shall establish and
maintain with the Indenture Trustee or its nominee in the name of the Indenture
Trustee, the Series 2000-1 Principal Subaccount, which shall be a subaccount of
the Collection Account (the "SERIES 2000-1 PRINCIPAL SUBACCOUNT"). The Indenture
Trustee shall possess all right, title and interest in all monies, instruments,
investment property and other property credited from time to time to the Series
2000-1 Principal Subaccount (and any subaccount thereof) and in all proceeds,
earnings, income, revenue, dividends and distributions thereof for the benefit
of the Series 2000-1 Noteholders. The Series 2000-1 Principal Subaccount shall
be under the sole dominion and control of the Indenture Trustee for the benefit
of the Noteholders. Pursuant to the authority granted to the Servicer in Article
III of the Transfer and Servicing Agreement, the Servicer shall have the power,
revocable by the Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Series 2000-1 Principal Subaccount for the
purposes of making the payments required under Section 4.05.
(b) Funds on deposit in the Series 2000-1 Principal Subaccount shall be
invested in accordance with Section 4.01 of the Transfer and Servicing Agreement
and Section 6.13 of the Indenture. The Indenture Trustee shall bear no
responsibility or liability for any losses resulting from investment or
reinvestment of any funds in accordance with this Section 4.08(b) nor for the
selection of Eligible Investments, except with respect to investments on which
the institution acting as Indenture Trustee is an obligor.
(c) The Indenture Trustee shall withdraw and transfer funds on deposit
in the Series 2000-1 Principal Subaccount on each Business Day during the
Revolving Period to, or at the direction of, the Issuer if no Series 2000-1
Asset Amount Deficiency has occurred and is continuing and no event that with
the passage of time or the giving of notice could become an Amortization Event,
including a Series 2000-1 Asset Amount Deficiency, would result from such
withdrawal. Any such transfer to the Issuer shall be made free and clear of the
lien of the Indenture and without compliance with Section 12.01(b) of the
Indenture.
21
Section 4.09. Liquidity Reserve Account.
(a) The Issuer, for the benefit of the Series 2000-1 Noteholders and
the Series Enhancer, shall establish and maintain with the Indenture Trustee in
the name of the Indenture Trustee or its nominee, a Qualified Account (including
any subaccounts thereof) bearing a designation clearly indicating that the funds
and other property credited thereto are held for the benefit of the Series
2000-1 Noteholders and the Series Enhancer (the "LIQUIDITY RESERVE ACCOUNT").
The Indenture Trustee shall possess all right, title and interest in all monies,
instruments, investment property and other property credited from time to time
to the Liquidity Reserve Account and in all proceeds, earnings, income, revenue,
dividends and distributions thereof for the benefit of the Series 2000-1
Noteholders and the Series Enhancer. The Liquidity Reserve Account shall be
under the sole dominion and control of the Indenture Trustee for the benefit of
the Series 2000-1 Noteholders and the Series Enhancer. If, at any time, the
Liquidity Reserve Account ceases to be a Qualified Account, the Issuer (or the
Indenture Trustee on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency and the
Series Enhancer may consent) establish a new Liquidity Reserve Account meeting
the conditions specified above, transfer any monies, instruments, investment
property and other property to such new Liquidity Reserve Account and from the
date such new Liquidity Reserve Account is established, it shall be deemed to be
the Liquidity Reserve Account. Pursuant to the authority granted to the Servicer
in Article III of the Transfer and Servicing Agreement, the Servicer shall have
the power, revocable by the Indenture Trustee, to instruct the Indenture Trustee
to make withdrawals and payments from the Series 2000-1 Liquidity Reserve
Account for the purposes of making the payments required under Section 4.05.
(b) On the Series 2000-1 Closing Date, the Issuer deposited $4,597,084
into the Liquidity Reserve Account. Funds on deposit in the Liquidity Reserve
Account shall at the written direction of the Servicer be invested by the
Indenture Trustee in Eligible Investments selected by the Servicer. All such
Eligible Investments shall be held by the Indenture Trustee for the benefit of
the Series 2000-1 Noteholders in accordance with Section 6.13 of the Indenture.
Funds on deposit in the Liquidity Reserve Account will be invested in Eligible
Investments that will mature so that such funds will be available no later than
the close of business on the succeeding Transfer Date. No such Eligible
Investment shall be disposed of prior to its maturity; provided, however, that
the Indenture Trustee may sell, liquidate or dispose of an Eligible Investment
before its maturity, at the written direction of the Issuer, if such sale,
liquidation or disposal would not result in a loss of all or part of the
principal portion of such Eligible Investment or if, prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. Unless directed by
the Servicer, funds deposited in the Liquidity Reserve Account on a Transfer
Date with respect to the immediately succeeding Distribution Date are not
required to be invested overnight. On each Distribution Date, all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Liquidity Reserve Account shall be withdrawn and applied as
Series 2000-1 Collections in accordance with the priority of distribution set
forth in Section 4.01(c). The Indenture Trustee shall bear no responsibility or
liability for any losses resulting from investment or reinvestment of any funds
in accordance with this Section 4.09(c) nor for the selection of Eligible
Investments in accordance with the
22
provisions of this Indenture and any Indenture Supplement, except with respect
to investments on which the institution acting as Indenture Trustee is an
obligor.
Section 4.10. Determination of LIBOR.
(a) On each LIBOR Determination Date, the Paying Agent shall determine
LIBOR on the basis of the rate for deposits in United States dollars for a
one-month period which appears on Telerate Page 3750 as of 11:00 a.m., London
time, on such date. If such rate does not appear on Telerate Page 3750, the rate
for that LIBOR Determination Date shall be determined on the basis of the rates
quoted by the Reference Banks to the Paying Agent as the rates at which deposits
in United States dollars are offered by the Reference Banks to the Paying Agent
at approximately 11:00 a.m., London time, on that day to prime banks in the
London interbank market for a one-month period. The Paying Agent shall request
the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that LIBOR Determination Date shall be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for
that LIBOR Determination Date will be the arithmetic mean of the rates quoted by
major banks in New York City, selected by the Paying Agent, at approximately
11:00 a.m., New York City time, on that day for loans in United States dollars
to leading European banks for a one-month period.
(b) The Note Interest Rate applicable to the then current and the
immediately preceding Interest Periods may be obtained by telephoning the Paying
Agent at its corporate trust office at (000) 000-0000 or such other telephone
number as shall be designated by the Paying Agent for such purpose by prior
written notice by the Paying Agent to each Series 2000-1 Noteholder and the
Series Enhancer from time to time.
Section 4.11. Investment Instructions. Any investment instructions
required to be given to the Indenture Trustee pursuant to the terms hereof must
be given to the Indenture Trustee no later than 11:00 a.m. (New York City time)
on the date such investment is to be made. If the Indenture Trustee receives
such investment instruction later than such time, the Indenture Trustee may, but
shall have no obligation to, make such investment. If the Indenture Trustee is
unable to make an investment required in an investment instruction received by
the Indenture Trustee after 11:00 a.m. (New York City time) on such day, such
investment shall be made by the Indenture Trustee on the next succeeding
Business Day. In no event shall the Indenture Trustee be liable for any
investment not made pursuant to investment instructions received after 11:00
a.m. (New York City time) on the day such investment is requested to be made.
[END OF ARTICLE IV]
23
ARTICLE V
Delivery of Series 2000-1 Notes;
Distributions; Reports to Series 2000-1 Noteholders
Section 5.01. Delivery and Payment for the Series 2000-1 Notes;
Denominations.
The Issuer shall execute and the Authentication Agent shall
authenticate the Series 2000-1 Notes in accordance with Section 2.03 of the
Indenture. The Indenture Trustee shall deliver the Series 2000-1 Notes to or
upon the order of the Issuer when so authenticated.
The Series 2000-1 Notes shall be issuable in the minimum denomination
of $250,000 and in integral multiples of $1,000 in excess thereof.
Section 5.02. Registration; Registration of Transfer and Exchange;
Transfer Restrictions.
(a) The Series 2000-1 Notes have not been registered under the
Securities Act or any state securities law. None of the Issuer, the Registrar or
the Indenture Trustee is obligated to register the Series 2000-1 Notes under the
Securities Act or any other securities or "Blue Sky" laws or to take any other
action not otherwise required under the Agreement to permit the transfer of any
Series 2000-1 Note without registration.
(b) No transfer of any Series 2000-1 Note or any interest therein
(including, without limitation, by pledge or hypothecation) shall be made except
in compliance with the restrictions on transfer set forth in this Section 5.02
(including the applicable legend to be set forth on the face of each Series
2000-1 Note as provided in Exhibits X-0, X-0 xxx X-0, as applicable) and in
Section 5.04 and Section 5.06 in a transaction exempt from the registration
requirements of the Securities Act and applicable state securities or "Blue Sky"
laws (i) to a person (A) who the transferor reasonably believes is a "qualified
institutional buyer" within the meaning thereof in Rule 144A (a "QIB") in the
form of beneficial interest in the Rule 144A Global Note, and (B) that is aware
that the resale or other transfer is being made in reliance on Rule 144A or (ii)
in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation
S, in the form of beneficial interests in the applicable Regulation S Global
Note.
(c) Each Beneficial Owner of a Series 2000-1 Note, by its acceptance
thereof, will be deemed to have acknowledged, represented to and agreed with the
Issuer and the Initial Purchasers as follows:
(i) It understands that the Series 2000-1 Notes will be offered
and may be resold by an Initial Purchaser (A) in the United
States to QIBs pursuant to Rule 144A in the form of beneficial
interests in the Rule 144A Global Note or (B) outside the
United States pursuant to Regulation S, initially in the form
of beneficial interests in the Temporary Regulation S Global
Note. As set forth in Section 5.04(a), beneficial interests in
the Temporary Regulation S Global Note may be exchanged for
beneficial interests in the Permanent Regulation S Global
Note.
24
(ii) It understands that the Series 2000-1 Notes have not been and
will not be registered under the Securities Act or any state
or other applicable securities law and that the Series 2000-1
Notes, or any interest or participation therein, may not be
offered, sold, pledged or otherwise transferred unless
registered pursuant to, or exempt from registration under, the
Securities Act and any other applicable securities law.
(iii) It acknowledges that none of the Issuer or any Initial
Purchaser or any person representing the Issuer or any Initial
Purchaser has made any representation to it with respect to
the Issuer or the offering or sale of any Series 2000-1 Notes,
other than the information contained in the Offering
Memorandum, which has been delivered to it and upon which it
is relying in making its investment decision with respect to
the Series 2000-1 Notes. It has had access to such financial
and other information concerning the Issuer and the Series
2000-1 Notes as it has deemed necessary in connection with its
decision to purchase the Series 2000-1 Notes.
(iv) It acknowledges that the Series 2000-1 Notes will bear a
legend to the following effect unless the Issuer determines
otherwise, consistent with applicable law:
"THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER
HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE OR ANY
INTEREST OR PARTICIPATION HEREIN, MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) TO THE
ISSUER, (2) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO
A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT (A "QIB") PURCHASING FOR ITS OWN ACCOUNT OR A
QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS
INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER
THE SECURITIES ACT OR (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT. EACH NOTE OWNER BY ACCEPTING A BENEFICIAL
INTEREST IN THIS NOTE, UNLESS SUCH PERSON ACQUIRED THIS NOTE
IN A TRANSFER DESCRIBED IN CLAUSE (3) ABOVE, IS DEEMED TO
REPRESENT THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN
ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
PRIOR TO PURCHASING ANY NOTES, PURCHASERS SHOULD CONSULT
COUNSEL WITH RESPECT TO THE AVAILABILITY AND CONDITIONS OF
EXEMPTION FROM THE RESTRICTION ON RESALE OR TRANSFER. THE
ISSUER HAS NOT AGREED TO REGISTER THE NOTES UNDER THE
SECURITIES ACT, TO QUALIFY THE NOTES
25
UNDER THE SECURITIES LAWS OF ANY STATE OR TO PROVIDE
REGISTRATION RIGHTS TO ANY PURCHASER.
AS SET FORTH HEREIN, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF."
(v) If it is acquiring any Series 2000-1 Note, or any interest or
participation therein, as a fiduciary or agent for one or more
investor accounts, it represents that it has sole investment
discretion with respect to such account and that it has full
power to make the acknowledgements, representations and
agreements contained herein on behalf of each such account.
(vi) It (A)(1) is a QIB, (2) is aware that the sale to it is being
made in reliance on Rule 144A and if it is acquiring such
Series 2000-1 Notes or any interest or participation therein
for the account of another QIB, such other QIB is aware that
the sale is being made in reliance on Rule 144A and (3) is
acquiring such Series 2000-1 Notes or any interest or
participation therein for its own account or for the account
of a QIB, or (B) is not a U.S. person and is purchasing such
Series 2000-1 Notes or any interest or participation therein
in an offshore transaction meeting the requirements of Rule
903 or 904 of Regulation S.
(vii) It is purchasing the Series 2000-1 Notes for its own account,
or for one or more investor accounts for which it is acting as
fiduciary or agent, in each case for investment, and not with
a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act,
subject to any requirements of law that the disposition of its
property or the property of such investor account or accounts
be at all times within its or their control and subject to its
or their ability to resell such Series 2000-1 Notes, or any
interest or participation therein, as described in the
Offering Memorandum and as provided in the Agreement.
(viii) It agrees that if in the future it should offer, sell or
otherwise transfer such Series 2000-1 Note or any interest or
participation therein, it will do so only (A) to the Issuer,
(B) pursuant to Rule 144A to a person who it reasonably
believes is a QIB in a transaction meeting the requirements of
Rule 144A, purchasing for its own account or for the account
of a QIB, whom it has informed that such offer, sale or other
transfer is being made in reliance on Rule 144A or (C) in an
offshore transaction meeting the requirements of Rule 903 or
Rule 904 of Regulation S.
(ix) If it is acquiring such Series 2000-1 Note or any interest or
participation therein in an "offshore transaction" (as defined
in Regulation S), it acknowledges that the Series 2000-1 Notes
initially will be represented by the Temporary Regulation S
Global Note and that transfers thereof or any interest or
participation therein are restricted as described in the
Offering
26
Memorandum and as provided in the Agreement. If it is a QIB,
it acknowledges that the Series 2000-1 Notes offered in
reliance on Rule 144A will be represented by a Rule 144A
Global Note and that transfers thereof or any interest or
participation therein are restricted as described in the
Offering Memorandum and as provided in the Agreement.
(x) It understands that the Temporary Regulation S Global Note
will bear a legend to the following effect unless the Issuer
determines otherwise, consistent with applicable law:
"THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS TEMPORARY
GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO
BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON
UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE INDENTURE."
(xi) It acknowledges that the Issuer, the Initial Purchasers and
others will rely on the truth and accuracy of the foregoing
acknowledgments, representations and agreements, and agrees
that if any of the foregoing acknowledgments, representations
and agreements deemed to have been made by it are no longer
accurate, it shall promptly notify the Issuer and the Initial
Purchasers.
(xii) With respect to any foreign purchaser claiming an exemption
from United States income or withholding tax, that it has
delivered to the Paying Agent a true and complete Form W-8,
Form 1001 or Form 4224, indicating such exemption.
(xiii) It acknowledges that transfers of the Series 2000-1 Notes or
any interest or participation therein shall otherwise be
subject in all respects to the restrictions applicable thereto
contained in the Agreement.
Any transfer, resale, pledge or other transfer of the Series 2000-1
Notes contrary to the restrictions set forth above and in the Indenture shall be
deemed void ab initio by the Transfer Agent and Registrar. As used in this
Section 5.02, the terms "United States" and "U.S. persons" have the meaning
given them in Regulation S.
(d) Notwithstanding anything to the contrary contained herein, each
Series 2000-1 Note and the Agreement may, with prior written notice to the
Series Enhancer, be amended or supplemented to modify the restrictions on and
procedures for resale and other transfers of the Series 2000-1 Notes to reflect
any change in applicable law or regulation (or the interpretation thereof) or in
practices relating to the resale or transfer of restricted securities
27
generally. Each Noteholder shall by its acceptance of a Series 2000-1 Note have
agreed to any such amendment or supplement.
(e) Holders of a beneficial interest in Series 2000-1 Notes sold in
reliance on Regulation S as Temporary Regulation S Global Notes are prohibited
from receiving distributions or from exchanging beneficial interests in such
Temporary Regulation S Global Notes for a beneficial interest in a Permanent
Regulation S Global Note until the later of (i) the expiration of the
Distribution Compliance Period (the "RELEASE DATE") and (ii) the furnishing of a
certificate, substantially in the form of Exhibit E-2 attached hereto,
certifying that the beneficial owner of the Temporary Regulation S Global Note
is a non-United States Person (a "REGULATION S CERTIFICATE") as provided in
Section 5.04.
Section 5.03. Global Notes. The Series 2000-1 Notes, upon original
issuance, will be issued (i) in fully registered global form without interest
coupons to QIBs in transactions exempt from the registration requirements of the
Securities Act in reliance on Rule 144A, as a single note in fully registered
form, without interest coupons (the "RULE 144A GLOBAL NOTE"), authenticated and
delivered in substantially the form attached hereto as Exhibit A-1 and/or (ii)
as a single note in "offshore transactions" (within the meaning of Regulation
S), in fully registered form, without interest coupons (the "TEMPORARY
REGULATION S GLOBAL NOTE"), authenticated and delivered in substantially the
form attached hereto as Exhibit A-2. Such Notes shall be delivered to The
Depository Trust Company, the initial Clearing Agency by or on behalf of the
Issuer and initially shall be registered on the Note Register in the name of
Cede & Co., the nominee of the initial Clearing Agency, and no Beneficial Owner
will receive a Definitive Note representing such Beneficial Owner's interest in
such Note, except as provided in Section 2.13 of the Indenture.
Section 5.04. Regulation S Global Notes.
(a) Series 2000-1 Notes issued in reliance on Regulation S initially
will be in the form of a Temporary Regulation S Global Note. Any interest in a
Series 2000-1 Note evidenced by the Temporary Regulation S Global Note is
exchangeable for an interest in a Series 2000-1 Note in fully registered, global
form, without interest coupons, authenticated and delivered in substantially the
form attached hereto as Exhibit A-3 (the "PERMANENT REGULATION S GLOBAL NOTE")
upon the later of (i) the Release Date and (ii) the furnishing of a Regulation S
Certificate.
(b) i) On or prior to the Release Date, each Beneficial Owner of a
Temporary Regulation S Global Note shall deliver to Euroclear or Clearstream
Banking (as applicable) a Regulation S Certificate; provided, however, that any
Beneficial Owner of a Temporary Regulation S Global Note on the Release Date or
on any payment date that has previously delivered a Regulation S Certificate
hereunder shall not be required to deliver any subsequent Regulation S
Certificate (unless the certificate previously delivered is no longer true as of
such subsequent date, in which case such Beneficial Owner shall promptly notify
Euroclear or Clearstream Banking, as applicable, thereof and shall deliver an
updated Regulation S Certificate). Euroclear and/or Clearstream Banking, as
applicable, shall deliver to the Paying Agent a certificate substantially in the
form of Exhibit E-1 (a "NON-U.S. CERTIFICATE") attached hereto promptly upon the
receipt of each such Regulation S Certificate, and no such Beneficial
28
Owner (or transferee from such Beneficial Owner) shall be entitled to receive an
interest in a Permanent Regulation S Global Note or any payment of principal of
or interest on or any other payment with respect to its beneficial interest in a
Temporary Regulation S Global Note prior to the Paying Agent receiving such
Non-U.S. Certificate from Euroclear or Clearstream Banking with respect to the
portion of the Temporary Regulation S Global Note owned by such Beneficial Owner
(and, with respect to an interest in the Permanent Regulation S Global Note,
prior to the Release Date).
(c) Any payments of principal of, interest on or any other payment on a
Temporary Regulation S Global Note received by Euroclear or Clearstream Banking
with respect to any portion of such Regulation S Global Note owned by a
Beneficial Owner that has not delivered the Regulation S Certificate required by
this Section 5.04 shall be held by Euroclear and Clearstream Banking solely as
agents for the Paying Agent. Euroclear and Clearstream Banking shall remit such
payments to the applicable Beneficial Owner (or to a Euroclear or Clearstream
Banking member on behalf of such Beneficial Owner) only after Euroclear or
Clearstream Banking has received the requisite Regulation S Certificate. Until
the Paying Agent has received a Non-U.S. Certificate from Euroclear or
Clearstream Banking, as applicable, stating that it has received the requisite
Regulation S Certificate with respect to the beneficial ownership of any portion
of a Temporary Regulation S Global Note, the Paying Agent may revoke the right
of Euroclear or Clearstream Banking, as applicable, to hold any payments made
with respect to such portion of such Temporary Regulation S Global Note. If the
Paying Agent exercises its right of revocation pursuant to the immediately
preceding sentence, Euroclear or Clearstream Banking, as applicable, shall
return such payments to the Paying Agent and the Paying Agent shall hold such
payments in the Distribution Account until Euroclear or Clearstream Banking, as
applicable, has provided the necessary Non-U.S. Certificates to the Paying Agent
(at which time the Paying Agent shall forward such payments to Euroclear or
Clearstream Banking, as applicable, to be remitted to the Beneficial Owner that
is entitled thereto on the records of Euroclear or Clearstream Banking (or on
the records of their respective members)).
(d) Each Beneficial Owner with respect to a Temporary Regulation S
Global Note shall exchange its interest therein for an interest in a Permanent
Regulation S Global Note on or after the Release Date upon furnishing to
Euroclear or Clearstream Banking (as applicable) the Regulation S Certificate
and upon receipt by the Paying Agent of the Non-U.S. Certificate thereof from
Euroclear or Clearstream Banking, as applicable, in each case pursuant to the
terms of this Section 5.04. On and after the Release Date, upon receipt by the
Paying Agent of any Non-U.S. Certificate from Euroclear or Clearstream Banking
described in the immediately preceding sentence (i) with respect to the first
such certification, the Issuer shall execute and, upon receipt of an order to
authenticate, the Authentication Agent shall authenticate and deliver to the
Custodian the applicable Permanent Regulation S Global Note and (ii) with
respect to the first and all subsequent certifications, the Custodian shall
exchange on behalf of the applicable Beneficial Owners the portion of the
applicable Temporary Regulation S Global Note covered by such certification for
a comparable portion of the applicable Permanent Regulation S Global Note. Upon
any exchange of a portion of a Temporary Regulation S Global Note for a
comparable portion of a Permanent Regulation S Global Note, the Custodian shall
endorse on the schedules affixed to each of such Regulation S Global Notes (or
on continuations of such schedules affixed to each of such Regulation S Global
Notes and made parts thereof) appropriate
29
notations evidencing the date of transfer and (x) with respect to the Temporary
Regulation S Global Note, a decrease in the principal amount thereof equal to
the amount covered by the applicable certification and (y) with respect to the
Permanent Regulation S Global Note, an increase in the principal amount thereof
equal to the principal amount of the decrease in the Temporary Regulation S
Global Note pursuant to clause (x) above.
Section 5.05. Special Transfer Provisions.
(a) If a holder of a beneficial interest in the Rule 144A Global Note
wishes at any time to exchange its interest in the Rule 144A Global Note for an
interest in the Regulation S Global Note, or to transfer its interest in the
Rule 144A Global Note to a person who wishes to take delivery thereof in the
form of an interest in the Regulation S Global Note, such holder may, subject to
the rules and procedures of the Clearing Agency and to the requirements set
forth in the following sentence, exchange or cause the exchange or transfer or
cause the transfer of such interest for an equivalent beneficial interest in the
Regulation S Global Note. Upon receipt by Transfer Agent and Registrar of (1)
instructions given in accordance with the Clearing Agency's procedures from or
on behalf of a Beneficial Owner of the Rule 144A Global Note, directing the
Transfer Agent and Registrar (via DWAC) to credit or cause to be credited a
beneficial interest in the Regulation S Global Note in an amount equal to the
beneficial interest in the Rule 144A Global Note to be exchanged or transferred,
(2) a written order in accordance with the Clearing Agency's procedures
containing information regarding the Euroclear or Clearstream Banking account to
be credited with such increase and the name of such account and (3) a
certificate given by such holder stating that the exchange or transfer of such
interest has been made pursuant to and in accordance with Rule 903 or Rule 904
of Regulation S under the Securities Act, the Transfer Agent and Registrar shall
promptly deliver appropriate instructions to the Clearing Agency (via DWAC), its
nominee or the Custodian, as the case may be, to reduce or reflect on its
records a reduction of the Rule 144A Global Note by the aggregate principal
amount of the beneficial interest in the Rule 144A Global Note to be so
exchanged or transferred from the relevant participant, and the Transfer Agent
and Registrar shall promptly deliver appropriate instructions (via DWAC) to the
Clearing Agency, its nominee, or the Custodian, as the case may be, concurrently
with such reduction, to increase or reflect on its records an increase of the
principal amount of such Regulation S Global Note by the aggregate principal
amount of the beneficial interest in the Rule 144A Global Note to be so
exchanged or transferred, and to credit or cause to be credited to the account
of the person specified in such instructions (who may be Xxxxxx Guaranty Trust
Company of New York, Brussels office, as operator of Euroclear or Clearstream
Banking or another agent member of Euroclear or Clearstream Banking, or both, as
the case may be, acting for and on behalf of them) a beneficial interest in such
Regulation S Global Note equal to the reduction in the principal amount of the
Rule 144A Global Note. Notwithstanding anything to the contrary, the Transfer
Agent and Registrar may conclusively rely upon the completed schedule set forth
in the certificate evidencing the Notes.
(b If a holder of a beneficial interest in the Regulation S Global Note
wishes at any time to exchange its interest in the Regulation S Global Note for
an interest in the Rule 144A Global Note, or to transfer its interest in the
Regulation S Global Note to a person who wishes to take delivery thereof in the
form of an interest in the Rule 144A Global Note, such holder may, subject to
the rules and procedures of Euroclear or Clearstream Banking and the
30
Clearing Agency, as the case may be, and to the requirements set forth in the
following sentence, exchange or cause the exchange or transfer or cause the
transfer of such interest for an equivalent beneficial interest in the Rule 144A
Global Note. Upon receipt by the Transfer Agent and Registrar of (1)
instructions given in accordance with the procedures of Euroclear or Clearstream
Banking and the Clearing Agency, as the case may be, from or on behalf of a
Beneficial Owner of the Regulation S Global Note directing the Transfer Agent
and Registrar to credit or cause to be credited a beneficial interest in the
Rule 144A Global Note in an amount equal to the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, (2) a written order
given in accordance with the procedures of Euroclear or Clearstream Banking and
the Clearing Agency, as the case may be, containing information regarding the
account with the Clearing Agency to be credited with such increase and the name
of such account and (3) prior to the expiration of the Distribution Compliance
Period, a certificate given by such Beneficial Owner stating that the person
transferring such interest in such Regulation S Global Note reasonably believes
that the person acquiring such interest in the Rule 144A Global Note is a QIB
and is obtaining such beneficial interest for its own account or the account of
a QIB in a transaction meeting the requirements of Rule 144A and any applicable
securities laws of any state of the United States or any other jurisdiction, the
Transfer Agent and Registrar shall promptly deliver (via DWAC) appropriate
instructions to the Clearing Agency, its nominee or the Custodian, as the case
may be, to reduce or reflect on its records a reduction of the Regulation S
Global Note by the aggregate principal amount of the beneficial interest in such
Regulation S Global Note to be exchanged or transferred, and the Transfer Agent
and Registrar shall promptly deliver (via DWAC) appropriate instructions to the
Clearing Agency, its nominee, or the Custodian, as the case may be, concurrently
with such reduction, to increase or reflect on its records an increase of the
principal amount of the Rule 144A Global Note by the aggregate principal amount
of the beneficial interest in the Regulation S Global Note to be so exchanged or
transferred, and to credit or cause to be credited to the account of the person
specified in such instructions a beneficial interest in the Rule 144A Global
Note equal to the reduction in the principal amount of the Regulation S Global
Note. After the expiration of the Distribution Compliance Period, the
certification requirement set forth in clause (3) of the second sentence of this
Section 5.05 shall no longer apply to such exchanges and transfers.
Notwithstanding anything to the contrary, the Transfer Agent and Registrar may
conclusively rely upon the completed schedule set forth in the certificate
evidencing the Notes.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) Until the later of the Release Date and the provision of the
certifications required by Section 5.04, beneficial interests in a Regulation S
Global Note may only be held through Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of Euroclear or Clearstream Banking or another
agent member of Euroclear and Clearstream Banking acting for and on behalf of
them. During the Distribution Compliance Period, interests in the Regulation S
Global Note may be exchanged for interests in the Rule 144A Global Note only in
accordance with the certification requirements described above.
31
Section 5.06. CUSIP Numbers. The Issuer in issuing the Series 2000-1
Notes may use "CUSIP" numbers and, if so, the Paying Agent may use "CUSIP"
numbers in notices of redemption as a convenience to Series 2000-1 Noteholders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Series 2000-1 Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Series 2000-1 Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Issuer shall promptly notify the Paying Agent of any change in the
"CUSIP" numbers.
Section 5.07. Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute to
each Series 2000-1 Noteholder of record on the related Record Date such Series
2000-1 Noteholder's pro rata share of amounts on deposit in the Distribution
Account as are payable to the Series 2000-1 Noteholders pursuant to Section 4.05
and Section 4.06(b).
(b) Distributions to Series 2000-1 Noteholders hereunder shall be made
by (i) check mailed to each Series 2000-1 Noteholder (at such Series 2000-1
Noteholder's address as it appears in the Note Register), except that with
respect to any Series 2000-1 Notes registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available funds
and (ii) without presentation or surrender of any Series 2000-1 Note or the
making of any notation thereon.
Section 5.08. Reports and Statements to Series 2000-1 Noteholders.
(a) On each Distribution Date, the Paying Agent shall forward to each
Series 2000-1 Noteholder and the Series Enhancer a statement substantially in
the form of Exhibit C prepared by the Servicer and delivered to the Paying
Agent. The Paying Agent shall have no liability for the Servicer's failure to
provide such statement to it.
(b) On or before January 31 of each calendar year, beginning with
calendar year 2001, the Paying Agent shall furnish or cause to be furnished to
each Person and the Series Enhancer who at any time during the preceding
calendar year was a Series 2000-1 Noteholder, a statement prepared by the
Servicer containing the information required to be contained in the statement to
Series 2000-1 Noteholders and the Series Enhancer, as set forth in paragraph (a)
above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Series 2000-1 Noteholder or the Series Enhancer,
together with such other information as is required to be provided by an issuer
of indebtedness under the Code. Such obligation of the Paying Agent shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Paying Agent pursuant to any requirements
of the Code as from time to time in effect.
[END OF ARTICLE V]
32
ARTICLE VI
Amortization Events
Section 6.01. Series 2000-1 Amortization Events. Upon the
occurrence and continuance of any of the following events:
(a) (i) failure on the part of the Issuer to pay principal of and
interest on the Series 2000-1 Notes in full on or before the Final Stated
Maturity Date (determined without giving effect to any payments on the Series
2000-1 Notes made with proceeds of draws under the Policy), or to pay accrued
interest on the Series 2000-1 Notes in full on any Distribution Date, and such
failure remains unremedied for one Business Day (determined without giving
effect to any payments on the Series 2000-1 Notes made with proceeds of draws
under the Policy), or (ii) failure on the part of the Issuer to maintain its
separate existence or duly to perform or observe any covenant set forth in
Section 3.03(a), (c), (d), (e), (f), (g) or (j) of the Indenture, which failure
continues unremedied for a period of ten calendar days, or (iii) failure on the
part of the Issuer duly to perform or observe any other covenants or agreements
of the Issuer set forth in the Indenture or this Indenture Supplement, which
failure has a Material Adverse Effect with respect to the Issuer or the
interests of the Series 2000-1 Noteholders (determined without giving effect to
any credit enhancement under the Policy) and which continues unremedied for a
period of 30 days, in each case, after the date on which written notice of such
failure, requiring the same to be remedied, has been given to the Issuer by the
Indenture Trustee, or to the Issuer and the Indenture Trustee by the Holders of
not less than a majority of the Series Outstanding Amount;
(b) any representation or warranty made by the Issuer in this Indenture
Supplement or the Indenture proves to have been incorrect in any material
respect when made or when delivered, and continues to be incorrect in any
material respect for a period of 30 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Issuer by the Indenture Trustee, or to the Issuer and the Indenture Trustee by
the Holders of not less than a majority of the Series Outstanding Amount, and as
a result of which the interests of the Series 2000-1 Noteholders are materially
and adversely affected for such period (determined without giving effect to any
credit enhancement under the Policy);
(c) a Servicer Default;
(d) a CMSC Purchase Termination Event under the Purchase Agreement, an
ARSC Purchase Termination Event under the Receivables Purchase Agreement or
Transfer Termination Event under the Transfer and Servicing Agreement;
(e) other than an Event of Default described in clause (s) below, an
Event of Default with respect to the Series 2000-1 Notes;
(f) a Series 2000-1 Asset Amount Deficiency, which Series 2000-1 Asset
Amount Deficiency continues for any five consecutive Business Days;
(g) the amount on deposit in the Liquidity Reserve Account Amount is
less than the Required Liquidity Reserve Account Amount for any five consecutive
Business Days;
(h) the amount on deposit in the Marketing Expenses Account is less
than the Required Marketing Expenses Account Amount for any five consecutive
Business Days;
33
(i) (i) the Average Days in Inventory for Appraised Value Homes
equals or exceeds 210 days for any Monthly period; or
(ii) the average of the Average Days in Inventory for
Appraised Value Homes for any Monthly Period and for the immediately
preceding five Monthly Periods equals or exceeds 180 days; or
(iii) the Average Days in Inventory for Homes other than
Appraised Value Homes equals or exceeds 60 days for any Monthly Period;
or
(iv) the average of the Average Days in Inventory for Homes
other than Appraised Value Homes for any Monthly Period and for the
immediately preceding five Monthly Periods equals or exceeds 40 days;
(j) the Default Ratio for any Monthly Period exceeds 7.0%, or the Three
Month Average Default Ratio for any Monthly Period exceeds 6.0%;
(k) the Dilution Ratio for any Monthly Period exceeds 2.25%, or the
Three Month Average Dilution Ratio for any Monthly Period exceeds 1.50%;
(l) Net Credit Losses for any Monthly Period exceed $750,000 and for
any 12 consecutive Monthly Periods exceed $1,500,000;
(m) the failure to vest and maintain in the Indenture Trustee a
perfected first priority security interest in the Pledged Assets;
(n) either (i) the Internal Revenue Service files notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with respect to any of the
ARSC Purchased Assets, and such Lien has not been released within five days or,
if released, proved to the satisfaction of the Rating Agencies, or (ii) the PBGC
files, or indicates its intention to file a notice of a lien pursuant to Section
4068 of ERISA with respect to any of the Pledged Assets;
(o) an Insolvency Event occurs with respect to the Series Enhancer;
(p) any of the Purchase Agreement, the Receivables Purchase Agreement,
the Transfer and Servicing Agreement, the Indenture, this Indenture Supplement,
the Insurance Agreement or any related documents cease, for any reason, to be in
full force and effect, other than in accordance with its terms;
(q) a failure on the part of CMSC, as the Servicer, to cooperate with
the transfer of the servicing to a successor Servicer following the delivery of
a Termination Notice pursuant to the Transfer and Servicing Agreement, which
failure is determined by the Majority Investors to be material and continues
unremedied for a period of ten calendar days after the date on which written
notice of such failure, requiring the same to be remedied, has been given to the
Issuer by the Indenture Trustee, or to the Issuer and the Indenture Trustee by
the Holders of a majority of the Series Outstanding Amount;
(r) an Event of Bankruptcy shall occur with respect to the Issuer, the
Transferor, the Performance Guarantor, CMSC or CMF; or
34
(s) an Event of Default arising from a determination that the Issuer is
required to be registered under the Investment Company Act of 1940;
then, in the case of any event described in clauses (a) through (e), (g), (h)
and (j) through (q) an "AMORTIZATION EVENT" will be deemed to have occurred only
if, after the applicable grace period, if any, set forth in such clauses, either
the Indenture Trustee or the Holders of not less than a majority of the Series
Outstanding Amount by notice then given in writing to the Issuer and the
Servicer (and to the Indenture Trustee if given by the Series 2000-1
Noteholders) may declare that an Amortization Event has occurred as of the date
of such notice, in the case of any event described in clauses (f) and (i), an
Amortization Event will occur at the close of business on the fifth Business Day
following the occurrence of such event without any notice or other action on the
part of the Indenture Trustee or the Series 2000-1 Noteholders unless prior to
that time the Holders of not less than a majority of the Series Outstanding
Amount by notice then given in writing to the Issuer, the Servicer and the
Indenture Trustee declare that an Amortization Event will not result from the
occurrence of such event and, in the case of any event described in clauses (r)
or (s), an Amortization Event shall occur immediately upon the occurrence of
such event without any notice or other action on the part of the Indenture
Trustee or the Series 2000-1 Noteholders.
Section 6.02. Cross-Defaults. The Issuer will not include in any
Indenture Supplement for any Series of Notes (other than Series 2000-1) an
amortization event which would allow such Series to amortize based on the
occurrence of an Amortization Event.
[END OF ARTICLE VI]
35
ARTICLE VII
Optional Redemption of Series 2000-1 Notes
Section 7.01 Optional Redemption of Series 2000-1 Notes.
(a) On any Business Day occurring on or after the date on which the
Series Outstanding Amount is reduced to an amount equal to or less than 10% of
the Initial Series Outstanding Amount, the Issuer shall have the option to
redeem the Series 2000-1 Notes, at a redemption price equal to (i) if such day
is a Distribution Date, the Redemption Price for such Distribution Date or (ii)
if such day is not a Distribution Date, the Redemption Price for the immediately
succeeding Distribution Date.
(b) The Issuer shall give the Servicer and the Indenture Trustee at
least 30 days prior written notice of the date on which the Issuer intends to
exercise such optional redemption. Not later than 12:00 noon, New York City
time, on such day the Issuer shall deposit into (a) the Series 2000-1 Principal
Subaccount in immediately available funds the excess of the principal portion of
the Redemption Price over the amount, if any, on deposit in the Series 2000-1
Principal Subaccount and (b) the Series 2000-1 Expense Subaccount in immediately
available funds the excess of the interest portion of the Redemption Price over
the amount, if any, of the Monthly Interest on deposit in the Series 2000-1
Expense Subaccount. The portion of the Redemption Price relating to amounts
owing to the Series Enhancer shall be paid directly to the Series Enhancer on
such day Such redemption option is subject to payment in full of the Redemption
Price. Upon payment and distribution of the Redemption Price and the reduction
in the Series Outstanding Amount to zero, the Series 2000-1 Noteholders and the
Series Enhancer shall have no further interest in the Pledged Assets. The
Redemption Price shall be distributed as set forth in Section 4.05.
[END OF ARTICLE VII]
36
ARTICLE VIII
Miscellaneous Provisions
Section 8.01. Ratification of Agreement. As supplemented by this
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.
Section 8.02. Counterparts. This Indenture Supplement may be
executed in two or more counterparts, and by different parties on separate
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
Section 8.03. Governing Law. THIS INDENTURE SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING ss.5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
Section 8.04. Series Enhancer Deemed Series 2000-1 Noteholder.
Except for any period during which a Series Enhancer Default is continuing, the
Series Enhancer shall be deemed to be the Holder of 100% of the Series 2000-1
Notes for the purposes of giving any consents, waivers, approvals, instructions,
directions, declarations, notices and/or taking any other action pursuant to the
Indenture, this Indenture Supplement and the other Transaction Documents. So
long as no Series Enhancer Default shall have occurred and be continuing, the
Series Enhancer shall have the right to exercise all rights of the Holders of
the Series 2000-1 Notes under the Transaction Documents without any consent of
such Holders, and such Holders may exercise such rights only with the prior
written consent of the Series Enhancer, except as otherwise expressly provided
herein. Any reference in the Indenture or the Transaction Documents to
materially, adversely, or detrimentally affecting the rights or interests of the
Noteholders, or words of similar meaning, shall be deemed, for purposes of the
Series 2000-1 Notes, to refer to the rights or interests of the Series Enhancer.
Section 8.05. Subrogation. In furtherance of and not in limitation
of the Series Enhancer's equitable right of subrogation, each of the Indenture
Trustee and the Issuer acknowledge that, to the extent of any payment made by
the Series Enhancer under the Policy with respect to interest on or principal of
the Series 2000-1 Notes, the Series Enhancer is to be fully subrogated to the
extent of such payment and any additional interest due on any late payment, to
the rights of the Series 2000-1 Noteholders under the Indenture and this
Indenture Supplement. Each of the Issuer and the Indenture Trustee agree to such
subrogation and, further, agree to take such actions as the Series Enhancer may
reasonably request to evidence such subrogation.
37
Section 8.06. Certain Rights of the Series Enhancer.
(a) The Series Enhancer is an express third-party beneficiary of the
Indenture to the extent of provisions relating to any Series Enhancer and this
Indenture Supplement.
(b) The Indenture Trustee shall provide to the Series Enhancer upon
request copies of any report, notice, opinion of counsel, officer's certificate,
request for consent or request for amendment to any Transaction Document
promptly upon the Indenture Trustee's production or receipt thereof (in each
case, to the extent that such documents are not expressly required to be
provided directly to the Series Enhancer pursuant to the terms of the
Transaction Documents).
(c) Subject, in each case, to Section 6.03(d) of the Indenture, the
Indenture Trustee shall cooperate in all respect with any reasonable request by
the Series Enhancer for action to preserve or enforce the Series Enhancer's
rights or interests under the Indenture, this Indenture Supplement and the other
Transaction Documents, including, without limitation, a request to institute
proceedings for collection of all amounts then owing in respect of the Series
2000-1 Notes or the Insurance Premium.
(d) The Indenture Trustee shall, upon reasonable prior written request,
permit any representative of the Series Enhancer, during the Indenture Trustee's
normal business hours, to examine all books of accounts, records, reports and
other information of the Indenture Trustee relating to the Series 2000-1 Notes
and the Pledged Assets, to make copies and extracts therefrom and to discuss the
Indenture Trustee's performance of its duties with respect to the Transaction
Documents with the responsible officers and employees of the Indenture Trustee.
(e) The Series Enhancer shall be deemed to be an Applicable Series
Enhancer for purposes of the Indenture.
[END OF ARTICLE VIII]
[SIGNATURE PAGE FOLLOWS]
38
IN WITNESS WHEREOF, the undersigned have caused this Indenture
Supplement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
APPLE RIDGE FUNDING LLC,
as Issuer
By:
---------------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Paying Agent, Authentication Agent
and Transfer Agent and Registrar
By:
---------------------------------------
Name:
Title:
[Signature Page to Indenture Supplement]
DISTRICT OF COLUMBIA )
) ss.:
COUNTY OF __________________ )
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared _______________ known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said Delaware limited
liability company and that she/he executed the same as the corporation for the
purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of __________,
2000.
-----------------------------
Notary Public
[Seal]
My commission expires:
------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared Xxxxx X. Xxxxxxxx known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said national
banking organization and that she/he executed the same as the corporation for
the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of __________,
2000.
------------------------------
Notary Public
[Seal]
My commission expires:
------------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF _____________ )
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared ________________ known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said New York
banking corporation and that she/he executed the same as the corporation for the
purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of __________,
2000.
-----------------------------
Notary Public
[Seal]
My commission expires:
------------------------------
