Exhibit 10.9
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LFI RECEIVABLES MASTER TRUST
SERIES 1997-2 SUPPLEMENT
Dated as of February 4, 1997
to
AMENDED AND RESTATED
POOLING AGREEMENT
Dated as of February 4, 1997
Among
LFI RECEIVABLES CORPORATION,
LFI SERVICING CORPORATION,
as Master Servicer,
THE CHASE MANHATTAN BANK,
as Agent and as Initial Purchaser
and
THE CHASE MANHATTAN BANK,
as Trustee
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TOC Series 1997-2 Supplement
TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Definitions.............................................. 2
ARTICLE II
Designation of VFC Certificates; Purchase and Sale
of the VFC Certificates
SECTION 2.01. Designation.............................................. 27
SECTION 2.02. The Series 1997-2 Certificates and
Series 1997-2 Subordinated Interest..................... 27
SECTION 2.03. Purchases of Interests in the VFC
Certificates and the Series 1997-2
Subordinated Interest................................. 28
SECTION 2.04. Delivery................................................. 29
SECTION 2.05. Procedure for Initial Issuance and for
Increasing the Series 1997-2
Invested Amount....................................... 29
SECTION 2.06. Procedure for Decreasing the Series
1997-2 Invested Amount; Optional
Termination........................................... 31
SECTION 2.07. Reductions of the Commitments............................ 33
SECTION 2.08. Interest; Commitment Fee................................. 34
SECTION 2.09. Indemnification by the Company and the
Master Servicer....................................... 35
ARTICLE III
Article III of the Agreement
SECTION 3A.02. Establishment of Trust Accounts.......................... 37
SECTION 3A.03. Daily Allocations........................................ 39
SECTION 3A.04. Determination of Interest................................ 42
SECTION 3A.05. Determination of Series 1997-2 Monthly
Principal............................................. 44
SECTION 3A.06. Applications............................................. 46
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ARTICLE IV
Distributions and Reports
SECTION 4A.01. Distributions............................................ 49
SECTION 4A.02. Daily Reports............................................ 49
SECTION 4A.03. Statements and Notices................................... 49
ARTICLE V
Additional Early Amortization Events
SECTION 5.01. Additional Early Amortization Events..................... 51
ARTICLE VI
Servicing Fee
SECTION 6.01. Servicing Compensation................................... 56
ARTICLE VII
Change in Circumstances
SECTION 7.01. Illegality............................................... 57
SECTION 7.02. Requirements of Law...................................... 57
SECTION 7.03. Taxes.................................................... 59
SECTION 7.04. Indemnity................................................ 62
SECTION 7.05. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate....................... 63
SECTION 7.06. Limitation............................................... 65
ARTICLE VIII
Covenants, Representations and Warranties
SECTION 8.01. Representations and Warranties of the
Company and the Master Servicer....................... 65
SECTION 8.02. Covenants of the Company and the Master
Servicer.............................................. 65
SECTION 8.03. Negative Covenant of the Company;
Covenants of the Master Servicer...................... 67
SECTION 8.04. Obligations Unaffected................................... 67
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SECTION 8.05. Representations and Warranties of the
Initial Purchasers and Acquiring
Purchasers............................................ 68
ARTICLE IX
Conditions Precedent
SECTION 9.01. Conditions Precedent to Effectiveness
of Supplement......................................... 70
ARTICLE X
The Agent
SECTION 10.01. Appointment.............................................. 75
SECTION 10.02. Delegation of Duties..................................... 76
SECTION 10.03. Exculpatory Provisions................................... 76
SECTION 10.04. Reliance by Agent........................................ 77
SECTION 10.05. Notice of Master Servicer Default or
Early Amortization Event or
Potential Early Amortization Event.................... 77
SECTION 10.06. Non-Reliance on Agent and Other
Purchasers............................................ 78
SECTION 10.07. Indemnification.......................................... 79
SECTION 10.08. Agent in Its Individual Capacity......................... 80
SECTION 10.09. Successor Agent.......................................... 80
ARTICLE XI
Miscellaneous
SECTION 11.01. Ratification of Agreement................................ 81
SECTION 11.02. Governing Law............................................ 81
SECTION 11.03. Further Assurances....................................... 81
SECTION 11.04. Payments................................................. 81
SECTION 11.05. Costs and Expenses....................................... 82
SECTION 11.06. No Waiver; Cumulative Remedies........................... 82
SECTION 11.07. Amendments............................................... 82
SECTION 11.08. Severability............................................. 84
SECTION 11.09. Notices.................................................. 84
SECTION 11.10. Successors and Assigns................................... 85
SECTION 11.11. Counterparts............................................. 90
SECTION 11.12. Adjustments; Setoff...................................... 90
SECTION 11.13. Limitation of Payments by Company........................ 91
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SECTION 11.14. No Bankruptcy Petition................................... 92
SECTION 11.15. Limitation on Addition and Termination
of Sellers.............................................. 92
ARTICLE XII
Final Distributions
SECTION 12.01. Certain Distributions.................................... 94
EXHIBITS
Exhibit A Form of VFC Certificate, Series 1997-2
Exhibit B Form of Commitment Transfer Supplement
Exhibit C Form of Administrative Questionnaire
Exhibit D Form of Daily Report
Exhibit E Form of Monthly Settlement Statement
Exhibit F Form of Notice of Issuance/Increase
Exhibit G Form of Confidentiality Agreement
SCHEDULES
Schedule 1 Commitments
Schedule 2 Trust Accounts
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Series 1997-2 Supplement
SERIES 1997-2 SUPPLEMENT dated as of February 4, 1997
(this "Supplement"), among LFI RECEIVABLES CORPORATION, a
Delaware corporation (the "Company"), LFI SERVICING
CORPORATION, a Delaware corporation, as master servicer (the
"Master Servicer"), The Chase Manhattan Bank, as the initial
purchaser (the "Initial Purchaser"), the other financial
institutions from time to time parties hereto as purchasers
pursuant to Section 11.10, The Chase Manhattan Bank, a New
York corporation, as agent (the "Agent") for the Purchasers
(as hereinafter defined) in its individual capacity and not as
Trustee and THE CHASE MANHATTAN BANK, in its capacity as
trustee (the "Trustee") under the Agreement.
W I T N E S S E T H :
WHEREAS, the Company, the Master Servicer and the Trustee have
entered into the Amended and Restated Pooling Agreement, dated as of February 4,
1997 (the "Agreement");
WHEREAS, the Agreement provides, among other things, that the
Company, the Master Servicer and the Trustee may at any time and from time to
time enter into supplements to the Agreement for the purpose of authorizing the
issuance on behalf of the Trust by the Company for execution and redelivery to
the Trustee for authentication of one or more Series of Investor Certificates;
and
WHEREAS, the Company, the Master Servicer, the Trustee and the
Initial Purchaser wish to supplement the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and other good
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and valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) The following words and phrases shall
have the following meanings with respect to Series 1997-2 and the definitions of
such terms are applicable to the singular as well as the plural form of such
terms and to the masculine as well as the feminine and neuter genders of such
terms:
"ABR" shall mean, for any day, a per annum alternate base rate
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. If for any reason, the Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the immediately preceding sentence, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
The term "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Agent as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall
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be effective on the date such change is publicly announced as being effective.
The term "Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment
Rate. The term "Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it. The term
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Accrual Period" shall mean, with respect to Series 1997-2, the
period from and including a Distribution Date to but excluding the succeeding
Distribution Date; provided that in the case of the initial Accrual Period, it
shall mean the period from and including the Issuance Date to but excluding
March 17, 1997.
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Series 1997-2 Supplement
"Accrued Expense Adjustment" shall mean, for any Business Day in any
Accrual Period, the amount, if any, which may be less than zero, equal to the
difference between (a) the entire amount of (i) the Commitment Fee, if any, due
and payable on the next succeeding Distribution Date, (ii) the Series 1997-2
Monthly Interest to be distributed on the next succeeding Distribution Date,
(iii) the Series 1997-2 Monthly Servicing Fee, (iv) the aggregate amount of all
previously accrued, unpaid and unallocated Series 1997-2 Monthly Interest for
prior Distribution Dates, (v) the aggregate amount of all accrued, unpaid and
unallocated Additional Interest and (vi) all accrued Program Costs, in each case
for such Accrual Period determined as of such day, and (b) the aggregate of the
amounts transferred to the Series 1997-2 Non-Principal Collection Sub-subaccount
on or before such day in respect of such Accrual Period pursuant to subsection
3A.03(a)(i), before giving effect to any transfer made in respect of the Accrued
Expense Adjustment on such day pursuant to the further proviso to such
subsection.
"Accrued Expense Amount" shall mean, for each Business Day during an
Accrual Period, the sum of (a) in the case of each of the first ten Business
Days in the Accrual Period, one-tenth of the Series 1997-2 Monthly Interest
determined as of such Business Day, (b) in the case of each of the first ten
Business Days in the Accrual Period, one-tenth of the Commitment Fee payable to
the VFC Certificateholders on the next succeeding Distribution Date, (c) in the
case of each of the first ten Business Days in the Accrual Period, one-tenth of
the Series 1997-2 Monthly Servicing Fee (in the case of each of the foregoing
clauses (a) through (c), up to the amount thereof due and payable on the
succeeding Distribution Date, but subject to Accrued Expense Adjustments as
provided in subsection 3A.03(a)(i)), (d) the aggregate amount of all previously
accrued, unpaid and unallocated Series 1997-2 Monthly Interest for prior
Distribution Dates, (e) the aggregate amount of all accrued, unpaid and
unallocated Additional Interest and (f) all
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Program Costs that have accrued since the preceding Business Day.
"Acquiring Purchaser" shall have the meaning assigned in subsection
11.10(b).
"Additional Interest" shall have the meaning assigned in subsection
3A.04(b).
"Aged Receivables Ratio" shall mean, as of the last day of each
Settlement Period, the percentage equivalent of a fraction, the numerator of
which shall be the sum of (a) the aggregate unpaid balance of Receivables
originated by the Sellers that were 91 to 120 days past due and (b) the
aggregate amount of Receivables of such Sellers that were charged off as
uncollectible prior to the day that is 91 days after its original due date
during such Settlement Period, and the denominator of which shall be the
aggregate Principal Amount of Receivables originated by the Sellers during the
fourth prior Settlement Period (including the Settlement Period ended on such
day).
"Agent" shall have the meaning specified in the recitals hereto.
"Aggregate Commitment Amount" shall mean, with respect to any
Business Day, the aggregate amount of the Commitments of all Purchasers on such
date, as reduced from time to time pursuant to Section 2.07.
"Applicable Margin" shall mean at any date of determination, for
each Eurodollar Tranche, 1.0% per annum and, for the Floating Tranche, 0.0% per
annum.
"Article VII Costs" shall mean any amounts due pursuant to Article
VII.
"Assessment Rate" shall mean, for any date, the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent as the
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then current net annual assessment rate that will be employed in determining
amounts payable by the Agent to the Federal Deposit Insurance Corporation (or
any successor) for insurance by such corporation (or such successor) of time
deposits made in U.S. Dollars at the Agent's domestic offices.
"Available Commitment" shall mean, with respect to any Business Day,
the (i) Aggregate Commitment Amount on such Business Day minus (ii) the Series
1997-2 Invested Amount.
"Available Pricing Amount" shall mean, on any Business Day, the sum
of (i) the Unallocated Balance plus (ii) the Increase, if any, on such date.
"Benefitted Purchaser" shall have the meaning assigned in Section
11.12.
"Carrying Cost Reserve Ratio" shall mean, as of any Settlement
Report Date and continuing until (but not including) the next Settlement Report
Date, an amount (expressed as a percentage) equal to (a) the product of (i) 2.0
times Days Sales Outstanding as of such day and (ii) 1.30 times the ABR in
effect as of such day divided by (b) 365.
"Certificate Rate" shall mean on any date of determination, the
average (weighted based on the respective outstanding amounts of the Floating
Tranche and each Eurodollar Tranche) of the ABR in effect on such day and
One-Month LIBOR in effect on such day plus, in each case, the Applicable Margin.
"Change in Control" shall mean the occurrence of any event the
result of which causes Lifestyle Holdings Ltd. or the Company not to be a direct
or indirect, wholly owned Subsidiary of Lifestyle Furnishings International Ltd.
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"Claim" shall have the meaning specified in subsection 2.09(a).
"Commitment" shall mean, as to any Purchaser, its obligation to
maintain and, subject to certain conditions, increase, its Series 1997-2
Purchaser Invested Amount, in an aggregate amount not to exceed at any one time
outstanding the amount set forth opposite such Purchaser's name on Schedule 1
under the caption "Commitment", as such amount may be reduced from time to time
as provided herein; collectively, as to all Purchasers, the "Commitments".
"Commitment Fee" shall have the meaning assigned in subsection
2.08(b).
"Commitment Percentage" shall mean, as to any Purchaser and as of
any date, the percentage equivalent of a fraction, the numerator of which is
such Purchaser's Commitment as set forth on Schedule 1 and the denominator of
which is the Aggregate Commitment Amount as of such date.
"Commitment Period" shall mean the period commencing on the Issuance
Date and terminating on the date that the Series 1997-2 Amortization Period
commences.
"Commitment Reduction" shall have the meaning assigned in subsection
2.07(a).
"Commitment Termination Date" shall mean the earlier of (a) the
Scheduled Revolving Termination Date and (b) the date on which the Commitments
are terminated in whole pursuant to Section 2.07.
"Commitment Transfer Supplement" shall have the meaning assigned in
subsection 11.10(c).
"Company Indemnified Person" shall have the meaning assigned in
subsection 2.09(a).
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Series 1997-2 Supplement
"Daily Interest Adjustment" shall mean, for any Business Day in any
Accrual Period, the amount, if any, which may be less than zero, equal to the
difference between (i) the sum of (A) the Series 1997-2 Monthly Interest
determined as of such day, (B) the aggregate amount of all previously accrued,
unpaid and unallocated Series 1997-2 Monthly Interest for prior Distribution
Dates and (C) the aggregate amount of all accrued, unpaid and unallocated
Additional Interest and (ii) the amount on deposit in the Series 1997-2 Accrued
Interest Sub-subaccount on such day after making any deposit thereto pursuant to
subsection 3A.03(c), before giving effect to any transfer made in respect of the
Daily Interest Adjustment on such day pursuant to the proviso to such
subsection.
"Daily Interest Deposit" shall mean, for any Business Day, an amount
equal to (i) the amount of accrued and unpaid Daily Interest Expense in respect
of such day plus (ii) the aggregate amount of all previously accrued, unpaid and
unallocated Series 1997-2 Monthly Interest for prior Distribution Dates plus
(iii) the aggregate amount of all accrued, unpaid and unallocated Additional
Interest.
"Daily Interest Expense" for any day in any Accrual Period, shall
mean the sum of (A) the product of (i) the portion of the Series 1997-2 Invested
Amount (calculated without regard to clauses (d) and (e) of the definition of
Series 1997-2 Purchaser Invested Amount) allocable to the Floating Tranche on
such day divided by 365 and (ii) the ABR plus the Applicable Margin in effect on
such day, and (B) the product of (i) the portion of the Series 1997-2 Invested
Amount (calculated without regard to clauses (d) and (e) of the definition of
Series 1997-2 Purchaser Invested Amount) allocable to Eurodollar Tranches on
such day divided by 360 and (ii) One-Month LIBOR plus the Applicable Margin on
such day in effect with respect thereto; provided, however, that for the
purposes of calculating Series 1997-2 Monthly Interest, the "Daily Interest
Expense" for any day following the date of determination shall be based on the
allocable portions of
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Series 1997-2 Supplement
the Series 1997-2 Invested Amount, the ABR, One-Month LIBOR and the Applicable
Margins as of or in effect on such date of determination; provided, further,
that for any such day during the continuation of an Early Amortization Period,
the "Daily Interest Expense" for such day shall be equal to the greater of (i)
the sum of the amounts calculated pursuant to clauses (A) and (B) above and (ii)
the product of (x) the Series 1997-2 Invested Amount on such day divided by 365
and (y) the ABR in effect on such day plus 2.00% per annum.
"Daily Report" shall mean a report prepared by the Master Servicer
on each Business Day for the period specified therein, in substantially the form
of Exhibit D.
"Days Sales Outstanding" shall mean, as of any Settlement Report
Date and continuing until the next Settlement Report Date, the number of days
equal to the product of (a) 91 and (b) the amount obtained by dividing (i) the
aggregate Principal Amount of Eligible Receivables as at the last day of the
Settlement Period immediately preceding such earlier Settlement Report Date, by
(ii) the aggregate Principal Amount of Receivables generated by the Sellers for
the three Settlement Periods immediately preceding such earlier Settlement
Report Date.
"Decrease" shall have the meaning assigned in Section 2.06.
"Dilution Horizon" shall mean the number of days from the invoicing
of a Receivable until a Dilution Adjustment with respect to such Receivable is
issued by the related Seller or the related Seller receives notice that a
Dilution Adjustment will have to be issued in respect of such Receivable;
provided, however, that in no event shall the Dilution Horizon be less than 30
days.
"Dilution Horizon Factor" shall mean (a) for the period from the
Issuance Date until the sixth Settlement Report Date to occur thereafter, 3.167
and (b) for each six-month period to occur after such initial period, a
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Series 1997-2 Supplement
fraction, the numerator of which is the dollar weighted average Dilution Horizon
of the Sellers (based upon the Dilution Adjustment of the selected Receivables)
for such period (which shall be calculated by the related Servicer, in
accordance with its past procedures for such calculations, selecting a random
sample of approximately 200 Dilution Adjustment memos from each Seller created
during such period and determining the Dilution Horizon therefrom) and the
denominator of which is 30; provided, however, that the numerator used to
calculate the Dilution Horizon Factor shall in no event be less than 30;
provided, further, that if the Dilution Horizon Factor for any period is less
than the Dilution Horizon Factor for the immediately preceding period, then the
actual Dilution Horizon Factor for such current period shall be recalculated to
equal a fraction, the numerator of which is equal to the average of the
numerators used to calculate the Dilution Horizon Factor for such immediately
preceding period and such current period (but not less than 30) and the
denominator of which is 30.
"Dilution Period" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
quotient of (i) the product of (A) the aggregate Principal Amount of Receivables
that were originated by the Sellers during the Settlement Period preceding such
earlier Settlement Report Date and (B) the Dilution Horizon Factor and (ii) the
Aggregate Receivables Amount as of the last day of the Settlement Period
preceding such earlier Settlement Report Date.
"Dilution Ratio" shall mean, as of the last day of each Settlement
Period, an amount (expressed as a percentage) equal to the aggregate amount of
Dilution Adjustments made during such Settlement Period divided by the aggregate
Principal Amount of Receivables that were originated by the Sellers during the
second prior Settlement Period (including the Settlement Period ending on such
day).
"Dilution Reserve Ratio" shall mean, as of any Settlement Report
Date and continuing until (but not
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Series 1997-2 Supplement
including) the next Settlement Report Date, an amount (expressed as a
percentage) that is calculated as follows:
DRR = [(c * d) + [(e-d) * (e/d)]] * f
Where:
DRR = Dilution Reserve Ratio;
c = 2.00;
d = the three-month rolling average of the Dilution Ratio that occurred
during the period of three consecutive Settlement Periods ending
immediately prior to such earlier Settlement Report Date; provided,
however, that if the Dilution Horizon is (i) at least two but less
than three, "d" shall equal the two-month rolling average of the
Dilution Ratio that occurred during the period of two consecutive
Settlement Periods ending immediately prior to such earlier
Settlement Report Date or (ii) less than two, "d" shall equal the
Dilution Ratio for the Settlement Period ending immediately prior to
such earlier Settlement Report Date;
e = the highest three-month rolling average of the Dilution Ratio that
occurred during the period of twelve consecutive Settlement Periods
ending prior to such earlier Settlement Report Date; provided,
however, that if the Dilution Horizon Factor is (i) at least two but
less than three, "e" shall equal the highest two-month rolling
average of the Dilution Ratio that occurred during the period of
twelve consecutive Settlement Periods ending prior to such earlier
Settlement Report Date or (ii) less than two, "e" shall equal the
highest Dilution Ratio for any Settlement Period during the period
of twelve consecutive Settlement
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Series 1997-2 Supplement
Periods ending prior to such earlier Settlement Report Date; and
f = the Dilution Period.
"Early Amortization Event" shall have the meanings assigned in
Section 5.01 of this Supplement and Section 7.01 of the Agreement.
"Early Amortization Period" shall have the meaning assigned in
Section 5.01 of this Supplement and Section 7.01 of the Agreement.
"Effective Date" shall have the meaning assigned in Section 9.01.
"Eurodollar Period" shall mean, with respect to any Eurodollar
Tranche:
(a) initially, the period commencing on the Issuance Date, Increase
Date or conversion date, as the case may be, with respect to such
Eurodollar Tranche and ending one month thereafter; and
(b) thereafter, each period commencing on the last day of the
immediately preceding Eurodollar Period applicable to such Eurodollar
Tranche and ending one month thereafter;
provided that, all of the foregoing provisions relating to Eurodollar Periods
are subject to the following:
(1) if any Eurodollar Period would otherwise end on a day that is
not a Business Day, such Eurodollar Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Eurodollar Period into another calendar month in which event
such Eurodollar Period shall end on the immediately preceding Business
Day;
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Series 1997-2 Supplement
(2) any Eurodollar Period that would otherwise extend beyond the
Scheduled Revolving Termination Date shall end on the Scheduled Revolving
Termination Date; and
(3) any Eurodollar Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Eurodollar
Period) shall end on the last Business Day of a calendar month.
"Eurodollar Tranche" shall mean a portion of the Series 1997-2
Invested Amount for which the Series 1997-2 Monthly Interest is calculated by
reference to One-Month LIBOR determined by reference to a particular Eurodollar
Period.
"Excess Program Costs" shall have the meaning assigned to such term
within the definition of "Program Costs".
"Floating Tranche" shall mean that portion of the Series 1997-2
Invested Amount not allocated to a Eurodollar Tranche for which the Series
1997-2 Monthly Interest is calculated by reference to the ABR.
"Government Obligor Factor" shall mean 2.5% for the three month
period from December through February of any year and 1.5% for the nine month
period from March through November of any year.
"HFG Companies" shall mean Ametex Fabrics, Inc., The Berkline
Corporation, Drexel Heritage Furnishings Inc., Henredon Furniture Industries,
Inc., Interior Fabric Design, Inc., Intro Europe, Inc., La Barge, Inc.,
Lexington Furniture Industries, Inc., Lifestyle Holdings Ltd., Xxxxxxxx-Xxxxx,
Inc., Marbro Lamp Company, Xxxx, Son & Xxxxxxx, Inc., Xxxxxx Xxxxx Fabrics,
Inc., Xxxxxx Xxxxx Fabrics of N.Y., Inc., Sunbury Textile Xxxxx, Inc.,
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Series 1997-2 Supplement
Universal Furniture Limited, Lineage Home Furnishings, Inc., and Masco Home
Furnishings, Inc.
"Increase" shall have the meaning assigned in subsection 2.05(a).
"Increase Amount" shall have the meaning assigned in subsection
2.05(a).
"Increase Date" shall have the meaning assigned in subsection
2.05(a).
"Initial Purchaser" shall have the meaning specified in the recitals
hereto.
"Initial Series 1997-2 Invested Amount" shall mean $0.
"Initial Series 1997-2 Subordinated Interest Amount" shall mean the
Series 1997-2 Subordinated Interest Amount in respect of the Issuance Date.
"Interest Shortfall" shall have the meaning assigned in subsection
3A.04(b).
"Invested Amount" shall mean, with respect to Series 1997-2, the
Series 1997-2 Invested Amount.
"Issuance Date" shall mean February 4, 1997.
"Loss Reserve Ratio" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date, an
amount (expressed as a percentage) that is calculated as follows:
LRR = [(a * b)/c] * d * e
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Series 1997-2 Supplement
Where:
LRR = Loss Reserve Ratio;
a = the aggregate Principal Amount of Receivables originated by the
Sellers during the three Settlement Periods immediately preceding
such earlier Settlement Report Date;
b = the highest three-month rolling average of the Aged Receivables
Ratio that occurred during the period of twelve consecutive
Settlement Periods ending prior to such earlier Settlement Report
Date;
c = the Aggregate Receivables Amount as of the last day of the
Settlement Period immediately preceding such earlier Settlement
Report Date;
d = 2.00; and
e = the Payment Terms Factor.
"Majority Purchasers" shall mean, on any day, Purchasers having, in
the aggregate, more than 50% of the Aggregate Commitment Amount.
"Master Servicer Indemnified Person" shall have the meaning
specified in subsection 2.09(b).
"Maximum Commitment Amount" shall mean $50,000,000.
"Maximum Invested Amount" shall mean, as of any day, the lesser of
(a) the Maximum Commitment Amount as of such day and (b) the Aggregate
Receivables Amount as of such day minus the Series 1997-2 Required Subordinated
Amount as of such day.
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Series 1997-2 Supplement
"Minimum Ratio" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, an amount
(expressed as a percentage) that is calculated as follows:
MR = (a * b) + c + d
Where:
MR = Minimum Ratio;
a = the average of the Dilution Ratio during the period of the twelve
consecutive Settlement Periods ending prior to such earlier
Settlement Report Date;
b = the Dilution Period;
c = 12.0%; and
d = Government Obligor Factor.
"Monthly Interest Payment" shall have the meaning assigned in
subsection 3A.06(b).
"One-Month LIBOR" shall mean, with respect to any Eurodollar Tranche
for any Eurodollar Period, the rate per annum, as recorded by the Trustee, which
is the arithmetic mean (rounded to the nearest 1/100th of 1%) of the offered
rates for U.S. Dollar deposits having a maturity of one month commencing on the
first day of such Eurodollar Period that appears on Page 3750 of the Telerate
(or on any successor or substitute page of such service, or any successor to or
substitute for such service providing rate quotations comparable to those
currently provided on such page of the Telerate Service as determined by the
Trustee for purposes of providing interest rates applicable to U.S. Dollar
deposits having a maturity of one month in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such
17
Series 1997-2 Supplement
Eurodollar Period. In the event that such rate is not so available at such time
for any reason, then "One-Month LIBOR" for such Eurodollar Period shall be the
rate at which U.S. Dollar deposits in a principal amount of not less than
$1,000,000 maturing in one month are offered to the principal London office of
the Trustee in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Eurodollar Period.
"Optional Repurchase Percentage" shall mean 10% of the largest
Series 1997-2 Invested Amount at any time on or before the date of
determination.
"Optional Termination Date" shall have the meaning assigned in
subsection 2.06(d)(i).
"Optional Termination Notice" shall have the meaning assigned in
subsection 2.06(d)(i).
"Participants" shall have the meaning assigned in subsection
11.10(f).
"Payment Terms Factor" shall mean (a) for the period from the
Issuance Date until the third Settlement Report Date to occur thereafter, 1.14
and (b) for each three-month period to occur after such initial period, a
fraction, the numerator of which is the sum of (i) the weighted average payment
terms (based upon the Principal Amount of the Receivables and expressed as a
number of days) for the Receivables originated during such period and (ii) 60
and the denominator of which is 90; provided, however, that if the Payment Terms
Factor for any period is less than the Payment Terms Factor for the immediately
preceding period, then the actual Payment Terms Factor for such current period
shall be recalculated to equal a fraction, the numerator of which is equal to
the average of the numerators used to calculate the Payment Terms Factor for
such current period and the three immediately preceding periods and the
denominator of which is 90.
18
Series 1997-2 Supplement
"Program Costs" shall mean, for any Business Day, the sum of (i) all
expenses, indemnities and other amounts due and payable to the Purchasers and
the Agent under the Agreement or this Supplement (including, without limitation,
any Article VII Costs), (ii) the product of (A) all unpaid fees and expenses due
and payable to counsel to, and independent auditors of, the Company (other than
fees and expenses payable on or in connection with the closing of the issuance
of the VFC Certificates) and (B) a fraction, the numerator of which is the
Aggregate Commitment Amount on such Business Day and the denominator of which is
the sum of (x) the Series 1997-1 Invested Amount on such Business Day and (y)
the Aggregate Commitment Amount on such Business Day and (iii) all unpaid fees
and expenses due and payable to Rating Agencies rating the VFC Certificates;
provided, however, that Program Costs shall not exceed $50,000 in the aggregate
in any fiscal year of the Master Servicer (any amount of the foregoing expenses,
indemnities and fees in excess of $50,000 shall be referred to herein as "Excess
Program Costs").
"Purchase Termination Event" shall have the meaning assigned in
Section 7.01 of the Receivables Sale Agreement.
"Purchaser" shall mean each purchaser of a VFC Certificate,
including each Initial Purchaser and each Acquiring Purchaser.
"Rating Agency" shall mean, in the event that Series 1997-2 has been
rated, S&P, DCR or any such other rating agency that has rated the VFC
Certificates at the request of the Agent, as applicable; provided that in the
event that Series 1997-2 has not been rated, any reference to "Rating Agency" or
the "Rating Agencies" shall be deemed to have been deleted herefrom and from the
Agreement; provided that, in the case of the term "Rating Agency Condition" and
in the event that Series 1997-2 has not been rated, references to such term
shall not be deemed deleted
19
Series 1997-2 Supplement
but shall be modified as set forth under the definition of such term.
"Rating Agency Condition" shall, with respect to any action, have
the meaning assigned in Section 1.01 of the Agreement; provided that in the
event that Series 1997-2 has not been rated, any reference to a "Rating Agency
Condition" shall be deemed to be a reference to the prior written consent of the
Agent with respect to such action.
"Record Date" shall mean, with respect to any Distribution Date, the
Business Day immediately preceding such date.
"Register" shall have the meaning assigned in subsection 11.10(d).
"Scheduled Revolving Termination Date" shall mean the last day of
the Settlement Period ending in October 2001.
"Seller Addition Date" shall have the meaning assigned in Section
3.05 of the Receivables Sale Agreement.
"Series 1997-2" shall mean the Series of Investor Certificates and
Subordinated Company Interest, the Principal Terms of which are set forth in
this Supplement.
"Series 1997-2 Accrued Interest Sub-subaccount" shall have the
meaning assigned in subsection 3A.02(a).
"Series 1997-2 Adjusted Invested Amount" shall mean, as of any date
of determination, (i) the Series 1997-2 Invested Amount on such date, minus (ii)
the amount on deposit in the Series 1997-2 Principal Collection Sub- subaccount
on such date up to a maximum of the Series 1997-2 Invested Amount.
"Series 1997-2 Allocable Charged-Off Amount" shall mean, with
respect to any Special Allocation Settlement
20
Series 1997-2 Supplement
Report Date, the "Allocable Charged-Off Amount", if any, that has been allocated
to Series 1997-2.
"Series 1997-2 Allocable Recoveries Amount" shall mean, with respect
to any Special Allocation Settlement Report Date, the "Allocable Recoveries
Amount", if any, that has been allocated to Series 1997-2.
"Series 1997-2 Allocated Receivables Amount" shall mean, on any date
of determination, the lower of (i) the Series 1997-2 Target Receivables Amount
on such day and (ii) the Aggregate Receivables Amount on such day times the
percentage equivalent of a fraction the numerator of which is the Series 1997-2
Target Receivables Amount on such day and the denominator of which is the
Aggregate Target Receivables Amount on such day.
"Series 1997-2 Amortization Period" shall mean the period commencing
on the Business Day following the earliest to occur of (i) the date on which an
Early Amortization Period is declared to commence or automatically commences,
(ii) the Optional Termination Date and (iii) the Scheduled Revolving Termination
Date and ending on the earlier of (i) the date when the Series 1997-2 Invested
Amount shall have been reduced to zero and all accrued interest and other
amounts owing on the VFC Certificates and to the Agent and the Purchasers
hereunder shall have been paid and (ii) the Series 1997-2 Termination Date.
"Series 1997-2 Collections" shall mean, with respect to any Business
Day, an amount equal to the product of (i) the Series 1997-2 Invested Percentage
on such Business Day and (ii) Aggregate Daily Collections.
"Series 1997-2 Collection Subaccount" shall have the meaning
assigned in subsection 3A.02(a).
"Series 1997-2 Invested Amount" shall mean, as of any date of
determination, the sum of the Series 1997-2 Purchaser Invested Amounts of all
Purchasers on such date.
21
Series 1997-2 Supplement
"Series 1997-2 Invested Percentage" shall mean, with respect to any
Business Day (i) during the Series 1997-2 Revolving Period, the percentage
equivalent of a fraction, the numerator of which is the Series 1997-2 Allocated
Receivables Amount as of the end of the immediately preceding Business Day and
the denominator of which is the greater of (A) the Aggregate Receivables Amount
as of the end of the immediately preceding Business Day and (B) the sum of the
numerators used to calculate the Invested Percentage for all Outstanding Series
on the Business Day for which such percentage is determined and (ii) during the
Series 1997-2 Amortization Period, the percentage equivalent of a fraction, the
numerator of which is the Series 1997-2 Allocated Receivables Amount as of the
end of the last Business Day of the Series 1997-2 Revolving Period (provided
that if during the Series 1997-2 Amortization Period, the amortization periods
of all other Outstanding Series which were outstanding prior to the commencement
of the Series 1997-2 Amortization Period commence, then, from and after the date
the last of such series commences its Amortization Period, the numerator shall
be the Series 1997-2 Allocated Receivables Amount as of the end of the Business
Day preceding such date) and the denominator of which is the greater of (A) the
Aggregate Receivables Amount as of the end of the immediately preceding Business
Day and (B) the sum of the numerators used to calculate the Invested Percentage
for all Outstanding Series on the Business Day for which such percentage is
determined.
"Series 1997-2 Monthly Interest" shall mean, with respect to any
Accrual Period, the sum of the Daily Interest Expense for each day in such
Accrual Period.
"Series 1997-2 Monthly Interest Distribution" shall have the meaning
assigned in subsection 3A.04(a).
"Series 1997-2 Monthly Principal Payment" shall have the meaning
assigned in Section 3A.05.
22
Series 1997-2 Supplement
"Series 1997-2 Monthly Servicing Fee" shall have the meaning
assigned in Section 6.01.
"Series 1997-2 Non-Principal Collection Sub- subaccount" shall have
the meaning assigned in subsection 3A.02(a).
"Series 1997-2 Principal Collection Sub- subaccount" shall have the
meaning assigned in subsection 3A.02(a).
"Series 1997-2 Purchaser Invested Amount" shall mean, with respect
to any Purchaser on the Issuance Date, an amount equal to the product of such
Purchaser's Commitment Percentage on such date and the Initial Series 1997-2
Invested Amount, and with respect to such Purchaser on any date of determination
thereafter, an amount equal to (a) such Purchaser's Series 1997-2 Invested
Amount on the immediately preceding Business Day (or, with respect to the day as
of which such Purchaser becomes a party to this Supplement, whether by executing
a counterpart hereof, a Commitment Transfer Supplement or otherwise, the portion
of the transferor's Series 1997-2 Purchaser Invested Amount being purchased, in
the case of an Acquiring Purchaser), plus (b) the amount of any increases in
such Purchaser's Series 1997-2 Invested Amount pursuant to Section 2.05 made on
such day, minus (c) the amount of any distributions to such Purchaser pursuant
to Section 2.06 or subsection 3A.06(c)(i) on such day minus (d) the aggregate
Series 1997-2 Allocable Charged-Off Amount applied to such Purchaser on or prior
to such date pursuant to subsection 3A.05(b)(ii) plus (e) (but only to the
extent of any unreimbursed reductions made pursuant to clause (d) above) the
aggregate Series 1997-2 Allocable Recoveries Amount applied to such Purchaser on
or prior to such date pursuant to subsection 3A.05(c)(i).
"Series 1997-2 Required Reserves Ratio" shall mean, the greater of
(i) the sum of the Dilution Reserve Ratio and the Loss Reserve Ratio and (ii)
the Minimum Ratio.
23
Series 1997-2 Supplement
"Series 1997-2 Required Subordinated Amount" shall mean, (a) on any
date of determination during the Series 1997-2 Revolving Period, an amount equal
to the sum of:
(i) an amount equal to the product of (A) the Series 1997-2 Adjusted
Invested Amount on such day and (B) a fraction the numerator of which is
the Series 1997-2 Required Reserves Ratio and the denominator of which is
one minus the Series 1997-2 Required Reserves Ratio;
(ii) the product of (A) the Series 1997-2 Invested Amount and (B) a
fraction the numerator of which is the Carrying Cost Reserve Ratio and the
denominator of which is one minus the Series 1997-2 Required Reserves
Ratio; and
(iii) the product of (A) the Principal Amount of Receivables in the
Trust on such day, (B) a fraction the numerator of which is the Series
1997-2 Invested Amount and the denominator of which is the Aggregate
Invested Amount on such day and (C) a fraction the numerator of which is
the Servicing Reserve Ratio and the denominator of which is one minus the
Series 1997-2 Required Reserves Ratio.
and (b) on any date of determination during the Series 1997-2 Amortization
Period, an amount equal to the Series 1997-2 Required Subordinated Amount on the
last Business Day of the Series 1997-2 Revolving Period; provided that such
amount shall be adjusted on each Special Allocation Settlement Report Date, if
any, as set forth in Section 3A.05(b)(i) and Section 3A.05(c)(ii).
"Series 1997-2 Revolving Period" shall mean the period commencing on
the Issuance Date and terminating on the earliest to occur of the close of
business on (i) the date on which an Early Amortization Period is declared to
24
Series 1997-2 Supplement
commence or automatically commences, (ii) the Optional Termination Date and
(iii) the Commitment Termination Date.
"Series 1997-2 Subordinated Interest" shall have the meaning
assigned in subsection 2.02(b).
"Series 1997-2 Subordinated Interest Amount" shall mean, for any
date of determination, an amount equal to (i) the Series 1997-2 Allocated
Receivables Amount minus (ii) the Series 1997-2 Adjusted Invested Amount.
"Series 1997-2 Subordinated Interest Increase Amount" shall have the
meaning assigned in subsection 2.05(a).
"Series 1997-2 Subordinated Interest Reduction Amount" shall have
the meaning assigned in subsection 2.06(b).
"Series 1997-2 Target Receivables Amount" shall mean, on any date of
determination, the sum of (i) the Series 1997-2 Adjusted Invested Amount on such
day and (ii) the Series 1997-2 Required Subordinated Amount for such day.
"Series 1997-2 Termination Date" shall mean the Distribution Date
that occurs in August 2002.
"Servicing Reserve Ratio" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) equal to (i) the product of (A) the
Servicing Fee Percentage and (B) 2.0 times Days Sales Outstanding as of such
earlier Settlement Report Date divided by (c) 360.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one
25
Series 1997-2 Supplement
minus the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board and any other banking authority, domestic or foreign, to which the
Agent is subject for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Transfer Issuance Date" shall mean the date on which a Commitment
Transfer Supplement becomes effective pursuant to the terms of such Commitment
Transfer Supplement.
"Transferee" shall have the meaning assigned in subsection 11.10(f).
"Trust Accounts" shall have the meaning assigned in subsection
3A.02(a).
"Unallocated Balance" shall mean, as of any Business Day, the sum of
(i) the portion of the Series 1997-2 Invested Amount for which interest is then
being calculated by reference to the ABR and (ii) the portion of the Series
1997-2 Invested Amount allocated to any Eurodollar Tranche that expires on such
Business Day.
"VFC Certificate" shall mean a VFC Certificate, Series 1997-2,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"VFC Certificateholders" shall mean the Purchasers.
"VFC Certificateholders' Interest" shall have the meaning assigned
in subsection 2.02(a).
26
Series 1997-2 Supplement
(b) If any term, definition or provision contained herein conflicts
with or is inconsistent with any term, definition or provision contained in the
Agreement, the terms and provisions of this Supplement shall govern. All
capitalized terms not otherwise defined herein are defined in the Agreement. All
Article, Section, subsection, Exhibit and Schedule references herein shall mean
Article, Section or subsection of or Exhibit or Schedule to this Supplement,
except as otherwise provided herein. Unless otherwise stated herein, as the
context otherwise requires or if such term is otherwise defined in the
Agreement, each capitalized term used or defined herein shall relate only to the
VFC Certificates and the Series 1997-2 Subordinated Interest and to no other
Series of Investor Certificates or Subordinated Company Interest issued by the
Trust.
(c) Any reference herein to a Schedule or Exhibit to this Supplement
shall be deemed to be a reference to such Schedule or Exhibit as it may be
amended, modified or supplemented from time to time to the extent that such
Schedule or Exhibit may be amended, modified or supplemented (or any term or
provision of any Transaction Document may be amended that would have the effect
of amending, modifying or supplementing information contained in such Schedule
or Exhibit) in compliance with the terms of the Transaction Documents.
(d) Any reference in this Supplement to any representation, warranty
or covenant "deemed" to have been made is intended to encompass only
representations, warranties or covenants that are expressly stated to be
repeated on or as of dates following the execution and delivery of this
Supplement, and no such reference shall be interpreted as a reference to any
implicit, inferred, tacit or otherwise unexpressed representation, warranty or
covenant.
(e) The words "include", "includes" or "including" shall be
interpreted as if followed, in each case, by the phrase "without limitation".
27
Series 1997-2 Supplement
ARTICLE II
Designation of VFC Certificates; Purchase and
Sale of the VFC Certificates
SECTION 2.01. Designation. The Investor Certificates created and
authorized pursuant to the Agreement and this Supplement shall be designated as
the "VFC Certificates, Series 1997-2."
SECTION 2.02. The VFC Certificates and Series 1997-2 Subordinated
Interest. (a) The VFC Certificates shall represent fractional undivided
interests in the Trust Assets, consisting of the right of the VFC
Certificateholders to receive the distributions specified herein out of (i) the
Series 1997-2 Invested Percentage (expressed as a decimal) of Collections
received with respect to the Receivables and all other funds on deposit in the
Collection Account and (ii) to the extent such interests appear herein, all
other funds on deposit in the Series 1997-2 Collection Subaccount and any
subaccounts thereof (collectively, the "VFC Certificateholders' Interest").
(b) The Company shall retain a fractional undivided interest in the
Trust Assets, consisting of the right of the holder of the Series 1997-2
Subordinated Company Interest to receive the distributions specified herein out
of (i) the Series 1997-2 Invested Percentage (expressed as a decimal) of
Collections received with respect to the Receivables and all other funds on
deposit in the Collection Account and (ii) to the extent such interests appear
herein, all other funds on deposit in the Series 1997-2 Collection Subaccount
and any subaccounts thereof, in each case to the extent not required to be
distributed to or for the benefit of the VFC Certificateholders (the "Series
1997-2 Subordinated Interest"). The Exchangeable Company Interest and any other
Series of Investor Certificates or Subordinated Company
28
Series 1997-2 Supplement
Interests outstanding shall represent the ownership interests in the remainder
of the Trust Assets not allocated pursuant hereto to the VFC Certificateholders'
Interest or the Series 1997-2 Subordinated Interest.
(c) The VFC Certificates shall be substantially in the forms of
Exhibit A, and shall, upon issue, be executed and delivered by the Company to
the Trustee for authentication and redelivery as provided in Section 2.04 hereof
and Section 5.02 of the Agreement. The VFC Certificates shall not be issued in
the form of a single global certificate as provided for in Section 5.01 of the
Agreement, but shall instead be issued in the form of one or more definitive
certificates, each registered in the name of a Purchaser as the holder thereof.
The Series 1997-2 Subordinated Interest shall be uncertificated.
SECTION 2.03. Purchases of Interests in the VFC Certificates and the
Series 1997-2 Subordinated Interest. (a) Initial Purchase. Subject to the terms
and conditions of this Supplement, including delivery of notice in accordance
with Section 2.04, (i) each Initial Purchaser hereby severally agrees (A) to
purchase on the Issuance Date a VFC Certificate in an amount equal to such
Initial Purchaser's Commitment Percentage of the Initial Series 1997-2 Invested
Amount and (B) to maintain its VFC Certificate, subject to increase or decrease
during the Series 1997-2 Revolving Period, in accordance with the provisions of
this Supplement and (ii) the Company hereby agrees (A) to purchase from the
Trust on the Issuance Date the rights as holder of the Series 1997-2
Subordinated Interest in an amount equal to the Initial Series 1997-2
Subordinated Interest Amount and (B) to maintain such interest in the Series
1997-2 Subordinated Interest, subject to increase or decrease during the Series
1997-2 Revolving Period, in accordance with the provisions of this Supplement.
Payments by the Initial Purchasers in respect of the VFC Certificates shall be
made in immediately available funds on the Issuance Date to the Agent for
payment to the Trust.
29
Series 1997-2 Supplement
(b) Subsequent Purchases. Subject to the terms and conditions of
this Supplement, each Acquiring Purchaser shall be deemed to have severally
agreed, by its acceptance of its VFC Certificate, to maintain its VFC
Certificate, subject to increase or decrease during the Series 1997-2 Revolving
Period, in accordance with the provisions of this Supplement.
(c) Maximum Series 1997-2 Purchaser Invested Amount. Notwithstanding
anything to the contrary contained in this Supplement, at no time shall the
Series 1997-2 Purchaser Invested Amount (calculated without regard to clauses
(d) and (e) of the definition thereof) of any Purchaser exceed such Purchaser's
Commitment at such time.
SECTION 2.04. Delivery. On the Issuance Date, the Company shall sign
on behalf of the Trust and shall direct the Trustee in writing pursuant to
Section 5.02 of the Agreement to duly authenticate, and the Trustee, upon
receiving such direction, shall so authenticate the VFC Certificates in such
names and such denominations and deliver such VFC Certificates to the Initial
Purchasers in accordance with such written directions. The Trustee shall xxxx on
its books the actual Series 1997-2 Invested Amount and Series 1997-2
Subordinated Interest Amount outstanding on any date of determination, which,
absent manifest error, shall constitute prima facie evidence of the outstanding
Series 1997-2 Invested Amount and Series 1997-2 Subordinated Interest Amount
from time to time.
SECTION 2.05. Procedure for Initial Issuance and for Increasing the
Series 1997-2 Invested Amount. (a) Subject to subsection 2.05(b), on any
Business Day during the Commitment Period, each Purchaser agrees that the Series
1997-2 Invested Amount may be increased by increasing each Purchaser's Series
1997-2 Purchaser Invested Amount (an "Increase"), up to an amount not exceeding
each Purchaser's Commitment, upon the request of the Master Servicer or the
Company on behalf of the Trust (each date on which an increase in the Series
1997-2 Invested Amount occurs
30
Series 1997-2 Supplement
hereunder being herein referred to as the "Increase Date" applicable to such
Increase); provided, however, that the Master Servicer or the Company, as the
case may be, shall have given the Agent irrevocable written notice (effective
upon receipt), substantially in the form of Exhibit F hereto, of such request no
later than (i) if the Initial Series 1997-2 Invested Amount or Increase Amount
is to be priced solely with reference to the ABR, 1:00 p.m., New York City time,
on the Issuance Date or such Increase Date, as the case may be, or (ii) if all
or a portion of the Initial Series 1997-2 Invested Amount or Increase Amount is
to be allocated to a Eurodollar Tranche, 1:00 p.m., New York City time, three
Business Days prior to the Issuance Date or such Increase Date, as the case may
be; provided further that the provisions of this subsection shall not restrict
the allocations of Collections pursuant to Article III. Such notice shall state
(x) the Issuance Date or the Increase Date, as the case may be; (y) the Initial
Series 1997-2 Invested Amount or the proposed amount of such Increase (the
"Increase Amount"), as the case may be; and (z) what portions thereof will be
allocated to a Eurodollar Tranche and the Floating Tranche. No Purchaser shall
be obligated to fund any such Increase, unless concurrently with any such
Increase in the Series 1997-2 Invested Amount, the Series 1997-2 Subordinated
Interest Amount shall be increased by an amount (the "Series 1997-2 Subordinated
Interest Increase Amount") such that after giving effect to such increase, the
Series 1997-2 Adjusted Invested Amount plus the Series 1997-2 Subordinated
Interest Amount equals the Series 1997-2 Target Receivables Amount.
(b) The Purchasers shall not be required to make the initial
purchase of VFC Certificates on the Issuance Date or to increase their
respective Series 1997-2 Invested Amounts on any Increase Date hereunder unless:
(i) the related aggregate initial purchase amount or Increase Amount
is equal to (A) in the case of a Floating Tranche, $100,000 or an integral
multiple of $100,000 in excess thereof and (B) in the case of a
31
Series 1997-2 Supplement
Eurodollar Tranche, $500,000 or an integral multiple of $500,000 in excess
thereof;
(ii) after giving effect to the initial purchase amount or Increase
Amount, (A) the Series 1997-2 Invested Amount (calculated without regard
to clauses (d) and (e) of the definition of Series 1997-2 Purchaser
Invested Amount) would not exceed the Maximum Commitment Amount on the
Issuance Date or such Increase Date, as the case may be, and (B) the
Series 1997-2 Allocated Receivables Amount would not be less than the
Series 1997-2 Target Receivables Amount on the Issuance Date or such
Increase Date, as the case may be; and
(iii) no Early Amortization Event or Potential Early Amortization
Event shall have occurred and be continuing.
(c) After receipt by the Agent of the notice required by subsection
2.05(a) from the Master Servicer or the Company on behalf of the Trust, the
Agent shall, so long as the conditions set forth in subsections 2.05(a) and (b)
are satisfied, promptly provide telephonic notice to each Purchaser of the
Increase Date and of the portion of the Increase Amount allocable to such
Purchaser (which shall equal such Purchaser's Commitment Percentage of the
Increase Amount). The Master Servicer shall promptly notify the Company of the
Increase Date and the amount of the Series 1997-2 Subordinated Interest Increase
Amount. Each Purchaser agrees to pay in immediately available funds such
Purchaser's Commitment Percentage of each Increase on the related Increase Date
to the Agent for payment to the Trust.
SECTION 2.06. Procedure for Decreasing the Series 1997-2 Invested
Amount; Optional Termination. (a) On any Business Day during the Series 1997-2
Revolving Period or the Series 1997-2 Amortization Period (except for
Distribution Dates during the Series 1997-2 Amortization Period (which shall be
governed by subsection 3A.06(c))), upon the written request of the Master
Servicer or the
32
Series 1997-2 Supplement
Company on behalf of the Trust, the portion of the Series 1997-2 Invested Amount
not allocated to a Eurodollar Tranche may be reduced (a "Decrease") by the
distribution by the Trustee to the Agent for the pro rata benefit of the
Purchasers in accordance with their Commitment Percentages of some or all of the
funds on deposit in the Series 1997-2 Principal Collection Sub-subaccount on
such day; provided that the Master Servicer shall have given the Agent and the
Trustee irrevocable written notice (effective upon receipt), prior to 1:00 p.m.,
New York City time, on the Business Day of such Decrease and which notice shall
state the amount of such Decrease; provided further that such Decrease shall be
in an amount equal to $100,000 and integral multiples of $100,000 in excess
thereof; provided further, however, that no prepayment of any Eurodollar Tranche
prior to the termination of a Eurodollar Period may occur unless, concurrently
with such prepayment, the Sellers shall have paid to the Purchasers any amounts
due and payable pursuant to Section 7.04.
(b) Simultaneously with any such Decrease during the Series 1997-2
Revolving Period, the Series 1997-2 Subordinated Interest Amount shall be
reduced by an amount (the "Series 1997-2 Subordinated Interest Reduction
Amount") such that the Series 1997-2 Subordinated Interest Amount shall equal
the Series 1997-2 Required Subordinated Amount after giving effect to such
Decrease. During the Series 1997-2 Revolving Period, after the distribution
described in subsection (a) above has been made, and the Series 1997-2
Subordinated Interest Amount shall have been reduced by the Series 1997-2
Subordinated Interest Reduction Amount, a distribution shall be made to the
holder of the Series 1997-2 Subordinated Interest out of remaining funds on
deposit in the Series 1997-2 Principal Collection Sub- subaccount in an amount
equal to the lesser of (x) the Series 1997-2 Subordinated Interest Reduction
Amount and (y) the amount of such remaining funds on deposit in the Series
1997-2 Principal Collection Sub-subaccount.
33
Series 1997-2 Supplement
(c) Any reduction in the Series 1997-2 Invested Amount on any
Business Day shall be allocated first to reduce the Available Pricing Amount.
(d) (i) On any Business Day to occur following the second
anniversary of the Issuance Date and prior to the occurrence of the Scheduled
Revolving Termination Date, an Early Amortization Event or Potential Early
Amortization Event, the Company shall have the right to deliver an irrevocable
notice (an "Optional Termination Notice") to the Trustee and the Master Servicer
in which the Company declares that the Series 1997-2 Revolving Period shall
terminate on the date (the "Optional Termination Date") set forth in such notice
(which date, in any event, shall not be less than 10 days from the date on which
such notice is delivered).
(ii) From and after the Optional Termination Date, the Series 1997-2
Amortization Period shall commence for all purposes under this Agreement and the
other Transaction Documents. The Trustee shall give prompt written notice of its
receipt of an Optional Termination Notice to the Purchasers and each Rating
Agency.
SECTION 2.07. Reductions of the Commitments. (a) On any Business Day
during the Series 1997-2 Revolving Period, the Company, on behalf of the Trust,
may, upon three Business Days prior written notice (effective upon receipt)
reduce or terminate the Commitments (a "Commitment Reduction") in an aggregate
amount equal to $5,000,000 or a whole multiple of $5,000,000 in excess thereof;
provided that no such termination or reduction shall be permitted if, after
giving effect thereto and to any reduction in the Series 1997-2 Invested Amount
(calculated without regard to clauses (d) and (e) of the definition of Series
1997-2 Purchaser Invested Amount) on such date, the Series 1997-2 Invested
Amount would exceed the Commitment Amount then in effect. Each Purchaser's
Commitment shall be reduced by such Purchaser's Commitment Percentage of the
amount of such Commitment Reduction.
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Series 1997-2 Supplement
(b) Once reduced, the Commitments may not be subsequently
reinstated. Upon effectiveness of any such reduction, the Agent shall prepare a
revised Schedule 1 to reflect the reduced Commitment of each Purchaser and
Schedule 1 of this Supplement shall be deemed to be automatically superseded by
such revised Schedule 1. The Agent shall distribute such revised Schedule 1 to
the Company, the Master Servicer, the Trustee and each Purchaser.
SECTION 2.08. Interest; Commitment Fee. (a) Interest shall be
payable on the VFC Certificates on each Distribution Date pursuant to subsection
3A.06(a).
(b) The Trustee (acting at the written direction of the Master
Servicer) shall pay to the Agent, for the pro rata account of the Purchasers in
accordance with their Commitment Percentages, on each Distribution Date, a
commitment fee with respect to each Accrual Period or portion thereof ending on
such date (the "Commitment Fee") during the Series 1997-2 Revolving Period at a
rate equal to 1/2% per annum of the average daily excess of the Aggregate
Commitment Amount over the average Series 1997-2 Invested Amount during such
Accrual Period; provided that, for purposes of calculating clause (b) of the
Accrued Expense Amount on any date of determination and clause (a)(i) of the
Accrued Expense Adjustment for purposes of clause (A) of the proviso to
subsection 3A.03(a)(i) of this Supplement, as they relate to the Commitment Fee,
it will be assumed that the average Series 1997-2 Invested Amount during the
relevant Accrual Period is equal to zero. The Commitment Fee shall be payable
(a) monthly in arrears on each Distribution Date, (b) on the Commitment
Termination Date and (c) the Optional Termination Date. To the extent that funds
on deposit in the Series 1997-2 Accrued Interest Sub- subaccount and the Series
1997-2 Non-Principal Collection Sub-subaccount at any such date are insufficient
to pay the Commitment Fee due on such date, the Trustee shall so notify the
Company and the Company shall immediately pay the Agent the amount of any such
deficiency. The Trustee shall not be
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Series 1997-2 Supplement
liable for the payment of the Commitment Fee from its own funds.
(c) Calculations of per annum rates and fees under this Supplement
shall be made on the basis of a 365- day year with respect to Commitment Fees,
other fees, and, except with respect to Eurodollar Tranches, interest rates.
Each determination of One-Month LIBOR by the Agent shall be conclusive and
binding upon each of the parties hereto in the absence of manifest error.
SECTION 2.09. Indemnification by the Company and the Master
Servicer. (a) The Company agrees to indemnify and hold harmless the Agent, each
Purchaser and each of their respective officers, directors, agents and employees
(each, a "Company Indemnified Person") from and against any loss, liability,
expense, damage or injury (a "Claim") suffered or sustained by such Company
Indemnified Person by reason of (i) any acts, omissions or alleged acts or
omissions arising out of, or relating to, activities of the Company pursuant to
any Pooling and Servicing Agreement or the other Transaction Documents to which
it is a party, (ii) in the case of a Claim brought by a third party, a breach of
any representation or warranty made or deemed made by the Company (or any of its
officers), except to the extent that such Company Indemnified Person would be
indemnified and held harmless by an adjustment payment in respect of Ineligible
Receivables pursuant to Section 2.05 of the Agreement or (iii) in the case of
Claim brought by a third party, a failure by the Company to comply with any
applicable law or regulation or to perform its covenants, agreements, duties or
obligations required to be performed or observed by it in accordance with the
provisions of any Pooling and Servicing Agreement or the other Transaction
Documents including but not limited to any judgment, award settlement,
reasonable attorneys' fees and other reasonable costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim, except to the extent such loss, liability, expense, damage or injury
resulted from the gross negligence, bad faith or
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Series 1997-2 Supplement
wilful misconduct of such Company Indemnified Person or its officers, directors,
agents, principals, employees or employers; provided, however, that any payments
made by the Company pursuant to this subsection shall be Company Subordinated
Obligations.
(b) The Master Servicer agrees to indemnify and hold harmless the
Agent, each Purchaser and each of their respective officers, directors, agents
and employees (each, a "Master Servicer Indemnified Person") from and against
any Claim by reason of (i) any acts, omissions or alleged acts or omissions
arising out of, or relating to, activities of the Master Servicer pursuant to
any Pooling and Servicing Agreement or the other Transaction Documents to which
it is a party, (ii) in the case of a Claim brought by a third party, a breach of
any representation or warranty made or deemed made by the Master Servicer or any
Servicer (or any of their respective officers) or (c) in the case of a Claim
brought by a third party, a failure by the Master Servicer or any Servicer to
comply with any applicable law or regulation or to perform its covenants,
agreements, duties or obligations required to be performed or observed by it in
accordance with the provisions of any Pooling and Servicing Agreement or the
other Transaction Documents including but not limited to any judgment, award,
settlement, reasonable attorneys fees and other reasonable costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim, except to the extent such loss, liability, expense, damage
or injury resulted from the gross negligence, bad faith or wilful misconduct of
such Master Servicer Indemnified Person or its officers, directors, agents,
principals, employees or employers.
ARTICLE III
Article III of the Agreement
SECTION 3.01 of the Agreement and each other section of Article III
of the Agreement relating to another
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Series 1997-2 Supplement
Series shall be read in its entirety as provided in the Agreement. Article III
of the Agreement (except for Section 3.01 thereof and any portion thereof
relating to another Series) shall read in its entirety as follows and shall be
exclusively applicable to Series 1997-2:
SECTION 3A.02. Establishment of Trust Accounts. (a) The Trustee
shall cause to be established and maintained in the name of the Trustee, on
behalf of the Trust, (i) for the benefit of the Purchasers and (ii) in the case
of clauses (A) and (B) below, for the benefit (subject to the prior and senior
interest of the Purchasers) of the holder of the Series 1997-2 Subordinated
Interest, (A) a subaccount of the Collection Account (the "Series 1997-2
Collection Subaccount"), which subaccount is the Series Collection Subaccount
with respect to Series 1997-2; (B) two subaccounts of the Series 1997-2
Collection Subaccount: (1) the Series 1997-2 Principal Collection Sub-
subaccount and (2) the Series 1997-2 Non-Principal Collection Sub-subaccount
(respectively, the "Series 1997-2 Principal Collection Sub-subaccount" and the
"Series 1997-2 Non-Principal Collection Sub-subaccount"), and (C) a subaccount
of the Series 1997-2 Non-Principal Collection Sub-subaccount (the "Series 1997-2
Accrued Interest Sub- subaccount"; all accounts established pursuant to this
subsection 3A.02(a) and listed on Schedule 2, collectively, the "Trust
Accounts"), each Trust Account to bear a designation indicating that the funds
deposited therein are held for the benefit of the Persons (and, for each such
Person, to the extent) set forth in clauses (i) and (ii) above. The Trustee, on
behalf of the Holders, shall possess all right, title and interest in all funds
from time to time on deposit in, and all Eligible Investments credited to, the
Trust Accounts and in all proceeds thereof. The Trust Accounts shall be under
the sole dominion and control of the Trustee for the exclusive benefit of the
Persons (and, for each such Person, to the extent) set forth in clauses (i) and
(ii) above. In any case that the Company has not provided applicable written
direction as to Eligible Investments to the Trustee, the Trustee shall invest in
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Series 1997-2 Supplement
demand deposits or money market funds that constitute Eligible Investments.
(b) All Eligible Investments in the Trust Accounts shall be held by
the Trustee, on behalf of the Holders, for the benefit of the Purchasers and,
subject to the prior interest of the Purchasers, of the holder of the Series
1997-2 Subordinated Interest; provided, however, that funds on deposit in a
Trust Account that is a subaccount of the Collection Account shall, at the
direction of the Company, be invested together with funds held in other Sub-
subaccounts of the Collection Account. After giving effect to any distribution
to the Company pursuant to subsection 3A.03(b)(i), amounts on deposit and
available for investment in the Series 1997-2 Principal Collection Sub-
subaccount shall be invested by the Trustee at the written direction of the
Company in Eligible Investments that mature, or that are payable or redeemable
upon demand of the holder thereof, (i) in the case of any such investment made
during the Series 1997-2 Revolving Period, on or prior to the next Business Day
and (ii) in the case of any such investment made during the Series 1997-2
Amortization Period, on or prior to the Business Day immediately preceding the
next Distribution Date. Amounts on deposit and available for investment in the
Series 1997-2 Non- Principal Collection Sub-subaccount and the Series 1997-2
Accrued Interest Sub-subaccount shall be invested by the Trustee at the written
direction of the Company in Eligible Investments that mature, or that are
payable or redeemable upon demand of the holder thereof, on or prior to the
Business Day immediately preceding the subsequent Distribution Date. As of the
Business Day immediately preceding the Settlement Report Date, all interest and
other investment earnings (net of losses and investment expenses) on funds
deposited in the Series 1997-2 Accrued Interest Sub-subaccount shall be
deposited in the Series 1997-2 Non- Principal Collection Sub-subaccount. All
interest and investment earnings (net of losses and investment expenses) on
funds deposited in the Series 1997-2 Principal Collection
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Series 1997-2 Supplement
Sub-subaccount shall be deposited in the Series 1997-2 Non- Principal Collection
Sub-subaccount.
SECTION 3A.03. Daily Allocations. (a) The portion of the Aggregate
Daily Collections allocated to Series 1997-2 pursuant to Article III of the
Agreement shall be allocated and distributed as set forth in this Article III by
the Trustee based solely on the information provided it by the Master Servicer
in the Daily Report (upon which the Trustee may conclusively rely, subject to
its obligation to perform the procedures set forth in the Internal Operating
Procedures Memorandum):
(i) on each Business Day, an amount equal to the Accrued Expense
Amount for such day (or, during the Series 1997-2 Revolving Period, such
greater amount as the Company may request in writing) shall be transferred
from the Series 1997-2 Collection Subaccount to the Series 1997-2
Non-Principal Collection Sub-subaccount; provided, that (A) on the tenth
Business Day of each Accrual Period (and each Business Day thereafter, if
necessary, until the full amount of any positive Accrued Expense
Adjustment is transferred), (B) on the day of any Increase (and each
Business Day thereafter, if necessary, until the full amount of any
positive Accrued Expense Adjustment is transferred), (C) on the day of any
Decrease and (D) on the last Business Day of each Accrual Period, an
amount equal to the Accrued Expense Adjustment shall, if such adjustment
is a positive amount, be transferred from the Series 1997-2 Collection
Subaccount to the Series 1997-2 Non-Principal Collection Sub-subaccount
or, if such adjustment is a negative amount, be transferred from the
Series 1997-2 Non-Principal Collection Sub-subaccount to the Series 1997-2
Collection Subaccount (or deducted from the transfer in respect of the
Accrued Expense Amount for such day); and
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Series 1997-2 Supplement
(ii) on each Business Day (including Distribution Dates), following
the transfers pursuant to clause (i) above, any remaining funds on deposit
in the Series 1997-2 Collection Subaccount shall be transferred by the
Trustee to the Series 1997-2 Principal Collection Sub-subaccount.
(b) (i) On each Business Day during the Series 1997-2 Revolving
Period (including Distribution Dates), after giving effect to all allocations of
Aggregate Daily Collections referred to in subparagraphs (a)(i) and (a)(ii) on
such Business Day, amounts on deposit in the Series 1997-2 Principal Collection
Sub-subaccount (including any amounts transferred thereto to subsection
3A.03(c)(i) of the Series 1997-1 Supplement) shall be distributed by the
Trustee, based solely on the information provided to the Trustee by the Master
Servicer in the Daily Report (upon which the Trustee may conclusively rely,
subject to its obligation to perform the procedures set forth in the Internal
Operating Procedures Memorandum), (A) first, to pay Excess Program Costs and (B)
second, to the Company (but only to the extent that the Trustee has received a
Daily Report which reflects the receipt of the Collections on deposit therein)
in accordance with directions contained in the Daily Report or to such accounts
or such persons as the Company may direct in writing (which directions may
consist of standing instructions provided by the Company that shall remain in
effect until changed by the Company in writing); provided that such distribution
shall be made only if no Early Amortization Event or Potential Early
Amortization Event relating to an Early Amortization Event set forth in
subsections (a), (d) (but only with respect to a Servicer Default set forth in
subsection 6.01(e) of the Servicing Agreement relating to the Master Servicer or
to one or more Servicers that are responsible for servicing Receivables
representing 15% or more of the Aggregate Receivables Amount), (g), (j) or (k)
of Section 5.01 of this Supplement has occurred and is continuing and only to
the extent that if, after giving effect to such distribution, the Series 1997-2
Target Receivables Amount would not exceed the
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Series 1997-2 Supplement
Series 1997-2 Allocated Receivables Amount; provided further that if the Company
or the Master Servicer, on behalf of the Company, shall have given the Agent and
the Trustee irrevocable written notice (effective upon receipt) at least one
Business Day prior to such day (or, in the case of the Floating Tranche, notice
may be given on such day), the Company or the Master Servicer may instruct the
Trustee in writing (specifying the related amount) to withdraw all or a portion
of such amounts on deposit in the Series 1997-2 Principal Collection
Sub-subaccount (including any amounts transferred thereto pursuant to subsection
3A.03(c)(i) of the Series 1997-1 Supplement) and apply such withdrawn amounts
toward the reduction of the Series 1997-2 Invested Amount and the Series 1997-2
Subordinated Interest Amount in accordance with Section 2.06. Amounts
distributed to the Company hereunder shall be deemed to be paid first from
Collections received directly by the Master Servicer and second from Collections
received in the Lockboxes.
(ii) During the Series 1997-2 Amortization Period, amounts on
deposit in the Series 1997-2 Principal Collection Sub-subaccount on each
Distribution Date shall be distributed on such Distribution Date in accordance
with subsection 3A.06(c). No amounts on deposit in the Series 1997-2 Principal
Collection Sub-subaccount shall be distributed by the Trustee to the Company or
the holder of the Series 1997-2 Subordinated Interest during the Series 1997-2
Amortization Period.
(c) On each Business Day, an amount equal to the Daily Interest
Deposit for such day shall be transferred by the Trustee, based solely on the
information provided to the Trustee by the Master Servicer in the Daily Report
(upon which the Trustee may conclusively rely, subject to its obligation to
perform the procedures set forth in the Internal Operating Procedures
Memorandum), from the Series 1997-2 Non-Principal Collection Sub-subaccount to
the Series 1997-2 Accrued Interest Sub-subaccount provided, that, on each
Business Day that a transfer of funds is required to be made in respect of an
Accrued Expense
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Series 1997-2 Supplement
Adjustment pursuant to the further proviso to subsection 3A.03(a)(i), an amount
equal to the Daily Interest Adjustment shall, if such adjustment is a positive
amount, be transferred from the Series 1997-2 Non-Principal Collection
Sub-subaccount to the Series 1997-2 Accrued Interest Sub-subaccount or, if such
adjustment is a negative amount, be transferred from the Series 1997-2 Accrued
Interest Sub-subaccount to the Series 1997-2 Non-Principal Collection
Sub-subaccount (or deducted from the transfer in respect of the Daily Interest
Deposit for such day).
(d) The allocations to be made pursuant to this Section 3A.03 are
subject to the provisions of Sections 2.05, 2.06, 7.02, 9.01 and 9.04 of the
Agreement.
SECTION 3A.04. Determination of Interest. (a) (i) The amount of
interest distributable with respect to the VFC Certificates ("Series 1997-2
Monthly Interest Distribution") on each Distribution Date shall be the aggregate
amount of Daily Interest Expense accrued during the immediately preceding
Accrual Period.
(ii) Following any change in the amount of any Eurodollar Tranche or
Floating Tranche during an Accrual Period, the Series 1997-2 Monthly Interest
shall be calculated with respect to such changed amount for the number of days
in the Accrual Period during which such changed amount is outstanding.
(iii) If the Certificate Rate changes during any Accrual Period, the
Master Servicer shall amend the Monthly Settlement Statement to reflect the
adjustment in the Series 1997-2 Monthly Interest for such Accrual Period caused
by such change and any consequent adjustments and the Master Servicer shall also
provide written notification to the Trustee of any such change in the
Certificate Rate. Any amendment to the Monthly Settlement Statement pursuant to
this subsection 3A.04(a)(iii) shall be completed by 1:00 p.m. on the day
preceding the next Settlement Report Date.
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Series 1997-2 Supplement
(b) On each Distribution Date, the Master Servicer shall determine
the excess, if any (the "Interest Shortfall"), of (i) the aggregate Series
1997-2 Monthly Interest Distribution for the Accrual Period ending on such
Distribution Date over (ii) the amount that will be available to be distributed
to the Purchasers on such Distribution Date in respect thereof pursuant to this
Supplement. If the Interest Shortfall with respect to any Distribution Date is
greater than zero, an additional amount ("Additional Interest") equal to the
product of (A) the number of days until such Interest Shortfall shall be repaid
divided by 365, (B) the ABR and (C) such Interest Shortfall (or the portion
thereof that has not been paid to the Purchasers) shall be payable as provided
herein with respect to the VFC Certificates on each Distribution Date following
such Distribution Date to and including the Distribution Date on which such
Interest Shortfall is paid to the VFC Certificateholders.
(c) On any Business Day, the Company may, subject to subsection
3A.04(e), elect to allocate all or any portion of the Available Pricing Amount
to one or more Eurodollar Tranches with Eurodollar Periods commencing on such
Business Day by giving the Agent irrevocable written or telephonic (confirmed in
writing) notice thereof, which notice must be received by the Agent prior to
1:00 p.m., New York City time, three Business Days prior to such Business Day.
Such notice shall specify (i) the applicable Business Day, (ii) the Eurodollar
Period for each Eurodollar Tranche to which a portion of the Available Pricing
Amount is to be allocated and (iii) the portion of the Available Pricing Amount
being allocated to each such Eurodollar Tranche. Promptly upon receipt of each
such notice the Agent shall notify each Purchaser of the contents thereof. If
the Agent shall not have received timely notice as aforesaid with respect to all
or any portion of the Available Pricing Amount, the Monthly Interest Payment on
such amount shall be calculated by reference to the ABR.
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Series 1997-2 Supplement
(d) Any reduction in the Series 1997-2 Invested Amount on any
Business Day shall be allocated in the following order of priority:
first, to reduce the Unallocated Balance, as appropriate; and
second, to reduce the portion of the Series 1997-2 Invested Amount
allocated to Eurodollar Tranches in such order as the Company may select
in order to minimize costs payable pursuant to Section 7.04.
(e) Notwithstanding anything to the contrary contained in this
Section 3A.04, (i) the portion of the Series 1997-2 Invested Amount allocable to
each Eurodollar Tranche must be in an amount equal to $500,000 or an integral
multiple of $500,000 in excess thereof; (ii) no more than five Eurodollar
Tranches shall be outstanding at any one time; (iii) after the occurrence and
during the continuance of any Early Amortization Event or Potential Early
Amortization Event relating to an Early Amortization Event set forth in
subsections (a), (d) (but only with respect to a Servicer Default set forth in
subsection 6.01(e) of the Servicing Agreement), (e), (g) or (j) of Section 5.01
of this Supplement, the Company, may not elect to allocate any portion of the
Available Pricing Amount to a Eurodollar Tranche; and (iv) after the end of the
Series 1997-2 Revolving Period, the Company may not select any Eurodollar Period
that does not end on or prior to the next succeeding Distribution Date.
SECTION 3A.05. Determination of Series 1997-2 Monthly Principal. (a)
Payments of Series 1997-2 Principal. The amount (the "Series 1997-2 Monthly
Principal Payment") distributable from the Series 1997-2 Principal Collection
Sub-subaccount on each Distribution Date during the Series 1997-2 Amortization
Period shall be equal to the amount on deposit in such account on the
immediately preceding Settlement Report Date; provided, however, that the Series
1997-2 Monthly Principal Payment on any
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Series 1997-2 Supplement
Distribution Date shall not exceed the Series 1997-2 Invested Amount on such
Distribution Date after giving effect to the reductions and increases pursuant
to paragraphs (b) and (c) below. Further, on any other Business Day during the
Series 1997-2 Amortization Period, funds may be distributed from the Series
1997-2 Principal Collection Sub-subaccount to the Purchasers in accordance with
Section 2.06 of this Supplement.
(b) Reductions to Series 1997-2 Principal. If, on any Special
Allocation Settlement Report Date, the Series 1997-2 Allocable Charged-Off
Amount is greater than zero for the related Settlement Period, the Trustee shall
(in accordance with the written directions of the Master Servicer upon which the
Trustee may conclusively rely) make the following applications of such amounts
in the following order of priority:
(i) the Series 1997-2 Required Subordinated Amount shall be reduced
(but not below zero) by an amount equal to the Series 1997-2 Allocable
Charged-Off Amount (which shall also be reduced by the amount so applied);
(ii) then, to the extent that the Series 1997-2 Allocable
Charged-Off Amount is greater than zero following the application in
clause (i) above, the Series 1997-2 Invested Amount shall be reduced (but
not below zero) by such remaining Series 1997-2 Allocable Charged-Off
Amount (which shall also be reduced by the amount so applied).
(c) Increases to Series 1997-2 Principal. If, on any Special
Allocation Settlement Report Date, the Series 1997-2 Allocable Recoveries Amount
is greater than zero for the related Settlement Period, the Trustee shall (in
accordance with written directions from the Master Servicer upon which the
Trustee may conclusively rely, subject to its obligation to perform the
procedures set forth in the Internal Operating Procedures Memorandum) make the
following applications (after giving effect to the
46
Series 1997-2 Supplement
applications in paragraph (b) of such amount in the following order of
priority):
(i) the Series 1997-2 Invested Amount shall be increased (but only
to the extent of any previous reductions of the Series 1997-2 Invested
Amount pursuant to subsection 3A.05(b)(ii)) by the amount of the Series
1997-2 Allocable Recoveries Amount (which shall also be reduced by the
amount so applied);
(ii) then, to the extent that the Series 1997-2 Allocable Recoveries
Amount is greater than zero following the applications in clause (i)
above, the Series 1997-2 Required Subordinated Amount shall be increased
(but only to the extent of any previous reductions of the Series 1997-2
Required Subordinated Amount pursuant to subsection 3A.05(b)(i)) by such
remaining Series 1997-2 Allocable Recoveries Amount (which shall also be
reduced by the amount so applied).
SECTION 3A.06. Applications. (a) The Trustee shall distribute, based
solely on the information provided to the Trustee by the Master Servicer in the
Monthly Settlement Statement (upon which the Trustee may conclusively rely,
subject to its obligation to perform the procedures set forth in the Internal
Operating Procedures Memorandum), on each Distribution Date, from amounts on
deposit in the Series 1997-2 Accrued Interest Sub- subaccount, an amount equal
to the Series 1997-2 Monthly Interest Distribution payable on such Distribution
Date (such amount, the "Monthly Interest Payment"), plus the amount of any
Monthly Interest Payment previously due but not distributed to the Purchasers on
a prior Distribution Date, plus the amount of any Additional Interest for such
Distribution Date and any Additional Interest previously due but not distributed
to the Purchasers on a prior Distribution Date, to the Purchasers.
(b) On each Distribution Date, the Trustee shall, based solely on
the information provided to the Trustee by
47
Series 1997-2 Supplement
the Master Servicer in the Daily Report (upon which the Trustee may conclusively
rely, subject to its obligation to perform the procedures set forth in the
Internal Operating Procedures Memorandum), apply funds on deposit in the Series
1997-2 Non-Principal Collection Sub-subaccount in the following order of
priority to the extent funds are available:
(i) an amount equal to the Series 1997-2 Monthly Servicing Fee for
the Accrual Period ending on such Distribution Date shall be withdrawn
from the Series 1997-2 Non-Principal Collection Sub-subaccount by the
Trustee and paid to the Master Servicer (less any amounts payable to the
Trustee pursuant to Section 8.05 of the Agreement which shall be paid to
the Trustee); and
(ii) an amount equal to any Program Costs due and payable shall be
withdrawn from the Series 1997-2 Non- Principal Collection Sub-subaccount
by the Trustee and paid to the Persons owed such amounts.
Any remaining amounts on deposit in the Series 1997-2 Non- Principal Collection
Sub-subaccount (in excess of the Accrued Expense Amount as of such day) not
allocated pursuant to clauses (i) and (ii) above shall be paid to the holder of
the Series 1997-2 Subordinated Interest; provided, however, that during the
Series 1997-2 Amortization Period, such remaining amounts shall be deposited in
the Series 1997-2 Principal Collection Sub-subaccount for distribution in
accordance with subsection 3A.06(c).
(c) During the Series 1997-2 Amortization Period, the Trustee shall,
based solely on the information provided to the Trustee by the Master Servicer
in the Daily Report (upon which the Trustee may conclusively rely, subject to
its obligation to perform the procedures set forth in the Internal Operating
Procedures Memorandum), apply, on each
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Series 1997-2 Supplement
Distribution Date, amounts on deposit in the Series 1997-2 Principal Collection
Sub-subaccount in the following order of priority:
(i) if any amounts are owed to the Trustee or any other Person, on
account of Servicing Fees incurred in respect of the performance of its
responsibilities as Successor Master Servicer or Successor Servicer, as
the case may be, an amount equal to the product of (a) the amount so owed
to such Successor Master Servicer or Successor Servicer, as the case may
be, and (b) a fraction, the numerator of which shall be equal to the
Series 1997-2 Invested Amount as of the end of the immediately preceding
Settlement Period and the denominator of which shall be equal to the
Aggregate Invested Amount as of the end of the immediately preceding
Settlement Period shall be transferred from the Series 1997-2 Principal
Collection Sub-subaccount to the Trustee or such other Person;
(ii) following the repayment in full of all amounts set forth in
clause (i) above, an amount equal to the Series 1997-2 Monthly Principal
Payment for such Distribution Date shall be distributed from the Series
1997-2 Principal Collection Sub-subaccount to the Purchasers in reduction
of the Series 1997-2 Invested Amount;
(iii) if, following the repayment in full of all amounts set forth
in clauses (i) and (ii) above, any amounts are owed to the Trustee or any
other Person, on account of its fees, expenses and disbursements incurred
in respect of the performance of its responsibilities hereunder (other
than pursuant to clause (i) above capacity as Successor Master Servicer or
Successor), such amounts shall be transferred from the Series 1997-2
Principal Collection Sub-subaccount and paid to the Trustee or such other
Person; and
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Series 1997-2 Supplement
(iv) following the repayment in full of all amounts set forth in
clauses (i) through (iii) above, the remaining amount on deposit in the
Series 1997-2 Principal Collection Sub-subaccount on such Distribution
Date, if any, shall be distributed to the holder of the Series 1997-2
Subordinated Interest.
ARTICLE IV
Distributions and Reports
Article IV of the Agreement (except for any portion thereof relating
to another Series) shall read in its entirety as follows and the following shall
be exclusively applicable to the VFC Certificates issued pursuant to this
Supplement:
SECTION 4A.01. Distributions. (a) On each Distribution Date, the
Trustee shall distribute to each Purchaser from the account indicated in Article
III an amount equal to the product of (i) the amount to be distributed to the
Purchasers pursuant to Article III and (ii) such Purchaser's Commitment
Percentage.
(b) All allocations and distributions hereunder shall be in
accordance with the Daily Report and the Monthly Settlement Statement and shall
be made in accordance with the provisions of Section 11.04 hereof and subject to
Section 3.01(h) of the Agreement.
SECTION 4A.02. Daily Reports. The Master Servicer shall provide the
Agent and the Trustee with a Daily Report in accordance with subsection 4.02(a)
of the Servicing Agreement. The Agent shall make copies of the Daily Report
available to the Purchasers at their reasonable request at the Agent's office in
The City of New York.
SECTION 4A.03. Statements and Notices. (a) Monthly Settlement
Statements. On each Settlement
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Series 1997-2 Supplement
Report Date (commencing with the Settlement Report Date occurring in March
1997), the Master Servicer shall deliver to the Trustee and the Agent a Monthly
Settlement Statement in the Form of Exhibit E setting forth, among other things,
the Loss Reserve Ratio, the Dilution Reserve Ratio, the Minimum Ratio, the
Carrying Cost Reserve Ratio and the Servicing Reserve Ratio, each as
recalculated for the next succeeding Settlement Period. The Agent shall forward
a copy of each Monthly Settlement Statement to any Purchaser upon request by
such Purchaser. The Company and the Master Servicer will deliver copies of all
notices, reports (other than Daily Reports), statements and other documents
delivered by it pursuant to the Pooling and Servicing Agreements to each Rating
Agency.
(b) Annual Certificateholders' Tax Statement. On or before April 1
of each calendar year (or such earlier date as required by applicable law),
beginning with calendar year 1998, the Company on behalf of the Trustee shall
furnish, or cause to be furnished, to each Person who at any time during the
preceding calendar year was a Purchaser, a statement prepared by the Company
containing the aggregate amount distributed to such Person for such calendar
year or the applicable portion thereof during which such Person was a Purchaser,
together with such other information as is required to be provided by an issuer
of indebtedness under the Internal Revenue Code and such other customary
information as the Company deems necessary to enable the Purchasers to prepare
their tax returns. Such obligation of the Company shall be deemed to have been
satisfied to the extent that substantially comparable information shall have
been provided by the Trustee or the Agent pursuant to any requirements of the
Internal Revenue Code as from time to time in effect. The Trustee shall be under
no obligation to prepare tax returns for the Trust.
(c) Early Amortization Event/Distribution of Principal Notices. Upon
the occurrence of an Early Amortization Event with respect to the Series 1997-2,
the Company or the Master Servicer, as the case may be, shall
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Series 1997-2 Supplement
give prompt written notice thereof to the Trustee and the Agent. As promptly as
reasonably practicable after its receipt of notice of the occurrence of an Early
Amortization Event with respect to Series 1997-2, the Trustee shall give notice
(i) to each Rating Agency (which notice shall be given, by telephone or
otherwise, not later than the second Business Day after such receipt) and (ii)
to the Agent, who in turn shall give notice to each Purchaser. In addition, on
the Business Day preceding each day on which a distribution of principal is to
be made during the Series 1997-2 Amortization Period, the Master Servicer shall
direct the Agent to send notice to each Purchaser, which notice shall set forth
the amount of principal to be distributed on the related date to the Purchasers
with respect to the outstanding VFC Certificates.
ARTICLE V
Additional Early Amortization Events
SECTION 5.01. Additional Early Amortization Events. If any one of
the events specified in Section 7.01 of the Agreement (after any grace periods
or consents applicable thereto) or any one of the following events (each, an
"Early Amortization Event") shall occur during the Series 1997-2 Revolving
Period:
(a) (i) failure on the part of the Master Servicer to direct any
payment to be made, or failure of any payment to be made, in respect of
interest owing on any VFC Certificate or the Commitment Fee within two
Business Days of the date such interest or Commitment Fee is due or (ii)
failure on the part of the Master Servicer to direct any payment to be
made, or of the Company to make any payment in respect of any other
amounts owing by the Company, under any Pooling and Servicing Agreement to
or for the benefit of the Purchasers within five Business Days of the date
such other amount is due;
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Series 1997-2 Supplement
(b) failure on the part of the Company duly to observe or perform in
any material respect any covenant or agreement of the Company set forth in
any Pooling and Servicing Agreement (including each covenant contained in
Sections 2.07 and 2.08 of the Agreement) that continues unremedied 30 days
after the earlier of (i) the date on which a Responsible Officer of the
Company or, so long as the Master Servicer is an Affiliate of the Company,
a Responsible Officer of the Master Servicer has knowledge of such failure
and (ii) the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Company by the Trustee,
or to the Company and the Trustee by the Agent or Purchasers evidencing
25% or more of the Series 1997-2 Invested Amount;
(c) any representation or warranty made or deemed made by the
Company in any Pooling and Servicing Agreement to or for the benefit of
the Purchasers shall prove to have been incorrect in any material respect
when made or when deemed made that continues to be incorrect 30 days after
the earlier of (i) the date on which a Responsible Officer of the Company
or, so long as the Master Servicer is an Affiliate of the Company, a
Responsible Officer of the Master Servicer has knowledge of such failure
and (ii) the date on which notice of such failure, requiring the same to
be remedied, shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Agent or Purchasers evidencing 25% or more
of the Series 1997-2 Invested Amount and as a result of such
incorrectness, the interests, rights or remedies of the Purchasers have
been materially and adversely affected; provided, however, that an Early
Amortization Event with respect to Series 1997-2 shall not be deemed to
have occurred under this paragraph if the incorrectness of such
representation or warranty gives rise to an obligation to repurchase or
make an adjustment payment in respect of the related Receivables and the
Company has repurchased or made an adjustment payment in
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Series 1997-2 Supplement
respect of the related Receivable or all such Receivables, if applicable,
in accordance with the provisions of any Pooling and Servicing Agreement
within 10 Business Days of when the Company was obligated to do so;
(d) a Servicer Default with respect to (i) the Master Servicer,
other than any Servicer Default that is within subsection 5.01(a) above,
or (ii) one or more Servicers that are responsible for servicing
Receivables representing 15% or more of the Aggregate Receivables Amount
shall have occurred and be continuing;
(e) a Purchase Termination Event with respect to one or more Sellers
that are responsible for originating Receivables representing 5% or more
of the Aggregate Receivables Amount shall have occurred and be continuing;
(f) a Change in Control shall have occurred;
(g) the Series 1997-2 Allocated Receivables Amount shall be less
than the Series 1997-2 Target Receivables Amount for a period of five
consecutive Business Days;
(h) any of the Agreement, the Servicing Agreement, this Supplement
or the Receivables Sale Agreement shall cease, for any reason, to be in
full force and effect, or the Company, Master Servicer, any Servicer, any
Seller or any Affiliate thereof shall so assert in writing;
(i) the Trust shall for any reason cease to have a valid and
perfected first priority undivided ownership or first priority security
interest in any of the Trust Assets (subject to no other Liens other than
any Permitted Liens) and such cessation would, individually or together
with other cessations, have a Material Adverse Effect;
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Series 1997-2 Supplement
(j) a Federal tax notice of Lien, in an amount equal to or greater
than $1,000,000, shall have been filed against the Company or the Trust
unless there shall have been delivered to the Trustee and the Rating
Agencies proof of release of such Lien;
(k) a notice of Lien shall have been filed by the Pension Benefit
Guaranty Corporation against the Company or the Trust under Section 412(n)
of the Code or Section 302(f) of ERISA for a failure to make a required
installment or other payment to a plan to which Section 412(n) of the Code
or Section 302(f) of ERISA applies unless there shall have been delivered
to the Trustee and the Rating Agencies proof of the release of such Lien;
(l) (i) one or more judgments for the payment of money (to the
extent not bonded or covered by insurance to the reasonable satisfaction
of the Agent) shall be rendered against the Company (A) in an aggregate
amount greater than $50,000 or (B) that, individually or in the aggregate,
have resulted or could reasonably be expected to result in a Company
Material Adverse Effect or (ii) one or more judgments for the payment of
money (to the extent not bonded or covered by insurance to the reasonable
satisfaction of the Agent) shall be rendered against the Master Servicer,
any Servicer, any Seller or any combination thereof (A) in an aggregate
amount greater than $7,500,000 or (B) that, individually or in the
aggregate, have resulted or could reasonably be expected to result in a
Servicer Material Adverse Effect or a Seller Material Adverse Effect, as
applicable, with respect to one or more Servicers or Sellers, as
applicable, that are responsible for servicing or originating, as the case
may be, 5% or more of the Aggregate Receivables Amount and, in either
case, the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to
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Series 1997-2 Supplement
levy upon assets or properties of the Company, the Master Servicer, any
Servicer or any Seller to enforce any such judgment; or
(m) The Chase Manhattan Bank shall be a VFC Certificateholder or the
Agent under this Supplement as of May 5, 1997;
then, in the case of (x) any event described in Section 7.01 of the Agreement,
automatically without any notice or action on the part of the Trustee or
Purchasers, an early amortization period shall immediately commence or (y) any
event described above, after the applicable grace period (if any) set forth in
the applicable subsection, the Trustee may, and at the written direction of the
Majority Purchasers shall, by written notice then given to the Company and the
Master Servicer, declare that an early amortization period has commenced as of
the date of such notice with respect to Series 1997-2 (any such period under
clause (x) or (y) above, an "Early Amortization Period; provided, however, that
in the case of the event described in clause (g) above, if an Early Amortization
Period has not been declared within 10 Business Days from the occurrence of such
event, then an Early Amortization Period shall occur automatically unless, (i)
prior to the end of such 10 Business Day period, the Series 1997-2 Allocated
Receivables Amount shall no longer be less than the Series 1997-2 Target
Receivables Amount and (ii) so long as the Series 1997-2 Allocated Receivables
Amount continues to be equal to or greater than the Series 1997-2 Target
Receivables Amount, VFC Certificateholders evidencing 66-2/3% or more of the
Series 1997-2 Invested Amount shall have waived the occurrence of such event.
Notwithstanding the foregoing, a delay or failure in performance
referred to in clause (a) above for a period of five Business Days after the
applicable grace period, or in clause (b) above for a period of 30 Business Days
after the applicable grace period, will not constitute an Early Amortization
Event if such delay or failure could not have
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Series 1997-2 Supplement
been prevented by the exercise of reasonable diligence by the Company and such
delay or failure was caused by a Force Majeure Delay. The Company will
nevertheless be required to use its best efforts to perform its obligations in a
timely manner in accordance with the terms of the Transaction Documents, and the
Company shall promptly give the Trustee an Officer's Certificate notifying it of
any such delay or failure.
ARTICLE VI
Servicing Fee
SECTION 6.01. Servicing Compensation. A monthly servicing fee (the
"Series 1997-2 Monthly Servicing Fee") shall be payable to the Master Servicer
on each Distribution Date for the preceding Settlement Period, in an amount
equal to the product of (a) the Servicing Fee and (b) a fraction, the numerator
of which shall be equal to the Series 1997-2 Invested Amount as of the end of
the second preceding Settlement Period and the denominator of which shall be
equal to the Aggregate Invested Amount as of the end of such second preceding
Settlement Period; provided, however, that, for the purposes of calculating the
Accrued Expense Adjustment on the last Business Day of any Accrual Period, such
calculation shall be based on the Series 1997-2 Invested Amount and Aggregate
Invested Amount as of the end of the most recent Settlement Period that has
elapsed. To the extent that funds on deposit in the Series 1997-2 Non-Principal
Collection Sub-subaccount at any such date are insufficient to pay the Series
1997-2 Monthly Servicing Fee due on such date as set forth in the Monthly
Settlement Statement delivered by the Master Servicer to the Trustee, the
Trustee shall so notify the Company and the Company shall immediately pay the
Master Servicer the amount of any such deficiency.
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Series 1997-2 Supplement
ARTICLE VII
Change in Circumstances
SECTION 7.01. Illegality. Notwithstanding any other provision
herein, if, after the Issuance Date, the adoption of or any change in any
Requirement of Law or in the interpretation or administration thereof shall make
it unlawful for any Purchaser to make or maintain its portion of the VFC
Certificateholders' Interest in any Eurodollar Tranche and such Purchaser shall
notify the Agent, the Trustee and the Company, then the portion of each
Eurodollar Tranche applicable to such Purchaser shall thereafter be calculated
by reference to the ABR (such calculation shall be performed by the Master
Servicer). If any such change in the method of calculating interest occurs on a
day which is not the last day of the Eurodollar Period with respect to any
Eurodollar Tranche, the Company shall pay to the Agent for the account of such
Purchaser the amounts, if any, as may be required pursuant to Section 7.04.
SECTION 7.02. Requirements of Law. (a) Notwithstanding any other
provision herein, if after the Issuance Date the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Purchaser with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall change the basis of taxation of payments to any Purchaser
in respect of the Transaction Documents (except for Excluded Taxes or
Non-Excluded Taxes described in Section 7.03); and
(ii) shall impose, modify or deem applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other
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Series 1997-2 Supplement
acquisition of funds by, any office of such Purchaser which is not
otherwise included in the determination of the Eurodollar Rate;
and the result of any of the foregoing is to increase the cost to such Purchaser
by an amount which such Purchaser deems to be material, of making, converting
into, continuing or maintaining Eurodollar Tranches or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Company
will pay to such Purchaser upon demand such additional amount or amounts as will
compensate such Purchaser for such additional costs incurred or reduced amount
receivable.
(b) If any Purchaser shall have determined after the Issuance Date
that the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Purchaser or any corporation controlling such Purchaser with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any Governmental Authority made subsequent to the date hereof shall have
the effect of reducing the rate of return on such Purchaser's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Purchaser's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Company shall
promptly pay to such Purchaser such additional amount or amounts as will
compensate such Purchaser for such reduction.
(c) If any Purchaser becomes entitled to claim any additional
amounts pursuant to subsection (a) or (b) above, it shall promptly notify the
Company (with a copy to the Agent) of the event by reason of which it has become
so entitled. A certificate setting forth (i) any additional amounts payable
pursuant to this subsection and (ii) a
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Series 1997-2 Supplement
reasonably detailed explanation of the calculation of such amount or amounts
submitted by such Purchaser to the Company (with a copy to the Agent) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive the termination of this Supplement and the Agreement and the
payment of all amounts payable hereunder.
SECTION 7.03. Taxes. (a) All payments made by the Company under this
Supplement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding (i) taxes imposed on the net income of the Agent or any
Purchaser, however denominated, and (ii) franchise taxes imposed on the net
income (or in lieu of net income) of the Agent or any Purchaser (the taxes
referred to in the foregoing clauses (i) and (ii) individually or collectively
being called "Excluded Taxes"), in each case imposed: (a) by the U.S. or any
political subdivision or taxing authority thereof or therein; (b) by any
jurisdiction under the laws of which the Agent or such Purchaser or lending
office is organized or in which its lending office or office is located, managed
or controlled or in which its principal office is located or any political
subdivision or taxing authority thereof or therein; or (c) by reason of any
connection between the jurisdiction imposing such tax and the Agent, such
Purchaser or such lending office other than a connection arising solely from the
Agreement or this Supplement or any transaction thereunder or hereunder (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, being called "Non-Excluded Taxes").
If any such Non-Excluded Taxes are required to be withheld from any amounts
payable to the Agent or any Purchaser hereunder, the amounts so payable to the
Agent or such Purchaser shall be increased to the extent necessary to yield to
the Agent or such Purchaser (after payment of all Non-Excluded Taxes) interest
or any such other amounts payable hereunder at the
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Series 1997-2 Supplement
rates or in the amounts specified in this Supplement, provided, however, that
the Company shall not be required to increase any such amounts payable to any
Purchaser that is not organized under the laws of the United States of America
or a state thereof (i) if such Purchaser fails to comply with the requirements
of paragraph (b) of this subsection or (ii) to the extent that the obligation to
withhold amounts with respect to United States federal withholding tax existed
on the date such Purchaser became a Purchaser (or, in the case of payments to a
new lending office, on the date such Purchaser designated such new lending
office). Whenever any Non-Excluded Taxes are payable by the Company as promptly
as possible thereafter the Company shall send to the Agent for its own account
or for the account of such Purchaser, as the case may be, a certified copy of
any original official receipt received by the Company showing payment thereof or
any other proof reasonably acceptable to the Agent. If the Company fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or any other proof reasonably
acceptable to the Agent, the Company shall indemnify the Agent and the
Purchasers for any incremental taxes, interest or penalties that may become
payable by the Agent or any Purchaser as a result of any such failure. If the
Agent or any Purchaser shall become aware that it is entitled to receive a
refund or other tax credit or benefit in respect of any Non-Excluded Taxes, it
shall promptly notify the Company thereof and, in the case of a refund, shall
within 30 days after receipt of a request by the Company, apply for such refund
at the Company's expense; provided that the Agent or such Purchaser shall not be
required to do so if it determines in its reasonable judgment that it is not in
its interest to do so. If the Agent or any Purchaser receives a refund or other
tax credit or benefit in respect of any Non-Excluded Taxes for which the Company
has made a payment hereunder, it shall promptly notify the Company thereof and
shall promptly repay such refund or, in the case of a tax credit or other
benefit shall repay the amount of the tax credit or benefit received promptly
following the date on which such tax credit or
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Series 1997-2 Supplement
other benefit is offset against such party's tax liability, in each case to the
Company without interest and net of any expenses incurred, except to the extent
interest shall have explicitly accompanied such refund or other tax credit or
benefit, provided that the Company, upon the request of such Purchaser or the
Agent, agrees to return the amount of such refund or other tax benefit or credit
(plus any penalties, interest or other charges required to be paid) to such
Purchaser or the Agent in the event such Purchaser or the Agent is required to
repay such amount to the relevant taxing authority. The agreements in this
subsection shall survive the termination of this Supplement and the repayment of
the Series 1997-2 Invested Amount and all other amounts payable hereunder.
(b) Each Purchaser that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Company, the Trustee and the Agent (A) two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as
the case may be;
(ii) deliver to the Company, the Trustee and the Agent two further
copies of any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Company; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Company or
the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has
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Series 1997-2 Supplement
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Purchaser from duly completing and delivering any such form with respect to it
and such Purchaser so advises the Company and the Agent. Each Purchaser so
incorporated shall certify to the Company, the Trustee and the Agent at the time
it first becomes a Purchaser, and thereafter to the extent provided by law, (i)
in the case of a Form 1001 or 4224, that it is entitled to receive payments
under this Agreement without, or at a reduced rate of, withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax. Each
Person that shall become a Purchaser or a Participant pursuant to subsection
11.10 shall, upon the effectiveness of the related transfer, be required to
provide to the Company, the Trustee and the Agent all of the forms and
statements required pursuant to this subsection, provided that in the case of a
Participant such Participant shall furnish all such required forms and
statements to the Purchaser from which the related participation shall have been
purchased.
SECTION 7.04. Indemnity. The Company and the Master Servicer jointly
and severally agree to indemnify each Purchaser and to hold each Purchaser
harmless from any loss or expense which such Purchaser may sustain or incur as a
consequence of (a) default by the Company in making a borrowing of, conversion
into or continuation of a Eurodollar Tranche after the Company has given
irrevocable notice requesting the same in accordance with the provisions of this
Supplement, or (b) default by the Company in making any prepayment in connection
with a Decrease after the Company has given irrevocable notice thereof in
accordance with the provisions of Section 2.06 of this Supplement or (c) the
making of a prepayment of a Eurodollar Tranche prior to the termination of the
Eurodollar Period for such Eurodollar Tranche. Such indemnification may include
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid
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Series 1997-2 Supplement
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the Eurodollar Period (or in the case of a failure to borrow, convert or
continue, the Eurodollar Period that would have commenced on the date of such
prepayment or of such failure) in each case at the applicable rate of interest
for such Eurodollar Tranche provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Purchaser) which would have accrued to such
Purchaser on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market; provided that any
payments made by the Company pursuant to this Section shall be Company
Subordinated Obligations. This covenant shall survive the termination of this
Supplement and the payment of all amounts payable hereunder. A certificate as to
any additional amounts payable pursuant to the foregoing sentence submitted by
any Purchaser to the Company and the Servicer shall be conclusive absent
manifest error.
SECTION 7.05. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. If (a)(i) any Purchaser delivers a notice described in Section
7.02 or (ii) the Company is required to pay any additional amount or
indemnification payment to any Purchaser pursuant to Sections 7.03 or 7.04, the
Company may, at its sole expense and effort (including with respect to the
processing and recordation fee referred to in subsection 11.10(b)), upon notice
to such Purchaser and the Agent, require such Purchaser to transfer and assign,
without recourse (in accordance with and subject to the restrictions contained
in Section 11.10), all of its interests, rights and obligations under this
Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Purchaser, if another Purchaser accepts such
assignment); provided that (A) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority having
jurisdiction, (B) the Company
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shall have received the prior written consent of the Agent, which consent shall
not unreasonably be withheld, and (C) the Company or such assignee shall have
paid to the affected Purchaser in immediately available funds an amount equal to
the sum of the principal of, and interest accrued to the date of such payment
on, the outstanding VFC Certificates of such Purchaser plus all fees and other
amounts accrued for the account of such Purchaser hereunder (including any
amounts under Sections 7.02, 7.03 and 7.04); and provided further that, if prior
to any such transfer and assignment the circumstances or event that resulted in
such Purchaser's notice under Section 7.02 or the amounts paid pursuant to
Sections 7.03 or 7.04, as the case may be, cease to cause such Purchaser to
suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in
Section 7.02, or cease to result in amounts being payable under Sections 7.03 or
7.04, as the case may be (including as a result of any action taken by such
Purchaser pursuant to subsection 7.05(b) below), or if such Purchaser shall
withdraw its notice under Section 7.02 or shall waive its right to further
payments under Sections 7.03 or 7.04 in respect of such circumstances or event,
as the case may be, then such Purchaser shall not thereafter be required to make
any such transfer and assignment hereunder.
(b) If (i) any Purchaser delivers a notice described in Section 7.02
or (ii) the Company is required to pay any additional amount to any Purchaser
(or Transferee) , pursuant to Sections 7.03 or 7.04, then such Purchaser shall
use reasonable efforts (which shall not require such Purchaser to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden reasonably deemed by it to be significant) (A)
to file any certificate or document reasonably requested in writing by the
Company or (B) to assign its rights and delegate and transfer its obligations
hereunder to another of its offices, branches or affiliates, if such filing or
assignment would enable it to withdraw its
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Series 1997-2 Supplement
notice pursuant to Section 7.02 or would reduce amounts payable pursuant to
Sections 7.03 or 7.04, as the case may be, in the future. The Company hereby
agrees to pay all reasonable costs and expenses incurred by any Purchaser in
connection with any such filing or assignment, delegation and transfer.
SECTION 7.06. Limitation. The obligations of the Company under this
Article VII shall be limited by Section 11.13.
ARTICLE VIII
Covenants, Representations and Warranties
SECTION 8.01. Representations and Warranties of the Company and the
Master Servicer. The Company and the Master Servicer each hereby represents and
warrants to the Trustee, the Agent and each of the Purchasers that each and
every of their respective representations and warranties contained in each
Pooling and Servicing Agreement is true and correct as of the Issuance Date and
as of the date of each Increase.
SECTION 8.02. Covenants of the Company and the Master Servicer. The
Company and the Master Servicer hereby agree, in addition to their obligations
under the Agreement and the Servicing Agreement, that:
(a) they shall not terminate the Agreement unless in compliance with
the terms of the Agreement and the supplements relating to each
Outstanding Series;
(b) they will (i) provide the Agent with evidence, satisfactory to
the Agent, of (A) the establishment of a disaster recovery plan, (B) the
establishment of computer back-up systems and (C) the operational
readiness of an off-site disaster recovery facility and (ii) deliver to
the Trustee executed copies of any
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landlord waivers, in a form reasonably acceptable to the Trustee, that may
be necessary to grant to the Trustee access to any leased premises of the
Master Servicer for which the Trustee may require access to perform the
collection and administrative functions to be performed by the Trustee
under the Transaction Documents;
(c) they shall observe in all material respects each and every of
their respective covenants (both affirmative and negative) contained in
the Agreement, the Servicing Agreement, this Supplement and all other
Transaction Documents to which each is a party;
(d) they shall afford the Agent or any representative of the Agent
access to all records relating to the Receivables at any reasonable time
during regular business hours, upon reasonable prior notice, for purposes
of inspection and shall permit the Agent or any representative of the
Agent to visit any of the Company's or the Master Servicer's, as the case
may be, offices or properties during regular business hours and as often
as may reasonably be requested, subject to the Company's or the Master
Servicer's, as the case may be, normal security and confidentiality
requirements and to discuss the business, operations, properties,
financial and other conditions of the Company or the Master Servicer with
their respective officers and employees and with their Independent Public
Accountants; provided that the Agent shall notify the Company or the
Master Servicer, as the case may be, prior to any contact with such
accountants and shall give the Company or the Master Servicer the
opportunity to participate in such discussions; and
(e) they shall not waive the provisions of subsections 7.01(d),
(e)(i) and (g) of the Receivables Sale Agreement without the consent of
the Agent.
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SECTION 8.03. Negative Covenant of the Company; Covenants of the
Master Servicer. (a) The Company shall not make any Restricted Payment while
Series 1997-2 is an Outstanding Series, except (i) from amounts distributed to
the Company pursuant to subsection 3A.03(b), (ii) in compliance with all terms
of the Transaction Documents, including the Company's covenant as to net worth
set forth in subsection 2.07(m) of the Agreement and (iii) such Restricted
Payment is made no more frequently than on a monthly basis and such Restricted
Payment is made in accordance with all corporate and legal formalities
applicable to the Company; provided that no Restricted Payment shall be made if
an Early Amortization Event has occurred and is continuing (or would occur as a
result of making such Restricted Payment).
(b) (i) The Master Servicer hereby agrees that it shall observe each
and all of its respective covenants (both affirmative and negative) contained in
each Pooling and Servicing Agreement in all material respects;
(ii) It shall provide to the Agent, simultaneously with delivery to
the Trustee or the Rating Agencies, all reports, notices, certificates,
statements and other documents required to be delivered to the Trustee or the
Rating Agencies pursuant to the Agreement, the Servicing Agreement and the other
Transaction Documents and furnish to the Agent promptly after receipt thereof a
copy of each material notice, material demand or other material communication
(excluding routine communications) received by or on behalf of the Company or
the Master Servicer with respect to the Transaction Documents; and
(iii) It shall provide notice to the Agent of the appointment of a
Successor Master Servicer pursuant to Section 6.02 of the Servicing Agreement.
SECTION 8.04. Obligations Unaffected. The obligations of the Company
and the Master Servicer to the Agent and the Purchasers under this Supplement
shall not be
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affected by reason of any invalidity, illegality or irregularity of any of the
Receivables or any sale of any of the Receivables.
SECTION 8.05. Representations and Warranties of the Initial
Purchasers and Acquiring Purchasers. Each Initial Purchaser and Acquiring
Purchaser represents, warrants and covenants to the Company, as of the Issuance
Date (or, in the case of each Acquiring Purchaser, as of the effective date of
the applicable Assignment and Assumption), that:
(a) It acknowledges that the VFC Certificates have not been and will
not be registered under the Securities Act and are being initially offered and
sold in reliance upon the exemption provided in Section 4(2) of the Securities
Act, and have not and will not be registered or qualified under the securities
or "blue sky" laws of any jurisdiction, and may not be resold or otherwise
transferred unless so registered or qualified or unless any exemption from such
requirements is available.
(b) It is purchasing the VFC Certificates in the ordinary course of
its business and for investment only solely for its own account or accounts for
which it exercises sole investment discretion and not as nominee or agent for
any other Person and not with a view to, or for offer or sale in connection
with, any distribution thereof (within to meaning of the Securities Act) that
would be in violation of the securities laws of the United States of America or
any state thereof.
(c) It is an institutional investor that is an "Accredited Investor"
(as defined under Rule 501(a)(1), (2), (3) or (7), of the Securities Act) or, if
the VFC Certificates are to be purchased for one or more institutional accounts
("investor accounts") for which it is acting as a fiduciary or agent, each such
investor account is an institutional investor that is an Accredited Investor.
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Series 1997-2 Supplement
(d) It invests in or has such knowledge and experience in business
and financial matters and with respect to investments in securities so as to
enable it to understand and evaluate the risks of such investments and form an
investment decision with respect thereto and is able to bear the risk of such
investment for an indefinite period and to afford a complete loss thereof.
(e) It has been afforded access to information (including the
financial condition) about the Company and the Sellers to enable it to evaluate
its investment in the VFC Certificates (the "Information") and acknowledges that
it has been afforded the opportunity (i) to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company, the
Sellers or Persons acting on their behalf concerning the terms and conditions of
the offering of the VFC Certificates and the merits and risks of investing in
the VFC Certificates, (ii) to obtain such additional information that the
Company possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy and completeness of the Information and (iii)
to review, if applicable, the filings of the Sellers with the Securities and
Exchange Commission and all of the public disclosure of the Sellers.
(f) It acknowledges that it is the expressed intent of the Company
that the VFC Certificates are being issued only in transactions not involving
any public offering within the meaning of the Securities Act and that the VFC
Certificates will bear a legend substantially as set forth in the form of the
VFC Certificates included in this Supplement and will be subject to certain
limitations on transfer and exchange specified in the Agreement, this Supplement
and the other Transaction Documents.
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ARTICLE IX
Conditions Precedent
SECTION 9.01. Conditions Precedent to Effectiveness of Supplement.
This Supplement will become effective on the date (the "Effective Date") on
which the following conditions precedent have been satisfied:
(a) Transaction Documents. The Agent shall have received an original
copy for itself and photocopies for each Purchaser, each executed and delivered
in form and substance satisfactory to the Agent, of (i) the Agreement executed
by a duly authorized officer of each of the Company, the Master Servicer and the
Trustee, (ii) this Supplement executed by a duly authorized officer of each of
the Company, the Master Servicer, the Trustee, the Agent and the Initial
Purchasers and (iii) the other Transaction Documents duly executed by the
parties thereto.
(b) Corporate Documents; Corporate Proceedings of the Company and
Master Servicer. The Agent shall have received, with a copy for each Purchaser,
from the Company, each Seller and the Master Servicer, complete copies of:
(i) on or before the Effective Date, a copy of the By-laws delivered
to The Chase Manhattan Bank on August 5, 1996 pursuant to the Series
1996-A Supplement to the Pooling Agreement;
(ii) a copy of the certificate of incorporation including all
amendments thereto, of such Person, certified as of the date certified for
the closing of Series 1996-A, (unless there has been any amendment or
modification thereto since such time, in which case, certified as of a
recent date) by the Secretary of State or other appropriate authority of
the state of incorporation, as the case may be, and a certificate of
compliance, of status or of good standing, as and to
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Series 1997-2 Supplement
the extent applicable, of each such Person as of a recent date, from the
Secretary of State or other appropriate authority of such jurisdiction;
(iii) a certificate of the Secretary or Assistant Secretary of such
Person dated the Effective Date and certifying (A) that the By-laws of
such Person delivered to The Chase Manhattan Bank on August 5, 1996,
pursuant to the Series 1996-A Supplement to the Pooling Agreement are
true, correct and in effect as of the Effective Date, (B) that attached
thereto is a true and complete copy of the resolutions of the Board of
Directors of such Person or committees thereof authorizing the execution,
delivery and performance of the Transaction Documents to which it is a
party and the transactions contemplated thereby, and in the case of the
Company, the execution, sale and delivery of the VFC Certificates, and
that such resolutions have not been amended, modified, revoked or
rescinded and are in full force and effect on the Effective Date, (C) that
the certificate of incorporation of such Person delivered to The Chase
Manhattan Bank on August 5, 1996, pursuant to the Series 1996-A Supplement
to the Pooling Agreement, is true, correct and in effect on the Effective
Date and has not been amended since the last amendment thereto shown on
the certificate of the Secretary of State of the state of incorporation of
such Person furnished pursuant to clause (ii) above and (D) as to the
incumbency and specimen signature of each officer executing any
Transaction Documents or any other document delivered in connection
herewith or therewith on behalf of such Person; and
(iv) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (iii) above.
(c) Good Standing Certificates. The Agent shall have received copies
of certificates of compliance, of
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Series 1997-2 Supplement
status or of good standing, dated as of a recent date from the Secretary of
State or other appropriate authority of such jurisdiction, with respect to the
Company, the Master Servicer, each Servicer and each Seller, in each State where
the ownership, lease or operation of property or the conduct of business
requires it to qualify as a foreign corporation, except where the failure to so
qualify would not have a material adverse effect on the business, operations,
properties or condition (financial or otherwise) of the Company, the Master
Servicer, such Servicer or such Seller, as the case may be.
(d) Consents, Licenses, Approvals, Etc. The Agent shall have
received, with a photocopy for each Purchaser, certificates dated the Effective
Date of the President, Vice Chairman, Chief Financial Officer or any Vice
President of the Company, the Master Servicer, each Servicer and each Seller
either (i) attaching copies of all material consents, licenses and approvals
required in connection with the execution, delivery and performance by the
Company, the Master Servicer, such Servicer or such Seller, as the case may be,
of the Agreement, this Supplement, the Receivables Sale Agreement and/or the
Servicing Agreement, as the case may be, and the validity and enforceability of
the Agreement, this Supplement, the Receivables Sale Agreement and/or the
Servicing Agreement against the Company, the Master Servicer, such Servicer or
such Seller, as the case may be, and such consents, licenses and approvals shall
be in full force and effect or (ii) stating that no such consents, licenses or
approvals are so required, except those that may be required under state
securities or "blue sky" laws.
(e) Filings, Registrations and Recordings. Any documents (including,
without limitation, financing statements) required to be filed in order (i) to
perfect the sale of the Receivables by each Seller to the Company pursuant to
the Receivables Sale Agreement and (ii) to create, in favor of the Trustee, a
perfected ownership/perfected first security interest in the Trust
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Series 1997-2 Supplement
Assets under the Agreement with respect to which an ownership/security interest
may be perfected by a filing under the UCC or other comparable statute shall, in
each case, have been properly prepared and filed in each office in each
jurisdiction where required pursuant to the Agreement or the Receivables Sale
Agreement, as the case may be, and such filings are the only filings required in
order to perfect the sale of the Receivables to the Company under the
Receivables Sale Agreement or to the Trust under the Agreement, as the case may
be. The Agent shall have received evidence reasonably satisfactory to it of each
such filing, registration or recordation and reasonably satisfactory evidence of
the payment of any necessary fee, tax or expense relating thereto.
(f) Lien Searches. The Agent and the Trustee shall have received the
results of a recent search satisfactory to the Agent of any UCC filings (or
equivalent filings) made with respect to the Company and the Sellers (and with
respect to such other Persons as the Agent deems necessary) in the states (or
other jurisdictions) in which the chief executive office of the Company, the
Sellers and each such other Person is located, any offices of the Company, the
Sellers and each such other Person in which records have been kept relating to
the Receivables and the other jurisdictions in which UCC filings (or equivalent
filings) were made pursuant to the preceding subsection, together with copies of
the financing statements (or similar documents) disclosed by such search, and
accompanied by evidence satisfactory to the Agent that any Liens disclosed by
such search would be Permitted Liens or have been released.
(g) Legal Opinions. The Agent, the Rating Agencies and the Trustee
shall have received, with a counterpart for each Purchaser, opinions (i) of
counsel to the Company, the Master Servicer, the Sellers and the Servicers,
dated the Issuance Date, as to corporate, tax, bankruptcy, perfection and other
matters, in form and substance acceptable to the Agent and its counsel and (ii)
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Series 1997-2 Supplement
opinions of local counsel to the Company, the Master Servicer and each Seller,
dated the Issuance Date, as to certain corporate, state tax, perfection,
priority and other matters, in form and substance acceptable to the Agent and
its counsel.
(h) Fees. The Agent, the Initial Purchaser and the Trustee shall
have received payment of all fees and other amounts due and payable to any of
them on or before the Effective Date.
(i) Conditions Under the Receivables Sale Agreement. A Responsible
Officer of the Company shall have certified that all conditions to the
obligations of the Company and each of the Sellers under the Receivables Sale
Agreement shall have been satisfied in all material respects.
(j) Copies of Written Policies. The Agent and the Trustee shall have
received copies of the written Policies of the Sellers in form and substance
acceptable to the Agent.
(k) Insurance. The Agent and the Trustee shall have received
evidence satisfactory to the Agent of each Servicer's fidelity bond or other
coverage insuring against losses through wrongdoing of its officers and
employees who are involved in the servicing of Receivables, including coverage
of depositor's forgery, in an amount and breadth of coverage satisfactory to the
Rating Agencies and the Agent.
(l) Company's Board of Directors. The composition of the Company's
Board of Directors (including two independent directors) shall be reasonably
acceptable to the Agent.
(m) Financial Statements. The Agent and the Trustee shall have
received a pro forma balance sheet for the Company giving effect to all
transactions occurring on or before the Issuance Date. The Agent shall have
received
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Series 1997-2 Supplement
the consolidated balance sheets and statements of income, stockholders' equity
and cash flows of the HFG Companies and their respective subsidiaries on a
consolidated basis (i) as of and for the fiscal year ended December 31, 1995,
audited by and accompanied by the opinion of Coopers & Xxxxxxx LLP, independent
public accountants, and (ii) as of and for the fiscal quarters ended June 30,
1996 and September 30, 1996, certified by its chief financial officer.
(n) Solvency Certificate. The Agent and the Trustee shall have
received a certificate dated the Effective Date and signed by a Responsible
Officer of the Company, in form satisfactory to the Agent, to the effect that
the Company will be solvent after giving effect to the transactions occurring on
or before the Issuance Date.
(o) Representations and Warranties. The representations and
warranties of the Company and the Master Servicer in the Agreement and this
Supplement shall be true and correct in all material respects.
(p) Rating of VFC Certificates. The VFC Certificates shall have been
given a rating by S&P that is at least equal to "A".
ARTICLE X
The Agent
SECTION 10.01. Appointment. Each Purchaser hereby irrevocably
designates and appoints the Agent as the agent of such Purchaser under this
Supplement and each such Purchaser irrevocably authorizes the Agent, in such
capacity, to take such action on its behalf under the provisions of this
Supplement and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Supplement, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in
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Series 1997-2 Supplement
this Supplement, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Purchaser, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Supplement or otherwise exist
against the Agent.
SECTION 10.02. Delegation of Duties. The Agent may execute any of
its duties under this Supplement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel (who may be counsel for the Company or
the Master Servicer), independent public accountants and other experts selected
by it concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 10.03. Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with the Agreement or this Supplement (x)
with the consent or at the request of the Majority Purchasers or (y) in the
absence of its own gross negligence or wilful misconduct or (ii) responsible in
any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by the Company or any officer thereof
contained in this Supplement or any other Transaction Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Supplement or any
other Transaction Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Supplement or any other
Transaction Document or for any failure of the Company to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Purchaser to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of,
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Series 1997-2 Supplement
this Supplement or any other Transaction Document, or to inspect the properties,
books or records of the Company.
SECTION 10.04. Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any VFC Certificate,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other documents or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company or the Master Servicer),
independent accountants and other experts selected by the Agent and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts. The Agent
may deem and treat the payee of any VFC Certificate as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Supplement or any other
Transaction Document unless it shall first receive such advice or concurrence of
the Majority Purchasers as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Supplement and the other Transaction
Documents in accordance with a request of the Majority Purchasers, and such
request and any action taken or failure to act pursuant thereto shall be
binding.
SECTION 10.05. Notice of Master Servicer Default or Early
Amortization Event or Potential Early Amortization Event. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Master Servicer
Default with respect to the Master Servicer or any Early Amortization Event or
Potential Early Amortization Event hereunder unless
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Series 1997-2 Supplement
the Agent has received written notice from a Purchaser, the Company or the
Master Servicer referring to the Agreement or this Supplement, describing such
Master Servicer Default or Early Amortization Event or Potential Early
Amortization Event and stating that such notice is a "notice of a Master
Servicer Default with respect to the Master Servicer" or a "notice of an Early
Amortization Event or Potential Early Amortization Event", as the case may be.
In the event that the Agent receives such a notice, the Agent shall give notice
thereof to the Purchasers, the Trustee, the Company and the Master Servicer. The
Agent shall take such action with respect to such Master Servicer Default or
Early Amortization Event or Potential Early Amortization Event as shall be
reasonably directed by the Majority Purchasers; provided that unless and until
the Agent shall have received such directions and indemnification satisfactory
to the Agent from the Purchasers, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Master Servicer Default or Early Amortization Event or Potential Early
Amortization Event as it shall deem advisable in the best interests of the
Purchasers.
SECTION 10.06. Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Company, shall be deemed to
constitute any representation or warranty by the Agent to any Purchaser. Each
Purchaser represents to the Agent that it has, independently and without
reliance upon the Agent or any other Purchaser, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Company and made its own decision to enter
into this Supplement. Each Purchaser also represents that it will, independently
and without reliance upon the Agent or any
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Series 1997-2 Supplement
other Purchaser, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Supplement and the other
Transaction Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly required to be furnished to the Purchasers by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Purchaser with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
SECTION 10.07. Indemnification. The Purchasers agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed by the Company
and the Master Servicer and without limiting the obligation of the Company and
the Master Servicer to do so), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought (or, if
indemnification is sought after the Commitment Termination Date, ratably in
accordance with their Commitment Percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time be imposed or, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Supplement any of the other Transaction Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Purchaser shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties,
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Series 1997-2 Supplement
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Agent's gross negligence or wilful misconduct. The agreements in this
Section shall survive the payment of all amounts payable hereunder.
SECTION 10.08. Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Company, the Master Servicer or any of their
Affiliates as though the Agent were not the Agent hereunder. With respect to any
VFC Certificate held by the Agent, the Agent shall have the same rights and
powers under this Supplement and the other Transaction Documents as any
Purchaser and may exercise the same as though it were not the Agent, and the
terms "Purchaser" and "Purchasers" shall include the Agent in its individual
capacity.
SECTION 10.09. Successor Agent. The Agent may resign as Agent upon
10 days' notice to the Purchasers. If the Agent shall resign as Agent under this
Supplement, then the Majority Purchasers shall appoint from among the Purchasers
a successor agent for the Purchasers, which successor agent shall be approved by
the Company and the Master Servicer (which approval shall not be unreasonably
withheld), whereupon such successor agent shall succeed to the rights, powers
and duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon such appointment and approval, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this
Supplement. After any retiring Agent's resignation as Agent, the provisions of
this Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Supplement.
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ARTICLE XI
Miscellaneous
SECTION 11.01. Ratification of Agreement. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
SECTION 11.02. Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ANY CONFLICT OF LAW PRINCIPLES, EXCEPT TO THE EXTENT ISSUES OF
PERFECTION ARE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.
SECTION 11.03. Further Assurances. Each of the Company, the Master
Servicer and the Trustee agrees, from time to time, to do and perform any and
all acts and to execute any and all further instruments required or reasonably
requested by the Agent or Majority Purchasers more fully to effect the purposes
of this Supplement and the sale of the VFC Certificates hereunder, including,
without limitation, in the case of the Company and the Master Servicer, the
execution of any financing or registration statements or similar documents or
notices or continuation statements relating to the Receivables and the other
Trust Assets for filing or registration under the provisions of the UCC or
similar legislation of any applicable jurisdiction, provided that, in the case
of the Trustee, in furtherance and without limiting the generality of subsection
8.01(d) of the Agreement, the Trustee shall have received reasonable assurance
in writing of adequate reimbursement and indemnity in connection with taking
such action before the Trustee shall be required to take any such action.
SECTION 11.04. Payments. Each payment to be made hereunder shall be
made on the required payment date in lawful money of the United States and in
immediately
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Series 1997-2 Supplement
available funds, if to the Purchasers, at the office of the Agent set forth
below its signature hereto. On each Distribution Date, the Agent shall remit in
like funds to each Purchaser its applicable pro rata share (based on each such
Purchaser's Series 1997-2 Invested Amount) of each such payment received by the
Agent for the account of the Purchasers.
SECTION 11.05. Costs and Expenses. The Company agrees to pay all
reasonable fees, out-of-pocket costs and expenses of the Agent (including,
without limitation, reasonable fees and disbursements of one counsel to the
Agent) in connection with (i) the preparation, execution and delivery of this
Supplement, the Agreement and the other Transaction Documents and amendments or
waivers of any such documents and (ii) the enforcement by the Agent of the
obligations and liabilities of the Company and the Master Servicer under the
Agreement, this Supplement or any related document; provided, however, that any
payments made by the Company pursuant to this Section shall be Company
Subordinated Obligations.
SECTION 11.06. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee, the Agent or
any Purchaser, any right, remedy, power or privilege hereunder, shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 11.07. Amendments. (a) Subject to subsection (c) of this
Section 11.07, this Supplement may be amended in writing from time to time by
the Master Servicer, the Company and the Trustee, with the consent of the Agent
but without the consent of any holder of any outstanding VFC Certificate, to
cure any ambiguity, to correct or supplement
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Series 1997-2 Supplement
any provisions herein or therein which may be inconsistent with any other
provisions herein or therein or to add any other provisions to or changing in
any manner or eliminating any of the provisions with respect to matters or
questions raised under this Supplement which shall not be inconsistent with the
provisions of any Pooling and Servicing Agreement; provided, however, that such
action shall not, as evidenced by an Officer's Certificate delivered to the
Trustee upon which the Trustee may conclusively rely, have a Material Adverse
Effect or a Company Material Adverse Effect (but, to the extent that the
determination of whether such action would have a Material Adverse Effect or a
Company Material Adverse Effect requires a conclusion as to a question of law,
an Opinion of Counsel shall be delivered to the Trustee in addition to such
Officer's Certificate); provided, further, that any amendment that is entered
into to provide additional Enhancement for any Outstanding Series shall, be
deemed to have no Material Adverse Effect or Company Material Adverse Effect.
The Trustee may, but shall not be obligated to, enter into any such amendment
pursuant to this paragraph or paragraph (b) below that affects the Trustee's
rights, duties or immunities under any Pooling and Servicing Agreement or
otherwise.
(b) Subject to subsection (c) of this Section 11.07, this Supplement
may also be amended (other than in the circumstances referred to in subsection
(a)) in writing from time to time by the Master Servicer, the Company and the
Trustee with the consent of the Majority Purchasers for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Supplement or of modifying in any manner the rights of the VFC
Certificateholders; provided, however, that no such amendment shall, unless
signed or consented to in writing by all Purchasers, (i) extend the time for
payment, or reduce the amount, of any amount on money payable to or for the
account of any Purchaser under any provision of this Supplement, (ii) subject
any Purchaser to any additional obligation (including, without limitation, any
change in the determination of any amount payable by any Purchaser) or
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Series 1997-2 Supplement
(iii) change the Aggregate Commitment Amount or the number of Purchasers which
shall be required for any action under this subsection or any other provision of
this Supplement.
(c) Any amendment hereof can be affected without the Agent being a
party thereto; provided, however, that no such amendment, modification or waiver
of this Supplement that affects rights or duties of the Agent shall be effective
unless the Agent shall have given its prior written consent thereto.
(d) No such amendment shall be effective until the Rating Agency
Condition is satisfied.
SECTION 11.08. Severability. If any provision hereof is void or
unenforceable in any jurisdiction, such voidness or unenforceability shall not
affect the validity or enforceability of (i) such provision in any other
jurisdiction or (ii) any other provision hereof in such or any other
jurisdiction.
SECTION 11.09. Notices. All notices, requests and demands to or upon
any party hereto to be effective shall be given (i) in the case of the Company,
the Master Servicer and the Trustee, in the manner set forth in Section 10.05 of
the Agreement and (ii) in the case of the Agent, each Purchaser and the Rating
Agencies, in writing (including a confirmed transmission by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand or three days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when received, (A) in
the case of the Agent and each Purchaser, at their respective addresses set
forth below their names on Schedule 1 hereto and (B) in the case of the Rating
Agencies, at the addresses notified by such Rating Agencies;
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Series 1997-2 Supplement
or to such other address as may be hereafter notified by the
respective parties hereto.
SECTION 11.10. Successors and Assigns. (a) This Supplement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
(b) Any Purchaser may assign to one or more assignees (any such
assignee shall be referred to herein as an "Acquiring Purchaser") all or a
portion of its interests, rights and obligations under this Supplement and the
Transaction Documents; provided, however, that (i) except in the case of an
assignment to a Purchaser or an Affiliate, the amount of the Commitment of the
assigning Purchaser subject to each such assignment (determined as of the date
the Commitment Transfer Supplement with respect to such assignment is delivered
to the Agent) shall not be less than $5,000,000 (or, if less, the entire
remaining amount of such Purchaser's Commitment), (ii) the parties to each such
assignment shall execute and deliver to the Agent the Commitment Transfer
Supplement, substantially in the form of Exhibit B, together with a processing
and recordation fee of $3,500 and (iii) the Acquiring Purchaser, if it shall not
be a Purchaser, shall deliver to the Agent an Administrative Questionnaire,
substantially in the form of Exhibit C. Upon acceptance and recording pursuant
to paragraph (e) of this Section 11.10, from and after the effective date
specified in each Commitment Transfer Supplement, which effective date shall be
at least five Business Days after the execution thereof, (A) the Acquiring
Purchaser thereunder shall be a party hereto and, to the extent of the interest
assigned by such Commitment Transfer Supplement, have the rights and obligations
of a Purchaser under this Supplement and (B) the assigning Purchaser thereunder
shall, to the extent of the interest assigned by such Commitment Transfer
Supplement, be released from its obligations under this Supplement and the other
Transaction Documents (and, in the case of an Commitment Transfer Supplement
covering all or the remaining portion of an assigning Purchaser's rights and
obligations
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Series 1997-2 Supplement
under this Supplement and the other Transaction Documents, such Purchaser shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 7.01, 7.02, 7.03, 7.04 and 11.05, as well as to any fees accrued for
its account and not yet paid).
(c) By executing and delivering a Commitment Transfer Supplement,
the assigning Purchaser thereunder and the Acquiring Purchaser thereunder shall
be deemed to confirm to and agree with each other and the other parties hereto
as follows: (i) such assigning Purchaser warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim and that its Commitment, and the outstanding balances of its VFC
Certificates, in each case without giving effect to assignments thereof which
have not become effective, are as set forth in such Commitment Transfer
Supplement; (ii) except as set forth in (i) above, such assigning Purchaser
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Supplement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Supplement, any other Transaction
Document or any other instrument or document furnished pursuant hereto or
thereto, or the financial condition of any Seller, any Servicer, the Company or
the Master Servicer, or the performance or observance by any Seller, any
Servicer, the Company or the Master Servicer of any of its obligations under
this Supplement, any other Transaction Document or any other instrument or
document furnished pursuant hereto or thereto; (iii) such Acquiring Purchaser
represents and warrants that it is legally authorized to enter into such
Commitment Transfer Supplement; (iv) such Acquiring Purchaser confirms that it
has received a copy of this Supplement and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Commitment Transfer Supplement; (v) such Acquiring Purchaser
will independently and without reliance upon the Agent, the Trustee, the
assigning Purchaser or any other
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Series 1997-2 Supplement
Purchaser and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Supplement or any other Transaction Document; (vi)
such Acquiring Purchaser appoints and authorizes the Agent and the Trustee to
take such action as agent on its behalf and to exercise such powers under this
Supplement as are delegated to the Agent and the Trustee, respectively, by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such Acquiring Purchaser agrees that it will perform in accordance
with their terms all the obligations which by the terms of this Supplement are
required to be performed by it as a Purchaser.
(d) Notwithstanding and in addition to the provisions of Section
5.03 of the Agreement, the Agent shall maintain at one of its offices in The
City of New York a copy of each Commitment Transfer Supplement delivered to it
and a register for the recordation of the names and addresses of the Purchasers,
and the Commitments of, and the principal amount of the VFC Certificates issued
to, each Purchaser pursuant to the terms hereof from time to time (the
"Register"). Notwithstanding the provisions of Section 5.05 of the Agreement,
the entries in the Register as provided in this subsection 11.10(d) shall be
conclusive and the Company, the Master Servicer, the Purchasers, the Paying
Agent, the Transfer Agent and Registrar, the Agent and the Trustee shall treat
each person whose name is recorded in the Register pursuant to the terms hereof
as a Purchaser hereunder for all purposes of this Supplement, notwithstanding
notice to the contrary. However, in accordance with Section 5.05 of the
Agreement, in determining whether the holders of the requisite Fractional
Undivided Interests have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, VFC Certificates owned by the Company, the
Master Servicer or any Servicer or any Affiliate thereof, shall be disregarded
and deemed not to be outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization,
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Series 1997-2 Supplement
direction, notice, consent or waiver, only VFC Certificates which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
VFC Certificates so owned by the Company, the Master Servicer or any Servicer or
any Affiliate thereof which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee establishes to the
satisfaction of the trustee the pledgee's right so to act with respect to such
VFC Certificates and that the pledgee is not the Company, the Master Servicer or
any Servicer or any Affiliate thereof. The Register shall be available for
inspection by the Company, the Master Servicer, the Purchasers and the Trustee,
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Commitment Transfer
Supplement executed by an assigning Purchaser and an Acquiring Purchaser, an
Administrative Questionnaire completed in respect of the Acquiring Purchaser
(unless the Acquiring Purchaser shall already be a Purchaser hereunder) and the
processing and recordation fee referred to in paragraph (b) above, the Agent
shall (i) accept such Commitment Transfer Supplement, (ii) record the
information contained therein in the Register and (iii) give prompt written
notice thereof to the Purchasers, the Company, the Master Servicer and the
Trustee. No assignment shall be effective unless and until it has been recorded
in the Register as provided in this paragraph (e).
(f) Any Purchaser may sell participations to one or more banks or
other entities (the "Participants") in all or a portion of its rights and
obligations under this Supplement and the other Transaction Documents (including
all or a portion of its Commitment and VFC Certificates); provided, however,
that (i) such Purchaser's obligations under this Agreement shall remain
unchanged, (ii) such Purchaser shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Participants
shall be entitled to the benefit of the cost protection provisions contained in
Sections 7.01,
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Series 1997-2 Supplement
7.02, 7.03 and 7.04, and shall be required to provide the tax forms and
certifications described in Section 7.03(b), to the same extent as if they were
Purchasers, provided that no such Participant shall be entitled to receive any
greater amount pursuant to such Sections than a Purchaser would have been
entitled to receive in respect of the amount of participation sold by such
Purchaser to such Participant had no sale occurred, (iv) the Company, the Master
Servicer, the other Purchasers, the Agent and the Trustee, shall continue to
deal solely and directly with such Purchaser in connection with such Purchaser's
rights and obligations under this Supplement, and such Purchaser shall retain
the sole right to enforce its rights under VFC Certificates and to approve any
amendment, modification or waiver of any provision of this Supplement (other
than amendments, modifications or waivers decreasing any fees payable hereunder
or the amount of principal of or the rate at which interest is payable on the
VFC Certificates, extending any scheduled principal payment date or date fixed
for the payment of interest on the VFC Certificates or increasing or extending
the Commitments) and (v) the sum of the aggregate amount of any Commitment or
portion thereof subject to each such participation plus the portion of the
Series 1997-2 Invested Amount represented by any VFC Certificates subject to
such participation shall not be less than $1,000,000.
(g) Any Purchaser may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.10, disclose to the Acquiring Purchaser or Participant or proposed Acquiring
Purchaser or Participant any information relating to the Sellers, the Servicers,
the Master Servicer, the Trust or the Company furnished to such Purchaser by or
on behalf of such entities, provided that, prior to any such disclosure of
information, each such Acquiring Purchaser or Participant or proposed Acquiring
Purchaser or Participant shall execute a confidentiality agreement in the form
of Exhibit G.
(h) Neither the Company nor the Master Servicer shall assign or
delegate any of its rights or duties
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Series 1997-2 Supplement
hereunder without the prior written consent of the Agent, the Trustee and each
Purchaser, and any attempted assignment without such consent shall be null and
void.
(i) Notwithstanding any other provisions herein, no transfer or
assignment of any interests or obligations of any Purchaser hereunder or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would result in a prohibited transaction under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA or cause the Trust Assets to be
regarded as "plan assets" pursuant to 29 C.F.R. ss. 2510.3-101, or require the
Company or any Seller to file a registration statement with the Securities and
Exchange Commission or to qualify under the "blue sky" laws of any state.
SECTION 11.11. Counterparts. This Supplement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.
SECTION 11.12. Adjustments; Setoff. (a) If any Purchaser (a
"Benefitted Purchaser") shall at any time receive in respect of its Series
1997-2 Purchaser Invested Amount any distribution of principal, interest,
Commitment Fees or other fees, or any interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by setoff,
or otherwise) in a greater proportion than any such distribution received by any
other Purchaser, if any, in respect of such other Purchaser's Series 1997-2
Purchaser Invested Amount, or interest thereon, such Benefitted Purchaser shall
purchase for cash from the other Purchasers such portion of each such other
Purchaser's interest in the VFC Certificates, or shall provide such other
Purchasers with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Purchaser to share the excess
payment or benefits of such collateral or proceeds ratably
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Series 1997-2 Supplement
with each of the Purchasers; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such Benefitted
Purchaser, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The Company
agrees that each Purchaser so purchasing a portion of the VFC
Certificateholders' Interest may exercise all rights of payment (including,
without limitation, rights of setoff) with respect to such portion as fully as
if such Purchaser were the direct holder of such portion.
(b) In addition to any rights and remedies of the Purchasers
provided by law, each Purchaser shall have the right, without prior notice to
the Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Company hereunder or under the VFC Certificates to setoff and appropriate and
apply against any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Purchaser to
or for the credit or the account of the Company. Each Purchaser agrees promptly
to notify the Company and the Agent after any such setoff and application made
by such Purchaser; provided that the failure to give such notice shall not
affect the validity of such setoff and application.
SECTION 11.13. Limitation of Payments by Company. The Company's
obligations under Article VII shall be limited to the funds available to the
Company which have been properly distributed to the Company pursuant to the
Agreement and any Supplement and neither the Agent nor any Purchaser shall have
any actionable claim against the Company for failure to satisfy such obligation
because it does not have funds available therefor from amounts properly
distributed.
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Series 1997-2 Supplement
SECTION 11.14. No Bankruptcy Petition. Each Purchaser hereby
covenants and agrees that, prior to the date which is one year and one day after
the later of (i) the last day of the Series 1997-2 Amortization Period and (ii)
the date on which all Investor Certificates of each other Outstanding Series are
repaid in full, it will not institute against, or join any other Person in
instituting against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other similar proceedings under any
Federal or state bankruptcy or similar law.
SECTION 11.15. Limitation on Addition and Termination of Sellers.
(a) Notwithstanding anything to the contrary contained in the Receivables Sale
Agreement or the Agreement, the Company shall not consent to the addition of a
Seller thereunder unless each of the following conditions shall have been
satisfied.
(i) Each of the conditions set forth in Section 3.05 of the
Receivables Sale Agreement shall have been satisfied and the Trustee shall
have received evidence in the form of an appropriate Officer's Certificate
as to that fact.
(ii) The Company, the Trustee and the Agent shall have received
evidence that the Rating Agency Condition shall have been satisfied with
respect to the addition of such Seller; provided that satisfaction of the
Rating Agency Condition (and such receipt of evidence thereof) shall not
be required with respect to the addition of up to three additional Sellers
during any calendar year, each of which meets the following criteria: (x)
such proposed additional Seller is, in the judgment of the Company as
certified by the Company to the Trustee in an Officer's Certificate, in
the same line of business as the existing Sellers as of the related Seller
Addition Date (as defined in the Receivables Sale Agreement and (y) as of
the Seller Addition Date, immediately prior to giving effect to
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Series 1997-2 Supplement
such addition, the ratio (as determined by the Company and expressed as a
percentage) of (I)the aggregate Principal Amount of what would constitute
all Eligible Receivables of the proposed additional Seller if it were a
Seller at the end of the Business Date immediately preceding the Seller
Addition Date minus the amount which would constitute the
Overconcentration Amount applicable to such Receivables on the Seller
Addition Date if the proposed additional Seller were a Seller to (II) the
Aggregate Receivables Amount on the Seller Addition Date (before giving
effect to such addition), is less than five percent.
(iii) The Company, the Trustee and the Agent shall have received a
certificate prepared by a Responsible Officer of each Servicer certifying
that after giving effect to the addition of such Seller, the Aggregate
Target Receivables Amount shall equal or exceed the Aggregate Allocated
Receivables Amount on the related Seller Addition Date.
(iv) The Trustee shall have notified the Company, the Agent and each
Rating Agency that a Standby Liquidation System is in place for such
proposed additional Seller.
(v) Each Purchaser shall have given its prior written consent to the
addition of such Seller, which shall not be unreasonably withheld;
provided, that Purchaser consent shall not be required for the addition of
Sunbury Textile Xxxxx as a Seller.
(b) Notwithstanding anything to the contrary contained in the
Receivables Sale Agreement, the Company shall not consent to any request made
pursuant to Section 9.14(b) thereof, nor shall any Seller which is the subject
of such request be terminated under the Receivables Sale Agreement, in each case
unless (i) no Early Amortization Event, Potential Early Amortization Event or
Potential Purchase Termination Event (as defined in the
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Series 1997-2 Supplement
Receivables Sale Agreement) (other than with respect to the Seller to be so
terminated) has occurred and is continuing (both before and after giving effect
to such termination) and (ii) the Trustee shall have received prior written
notice of such termination (which notice shall be accompanied by a pro forma
Daily Report confirming that the Aggregate Target Receivables Amount equals or
exceeds the Aggregate Allocated Receivables Amount, each calculated after giving
effect to such termination and excluding all Receivables originated by the
Seller to be terminated).
(c) Upon the termination of a Seller pursuant to Section 9.14(b) of
the Receivables Sale Agreement and the foregoing paragraph (b), the calculation
(including, without limitation, for purposes of the pro forma calculations
pursuant to paragraph (b) above) of the Aggregate Target Receivables Amount, the
Aggregate Allocated Receivables Amount, the Series 1997-2 Required Subordinated
Amount and all other amounts from which each such amount is directly or
indirectly derived shall exclude in each case the Receivables originated by such
terminated Seller.
ARTICLE XII
Final Distributions
SECTION 12.01. Certain Distributions. (a) Not later than 2:00 p.m.,
New York City time, on the Distribution Date following the date on which the
proceeds from the disposition of the Receivables pursuant to subsection 7.02(b)
of the Agreement are deposited into the Series 1997-2 Non-Principal Collection
Sub-subaccount and the Series 1997-2 Principal Collection Sub-subaccount, the
Trustee shall distribute such amounts pursuant to Article III of this
Supplement.
(b) Notwithstanding anything to the contrary in this Supplement or
the Agreement, any distribution made pursuant to this Section shall be deemed to
be a final
95
Series 1997-2 Supplement
distribution pursuant to Section 9.03 of the Agreement with respect to the VFC
Certificates.
96
Series 1997-2 Supplement
IN WITNESS WHEREOF, the Company, the Master Servicer, the Trustee,
the Agent and the Initial Purchasers have caused this Series 1997-2 Supplement
to be duly executed by their respective officers as of the day and year first
above written.
LFI RECEIVABLES CORPORATION,
by ______________________________________
Name:
Title:
LFI SERVICING CORPORATION, as
Master Servicer,
by ______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, not
in its individual capacity but
solely as Trustee,
by ______________________________________
Name:
Title:
97
Series 1997-2 Supplement
THE CHASE MANHATTAN BANK, as
Agent,
by ______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Initial Purchaser,
by ______________________________________
Name:
Title:
EXHIBIT A TO SERIES
1997-2 SUPPLEMENT
LFI RECEIVABLES MASTER TRUST
FORM OF VFC CERTIFICATE, SERIES 1997-2
REGISTERED UP TO $_____________.00 SERIES
NO. VFC-[ ] 1997-2 PURCHASER INVESTED AMOUNT*
(OF UP TO $_____________.00 SERIES
1997-2 INVESTED AMOUNT ISSUED)
*THE SERIES 1997-2 PURCHASER INVESTED AMOUNT OF THIS VFC CERTIFICATE
IS SUBJECT TO CHANGE AS DESCRIBED HEREIN.
THIS VFC CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"). NEITHER THIS VFC CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS.
THIS VFC CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED,
EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS
OF THE POOLING AGREEMENT AND SUPPLEMENT REFERRED TO HEREIN.
This VFC Certificate evidences a fractional undivided interest in
the assets of the
LFI RECEIVABLES MASTER TRUST
the corpus of which consists of receivables representing amounts payable for
goods or services, which receivables have been purchased by LFI Receivables
Corporation, a Delaware corporation, which in turn transferred and assigned such
receivables to the LFI Receivables Master Trust.
(Not an interest in or obligation of
LFI Receivables Corporation, the Sellers listed on
Schedule 1 to the Receivables Sale Agreement
or any Affiliate thereof)
2
This certifies that
[NAME OF CERTIFICATEHOLDER]
(the "VFC Certificateholder") is the registered owner of a fractional undivided
interest in the assets of LFI Receivables Master Trust (the "Trust") created
pursuant to the Pooling Agreement, dated as of August 5, 1996 (as amended and
restated on February 4, 1997, and as the same may from time to time be amended,
restated, supplemented or otherwise modified thereafter, the "Pooling
Agreement"), by and among LFI Receivables Corporation, a Delaware corporation
(the "Company"), LFI Servicing Corporation, a Delaware corporation, as master
servicer (the "Master Servicer"), and The Chase Manhattan Bank, a New York
banking corporation, not in its individual capacity but solely as trustee (in
such capacity, the "Trustee") for the Trust, as supplemented by the Series
1997-2 Supplement, dated as of February 4, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Supplement", collectively, with the
Pooling Agreement, the "Agreement"), by and among the Company, the Master
Servicer, the Trustee, the purchasers named therein and from time to time
parties thereto (the "Purchasers") and The Chase Manhattan Bank, a New York
corporation, as initial purchaser and agent for the Purchasers (in such
capacity, the "Agent"). The corpus of the Trust consists of receivables (the
"Receivables") representing amounts payable for goods or services and all other
Trust Assets referred to in the Agreement. Although a summary of certain
provisions of the Agreement is set forth below, this VFC Certificate does not
purport to summarize the Agreement, is qualified in its entirety by the terms
and provisions of the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Agreement may be requested by a holder hereof by
writing to the Trustee at Xxx Xxxxx
0
Xxxxxxxxx Xxxx, 000 X. 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Advanced Structured Products Group. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement.
This VFC Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the VFC
Certificateholder, by virtue of the acceptance hereof, assents and is bound.
The Master Servicer, the Servicers, the Company, each VFC
Certificateholder and the Trustee intend, for federal, state and local income
and franchise tax purposes only, that the VFC Certificates be evidence of
indebtedness of the Company secured by the Trust Assets and that the Trust not
be characterized as an association or publicly traded partnership taxable as a
corporation. The VFC Certificateholder, by the acceptance hereof, agrees to
treat the VFC Certificates for federal, state and local income and franchise tax
purposes as indebtedness of the Company.
This VFC Certificate is one in a Series of Investor Certificates
entitled "LFI Receivables Master Trust, VFC Certificates, Series 1997-2" (the
"VFC Certificates") representing a fractional undivided interest in the Trust
Assets, consisting of the right to receive the distributions specified in the
Supplement out of (i) the Series 1997-2 Invested Percentage (expressed as a
decimal) of Collections received with respect to the Receivables and all other
funds on deposit in the Collection Account and (ii) to the extent such interests
appear in the Supplement, all other funds on deposit in the Series 1997-2
Collection Subaccount and any subaccounts thereof (collectively, the "VFC
Certificateholders' Interest"). Concurrent with the issuance of the VFC
Certificates, the Trust shall also issue a Subordinated Company Interest to the
Company representing a fractional undivided interest in the Trust Assets,
consisting of the right to receive the distributions specified in the Supplement
out of (i) the Series 1997-2
4
Invested Percentage (expressed as a decimal) of Collections received with
respect to the Receivables and all other funds on deposit in the Collection
Account and (ii) to the extent such interests appear in the Supplement, all
other funds on deposit in the Series 1997-2 Collection Subaccount and any
subaccounts thereof, in each case to the extent not required to be distributed
to or for the benefit of the VFC Certificateholders (the "Series 1997-2
Subordinated Interest"). The Trust Assets are allocated in part to the VFC
Certificateholders and the holders of the Series 1997-2 Subordinated Interest
with the remainder allocated to the Investor Certificateholders and the holders
of the Subordinated Company Interests of other Series, if any, and to the
Company. An Exchangeable Company Interest representing the Company's interest in
the Trust was issued to the Company pursuant to the Pooling Agreement on August
5, 1996. The Exchangeable Company Interest represents the interest in the Trust
Assets not represented by the Investor Certificates and the Subordinated Company
Interests of each Outstanding Series. The Exchangeable Company Interest may be
decreased by the Company pursuant to the Pooling Agreement in exchange for an
increase in the Invested Amount of a Class of Investor Certificates of an
Outstanding Series and an increase in the related Series Subordinated Company
Interest, or one or more newly issued Series of Investor Certificates and the
related newly issued Series Subordinated Company Interest, upon the conditions
set forth in the Agreement.
Distributions with respect to this VFC Certificate shall be paid by
the Agent in immediately available funds to the VFC Certificateholder at the
office of the Agent set forth in the Agreement. Final payment of this VFC
Certificate shall be made only upon presentation and surrender of this VFC
Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee to the VFC Certificateholders in
accordance with the Agreement.
5
This VFC Certificate does not represent an obligation of, or an
interest in, the Company, the Master Servicer or any Affiliate of either of
them.
The transfer of this VFC Certificate shall be registered in the
Certificate Register upon surrender of this VFC Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer, in a form satisfactory to the
Trustee and the Transfer Agent and Registrar, duly executed by the VFC
Certificateholder or the VFC Certificateholder's attorney, and duly authorized
in writing with such signature guaranteed, and thereupon one or more new VFC
Certificates of authorized denominations and of like aggregate Fractional
Undivided Interests will be issued to the designated transferee or transferees.
In addition, the Agent shall maintain at one of its offices in the City of New
York the Register for the recordation of the names and addresses of the
Purchasers, and the Commitment of, and the principal amount of VFC Certificates
issued to, each Purchaser.
The Company, the Trustee, the Master Servicer, the Transfer Agent
and Registrar, the Agent and any agent of any of them, may treat the person
whose name is recorded in the Register as a Purchaser for all purposes of the
Supplement, notwithstanding notice to the contrary (other than notice in
connection with an assignment effected or to be effected in accordance with
Section 11.10 of the Supplement).
It is expressly understood and agreed by the Company and the VFC
Certificateholder that (i) the Agreement is executed and delivered by the
Trustee, not individually or personally but solely as Trustee of the Trust, in
the exercise of the powers and authority conferred and vested in it, (ii) the
representations, undertakings and agreements made on the part of the Trust in
the Agreement are made and intended not as personal representations,
undertakings and agreements by the Trustee, but are made and intended for the
purpose of binding only the Trust, (iii) nothing herein
6
contained shall be construed as creating any liability of the Trustee,
individually or personally, to perform any covenant either expressed or implied
made on the part of the Trust in the Agreement, all such liability, if any,
being expressly waived by the parties who are signatories to the Agreement and
by any Person claiming by, through or under such parties; provided, however, the
Trustee shall be liable in its individual capacity for its own wilful misconduct
or gross negligence and for any tax assessed against the Trustee based on or
measured by any fees, commission or compensation received by it for acting as
Trustee and (iv) under no circumstances shall the Trustee be personally liable
for the payment of any indebtedness or expenses of the Trust or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Trust under the Agreement.
The holder of this VFC Certificate is authorized to record the date
and amount of each increase and decrease in the Series 1997-2 Purchaser Invested
Amount with respect to such holder on the schedules annexed hereto and made a
part hereof and any such recordation shall constitute prima facie evidence of
the accuracy of the information so recorded, absent manifest error, provided
that the failure of the holder of this VFC Certificate to make such recordation
(or any error in such recordation) shall not affect the obligations of the
Company, the holder of the Series 1997-2 Subordinated Certificate, the Master
Servicer or the Trustee under the Agreement.
This VFC Certificate shall be construed in accordance with and
governed by the laws of the State of New York without reference to any conflict
of law principles.
By acceptance of this VFC Certificate, the VFC Certificateholder
hereby agrees that, prior to the date which is one year and one day after the
later of (i) the last day of the Series 1997-2 Amortization Period and (ii) the
date on which all Investor Certificates of each other Outstanding Series are
repaid in full, it will not
7
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this VFC Certificate shall not
be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Company has caused this VFC Certificate to
be duly executed.
Dated: _____________, 1997
LFI RECEIVABLES CORPORATION,
as authorized pursuant to
Section 5.01 of the Pooling
Agreement,
by ____________________________________
Title
8
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the VFC Certificates described in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, not
in its individual capacity but
solely as Trustee,
by ____________________________________
Authorized Signatory
OR
by ____________________________________
Authenticating Agent
by ____________________________________
Authorized Signatory
Schedule 1
to VFC Certificate
================================================================================
Increase Decrease
in Series in Series
1997-2 1997-2 Series 1997-2
Purchaser Purchaser Purchaser
Invested Invested Invested Notation
Date Amount Amount Amount Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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================================================================================
EXHIBIT C TO SERIES
1997-2 SUPPLEMENT
[Form of]
[ ]
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via Telecopy to
the attention of [ ] at [ ] as soon as possible, at Telecopy No. ( ) [ ].
________________________________________________________________________________
PURCHASER LEGAL NAME TO APPEAR IN DOCUMENTATION:
________________________________________________________________________________
GENERAL INFORMATION:
Institution Name: ______________________________________________________________
Street Address: ________________________________________________________________
City, State, Zip Code: _________________________________________________________
POST-CLOSING, ONGOING CREDIT CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS: _______________________________________________________________
Primary Contact: _______________________________________________________________
Street Address: ________________________________________________________________
City, State, Zip Code: _________________________________________________________
Phone Number: __________________________________________________________________
Telecopy Number: _______________________________________________________________
Backup Contact: ________________________________________________________________
Street Address: ________________________________________________________________
City, State, Zip Code: _________________________________________________________
Phone Number: __________________________________________________________________
Telecopy Number: _______________________________________________________________
TAX WITHHOLDING:
Nonresident Alien _________ Y* __________ N
* Form 4224 Enclosed
Tax ID Number _____________________________
POST-CLOSING, ONGOING ADMINISTRATIVE CONTACTS/NOTIFICATION
METHODS:
ADMINISTRATIVE CONTACTS - PAYMENTS, FEES, ETC.
Contact: _______________________________________________________________________
Street Address: ________________________________________________________________
City, State, Zip Code: _________________________________________________________
Phone Number: __________________________________________________________________
Telecopy Number: _______________________________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank to which funds are to be transferred:
________________________________________________________________________________
Routing Transit/ABA number of Bank to which funds are to be transferred:
________________________________________________________________________________
Name of Account, if applicable:
________________________________________________________________________________
Account Number: ________________________________________________________________
Additional information: ________________________________________________________
________________________________________________________________________________
It is very important that all the above information be accurately completed and
that this questionnaire be returned to the person specified in the introductory
paragraph of this questionnaire as soon as possible. If there is someone other
than yourself who should receive this questionnaire, please notify us of that
person's name and telecopy number and we will telecopy a copy of the
questionnaire. If you have any questions about this form, please call
[ ] at ( ) [ ].
EXHIBIT F TO SERIES
1997-2 SUPPLEMENT
FORM OF ISSUANCE/INCREASE NOTICE
________, 199__
[Agent/Address of Agent]
Telecopier:
Attention:
Ladies and Gentlemen:
Reference is hereby made to the Series 1997-2 Supplement, dated as
of , 1997 (as amended or supplemented, the "Supplement"), among
LFI Receivables Corporation (the "Company"), LFI Servicing Corporation (the
"Master Servicer"), the purchasers named therein and from time to time party
thereto, [ ], the purchases named therein and from time to
time party thereto, as Agent and Initial Purchaser, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used in this Notice and not otherwise
defined herein shall have the meanings assigned thereto in the Supplement.
This Notice constitutes the notice required in connection with [the
initial issuance] [any Increase] pursuant to subsection 2.05(a) of the
Supplement.
The [Master Servicer] [Company] hereby requests [a purchase in
respect of the initial issuance of Investor Certificates] [an Increase] be made
by the Purchasers on ______, ___ in the aggregate amount of $_______, such
[purchase] [Increase] to be allocated to a [Floating Tranche] [Eurodollar
Tranche with a Eurodollar Period of one month].
The [Master Servicer] [Company] hereby represents and warrants, as
of the date of such [purchase] [Increase]
2
after giving effect thereto, that the conditions set forthin subsections 2.05(a)
and (b) of the Supplement with respect to such [purchase] [Increase] have been
satisfied.
IN WITNESS WHEREOF, the undersigned has caused this Notice to be
executed by its duly authorized officer as of the date first above written.
[LFI SERVICING CORPORATION, as
Master Servicer]
[LFI RECEIVABLES CORPORATION]
By:_________________________________
Name:
Title:
EXHIBIT G TO SERIES
1997-2 SUPPLEMENT
Form of Confidentiality Agreement
(Telecopy to [ ] at - )
[Name of assignor Purchaser]
Ladies and Gentlemen:
You are prepared to furnish to the undersigned [describe information
to be provided]. The [described information] and any other materials, documents
and information which you, the Sellers, the Servicers, the Master Servicer, the
Company and the Trustee, on behalf of the Trust, or any of your or their
respective affiliates may furnish to us in connection with our evaluation of a
possible assignment or participation are collectively called the "Information".
Terms used herein that are not otherwise defined herein shall have the meaning
ascribed to such terms in the Amended and Restated Pooling Agreement, dated as
of January , 1997 among LFI Receivables Corporation, LFI Servicing Corporation
and The Chase Manhattan Bank, as Trustee.
We agree to keep confidential, and to not publish, disclose or
otherwise divulge, the Information (and to cause our officers, directors,
employees, agents and representatives to keep confidential, and to not publish,
disclose or otherwise divulge, the Information) and, at your, the Sellers', the
Servicers', the Master Servicer's, the Company's or the Trustee's request
(except as provided below), promptly to return to you, the Sellers, the
Servicers, the Master Servicer, the Company or the Trustee (as applicable), or
destroy, the Information and all copies thereof, extracts therefrom and analyses
or other materials
2
based thereon, except that we shall be permitted to disclose Information (i) to
such of our officers, directors, employees, agents and representatives as need
to know such Information in connection with our evaluation of a possible
assignment or participation (who will be informed of the confidential nature of
the Information); (ii) to the extent required by applicable laws or regulations
or by any subpoena or similar legal process, or requested by any bank regulatory
authority (in any which event we will notify you, the Sellers, the Servicers,
the Master Servicer, the Company or the Trustee to the extent not prohibited by
applicable law); (iii) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this agreement, (B) becomes
available to us on a non- confidential basis from a source other than you, the
Sellers, the Servicers, the Master Servicer, the Company or the Trustee or any
of your Affiliates or (C) was available to us on a non-confidential basis prior
to its disclosure to us by you; (iv) to the extent you, the Sellers, the
Servicers, the Master Servicer, the Company and the Trustee shall have consented
to such disclosure in writing; or (v) pursuant to the last paragraph of this
letter.
We further agree that we will use the Information (except to the
extent the conditions referred to in subclauses (A), (B) and (C) of clause (iii)
above have been met and as provided in the last paragraph of this letter) only
to evaluate a possible assignment or participation.
We further agree, in the event we participate in an assignment or
participation, that we will not disclose any of the Information to any assignee
or participant or proposed assignee or participant unless and until such
assignee or participant or proposed assignee or participant first executes and
delivers to you a letter substantially in the form hereof.
Our obligations under this letter are for the benefit of you, the
Sellers, the Servicers, the Master Servicer, the Company and the Trustee and
your and their
3
Affiliates and you and each of them may pursue remedies against us for the
breach hereof, either in equity or at law.
Notwithstanding anything to the contrary contained above if we
participate in an assignment or participation, we will be entitled to retain all
Information and to use it in monitoring our investment and in exercising our
rights with respect thereto. This agreement shall be governed by the laws of the
State of New York.
Name of Recipient:
by:
-----------------------------
Authorized Officer
------------------------------
[Name of Assignee/Participant/
Proposed Assignee/Proposed
Participant]
Schedule 1 to the
Series 1997-2 Supplement
Commitments
Purchaser Commitment
--------- ----------
The Chase Manhattan Bank $50,000,000
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Schedule 2 to the
Series 1997-2 Supplement
Trust Accounts
Account
-------
Series 1997-2 Collection Subaccount
Series 1997-2 Principal Collection Sub-
subaccount
Series 1997-2 Non-Principal Collection
Sub-subaccount
Series 1997-2 Accrued Interest Sub-
subaccount
