EXHIBIT 10.1
EXECUTION COPY
USS RECEIVABLES COMPANY, LTD.
UNITED STATIONERS FINANCIAL SERVICES LLC,
as Servicer,
FIFTH THIRD BANK,
as Administrator and Committed Purchaser,
and
JPMORGAN CHASE BANK,
as Trustee
----------
SERIES 2004-1 SUPPLEMENT
Dated as of March 26, 2004
to
SECOND AMENDED AND RESTATED
POOLING AGREEMENT
Dated as of March 28, 2003
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UNITED STATIONERS RECEIVABLES MASTER TRUST
TABLE OF CONTENTS
PAGE
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................1
SECTION 1.1 Definitions..........................................................1
ARTICLE II DESIGNATION OF CERTIFICATES; PURCHASE AND SALE OF..........................20
SECTION 2.1 Designation.........................................................21
SECTION 2.2 The Series 2004-1 Interests.........................................21
SECTION 2.3 Purchases of Interests in the VFC Certificates......................21
SECTION 2.4 Delivery............................................................22
SECTION 2.5 Procedure for Initial Issuance and for Increasing the Series
2004-1 Invested Amount..............................................22
SECTION 2.6 [Reserved]..........................................................24
SECTION 2.7 Procedure for Decreasing the Series 2004-1 Invested Amount;
Optional Termination................................................24
SECTION 2.8 Reduction of the Purchase Limit.....................................25
SECTION 2.9 Interest, Fees......................................................25
SECTION 2.10 Indemnification by the Company and the Servicer.....................26
ARTICLE III ARTICLE III OF THE AGREEMENT...............................................29
ARTICLE IV DISTRIBUTIONS AND REPORTS..................................................33
ARTICLE V ADDITIONAL EARLY AMORTIZATION EVENTS.......................................34
SECTION 5.1 Additional Early Amortization Events................................34
ARTICLE VI SERVICING FEE..............................................................38
SECTION 6.1 Servicing Compensation..............................................38
ARTICLE VII CHANGE IN CIRCUMSTANCES....................................................38
SECTION 7.1 Illegality..........................................................38
SECTION 7.2 Increased Costs.....................................................38
SECTION 7.3 Taxes...............................................................39
SECTION 7.4 Break Funding Payments..............................................41
SECTION 7.5 Mitigation Obligations..............................................41
ARTICLE VIII REPRESENTATIONS AND WARRANTIES, COVENANTS..................................42
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TABLE OF CONTENTS
(continued)
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SECTION 8.1 Representations and Warranties of the Company and the Servicer......42
SECTION 8.2 Covenants of the Company and the Servicer...........................42
SECTION 8.3 Covenants of the Servicer...........................................43
SECTION 8.4 Obligations Unaffected..............................................43
ARTICLE IX CONDITIONS PRECEDENT.......................................................44
SECTION 9.1 Conditions Precedent to Effectiveness of Supplement.................44
ARTICLE X [RESERVED].................................................................47
ARTICLE XI MISCELLANEOUS..............................................................47
SECTION 11.1 Ratification of Agreement...........................................47
SECTION 11.2 GOVERNING LAW.......................................................47
SECTION 11.3 Further Assurances..................................................48
SECTION 11.4 Payments............................................................48
SECTION 11.5 Costs and Expenses..................................................48
SECTION 11.6 No Waiver, Cumulative Remedies......................................48
SECTION 11.7 Amendments..........................................................49
SECTION 11.8 Severability........................................................50
SECTION 11.9 Notices.............................................................50
SECTION 11.10 Successors and Assigns..............................................51
SECTION 11.11 Securities Laws; Assignments........................................51
SECTION 11.12 [Reserved]..........................................................52
SECTION 11.13 Counterparts........................................................52
SECTION 11.14 No Bankruptcy Petition..............................................52
SECTION 11.15 Committed Purchaser's Liabilities...................................53
SECTION 11.16 Recourse to the Company.............................................53
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EXHIBITS
Exhibit A VFC Certificate, Series 2004-1
Exhibit B Form of [Assignment] [Participation] Certification
Exhibit C Form of Notice of Increase
Exhibit D Form of Monthly Settlement Statement
Exhibit E Form of Commitment Transfer Supplement
SCHEDULES
Schedule 1 Commitments
SERIES 2004-1 SUPPLEMENT, dated as of March 26, 2004 (as amended,
supplemented or otherwise modified from time to time, this ("SUPPLEMENT"), among
USS Receivables Company, Ltd., a Cayman Islands limited liability company (the
"COMPANY"), United Stationers Financial Services LLC ("USFS"), as servicer
(except where otherwise noted) (in such capacity, the "SERVICER"), Fifth Third
Bank (Chicago), a national banking association ("FIFTH THIRD" and, including its
successors and assigns, the "COMMITTED PURCHASER" and, in its capacity as
administrator for the Fifth Third Conduit Program, the "ADMINISTRATOR"), and
JPMorgan Chase Bank, in its capacity as Trustee (the "TRUSTEE") under the
Agreement (as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company, the Servicer and the Trustee (formerly known as
Bank One, NA) have entered into a Second Amended and Restated
Pooling Agreement,
dated as of March 28, 2003 (as amended, supplemented or otherwise modified from
time to time, the "AGREEMENT"; capitalized terms used herein and not otherwise
defined are used as defined in the Agreement);
WHEREAS, the Agreement provides, among other things, that the Company,
the Servicer and the Trustee may at any time and from time to time enter into
supplements to the Agreement for the purpose of authorizing the issuance on
behalf of the Trust by the Company for execution and redelivery to the Trustee
for authentication of one or more Series of Investor Certificates; and
WHEREAS, the Company, the Servicer, the Trustee, the Committed
Purchaser and the Administrator wish to supplement the Agreement as hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. (a) The following words and phrases shall
have the following meanings with respect to Series 2004-1 and the definitions of
such terms are applicable to the singular as well as the plural form of such
terms and to the masculine as well as the feminine and neuter genders of such
terms:
"ACCRUAL PERIOD" shall mean the period from and including a
Distribution Date, or, in the case of the initial Accrual Period, the Issuance
Date, to but excluding the succeeding Distribution Date.
"ACCRUED EXPENSE AMOUNT" shall mean, for each Business Day during an
Accrual Period, the sum of (i) the Daily Interest Deposit for such Business Day,
(ii) the Daily Commitment Fee Deposit for such Business Day, (iii) the Daily
Utilization Fee Deposit for such Business Day, (iv) the Daily Servicing Fee
Deposit for such Business Day and (v) all Program Costs which have accrued since
the preceding Business Day.
"ADDITIONAL INTEREST" shall have the meaning assigned in subsection
3A.4(c).
"ADMINISTRATOR" shall have the meaning specified in the introductory
paragraph hereto.
"AFFECTED PARTY" means any of the Committed Purchaser, any Liquidity
Purchaser, the Administrator, any other Program Support Provider and their
respective Affiliates.
"AGENT" shall mean, for purposes of this Supplement and the Agreement,
the Administrator.
"AGGREGATE COMMITMENT AMOUNT" for purposes of any calculation under
any Transaction Document referring to the "Commitment" amount under this
Supplement, shall mean the Purchase Limit.
"ALLOCATED RECEIVABLES AMOUNT" shall mean the Series 2004-1 Allocated
Receivables Amount.
"ALTERNATE RATE" shall mean, for any Rate Period for any Funding
Tranche, an interest rate PER ANNUM equal to: (a) the Applicable Margin PER
ANNUM plus the Euro-Rate for such Rate Period, or, in the sole discretion of the
Administrator (b) the Base Rate for such Rate Period as determined each day in
such Rate Period; PROVIDED, HOWEVER, that the "Alternate Rate" for any day while
an Early Amortization Event exists shall be an interest rate equal to 2.00% per
annum above the Base Rate in effect on such day.
"APPLICABLE MARGIN" shall mean on any date of determination, for each
Eurodollar Tranche, the sum of (i) the "Applicable Margin" (as defined in the
Credit Agreement) then in effect for "Eurodollar Advances" (as defined in the
Credit Agreement), plus (ii) .25% per annum.
"ASSIGNMENT/PARTICIPATION CERTIFICATION" shall mean an assignment or
participation certification, as the case may be, in substantially the form of
Exhibit B hereto.
"BASE RATE" shall mean, for any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the higher:
(a) the rate of interest in effect for such day as publicly announced
from time to time by Fifth Third in Cincinnati, Ohio as its "prime rate." Such
"prime rate" is set by Fifth Third based upon various factors, including Fifth
Third's costs and desired return, general
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economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate,
and
(b) 0.50% per annum above the latest Federal Funds Rate.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CHANGE IN LAW" shall mean (a) the adoption of any law, rule or
regulation after the Issuance Date, (b) any change in law, rule or regulation or
in the interpretation or application thereof by any Governmental Authority after
the Issuance Date, (c) compliance by any Person with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the Issuance Date or (d) any adoption of any generally
accepted accounting standard or any change therein or in the interpretation or
application thereof.
"CLAIM" shall have the meaning assigned in subsection 2.10(a).
"COMMERCIAL PAPER" shall mean the promissory notes issued or to be
issued by the Fifth Third Conduit Program in the commercial paper market.
"COMMITMENT EXPIRY DATE" shall mean March 25, 2005 (as may be extended
for an additional 364 days from time to time in writing by the Committed
Purchaser and the Administrator in their sole discretion).
"COMMITMENT FEE" shall have the meaning assigned in subsection 2.9(b).
"COMMITMENT FEE RATE" shall have the meaning assigned in the Fee
Letter.
"COMMITMENT PERIOD" shall mean the period commencing on the Issuance
Date and terminating on the Commitment Termination Date.
"COMMITMENT TERMINATION DATE" shall mean the earlier to occur of (i)
the date on which the Purchase Limit has been reduced to zero pursuant to
Section 2.8 of this Supplement, and (ii) the Commitment Expiry Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall have the meaning assigned in
subsection 11.11(b).
"COMPANY" shall have the meaning specified in the introductory
paragraph hereto.
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"COMMITTED PURCHASER" shall have the meaning specified in the
introductory paragraph hereto.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean for USI and its
Subsidiaries (other than TOPCO), with reference to any period, calculated on a
consolidated basis for such period and without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of USI and its
Subsidiaries prepared in accordance with GAAP, excluding (i) expenditures of
insurance proceeds to rebuild or replace any asset after a casualty loss, (ii)
leasehold improvement expenditures for which USI or a Subsidiary is reimbursed
by the lessor, sublessor or sublessee, (iii) expenditures of Net Cash Proceeds
of any asset sale permitted under Section 6.12 of the Credit Agreement, and (iv)
with respect to any Permitted Acquisition, (a) the Purchase Price thereof and
(b) any Capital Expenditures expended by the seller or entity to be acquired in
any Permitted Acquisition prior to the date of such Permitted Acquisition and
not in contemplation of such Permitted Acquisition.
"CONSOLIDATED EBITDA" means, with respect to any period, Consolidated
Net Income for such period plus, to the extent deducted from revenues in
determining Consolidated Net Income for such period, (i) Consolidated Interest
Expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv)
amortization, (v) losses attributable to equity in Affiliates, (vi) non-cash
charges related to employee compensation and (vii) any extraordinary non-cash or
nonrecurring non-cash charges or losses incurred other than in the ordinary
course of business, minus, to the extent included in Consolidated Net Income for
such period, any extraordinary non-cash or nonrecurring non-cash gains realized
other than in the ordinary course of business, all calculated for USI and its
Subsidiaries (other than TOPCO) on a consolidated basis.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, at any time, with respect to
any Person, without duplication, the sum of (i) the aggregate dollar amount of
Consolidated Indebtedness for borrowed money owing by such Person or for which
such Person is liable which has actually been funded and is outstanding at such
time, whether or not such amount is due or payable at such time, plus (ii) the
aggregate undrawn amount of all standby letters of credit at such time for which
such Person or any of its Subsidiaries is the account party or is otherwise
liable (other than standby letters of credit in an amount up to $10,000,000
issued to support worker's compensation obligations of the Credit Parties (as
defined in the Credit Agreement) and other than letters of credit supporting any
other component of this definition), plus (iii) the aggregate principal
component of Capitalized Lease Obligations owing by such Person and its
Subsidiaries on a consolidated basis or for which such Person or any of its
Subsidiaries is otherwise liable, plus (iv) all Off-Balance Sheet Liabilities of
such Person and its Subsidiaries on a consolidated basis, plus (v) all
Disqualified Stock of such Person and its Subsidiaries on a consolidated basis.
"CONSOLIDATED INDEBTEDNESS" means at any time, with respect to any
Person, the Indebtedness of such Person and its Subsidiaries calculated on a
consolidated basis as of such time.
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"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period,
the interest expense of USI and its Subsidiaries calculated on a consolidated
basis for such period (net of interest income), including, without limitation,
yield or any other financing costs resembling interest which are payable under
any Receivables Purchase Facility.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of USI and its Subsidiaries (other than TOPCO) calculated on a
consolidated basis for such period and on a FIFO basis of inventory valuation.
"CONSOLIDATED NET WORTH" means at any time, with respect to any
Person, the consolidated stockholders' equity of such Person and its
Subsidiaries calculated on a consolidated basis and on a FIFO basis of inventory
valuation as of such time.
"CONSOLIDATED RENTALS" means, with reference to any period, the rental
expense (net of rental income) of USI and its Subsidiaries in respect of
Operating Leases, but excluding rental expense for any extension thereof for a
period shorter than twelve months, calculated on a consolidated basis for such
period; provided that rental expense in respect of all non-real property rentals
shall be the amount as set forth on the compliance certificate most recently
delivered to the Administrator under the Credit Agreement pursuant to Section
6.1.3 of the Credit Agreement in connection with the most recent annual
financial statements of USI delivered pursuant to Section 6.1.1 of the Credit
Agreement (and for the period prior to the delivery of the first such compliance
certificate, the amount set forth on the compliance certificate delivered
pursuant to Section 4.1.5 of the Credit Agreement).
"CONTROLLED GROUP" shall mean all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with USI or any of its
Subsidiaries, are treated as a single employer under Section 414(b) or (c) of
the Internal Revenue Code.
"CP RATE" for any Rate Period for any Funding Tranche means a rate
calculated in good faith by the Administrator equal to: (a) the rate (or if more
than one rate, the weighted average of the rates) at which Commercial Paper of
the Fifth Third Conduit Program on each day during the related Accrual Period
have been outstanding; PROVIDED, that if such rate(s) is (are) a discount
rate(s), then the CP Rate shall be the rate (or if more than one rate, the
weighted average of the rates) resulting from converting such discount rate(s)
to an interest-bearing equivalent rate plus (b) the commissions and charges
charged by such placement agent or commercial paper dealer with respect to such
Commercial Paper, expressed as a percentage of the face amount of such
Commercial Paper and converted to an interest-bearing equivalent rate per annum.
Notwithstanding the foregoing, the "CP Rate" for any day while an Early
Amortization Event exists shall be an interest rate equal to 2% above the Base
Rate in effect on such day. In lieu of the foregoing, if the Company shall
request any Increase (i) during any period of time determined by the
Administrator in its sole discretion to result in an incrementally higher CP
Rate applicable to such Increase or (ii) for which the Company requests a
specific maturity of Commercial Paper, and as to which Rate Period the
Administrator approves in its sole discretion,
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that shall result in a CP Rate related solely to such Commercial Paper, the
Series 2004-1 Invested Amount associated with any such Increase shall, during
such period, be deemed to be funded by the Fifth Third Conduit Program in a
special Funding Tranche (which may include capital associated with other
receivable purchase facilities) for purposes of determining such CP Rate
applicable only to such special pool and charged each day during such period
against such Series 2004-1 Invested Amount, provided that, during the term of
this Supplement, there may be only one special Funding Tranche outstanding at
any one time.
"CP TRANCHE" shall mean a Funding Tranche that accrues interest at the
CP Rate.
"DAILY COMMITMENT FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Commitment Fee Expense for each day
since the preceding Business Day plus (ii) the aggregate amount of all
previously accrued Daily Commitment Fee Expense that has not yet been deposited
in the Series 2004-1 Collection Sub-account.
"DAILY COMMITMENT FEE EXPENSE" shall mean, (i) during the Series
2004-1 Revolving Period, for any day in any Accrual Period, the product of (A)
the excess of 102% of the Purchase Limit over the Series 2004-1 Purchaser
Invested Amount of the Committed Purchaser on such day multiplied by (B) the
Commitment Fee Rate divided by 360.
"DAILY INTEREST DEPOSIT" shall mean, for any Business Day, an amount
equal to (i) the amount of Daily Interest Expense for each day since the
preceding Business Day PLUS (ii) the aggregate amount of a previously accrued
Daily Interest Expense that has not yet been deposited in the Series 2004-1
Collection Sub-account PLUS (iii) the aggregate amount of all Additional
Interest for each day since the preceding Business Day.
"DAILY INTEREST EXPENSE" shall mean for each day in an Accrual Period,
the sum of: (i) for each CP Tranche outstanding on such day, the product of (A)
the portion of the Series 2004-1 Funded Amount allocated to such Funding Tranche
on such day and (B) the "estimated CP Rate" (which shall be the CP Rate in
effect for the preceding Accrual Period (or, in the case of the initial Accrual
Period, the CP Rate specified by the Administrator by notice to the Servicer on
or prior to the Closing Date)/360) PLUS (ii) for each Floating Tranche
outstanding on such day, the product of (A) the portion of the Series 2004-1
Funded Amount allocated to such Floating Tranche on such day and (B) the Base
Rate in effect on such day (or, if such day is after the delivery of the
calculation of Series 2004-1 Monthly Interest to the Servicer for any Accrual
Period, the Base Rate in effect on the date of such delivery)/365 or 366, as
applicable, PLUS (iii) for each Eurodollar Tranche outstanding on such day, the
product of (A) the portion of the Series 2004-1 Funded Amount allocable to such
Eurodollar Tranche on such day and (y) the Euro-Rate in effect for such Accrual
Period/360.
"DAILY SERVICING FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Servicing Fee Expense for each day since
the preceding Business Day PLUS (ii) the aggregate amount of all previously
accrued Daily Servicing Fee Expense that has not yet been deposited in the
Series 2004-1 Collection Sub-account.
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"DAILY SERVICING FEE EXPENSE" shall mean, for any day in any Accrual
Period the Series 2004-1 Interests' PRO RATA portion (determined in accordance
with Section 6.1) of the Servicing Fee accruing for such day.
"DAILY UTILIZATION FEE DEPOSIT" shall mean, for any day in an Accrual
Period, an amount equal to (i) the amount of Daily Utilization Fee Expense for
each day since the preceding Business Day PLUS (ii) the aggregate amount of all
previously accrued Daily Utilization Fee Expense that has not yet been deposited
in the Series 2004-1 Collection Sub-account.
"DAILY UTILIZATION FEE EXPENSE" shall mean for any day in any Accrual
Period, the product of (A) the Series 2004-1 Funded Amount on such day
multiplied by (B) the Utilization Fee Rate divided by 360 and (ii) for any day
thereafter, zero.
"DECREASE" shall have the meaning assigned in subsection 2.7(a).
"DEFAULT FEE" shall mean, for any day occurring after the occurrence
of an Early Amortization Event described in Section 5.1(a) (after giving effect
to any grace period set forth in such Section)to but excluding the day on which
such Early Amortization Event is cured or waived in accordance with the terms
hereof, an amount equal to the product of (x) the Base Rate plus 2%, multiplied
by (y) the aggregate of all amounts outstanding hereunder and payable by the
Company or the Servicer, divided by (z) 365 (or 366, as the case may be).
"DEFAULT RATIO" shall mean, as of the last day of any Accrual Period,
a ratio (expressed as a percentage) equal to the quotient of (a) the sum of,
without duplication, (i) the aggregate outstanding Principal Amount of all
Receivables which are unpaid in whole or in part for more than 60 days but less
than 91 days after their respective due dates on such day and (ii) the aggregate
amount of Receivables that became Charged-Off Receivables during such Accrual
Period; and (b) the aggregate sales of the Sellers during the Accrual Period
that ended three months prior to such Accrual Period.
"DELINQUENCY RATIO" shall mean, as of the last day of any Accrual
Period, a ratio (expressed as a percentage) equal to the quotient of (a) the sum
of (i) the aggregate outstanding Principal Amount of all Receivables which are
unpaid in whole or in part for more than 60 days after their respective due
dates on such day and (ii) the aggregate outstanding Principal Amount of all
Disputed Receivables on such day, divided by (b) the aggregate outstanding
Principal Amount of all Receivables on such day.
"DILUTION HORIZON RATIO" shall mean, as of the last day of any
calendar month, a ratio equal to (i) the aggregate gross sales of the Sellers
during the calendar month then most recently ended divided by (ii) the Aggregate
Receivables Amount plus the Aggregate Overconcentration Amount.
"DILUTION PERCENTAGE" shall mean as of the last day of any calendar
month, a percentage equal to:
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[[2.0 x ED] + [(DS - ED) x DS DIVIDED BY ED]] x DHR
where:
ED = the Expected Dilution Ratio at such time
DS = the Dilution Spike Ratio at such time
DHR = the Dilution Horizon Ratio at such time
"DILUTION SPIKE RATIO" shall mean, as of the last day of any calendar
month, the highest monthly Dilution Ratio calculated as of the last day of each
of the twelve calendar months then most recently ended.
"DILUTION RATIO" shall mean, as of the last day of each Accrual
Period, an amount (expressed as a percentage) equal to (i) the aggregate amount
of Dilution Adjustments (excluding the sum of all VCD rebates related to any
Receivable) made during such Accrual Period, divided by (ii) the aggregate gross
sales of the Sellers during such Accrual Period.
"DILUTION RESERVE" shall mean, on any date, an amount equal to the
Dilution Percentage multiplied by the Aggregate Receivables Amount as of the
close of business of the Servicer on such date.
"DISCOUNT" shall mean for each Rate Period and each Funding Tranche:
(a) for any Funding Tranche for any Rate Period to the extent the
Committed Purchaser will be funding such Funding Tranche during such Rate Period
through the issuance of Commercial Paper:
CPR x C x ED/360
(b) for any Funding Tranche for any Rate Period to the extent the
Committed Purchaser will not be funding such Funding Tranche during such Rate
Period through the issuance of Commercial Paper:
AR x C x ED/Year
where:
AR = the Alternate Rate for the Funding Tranche for such
Rate Period,
C = the Series 2004-1 Funded Amount allocated to the
Funding Tranche during such Rate Period,
CPR = the weighted average CP Rate for the Funding Tranche
for such Rate Period,
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ED = the actual number of days on which such Funding Tranche
remained outstanding during such Rate Period, and
Year = if such Funding Tranche is funded based upon: (i) the
Euro-Rate, 360 days, and (ii) the Base Rate, 365 or 366
days, as applicable;
PROVIDED, that no provision of this Supplement shall require the
payment or permit the collection of Discount in excess of the maximum permitted
by applicable law; and PROVIDED FURTHER, that Discount for the Funding Tranche
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason.
"EARLY AMORTIZATION EVENT" shall have the meanings assigned in Section
5.1 of this Supplement and Section 7.1 of the Agreement.
"EARLY AMORTIZATION PERIOD" shall have the meaning assigned in Section
5.1 of this Supplement and Section 7.1 of the Agreement.
"EFFECTIVE DATE" shall have the meaning assigned in Section 9.1.
"EURO-RATE" shall mean with respect to any Rate Period, the interest
rate per annum determined by the Administrator by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Administrator in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
to be the average of the London interbank market offered rates for U.S. dollars
quoted by the British Bankers' Association ("BBA") as set forth on Dow Xxxxx
Markets Service (formerly known as Telerate) (or appropriate successor or, if
BBA or its successor ceases to provide display page 3750 (or such other display
page on the Dow Xxxxx Markets Service system as may replace display page 3750)
at or about 11:00 a.m. (London time) on the Business Day which is two (2)
Business Days prior to the first day of such Rate Period for an amount
comparable to the Funding Tranche to be funded at the Alternate Rate and based
upon the Euro-Rate during such Rate Period by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:
Average of London interbank offered rates quoted by BBA
as shown on Dow Xxxxx Markets Service display page 3750
or appropriate successor
Euro-Rate = ----------------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
where "Euro-Rate Reserve Percentage" means, the maximum effective percentage in
effect on such day as prescribed by the Board (or any successor) for determining
the reserve requirements (including without limitation, supplemental, marginal,
and emergency reserve requirements) with respect to eurocurrency funding
(currently referred to as "Eurocurrency Liabilities"). The Euro-
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Rate shall be adjusted with respect to any Funding Tranche funded at the
Alternate Rate and based upon the Euro-Rate that is outstanding on the effective
date of any change in the Euro-Rate Reserve Percentage as of such effective
date. The Administrator shall give prompt notice to the Servicer of the
Euro-Rate as determined or adjusted in accordance herewith (which determination
shall be conclusive absent manifest error).
"EURODOLLAR TRANCHE" shall mean each Funding Tranche that accrues
interest at the Euro-Rate.
"EXCLUDED TAXES" shall mean, with respect to the Administrator, any
Purchaser or any other recipient of any payment to be made by or on account of
any increased obligation of the Company hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income (i) by the United States of America,
or (ii) by the jurisdiction under the laws of which such recipient is organized
or in which its principal office is located, managed or controlled, or, in the
case of any Alternate Investor, in which its applicable lending office is
located, or (iii) by reason of any connection between the jurisdiction imposing
such tax and the Administrator, such recipient or such office other than a
connection arising solely from this Supplement or any other Transaction Document
or any transaction hereunder or thereunder, and (b) any branch profits imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which the Company is located.
"EXPECTED DILUTION RATIO" shall mean, as of the last day of any
calendar month, the average Dilution Ratio in respect of the twelve months then
most recently ended.
"FACILITY TERMINATION DATE" shall mean the earliest to occur of: (a)
the Commitment Termination Date, (b) the date on which the Early Amortization
Period is declared to commence or automatically commences, (c) the Optional
Termination Date, (d) the date on which the commitment of the Liquidity
Purchasers terminates under the Liquidity Agreement and (e) the Company's
failure to cause the amendment or modification of any Transaction Document or
related opinion as required by Moody's or Standard & Poor's, which failure shall
continue for 30 days after such amendment is initially proposed.
"FEDERAL FUNDS RATE" shall mean, for any day, the per annum
rate set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)." If
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of
New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for such
day under the caption "Federal Funds Effective Rate." If on any relevant day the
appropriate rate is not yet published in either H.15(519) or the Composite 3:30
p.m. Quotations, the rate for such day will be the arithmetic mean as determined
by the Administrator of the rates for the last transaction in overnight Federal
funds arranged before 9:00 a.m. (
New York time) on that day by each of three
leading brokers of Federal funds transactions in
New York City selected by the
Administrator.
10
"FEE LETTER" shall mean, the Fee Letter, dated as of the date hereof,
among the Company, the Administrator and the Committed Purchaser.
"FIFTH THIRD CONDUIT PROGRAM" shall mean Fountain Square Commercial
Funding Corp. or any successor conduit program administered by the Committed
Purchaser.
"FINANCING" shall mean, with respect to any Person, the issuance,
assumption, incurrence or sale by such Person of any Indebtedness (other than
Indebtedness described in Section 6.14.1 through 6.14.10 of the Credit
Agreement, any Indebtedness incurred under Section 6.14.11 of the Credit
Agreement and described in clauses (a) or (b) of the first parenthetical
thereof, and any Indebtedness incurred under Section 6.14.12 of the Credit
Agreement and described in the first parenthetical thereof).
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to any fiscal
quarter of USI for the then most recently ended four fiscal quarters, the ratio
of (i) Consolidated EBITDA during such period plus Consolidated Rentals during
such period minus Consolidated Capital Expenditures during such period (provided
that Capitalized Lease Obligations shall be deducted only to the extent of
payments actually made during such period) to (ii) Consolidated Interest Expense
paid in cash during such period plus scheduled amortization of the principal
portion of Consolidated Indebtedness during such period (other than (i) amounts
owing in connection with Receivables Purchase Facilities permitted under the
Credit Agreement and (ii) scheduled term loan payments under the Existing Credit
Agreement and scheduled principal payments in respect of any industrial
development/revenue bonds of USI or any of its Subsidiaries in each case paid
prior to March 21, 2003) plus Consolidated Rentals for such period plus income
taxes paid in cash during such period plus all dividends and distributions paid
by USI during such period (other than the "Permitted Share Repurchase Amount"
for such period), all calculated for USI and its Subsidiaries (other than TOPCO)
on a consolidated basis; provided that the Fixed Charge Coverage Ratio shall be
calculated, with respect to Permitted Acquisitions, on a pro forma basis
reasonably satisfactory to the Administrator under the Credit Agreement, broken
down by fiscal quarter in USI's reasonable judgment.
"FLOATING TRANCHE" shall mean, a Funding Tranche that accrues interest
at the Base Rate.
"FUNDING TRANCHE" shall have the meaning assigned in subsection
3A.4(a).
"INCREASE" shall have the meaning assigned in subsection 2.5(a).
"INCREASE AMOUNT" shall have the meaning assigned in subsection
2.5(a).
"INCREASE DATE" shall have the meaning assigned in subsection 2.5(a).
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
11
"INITIAL SERIES 2004-1 INVESTED AMOUNT" shall have the meaning
assigned in subsection 2.5(a).
"INTEREST SHORTFALL" shall have the meaning assigned in subsection
3A.4(c).
"INVESTED PERCENTAGE" shall mean, with respect to any Business Day (i)
during the Series 2004-1 Revolving Period, the percentage equivalent of a
fraction, the numerator of which is the Series 2004-1 Invested Amount as of the
end of the immediately preceding Business Day and the denominator of which is
the difference between (x) the Aggregate Receivables Amount with respect to such
Business Day and (y) the Aggregate Target Receivables Amount with respect to
such Business Day and (ii) during the Series 2004-1 Amortization Period, the
percentage equivalent of a fraction, the numerator of which is the Series 2004-1
Invested Amount as of the end of the last Business Day of the Series 2004-1
Revolving Period and the denominator of which is the difference between (x) the
Aggregate Receivables Amount with respect to such Business Day and (y) Aggregate
Target Receivables Amount with respect to such Business Day.
"ISSUANCE DATE" shall have the meaning assigned in subsection 2.5(a).
"LEVERAGE RATIO" shall mean, the ratio of (i) Consolidated Funded
Indebtedness to (ii) Consolidated EBITDA for the then most-recently ended four
fiscal quarters. The Leverage Ratio shall be calculated as of the last day of
each fiscal quarter of USI based upon (a) for Consolidated Funded Indebtedness,
Consolidated Funded Indebtedness as of the last day of each such fiscal quarter
and (b) for Consolidated EBITDA, the actual amount as of the last day of each
fiscal quarter for the most recently ended four consecutive fiscal quarters;
provided that the Leverage Ratio shall be calculated, with respect to Permitted
Acquisitions, on a pro forma basis reasonably satisfactory to the administrative
agent under the Credit Agreement, broken down by fiscal quarter in USI's
reasonable judgment.
"LIQUIDITY AGREEMENT" shall mean a liquidity agreement, if any,
entered into after the date hereof between the Liquidity Purchasers from time to
time party thereto, the Committed Purchaser and Fifth Third, as Administrator
and liquidity agent for the Liquidity Purchasers, as the same may be amended,
supplemented or otherwise modified from time to time.
"LIQUIDITY PURCHASER" shall mean each bank or other institutions party
to the Liquidity Agreement, if any.
"LOSS HORIZON RATIO" shall mean, as of any date, a ratio equal to (i)
the aggregate gross sales of the Sellers during the three most recently ended
calendar months divided by (ii) the Aggregate Receivables Amount as of such
date, plus the Aggregate Overconcentration Amount as of such date.
"LOSS PERCENTAGE" shall mean, at any time, a percentage equal to the
greater of (i) 2.00 multiplied by the Loss Ratio multiplied by the Loss Horizon
Ratio and (ii) the Loss Reserve Floor.
12
"LOSS RATIO" shall mean, on any date, the greatest three-month average
Default Ratio as calculated for each of the twelve most recently ended calendar
months.
"LOSS RESERVE" shall mean, on any date, an amount equal to the Loss
Percentage multiplied by the Aggregate Receivables Amount as of the close of
business of the Servicer on such date.
"LOSS RESERVE FLOOR" shall mean 10%.
"MONTHLY INTEREST PAYMENT" shall have the meaning assigned in
subsection 3A.6(a).
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which
USI or any member of the Controlled Group is obligated to make contributions.
"NET CASH PROCEEDS" means, with respect to any sale of property or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person or any Subsidiary of such Person from such sale of property or
Financing, after (i) provision for all income or other taxes measured by or
resulting from such sale of property, (ii) payment of all reasonable brokerage
commissions and other fees and expenses related to such sale of property or
Financing, and (iii) all amounts used to repay Indebtedness secured by a Lien on
any asset disposed of in such sale of property which is or may be required (by
the express terms of the instrument governing such Indebtedness or by the
purchaser of such property) to be repaid in connection with such sale of
property (including payments made to obtain or avoid the need for the consent of
any holder of such Indebtedness).
"OFF-BALANCE SHEET LIABILITY" of a Person means, without duplication,
the principal component of (i) any Receivables Purchase Facility or any other
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person (other than the sale or disposition in the
ordinary course of business of accounts or notes receivable in connection with
the compromise or collection thereof consistent with customary industry practice
(and not as part of any bulk sale or financing of receivables)) or (ii) any
liability under any so-called "synthetic lease" or "tax ownership operating
lease" transaction entered into by such Person; provided that "Off-Balance Sheet
Liabilities" shall not include the principal component of the foregoing if such
principal component (a) is otherwise reflected as a liability on such Person's
consolidated balance sheet or (b) is deducted from revenues in determining such
Person's consolidated net income but is not thereafter added back in calculating
such Person's Consolidated EBITDA.
"OPERATING LEASE" of a Person means any lease of property (other than
a Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
13
"OPTIONAL TERMINATION DATE" shall have the meaning assigned in
subsection 2.7(d).
"OPTIONAL TERMINATION NOTICE" shall have the meaning assigned in
subsection 2.7(d).
"ORIGINAL SUPPLEMENT" shall have the meaning assigned in the preamble
hereto.
"OTHER TAXES" shall mean any and all current or future stamp or
documentary taxes or other excise or property taxes, charges or similar levies
arising from any payment made under the Transaction Documents or from the
execution, delivery or enforcement of, or otherwise with respect to, any
Transaction Document.
"PAYMENT TERMS FACTOR" shall mean 1.017.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED ACQUISITION" shall mean an Acquisition permitted by Section
6.13.5 of the Credit Agreement.
"PERMITTED SHARE REPURCHASE AMOUNT" shall mean the aggregate amount of
all distributions made by USSC to USI and the aggregate amount of all capital
stock of USI redeemed, repurchased, acquired or retired by USI, from and after
March 21, 2003, calculated as of the date such distribution is made, up to the
greater of (a) $50,000,000 and (b) an amount equal to (x) $50,000,000, plus (y)
25% of Consolidated Net Income (or minus 25% of any loss) in each fiscal quarter
beginning with the fiscal quarter ending June 30, 2003.
"PLAN" means an employee pension benefit plan, excluding any
Multiemployer Plan, which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code as to which USI or any
member of the Controlled Group may have any liability.
"PROGRAM COSTS" shall mean, for any Business Day, the sum of (i) all
expenses, indemnities and other amounts due and payable to any Affected Party
under the Agreement or this Supplement (including, without limitation, any
Article VII costs) and (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 Series 2004-1 Interests) and (B) a fraction, the numerator of which is
the Purchase Limit on such Business Day and the denominator of which is the sum
of (x) the Aggregate Invested Amounts on such Business Day (other than the
Series 2004-1 Invested Amount and the Invested Amount in respect of any variable
funding certificate of any other Outstanding Series) and (y) the Aggregate
Commitment Amount on such Business Day plus the Aggregate Commitment Amount for
any variable funding certificate of any other Outstanding
14
Series; PROVIDED, HOWEVER, that the amount of Program Costs payable pursuant to
subsection 3A.6(b)(iv) shall not exceed $75,000 in the aggregate in any fiscal
year of the Servicer.
"PROGRAM SUPPORT AGREEMENT" shall mean and include the Liquidity
Agreement and any other agreement entered into by any Program Support Provider
providing for: (a) the issuance of one or more letters of credit for the account
of the Committed Purchaser, (b) the issuance of one or more surety bonds for
which the Committed Purchaser is obligated to reimburse the applicable Program
Support Provider for any drawings thereunder, (c) the sale by the Committed
Purchaser to any Program Support Provider of its Series 2004-1 Purchaser
Invested Amount (or portions thereof or participations therein) and/or (d) the
making of loans and/or other extensions of credit to the Committed Purchaser in
connection with the Committed Purchaser's commercial paper program, together
with any letter of credit, surety bond or other instrument issued thereunder but
excluding any discretionary advance facility provided by the Administrator.
"PROGRAM SUPPORT PROVIDER" shall mean and include any Liquidity
Purchaser and any other Person (other than any customer of the Committed
Purchaser) now or hereafter extending credit or having a commitment to extend
credit to or for the account of, or to make purchases from, the Committed
Purchaser or issuing a letter of credit, surety bond or other instrument to
support any obligations arising under or in connection with the Committed
Purchaser's commercial paper program.
"PURCHASE LIMIT" shall mean $25,000,000 as such amount may be reduced
in accordance with Section 2.8. "PURCHASE LIMIT REDUCTION" shall have the
meaning assigned in subsection 2.7(a).
"RATE PERIOD" shall mean, unless otherwise mutually agreed by the
Administrator and the Company, with respect to any Funding Tranche, (i)
initially the period commencing on (and including) the date of the initial
purchase or funding of such Funding Tranche and ending on (but excluding) the
next following Distribution Date, and (ii) thereafter, each period commencing on
(and including) a Distribution Date and ending on (but excluding) the next
following Distribution Date; PROVIDED, that:
(A) any Rate Period with respect to any Funding Tranche not funded at
the CP Rate which would otherwise end on a day which is not a Business
Day shall be extended to the next succeeding Business Day; PROVIDED,
HOWEVER, if Yield in respect of such Rate Period is computed by
reference to the Euro-Rate, and such Rate Period would otherwise end
on a day which is not a Business Day, and there is no subsequent
Business Day in the same calendar month as such day, such Rate Period
shall end on the next preceding Business Day;
(B) in the case of any Rate Period for any Funding Tranche which
commences before the occurrence of an Early Amortization Event and
would otherwise end on a date occurring after the occurrence of an
Early Amortization Event, such
15
Rate Period shall end on the date of the occurrence of an Early
Amortization Event and the duration of each Rate Period which
commences on or after the occurrence of an Early Amortization Event
shall be of such duration as shall be selected by the Administrator;
and
(C) any Rate Period in respect of which Yield is computed by reference
to the CP Rate may be terminated at the election of, and upon notice
thereof to the Company and the Servicer by, the Administrator any
time, in which case the Funding Tranche allocated to such terminated
Rate Period shall be allocated to a new Rate Period commencing on (and
including) the date of such termination and ending on (but excluding)
the next following Distribution Date, and shall accrue Yield at the
Alternate Rate.
"RATE TYPE" shall mean the Euro-Rate, the Base Rate or the CP Rate.
"RATING AGENCY" and "RATING AGENCIES" shall mean Moody's, S&P and/or
any other nationally recognized statistical rating organization from which a
rating for the Commercial Paper was requested by the Fifth Third Conduit Program
and is currently in effect.
"RATING AGENCY CONDITION" shall mean, with respect to any action, that
the Administrator and the Fifth Third Conduit Program shall have given their
prior written consent to such action.
"RECORD DATE" shall mean the first Business Day prior to each
Distribution Date.
"RECOURSE OBLIGATIONS" shall have the meaning set forth in Section
11.16.
"REPORTED PERIOD" shall mean, with respect to Series 2004-1, each
Business Day.
"REQUIRED DOWNGRADE ASSIGNMENT PERIOD" is defined in Section 2.12(a).
"REQUIRED NOTICE PERIOD" means two Business Days.
"SCHEDULED REVOLVING TERMINATION DATE" shall mean the last day of the
Accrual Period ending on or immediately before the Commitment Expiry Date.
"SERIES 2004-1" shall mean Series 2004-1, the Principal Terms of which
are set forth in this Supplement.
"SERIES 2004-1 ADJUSTED INVESTED AMOUNT" shall mean, as of any date of
determination, (i) the Series 2004-1 Invested Amount on such date, MINUS (ii)
the amount on deposit in the Series 2004-1 Collection Sub-account on such date.
"SERIES 2004-1 ALLOCATED RECEIVABLES AMOUNT" shall mean, on any date
of determination, the product of (x) the Aggregate Receivables Amount on such
day and (y) the
16
percentage equivalent of a fraction the numerator of which is the Series 2004-1
Target Receivables Amount on such day and the denominator of which is the
Aggregate Target Receivables Amount on such day.
"SERIES 2004-1 AMORTIZATION PERIOD" shall mean the period commencing
on the Business Day following the earliest to occur of (i) the date on which an
Early Amortization Period is declared to commence or automatically commences,
(ii) the Optional Termination Date and (iii) the Scheduled Revolving Termination
Date and ending on the earlier of (i) the date when the Series 2004-1 Invested
Amount shall have been reduced to zero and all accrued interest and other
amounts owing on the VFC Certificates and to the Administrator and the Committed
Purchaser hereunder shall have been paid in full and (ii) the Series 2004-1
Termination Date.
"SERIES 2004-1 COLLECTION SUBACCOUNT" shall have the meaning assigned
in subsection 3A.2(a).
"SERIES 2004-1 FUNDED AMOUNT" shall mean, as of any date of
determination, the Series 2004-1 Purchaser Invested Amount of the Committed
Purchaser on such date.
"SERIES 2004-1 INTERESTS" shall mean, collectively, the VFC
Certificates and the Series 2004-1 Subordinated Interest.
"SERIES 2004-1 INVESTED AMOUNT" shall mean, as of any date of
determination, the Series 2004-1 Purchaser Invested Amount of the Committed
Purchaser on such date.
"SERIES 2004-1 MONTHLY INTEREST" shall mean, for each Distribution
Date, the summation of the Discount that accrued during the related Rate Period
on each Funding Tranche outstanding during all or a portion of such Accrual
Period.
"SERIES 2004-1 MONTHLY PRINCIPAL PAYMENT" shall have the meaning
assigned in Section 3A.5.
"SERIES 2004-1 PERIODIC SERVICING FEE" shall have the meaning assigned
in Section 6.1.
"SERIES 2004-1 PURCHASER INVESTED AMOUNT" shall mean, with respect to
the Committed Purchaser, in each case on any date of determination, an amount
equal to, without duplication, (a) the aggregate initial amount paid by the
Committed Purchaser for its interest in the VFC Certificate pursuant to Section
2.3, plus (b) the amount of any Increases funded by the Committed Purchaser,
pursuant to Section 2.5, minus (c) the aggregate amount of any Collections and
other distributions to the Committed Purchaser which are applied to reduce the
amounts funded by the Committed Purchaser under the foregoing clauses (a) and
(b).
"SERIES 2004-1 RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the sum of
the Loss
17
Percentage, the Dilution Percentage, the Servicing and Discount Reserve Ratio,
in each case, then in effect.
"SERIES 2004-1 REQUIRED RESERVES" shall mean, as of any date of
determination, an amount equal to the product of (i) the Series 2004-1 Ratio,
multiplied by (ii) the Aggregate Receivables Amount at such time.
"SERIES 2004-1 REVOLVING PERIOD" shall mean the period commencing on
the Issuance Date and terminating on the Facility Termination Date.
"SERIES 2004-1 SUBORDINATED INTEREST" shall have the meaning assigned
in subsection 2.2(b).
"SERIES 2004-1 SUBORDINATED INTEREST AMOUNT" shall mean, for any date
of determination, an amount equal to (i) the Series 2004-1 Allocated Receivables
Amount MINUS (ii) the Series 2004-1 Adjusted Invested Amount.
"SERIES 2004-1 SUBORDINATED INTEREST REDUCTION AMOUNT" shall have the
meaning assigned in subsection 2.7(b).
"SERIES 2004-1 TARGET RECEIVABLES AMOUNT" shall mean, on any date of
determination, the sum of (A) the Series 2004-1 Adjusted Invested Amount on such
day and (B) the Series 2004-1 Required Reserves for such day.
"SERIES 2004-1 TERMINATION DATE" shall mean the Distribution Date that
occurs in March, 2005.
"SERIES 2004-1 TRANSACTION DOCUMENTS" shall mean this Supplement, the
Receivables Sale Agreements, the Intercreditor Agreement, the Agreement and the
Servicing Agreement.
"SERVICER" shall have the meaning specified in the introductory
paragraph hereto.
"SERVICING AND DISCOUNT RESERVE RATIO" shall mean 2%.
"SUPPLEMENT" shall have the meaning specified in the introductory
paragraph hereto.
"TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TOPCO" means The Order People Company, a Delaware corporation.
"TRANSACTION PARTIES" shall have the meaning assigned in subsection
2.6(d).
18
"TRANSFER ISSUANCE DATE" shall mean the date on which a Commitment
Transfer Supplement becomes effective pursuant to the terms of such Commitment
Transfer Supplement.
"TRUSTEE" shall have the meaning specified in the introductory
paragraph hereto.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of
New York.
"UNALLOCATED BALANCE" shall mean, as of any Business Day, (i) the
portion of the Series 2004-1 Funded Amount allocated to any CP Tranche and (ii)
the sum of (A) the portion of the Series 2004-1 Funded Amount for which interest
is then being calculated by reference to the Base Rate and (B) the portion of
the Series 2004-1 Funded Amount allocated to any Eurodollar Tranche the Rate
Period in respect of which expires on such Business Day.
"USI" shall mean United Stationers, Inc., a Delaware corporation.
"USSC" shall mean United Stationers Supply Co., an Illinois
corporation.
"USSC CHANGE IN CONTROL" shall mean USI shall cease to own, directly
or indirectly, 100% of the outstanding capital stock of USSC.
"UTILIZATION FEE" shall have the meaning assigned in subsection
2.9(c).
"UTILIZATION FEE RATE" shall have the meaning assigned in the Fee
Letter.
"VFC CERTIFICATE" shall mean a VFC Certificate, Series 2004-1,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"VFC CERTIFICATEHOLDER' shall mean the Committed Purchaser.
"VFC CERTIFICATEHOLDERS' INTEREST" shall have the meaning assigned in
subsection 2.2(a).
(b) If any term or provision contained herein conflicts with or is
inconsistent with any term, definition or provision contained in the Agreement,
the terms and provisions of this Supplement shall govern. All Article, Section
or subsection references herein shall mean Article, Section or subsections of
this Supplement, except as otherwise provided herein. Unless otherwise stated
herein, the context otherwise requires or such term is otherwise defined in the
Agreement, each capitalized term used or defined herein shall relate only to the
Series 2004-1 Interests and no other Series of Investor Certificates issued by
the Trust. All capitalized terms used herein and not otherwise defined have the
meanings assigned to such terms in Section 1.1 of the Agreement.
19
ARTICLE II
DESIGNATION OF CERTIFICATES; PURCHASE AND SALE OF
THE VFC CERTIFICATES
SECTION 2.1 DESIGNATION. The Certificates and interests created and
authorized pursuant to the Agreement and this Supplement shall be divided into
two Classes, which shall be designated respectively as (i) the "VFC
Certificates, Series 2004-1" and (ii) an interest designated as the "Series
2004-1 Subordinated Interest."
SECTION 2.2 THE SERIES 2004-1 INTERESTS. (a) The VFC Certificates
shall represent fractional undivided interests in the Trust, including, without
limitation, the right to receive (i) the Invested Percentage (expressed as a
decimal) of Collections received with respect to the Receivables and all other
funds on deposit in the Collection Account and (ii) all other funds on deposit
in the Series 2004-1 Collection Subaccounts and any subaccounts thereof
(collectively, the "VFC CERTIFICATEHOLDERS' INTEREST").
(b) The "SERIES 2004-1 SUBORDINATED INTEREST" shall be a fractional
undivided interest in the Trust retained by the Company, consisting of the right
to receive Collections with respect to the Receivables allocated to the VFC
Certificateholders' Interest and not required to be distributed to or for the
benefit of the Committed Purchaser. The Exchangeable Company Interest and any
other Series of Investor Certificates outstanding shall represent the ownership
interest in the remainder of the Trust not allocated pursuant hereto to the VFC
Certificateholders' Interest or the Series 2004-1 Subordinated Interest.
(c) The VFC Certificates shall be substantially in the form of Exhibit
A and shall, upon issue, be executed and delivered by the Company to the Trustee
for authentication and redelivery as provided in Section 2.4 hereof and Section
5.2 of the Agreement.
SECTION 2.3 PURCHASES OF INTERESTS IN THE VFC CERTIFICATES.
(a) INITIAL PURCHASE. Subject to the terms and conditions of this
Supplement, including delivery of notice in accordance with Section 2.4 and 2.5,
(i) on the Issuance Date, the Committed Purchaser hereby agrees to purchase on
the Issuance Date a VFC Certificate in an amount equal to the Initial Series
2004-1 Invested Amount and (ii) thereafter, the Committed Purchaser hereby
agrees to maintain its VFC Certificate, subject to increase or decrease during
the Series 2004-1 Revolving Period, in accordance with the provisions of this
Supplement. The Company hereby agrees to maintain ownership of the Series 2004-1
Subordinated Interest, subject to increase or decrease during the Series 2004-1
Revolving Period, in accordance with the provisions of this Supplement. Payments
by the Committed Purchaser in respect of the VFC Certificates shall be made in
immediately available funds on the Issuance Date to the Administrator for
payment to the Company.
20
(b) MAXIMUM SERIES 2004-1 FUNDED AMOUNT. Notwithstanding anything to
the contrary contained in this Supplement, at no time shall the Series 2004-1
Funded Amount exceed the Purchase Limit at such time.
SECTION 2.4 DELIVERY. On the Issuance Date, the Company shall sign, on
behalf of the Trust, and shall direct the Trustee in writing pursuant to Section
5.2 of the Agreement to duly authenticate, and the Trustee, upon receiving such
direction, shall so authenticate a VFC Certificate in such name and such
denomination and deliver such VFC Certificate to the Administrator, on behalf of
the Committed Purchaser, in accordance with such written directions. The VFC
Certificate shall be issued in a minimum denominations of $1,000,000 and in
integral multiples of $100,000 in excess thereof. The Trustee shall xxxx on its
books the actual Series 2004-1 Invested Amount and Series 2004-1 Subordinated
Interest Amount outstanding on any date of determination, which, absent manifest
error, shall constitute PRIMA FACIE evidence of the outstanding Series 2004-1
Invested Amount and Series 2004-1 Subordinated Interest Amount from time to
time.
SECTION 2.5 PROCEDURE FOR INITIAL ISSUANCE AND FOR INCREASING THE
SERIES 2004-1 INVESTED AMOUNT. (a) Subject to subsection 2.5(c) of this
Supplement, (i) on the date designated in writing as provided herein (the
"ISSUANCE DATE"), the Committed Purchaser hereby agrees to purchase a VFC
Certificate in accordance with Section 2.3 and (ii) on any Business Day during
the Commitment Period up to eight times per calendar month, the Committed
Purchaser hereby agrees that the Series 2004-1 Invested Amount may be increased
by increasing its Series 2004-1 Purchaser Invested Amount (an "INCREASE"), upon
the request of the Servicer or the Company on behalf of the Trust (each date on
which an increase in the Series 2004-1 Invested Amount occurs hereunder being
herein referred to as the "INCREASE DATE" applicable to such Increase);
PROVIDED, HOWEVER, that the Servicer or the Company, as the case may be, shall
have given the Administrator (with a copy to the Trustee) irrevocable written
notice (effective upon receipt), substantially in the form of Exhibit C hereto,
of such request no later than (i) 2:00 p.m., Cincinnati time, two Business Days
prior to the Issuance Date or such Increase Date, as the case may be, in the
case of any Increase Date if the Initial Series 2004-1 Invested Amount or
Increase Amount is to be priced solely with reference to the CP Rate or (ii) (x)
if the Initial Series 2004-1 Invested Amount or Increase Amount is to be priced
solely with reference to the Base Rate, on or prior to 12:00 noon, Cincinnati
time, on the Issuance Date or such Increase Date, as the case may be and (y) if
all or a portion of the Initial Series 2004-1 Invested Amount or Increase Amount
is to be allocated to a Eurodollar Tranche, 1:00 p.m., Cincinnati 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, and (y) the
initial invested amount (the "INITIAL SERIES 2004-1 INVESTED AMOUNT") or, the
proposed amount of such Increase (the "INCREASE AMOUNT"), as the case may be.
(b) [Reserved].
21
(c) The Committed Purchaser shall not be required to make the initial
purchase of VFC Certificates on the Issuance Date or to increase its Series
2004-1 Purchaser Invested Amount on any Increase Date hereunder unless:
(i) the related aggregate initial purchase amount or Increase
Amount is equal to $1,000,000 or an integral multiple of $100,000 in excess
thereof;
(ii) after giving effect to the initial purchase amount or
Increase Amount, (A) the Series 2004-1 Funded Amount would not exceed the
Purchase Limit on the Issuance Date or such Increase Date, as the case may
be, and (B) the Series 2004-1 Allocated Receivables Amount would not be
less than the Series 2004-1 Target Receivables Amount on the Issuance Date
or such Increase Date, as the case may be;
(iii) at the time of and after giving effect to the initial
purchase amount or the Increase Amount, no Early Amortization Event or
Potential Early Amortization Event shall have occurred and be continuing; a
(iv) all of the representations and warranties made by each of
the Company, the Servicer, USFS and each Seller in each Transaction
Document to which it is a party are true and correct in all material
respects on and as of the Issuance Date or such Increase Date, as the case
may be, as if made on and as of such date (except to the extent such
representations and warranties are expressly made as of another date);
(v) the Servicer shall have delivered to the Administrator on
or prior to such Increase Date, in form and substance satisfactory to the
Administrator, all Monthly Settlement Statements as and when due under
Section 4.2 of the Servicing Agreement, and upon the Administrator's
request, the Servicer shall have delivered to the Administrator at least
three days prior to such Increase, an interim Monthly Settlement Statement
showing the amount of Eligible Receivables;
(vi) the Commitment Termination Date shall not have occurred;
and
(vii) the Administrator shall have received such other
approvals, opinions or documents as it may reasonably request as a result
of changes in circumstances or new credit information.
The Company's acceptance of funds in connection with (x) the initial purchase of
VFC Certificates on the Issuance Date and (y) each Increase occurring on any
Increase Date shall constitute a representation and warranty by the Company to
the Committed Purchaser as of the Issuance Date or such Increase Date (except to
the extent such representations and warranties are expressly made as of another
date), as the case may be, that all of the conditions contained in this
subsection 2.5(c) have been satisfied.
(d) After receipt by the Administrator of the notice required by
subsection 2.5(a) from the Servicer or the Company on behalf of the Trust, the
Administrator shall, so long as the
22
conditions set forth in subsections 2.5(a) and (c) are satisfied, promptly
provide telephonic notice to the Committed Purchaser of the Increase Date and of
the Increase Amount. The Committed Purchaser agrees to pay in immediately
available funds the amount of such Increase on the related Increase Date to the
Administrator for payment to the Trust for deposit in the Series 2004-1
Collection Subaccount.
SECTION 2.6 [Reserved]
SECTION 2.7 PROCEDURE FOR DECREASING THE SERIES 2004-1 INVESTED
AMOUNT; OPTIONAL TERMINATION. (a) On any Business Day during the Series 2004-1
Revolving Period or the Series 2004-1 Amortization Period, upon the written
request of the Servicer or the Company on behalf of the Trust to the
Administrator, the Series 2004-1 Invested Amount may be reduced (a "DECREASE")
by the distribution by the Servicer to the Administrator for the benefit of the
Committed Purchaser in accordance with its Series 2004-1 Purchaser Invested
Amount of funds on deposit in the Series 2004-1 Collection Subaccount on such
day in an amount not to exceed the amount of such funds on deposit on such day;
PROVIDED that the Servicer shall have given the Administrator (with a copy to
the Trustee) irrevocable written notice (effective upon receipt), prior to 1:00
p.m., Cincinnati time, in accordance with the Required Notice Period, and which
notice shall state the amount of such Decrease; provided, further, that such
Decrease shall be in an amount equal to $1,000,000 and integral multiples of
$100,000 in excess thereof.
(b) Simultaneously with any such Decrease during the Series 2004-1
Revolving Period, the Series 2004-1 Subordinated Interest Amount shall be
reduced by an amount (the "SERIES 2004-1 SUBORDINATED INTEREST REDUCTION
AMOUNT") such that the Series 2004-1 Subordinated Interest Amount shall equal
the Series 2004-1 Required Reserves after giving effect to such Decrease. During
the Series 2004-1 Revolving Period, after the distribution described in
subsection (a) above has been made, and the Series 2004-1 Subordinated Interest
Amount shall have been reduced by the Series 2004-1 Subordinated Interest
Reduction Amount, a distribution shall be made to the owner of the Series 2004-1
Subordinated Interest out of remaining funds on deposit in the Series 2004-1
Collection Subaccount in an amount equal to the lesser of (x) the Series 2004-1
Subordinated Interest Reduction Amount and (y) the amount of such remaining
funds on deposit in the Series 2004-1 Collection Subaccount.
(c) Any reduction in the Series 2004-1 Invested Amount on any Business
Day shall be allocated first to reduce the Unallocated Balance and then to
reduce the portion of the Series 2004-1 Invested Amount allocated to Eurodollar
Tranches in such order as the Company may select in order to minimize costs
payable pursuant to Section 7.4.
(d) (i) On any Business Day unless the Scheduled Revolving
Termination Date or an Early Amortization Event shall have occurred and be
continuing, the Company shall have the right to deliver an irrevocable
written notice (an "OPTIONAL TERMINATION NOTICE") to the Trustee, the
Servicer and the Administrator in which the Company declares that the
Series 2004-1 Revolving Period shall terminate on the date (the "OPTIONAL
TERMINATION DATE") set forth in such notice (which date, in any event,
shall be
23
the last day of a Accrual Period which is not less than 10 Business Days
from the date on which such notice is delivered).
(ii) From and after the Optional Termination Date, the Series
2004-1 Amortization Period shall commence for all purposes under this
Supplement and the other Transaction Documents. The Trustee shall give
prompt written notice of its receipt of an Optional Termination Notice to
the Committed Purchaser.
SECTION 2.8 REDUCTION OF THE PURCHASE LIMIT. (a) On any Business Day
during the Series 2004-1 Revolving Period, the Company, on behalf of the Trust,
may, upon three Business Days' prior written notice to the Administrator
(effective upon receipt) (with copies to the Servicer and the Trustee) reduce or
terminate the Purchase Limit (a "PURCHASE LIMIT REDUCTION") in a minimum
aggregate amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; PROVIDED that no such termination or reduction shall be permitted if,
after giving effect thereto and to any reduction in the Series 2004-1 Invested
Amount on such date, the Series 2004-1 Invested Amount would exceed the Purchase
Limit then in effect.
(b) [Reserved]
(c) Once reduced, the Purchase Limit may not be subsequently
reinstated. The Administrator shall provide written notice of the reduced
Purchaser Limit to the Company, the Servicer and the Trustee.
SECTION 2.9 INTEREST, FEES. (a) Interest shall be payable on the VFC
Certificates on each Distribution Date pursuant to subsection 3A.6(a).
(b) The Servicer shall distribute pursuant to subsection 3A.6(b), from
amounts on deposit in the Series 2004-1 Collection Sub-account, to the
Administrator, for the account of the Committed Purchaser, on each Distribution
Date, a commitment fee with respect to each Accrual Period ending on such date
(the "COMMITMENT FEE") at the Commitment Fee Rate of the average daily excess of
102% of the Purchase Limit OVER the average Series 2004-1 Purchaser Invested
Amount during such Accrual Period for the actual number of days in such Accrual
Period. The Commitment Fee shall be payable (i) monthly in arrears on each
Distribution Date and (ii) on the Facility Termination Date. To the extent that
funds on deposit in the Series 2004-1 Collection Sub-account at any such date
are insufficient to pay the Commitment Fee due on such date, the Servicer shall
so notify the Company and the Company shall immediately pay the Administrator
the amount of any such deficiency.
(c) The Servicer shall distribute pursuant to subsection 3A.6(b), from
amounts on deposit in the Series 2004-1 Collection Sub-account, to the
Administrator, for the account of the Committed Purchaser, on each Distribution
Date, a utilization fee (the "UTILIZATION FEE") with respect to each Accrual
Period ending on such date at the Utilization Fee Rate of the average daily
Series 2004-1 Purchaser Invested Amount during such period for the actual number
of days in such Accrual Period. The Utilization Fee shall be payable (i) monthly
in arrears on each Distribution Date and (ii) on the Facility Termination Date.
To the extent that funds on deposit in the Series 2004-1 Collection Sub-account
at any such date are insufficient to pay the Utilization Fee due on such date,
the Servicer shall so notify the Company and the Company shall immediately pay
the Administrator the amount of any such deficiency.
24
(d) Calculations of per annum rates and fees under this Supplement
shall be made on the basis of a 360- (or 365-/366-, in the case of interest on
the Floating Tranche based on the Base Rate) day year with respect to Commitment
Fees, Utilization Fees and interest rates. Each determination of the Euro-Rate
by the Administrator shall be conclusive and binding upon each of the parties
hereto in the absence of manifest error.
SECTION 2.10 Indemnification by the Company and the Servicer. Without
limiting any other rights that any Affected Party may have hereunder or under
applicable law, (A) the Company hereby agrees to indemnify (and pay upon demand
to) each Affected Party and their respective assigns, officers, directors,
agents and employees (each, an "INDEMNIFIED PARTY") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Indemnified Party, provided that such fees of attorneys that
are employees of any Indemnified Party shall not be duplicative of the fees of
any third-party attorneys retained by such Indemnified Party) and disbursements
(all of the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS")
awarded against or incurred by any of them arising out of or as a result of any
Pooling and Servicing Agreement or any other Transaction Document or the
acquisition, either directly or indirectly, by the Committed Purchaser of an
interest in the Trust or Trust Assets, and (B) the Servicer hereby agrees to
indemnify (and pay upon demand to) each Indemnified Party for Indemnified
Amounts awarded against or incurred by any of them arising out of the Servicer's
activities as Servicer hereunder excluding, however, in all of the foregoing
instances under the preceding clauses (A) and (B):
(i) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(ii) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
or
(iii) Excluded Taxes to the extent that the computation of such
taxes is consistent with the intended characterization for income tax
purposes of the acquisition by the Committed Purchaser of the VFC
Certificates (or any interest therein) as a loan or loans by the Committed
Purchaser to the Company secured by the Receivables, and other Trust
Assets;
provided, however, that nothing contained in this sentence shall limit
the liability of the Company or the Servicer or limit the recourse of the
Administrator or the Committed
25
Purchaser to the Company or the Servicer for amounts otherwise specifically
provided to be paid by the Company or the Servicer, as applicable, under the
terms of any Pooling and Servicing Agreement. Without limiting the generality of
the foregoing indemnification, the Company shall indemnify each Indemnified
Party for Indemnified Amounts (including, without limitation, losses in respect
of uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to the Company or the Servicer) relating to or resulting
from:
(i) any representation or warranty made by the Company, the
Servicer, the Support Provider or any Seller (or any officers of any such
Person) under or in connection with any Pooling and Servicing Agreement or
any other Transaction Document or any other information or report delivered
by any such Person pursuant hereto or thereto, which shall have been false
or incorrect when made or deemed made;
(ii) the failure by the Company, the Servicer, the Support
Provider or any Seller to comply with any applicable law, rule or
regulation with respect to any Receivable or Contract related thereto, or
the nonconformity of any Receivable or Contract included therein with any
such applicable law, rule or regulation or any failure of any Seller to
keep or perform any of its obligations, express or implied, with respect to
any Contract;
(iii) any failure of the Company, the Servicer, the Support
Provider or any Seller to perform its duties, covenants or other
obligations in accordance with the provisions of any Pooling and Servicing
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the merchandise or
service related to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from any Pooling and Servicing Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the proceeds of
an Increase, the ownership of the VFC Certificates (or any interest
therein) or any other investigation, litigation or proceeding relating to
the Company, the Servicer, the Support Provider or any Seller in which any
Affected Party becomes involved as a result of any of the transactions
contemplated hereby;
26
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Bankruptcy Event relating to the Company, the
Servicer, the Support Provider, any Seller or any of their respective
Subsidiaries;
(x) any failure of the Company to acquire and maintain legal
and equitable title to, and ownership of any Receivable and the Related
Property and Collections with respect thereto from USFS, free and clear of
any Lien (other than as created hereunder); or any failure of the Company
to give reasonably equivalent value to USFS under the USFS Receivables Sale
Agreement in consideration of the transfer by USFS of any Receivable, or
any attempt by any Person to void such transfer under statutory provisions
or common law or equitable action;
(xi) any failure of USFS to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related
Property and Collections with respect thereto from any Seller, free and
clear of any Lien (other than as created hereunder); or any failure USFS to
give reasonably equivalent value to any Seller under the USSC Receivables
Sale Agreement in consideration of the transfer by such Seller of any
Receivable, or any attempt by any Person to void such transfer under
statutory provisions or common law or equitable action;
(xii) any failure to vest and maintain vested in the Trustee for
the benefit of the Trust and the Committed Purchaser, or to transfer to the
Trustee for the benefit of the Trust and the Committed Purchaser, legal and
equitable title to, and ownership of, a first priority perfected undivided
percentage ownership interest (to the extent of the Invested Percentage
contemplated hereunder) or security interest in the Receivables, the
Related Property and the Collections, free and clear of any Lien (except as
created by the Transaction Documents);
(xiii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect to
any Receivable, the Related Property and Collections with respect thereto,
and the proceeds of any thereof, whether at the time of any Increase or at
any subsequent time;
(xiv) any action or omission by the Company, the Servicer, the
Support Provider or any Seller which reduces or impairs the rights of the
Trustee or the Committed Purchaser with respect to any Receivable or the
value of any such Receivable;
(xv) any attempt by any Person to void any Increase hereunder
or the purchase of any VFC Certificate under statutory provisions or common
law or equitable action; and
27
(xvi) the failure of any Receivable included in the calculation
of the Series 2004-1 Allocated Receivables Amount as an Eligible Receivable
to be an Eligible Receivable at the time so included.
The foregoing provisions shall survive the termination of this Supplement
and the Agreement, resignation or removal of any Indemnified Party and
satisfaction and discharge of the Trust
ARTICLE III
ARTICLE III OF THE AGREEMENT
Section 3.1 of the Agreement and each other section of Article III of
the Agreement relating to another Series shall read in their entirety herein as
provided in the Agreement. Article III of the Agreement (except for Section 3.1
thereof and any portion thereof relating to another Series) shall read in its
entirety herein as follows and shall be exclusively applicable to the Series
2004-1 Interests:
SECTION 3A.2. ESTABLISHMENT OF TRUST ACCOUNTS. The Servicer shall
cause to be established and maintained in the name of the Company, (i) for the
benefit of the Committed Purchasers and (ii) in the case of clauses (A) and (B)
below, for the benefit, subject to the prior and senior interest of the
Committed Purchasers, of the owner of the Series 2004-1 Subordinated Interest, a
subaccount of the Collection Account (the "SERIES 2004-1 COLLECTION
SUBACCOUNT"), which subaccount is the Series Collection Subaccount with respect
to Series 2004-1 and shall bear a designation indicating that the funds
deposited therein are held for the benefit of the Persons (and, for each such
Person, to the extent) set forth in clauses (i) and (ii) above. The Trustee
shall have the right to take sole dominion and control of the Collection Account
and the Series 2004-1 Collection Subaccount pursuant to the terms of a Lockbox
Agreement and to direct the disposition of funds from time to time on deposit in
the Series 2004-1 Collection Subaccount and in all proceeds thereof.
SECTION 3A.3. ALLOCATIONS. The Servicer shall apply and distribute the
portion of the Aggregate Daily Collections allocated to the Series 2004-1
Interests pursuant to Article III of the Agreement (the "SERIES 2004-1
COLLECTIONS"):
(a) On each Business Day during the Series 2004-1 Revolving
Period, an amount equal to the Accrued Interest Expense shall be set aside for
distribution in accordance with Section 3A.6(a) on the next occurring
Distribution Date. The balance of such Series 2004-1 Collections (the
"REINVESTMENT AMOUNT" shall be distributed by the Servicer 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 has occurred and is continuing and only to the extent that, if after
giving effect to such distribution, the Series 2004-1 Target Receivables Amount
would not exceed the Series 2004-1 Allocated Receivables Amount; PROVIDED
FURTHER that if the Company
28
or the Servicer, on behalf of the Company, shall have given the Administrator
irrevocable prior written notice (effective upon receipt) when required under
Section 2.7(a), the Servicer may withdraw all or a portion of such amounts on
deposit in the Series 2004-1 Collection Subaccount and apply such withdrawn
amounts toward the reduction of the Series 2004-1 Invested Amount and the Series
2004-1 Subordinated Interest Amount in accordance with Section 2.7.
(b) On each Business Day during the Series 2004-1 Amortization
Period (including Distribution Dates), funds deposited in the Series 2004-1
Collection Subaccount shall be set aside for distribution in accordance with
Section 3A.6(b). Except as set forth in Section 3A.6(b), no amounts on deposit
in the Series 2004-1 Collection Subaccount shall be distributed by the Servicer
to the Company or the owner of the Series 2004-1 Subordinated Interest during
the Series 2004-1 Amortization Period.
(c) The allocations to be made pursuant to this Section 3A.3 are
subject to the provisions of Sections 2.5, 2.7, 7.2, 9.1 and 9.4 of the
Agreement.
SECTION 3A.4. DETERMINATION OF SERIES 2004-1 MONTHLY INTEREST. (a) On
or before the Business Day preceding each Distribution Date, the Administrator
shall notify the Servicer and the Trustee of the Series 2004-1 Monthly Interest
for the Accrual Period ending on the related Distribution Date. From time to
time, for purposes of determining the Rate Periods applicable to the different
portions of the Series 2004-1 Funded Amount and of calculating Discount with
respect thereto, the Administrator shall allocate the Series 2004-1 Funded
Amount to one or more tranches (each a "FUNDING TRANCHE"). At any time, each
Funding Tranche shall have only one Rate Period and one Rate Type. In addition,
at any time when the Series 2004-1 Funded Amount is not divided into more than
one portion, "Funding Tranche" means 100% of the Series 2004-1 Invested Amount.
(b) From time to time the Administrator shall notify the Servicer
and the Trustee of the number of Funding Tranches and the Rate Type of each
Funding Tranche.
(c) On each Distribution Date, the Servicer shall determine the
excess, if any (the "INTEREST SHORTFALL"), of (i) the Series 2004-1 Monthly
Interest for the Accrual Period ending on such Distribution Date OVER (ii) the
amount which will be available to be distributed to the Purchasers on such
Distribution Date in respect thereof pursuant to this Supplement. If the
Interest Shortfall with respect to any Distribution Date is greater than zero,
an additional amount ("ADDITIONAL INTEREST") equal to the product of (A) the
number of days until such Interest Shortfall shall be repaid DIVIDED BY 365 (or
366, as the case may be), (B) the Base Rate PLUS 2.0% and (C) such Interest
Shortfall (or the portion thereof which has not been paid to the Committed
Purchaser) shall be payable as provided herein with respect to the VFC
Certificates on each Distribution Date following such Distribution Date to but
excluding the Distribution Date on which such Interest Shortfall is paid to the
VFC Certificateholders.
(d) Any reduction in the Series 2004-1 Invested Amount on any
Business Day shall be allocated in the following order of priority:
29
FIRST, to reduce the Unallocated Balance, as appropriate; and
SECOND, to reduce the portion of the Series 2004-1 Invested Amount
allocated to Eurodollar Tranches in such order as the Company may select in
order to minimize costs payable pursuant to Section 7.4.
SECTION 3A.5. DETERMINATION OF SERIES 2004-1 MONTHLY PRINCIPAL.
PAYMENTS OF SERIES 2004-1 PRINCIPAL. The amount (the "SERIES 2004-1 MONTHLY
PRINCIPAL PAYMENT") distributable from the Series 2004-1 Collection Subaccount
on each Distribution Date during the Series 2004-1 Amortization Period, as
determined by the Servicer, shall be equal to the amount on deposit in such
account on the immediately preceding Settlement Report Date; PROVIDED, HOWEVER,
that the Series 2004-1 Monthly Principal Payment on any Distribution Date shall
not exceed the Series 2004-1 Invested Amount on such Distribution Date.
SECTION 3A.6. APPLICATIONS. (a) During the Series 2004-1 Revolving
Period the Servicer shall on each Distribution Date apply funds on deposit in
the Series 2004-1 Collection Subaccount in the following order of priority to
the extent funds are available:
(i) to the payment of the Series 2004-1 Periodic Servicing Fee if
the Company or one of its Affiliates is not then acting as the Servicer;
(ii) to the reimbursement of the Administrator's costs of
collection and enforcement of this Supplement;
(iii) ratably, to the payment of all accrued and unpaid Series
2004-1 Monthly Interest payable on such Distribution Date (the "MONTHLY
INTEREST PAYMENT"), plus the amount of any Monthly Interest Payment
previously due but not distributed to the Administrator, for further
distribution to the Committed Purchaser 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
Administrator, for further distribution to the Committed Purchaser on a
prior Distribution Date, plus all accrued and unpaid fees under the Fee
Letter (including the Commitment Fee and the Utilization Fee);
(iv) to the extent applicable, to the reduction of Series 2004-1
Invested Amount;
(v) to the extent applicable, to fund any Decrease in accordance
with Section 2.7;
(vi) to the payment of any amounts owing to the Trustee pursuant to
Section 8.5 of the Agreement;
(vii) to the payment of all other accrued and unpaid Recourse
Obligations; and
30
(viii) to the payment of the Series 2004-1 Periodic Servicing Fee if
the Company or any Affiliate thereof is then acting as the Servicer.
Any remaining amounts on deposit in the Series 2004-1 Collection
Subaccount not allocated pursuant to clauses (i) through (viii) above shall be
paid to the owner of the Series 2004-1 Subordinated Interest; provided, however,
that during the Series 2004-1 Amortization Period, such remaining amounts shall
be distributed in accordance with Section 3A.6(b).
(b) During the Series 2004-1 Amortization Period, the Servicer
shall apply, on each Distribution Date (or any other Business Day specified by
the Administrator), amounts on deposit in the Series 2004-1 Collection
Subaccount in the following order of priority:
(i) to the payment of the Series 2004-1 Periodic Servicing Fee if the
Company or one of its Affiliates is not then acting as the Servicer;
(ii) to the reimbursement of the Administrator's costs of
collection and enforcement of this Supplement;
(iii) to the payment of all accrued and unpaid Monthly Interest
Payment payable on such Distribution Date, plus the amount of any Monthly
Interest Payment previously due but not distributed to the Administrator,
for further distribution to the Committed Purchaser 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
Administrator, for further distribution to the Committed Purchaser, on a
prior Distribution Date, plus all accrued and unpaid fees under the Fee
Letter (including the Commitment Fee and the Utilization Fee);
(iv) to the payment of any amounts owing to the Trustee pursuant to
Section 8.5 of the Agreement;
(v) to the payment of all other accrued and unpaid Recourse
Obligations (other than the Series 2004-1 Periodic Servicing Fee if the
Company or any of its Affiliates is then acting as the Servicer);
(vi) to the ratable reduction of Series 2004-1 Invested Amount;
(vii) to the payment of the Series 2004-1 Periodic Servicing Fee if
the Company or any Affiliate thereof is then acting as the Servicer; and
(viii) following the repayment in full of the Series 2004-1 Invested
Amount, the remaining amount on deposit in the Series 2004-1 Collection
Subaccount on such Distribution Date, if any, shall be distributed to the
owner of the Series 2004-1 Subordinated Interest.
31
Section 3A.7 ELIGIBLE INVESTMENTS. All amounts from time to time held
in, deposited in or credited to, the Series 2004-1 Collection Subaccount may be
invested by the Servicer (as agent for the Administrator) in Eligible
Investments. All such investments shall at all times be and remain credited to
an account, which if applicable, may be a subaccount of the Series 2004-1
Collection Subaccount (the "SERIES 2004-1 SECURITIES ACCOUNT") subject to a
securities control agreement in form and substance satisfactory to the
Administrator. All income or other gain from investment of monies deposited in
or credited to the Series 2004-1 Securities Account shall be deposited in or
credited to the Series 2004-1 Securities Account immediately upon receipt, and
any loss resulting from such investment shall be charged to the Series 2004-1
Securities Account. Funds on deposit in the Series 2004-1 Securities Account
shall be invested in Eligible Investments that will mature no later than the
Business Day immediately preceding the next Distribution Date. None of the
Administrator or the Committed Purchaser shall be held liable in any way by
reason of any insufficiency in the Series 2004-1 Securities Account resulting
from any investment loss on any Eligible Investments.
ARTICLE IV
DISTRIBUTIONS AND REPORTS
Article IV of the Agreement (except for any portion thereof relating
to another Series) shall read in its entirety herein as follows and the
following shall be exclusively applicable to the VFC Certificates:
SECTION 4A.1. DISTRIBUTIONS. (a) On each Distribution Date, the
Trustee shall distribute to the Administrator and the Administrator shall
further distribute to the Committed Purchaser the amount to be distributed to
the Committed Purchaser pursuant to Article III.
(b) All allocations and distributions hereunder shall be in accordance
with the Monthly Settlement Statement, upon which the Trustee may conclusively
rely, and shall be made in accordance with the provisions of Section 11.4 hereof
and subject to Section 3.1(h) of the Agreement.
SECTION 4A.2. Reserved.
SECTION 4A.3. STATEMENTS AND NOTICES. (a) MONTHLY SETTLEMENT
STATEMENTS. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and the Administrator (commencing with the Settlement Report Date
occurring on April 17, 2004) a Monthly Settlement Statement in the Form of
Exhibit D setting forth, among other things, the Default Ratio, Delinquency
Ratio and Dilution Ratio and the components of the calculation thereof, and the
Series 2004-1 Monthly Principal Payment, each as calculated for the Accrual
Period ending immediately prior to such Settlement Report Date. The Trustee
shall have no obligation whatsoever to verify the accuracy of any information
contained within the Monthly Settlement Statement, including any calculations
contained therein. A copy of any such items may be obtained by any holder of a
Certificate upon a written request delivered to the Trustee at the
32
Corporate Trust Office. Where the Servicer is required to provide written
instructions to the Trustee in respect of the distributions and allocations to
be made on a Distribution Date, the delivery by the Servicer to the Trustee of
the Monthly Settlement Statement with all such instructions contained therein on
the Settlement Report Date shall satisfy the Servicers obligation to provide
written instructions.
(b) ANNUAL CERTIFICATEHOLDERS' TAX STATEMENT. On or before January
31 of each calendar year (or such earlier date as required by applicable law),
beginning with calendar year 2005, the Company on behalf of the Trustee shall
furnish, or cause to be furnished, to the Committed Purchaser, a statement
prepared by the Company containing the aggregate amount distributed to the
Committed Purchaser for such calendar year or the applicable portion thereof,
together with such other information as is required to be provided by an issuer
of indebtedness under the Internal Revenue Code and such other customary
information as the Company deems necessary or desirable to enable the Purchasers
to prepare their tax returns. Such obligation of the Company shall be deemed to
have been satisfied to the extent that substantially comparable information
shall have been prepared by the Servicer and provided to the Trustee or the
Administrator and to the Committed Purchaser, in each case pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
(c) EARLY AMORTIZATION EVENT/DISTRIBUTION OF PRINCIPAL NOTICES.
Upon the occurrence of an Early Amortization Event with respect to Series
2004-1, the Company or the Servicer, as the case may be, shall give prompt
written notice thereof to the Trustee and the Administrator. As promptly as
reasonably practicable after its receipt of notice of the occurrence of an Early
Amortization Event with respect to Series 2004-1, the Trustee shall give notice
to the Administrator.
ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS
SECTION 5.1 ADDITIONAL EARLY AMORTIZATION EVENTS. If any one of the
events specified in Section 7.1 of the Agreement (after the expiration of any
grace periods or consents applicable thereto) or any one of the following events
(each, an "EARLY AMORTIZATION EVENT") shall occur during the Series 2004-1
Revolving Period with respect to the Series 2004-1 Interests:
(a) failure on the part of the Servicer to make or direct any payment
or deposit under any Pooling and Servicing Agreement required to be made or
directed by it or failure by the Company to make any payment or deposit required
to be made by it under any Pooling and Servicing Agreement which failure
continues, in either case, for two Business Days after the date such payment,
deposit or amount is required to be made or directed;
(b) failure on the part of the Company to duly observe or perform any
of the covenants or agreements of the Company set forth in Section 2.7 and 2.8
of the Agreement or (ii)
33
failure on the part of the Company or the Support Provider duly to observe or
perform any (other than as described in any other paragraph of this Section 5.1)
other covenants or agreements of the Company or the Support Provider (as
applicable) set forth in any Pooling and Servicing Agreement, which failure
continues unremedied until 10 Business Days after the earlier of the date on
which a Responsible Officer of the Company or the Support Provider has knowledge
thereof and the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Company or the Support Provider (as
applicable) by the Trustee, or to the Company or the Support Provider (as
applicable) and the Trustee by the Administrator;
(c) any representation or warranty made or deemed made by the Company
or the Support Provider in any Pooling and Servicing Agreement to or for the
benefit of the Committed Purchaser (i) proves to have been incorrect in any
material respect when made or when deemed made and (ii) continues to be
materially incorrect until 10 Business Days after the earlier of the date on
which a Responsible Officer of the Company or the Servicer has knowledge thereof
and the date on which notice of such failure, requiring the same to be remedied,
has been given to the Company or the Support Provider (as applicable) by the
Trustee, or to the Company or the Support Provider (as applicable) and the
Trustee by the Administrator;
(d) a Servicer Default with respect to the Servicer shall have
occurred and be continuing or the Servicer shall have resigned;
(e) a Purchase Termination Event (as defined in any Receivables Sale
Agreement) shall have occurred and be continuing under such Receivables Sale
Agreement or any Seller shall for any reason cease to transfer (other than in
accordance with the terms of the applicable Receivables Sale Agreement), or
cease to have the legal capacity to transfer, or otherwise be incapable of
transferring Receivables pursuant to the applicable Receivables Sale Agreement;
(f) a USSC Change in Control shall have occurred, or any Seller or the
Servicer shall cease to be a directly or indirectly wholly-owned, Subsidiary of
USSC;
(g) USFS, USSC or any one of USSC's wholly-owned direct or indirect
subsidiaries shall cease to own 100% of the ordinary shares of the Company, free
and clear of any Lien, other than any Lien in favor of the administrative agent
under the Credit Agreement; provided, that 30% of the voting rights with respect
to such shares shall be held by the independent director as nominee;
(h) any of the Agreement, the Servicing Agreement, this Supplement or
the Receivables Sale Agreements or any material provision of any of the
foregoing shall cease, for any reason, to be in full force and effect, or to be
the legally valid, binding and enforceable obligation of the Company, the
Servicer, the Support Provider or any Seller or the Company, any Seller, the
Support Provider or the Servicer or any Affiliate of any thereof shall so assert
in writing;
34
(i) the Trust shall for any reason cease to have a valid and perfected
first priority undivided ownership or security interest in the Trust Assets
(subject to no other Liens), or any of USSC, USFS, the Company or any Affiliate
of any one thereof shall so assert in writing;
(j) (i) there shall have been filed against the Company or the Trust a
notice of federal tax Lien from the Internal Revenue Service and 40 days shall
have elapsed without such notice having been effectively withdrawn or such Lien
having been released or discharged (ii) any formal step is taken to terminate
any Plan, other than a standard termination under Section 4041(b) of ERISA, or a
contribution failure has occurred with respect to any Plan sufficient to give
rise to a Lien under Section 302(f) of ERISA or (iii) there shall have been
filed against USSC, USFS, the Company, any Seller or the Trust a notice of any
other Lien the existence of which could reasonably be expected to have a
Material Adverse Effect on the business, operations or financial condition of
such Person, and 40 days shall have elapsed without such notice having been
effectively withdrawn or such Lien having been released or discharged;
(k) an event of default under the Credit Agreement shall have occurred
and the lender parties thereto shall have caused the indebtedness thereunder to
come due prior to its stated maturity;
(l) default by the Company in the payment of an Indebtedness when due
or the performance of any term, provision or condition contained in any
agreement under which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of the Company shall be declared to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the date of maturity thereof; or (ii) default by USSC or USFS
in the payment of an Indebtedness equal to or in excess of $25,000,000 or the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed and the lender parties
thereto shall have caused such Indebtedness to come due prior to its stated
maturity;
(m) any action, suit, investigation or proceeding at law or in equity
(including, without limitation, injunctions, writs or restraining orders) shall
be brought or commenced or filed by or before any arbitrator, court or
Governmental Authority against the Company or any of its properties, revenues or
rights which could reasonably be expected to have a Material Adverse Effect;
(n) one or more judgments for the payment of money shall be rendered
against the Company;
(o) as at the end of any Accrual Period, the average Delinquency Ratio
for the three preceding Accrual Periods (including such Accrual Period then
ended) shall exceed the greater of (x)125% of the highest three-month rolling
average Delinquency Ratio for the period from September 1, 2002 through August
31, 2003 and (y) 150% of the average of the three-
35
month rolling average Delinquency Ratio for the period from September 1, 2002
through August 31, 2003;
(p) as at the end of any Accrual Period, the average Default Ratio for
the three preceding Accrual Periods (including such Accrual Period then ended)
shall exceed 1.10%;
(q) as at the end of any Accrual Period, the average Dilution Ratio
for the three preceding Accrual Periods (including such Accrual Period then
ended) shall exceed 8.75%;
(r) as at the end of any fiscal quarter of USSC or USI, the Leverage
Ratio shall exceed 3.0 to 1.0;
(s) as of any day, Consolidated Net Worth shall be less than (i)
$450,000,000 minus (ii) amounts permitted to be expended by USI in connection
with repurchases or redemptions of its capital stock under Section 6.10 of the
Credit Agreement, plus (iii) 50% of Consolidated Net Income (if positive) earned
in each fiscal quarter beginning with the fiscal quarter ending June 30, 2003,
plus (iv) 50% of the Net Cash Proceeds resulting from issuances of the capital
stock of USI or any Subsidiary of USI;
(t) as of the end of any fiscal quarter of USSC or USI, the Fixed
Charge Coverage Ratio shall be less than 1.25 to 1.00;
(u) the Series 2004-1 Allocated Receivables Amount shall be less than
the Series 2004-1 Target Receivables Amount for more than two consecutive
Business Days; or
(v) any Bankruptcy Event shall occur with respect to the Support
Provider, and in the case of any such event arising from the commencement of an
involuntary proceeding, case or action, such event remains undismissed,
undischarged or unbonded for a period of 30 days;
then, in the case of (x) any event described in Section 7.1(a) of the Agreement,
Section 6.1(g) of any Receivables Sale Agreement or Section 6.1(e) of the
Servicing Agreement, after the applicable grace period (if any) set forth in
such Section, automatically without any notice or action on the part of the
Trustee or Administrator, an early amortization period shall immediately
commence or (y) any other event described above or in Section 7.1 of the
Agreement, after the expiration of the applicable grace period (if any) set
forth in such subsections, the Administrator may, by written notice then given
to the Company and the Servicer, declare that an early amortization period has
commenced as of the date of such notice with respect to Series 2004-1 (any such
period under clause (x) or (y) above, an "EARLY AMORTIZATION PERIOD").
ARTICLE VI
SERVICING FEE
SECTION 6.1 SERVICING COMPENSATION. A periodic servicing fee (the
"SERIES 2004-1 PERIODIC SERVICING FEE") shall be payable to the Servicer on each
Distribution Date for
36
the preceding Accrual Period in an amount equal to the product of (a) the
Servicing Fee and (b) a fraction the numerator of which is the daily average
Series 2004-1 Invested Amount for such Accrual Period and the denominator of
which is the sum of (i) the daily average Aggregate Invested Amounts.
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION 7.1 ILLEGALITY. Notwithstanding any other provision herein, if
any Change in Law shall make it unlawful for any Affected Party to make or
maintain its portion of the VFC Certificateholder's Interest (or funding thereof
through a Program Support Agreement) in any Eurodollar Tranche and such Affected
Party shall notify in writing the Administrator, the Trustee and the Company,
then the portion of each Eurodollar Tranche applicable to such Affected Party
shall thereafter be calculated by reference to the Base Rate. If any such change
in the method of calculating interest occurs on a day which is not the last day
of the Rate Period with respect to any Eurodollar Tranche, the Company shall pay
to the Administrator for the account of such Affected Party the amounts, if any,
as may be required pursuant to Section 7.4.
SECTION 7.2 INCREASED COSTS. If any Change in Law (except with respect
to Taxes which shall be governed by Section 7.3) shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Affected Party (except any such
reserve requirement reflected in the Euro-Rate); or
(ii) impose on any Affected Party or the London interbank market
any other condition affecting the Transaction Documents or the funding of
Eurodollar Tranches by such Affected Party;
and the result of any of the foregoing shall be to increase the cost to such
Affected Party of making, converting into, continuing or maintaining Eurodollar
Tranches (or maintaining its obligation to do so) or to reduce any amount
received or receivable by such Affected Party hereunder or under any Program
Support Agreement (whether principal, interest or otherwise), then the Company
will pay to such Affected Party such additional amount or amounts as will
compensate such Affected Party for both increased costs and maintenance of
bargained for yield.
(a) If any Affected Party determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Affected Party's capital or the capital of any corporation controlling
such Affected Party as a consequence of its obligations hereunder or under any
Program Support Agreement to a level below that which such Affected Party or
such corporation could have achieved but for such Change in Law (taking into
consideration such Affected Party's or such corporation's policies with respect
to capital adequacy), then from time to time, the Company shall pay to such
Affected Party such additional
37
amount or amounts as will compensate such Affected Party for both increased
costs and bargained for yield.
(b) A certificate of an Affected Party setting forth in reasonable
detail the amount or amounts necessary to compensate such Affected Party as
specified in subsections (a) and (b) of this Section 7.2 shall be delivered to
the Company (with a copy to the Administrator) and shall be conclusive absent
manifest error provided that such Certificate is delivered in good faith and in
a manner generally consistent with such Affected Party's standard practice. The
agreements in this Section shall survive the termination of this Supplement and
the Agreement and the payment of all amounts payable hereunder and thereunder
for a period of nine months.
(c) Failure or delay on the part of any Affected Party to demand
compensation pursuant to this Section 7.2 shall not constitute a waiver of such
Affected Party's right to demand such compensation; PROVIDED that the Company
shall not be required to compensate an Affected Party pursuant to this Section
7.2 for any increased costs or reductions incurred more than 270 days prior to
the date that such Affected Party notifies the Company of the Change in Law
giving rise to such increased costs or reductions and of such Affected Party's
intention to claim compensation therefor; PROVIDED FURTHER that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
(d) For avoidance of doubt any increase in cost and/or reduction in
yield caused by regulatory capital allocation adjustments due to Financial
Accounting Standards Board's Interpretation 46 (or any future statement or
interpretation issued by the Financial Accounting Standards Board or any
successor thereto) shall be covered by this Section 7.2.
SECTION 7.3 TAXES. (a) Any and all payments by or on account of any
obligation of the Company hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the Company
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 7.3) the Administrator or the Committed
Purchaser receives an amount equal to the sum that it would have received had no
such deductions been made, (ii) the Company shall make such deductions and (iii)
the Company shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Company shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Subject to paragraph (e) of this Section 7.3, the Company shall
indemnify the Administrator and the Committed Purchaser within the later of 10
days after written demand therefor and the Distribution Date next following such
demand for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrator or the Committed Purchaser on or
38
with respect to any payment by or on account of any obligation of the Company
hereunder or under any other Transaction Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 7.3) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Company by the Administrator or the Committed
Purchaser shall be conclusive absent manifest error. The agreements in this
subsection shall survive the termination of this Supplement and the Agreement
and the payment of all amounts payable hereunder and thereunder.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Administrator the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrator.
(e) The Administrator and the Committed Purchaser shall (but with
respect to any Indemnified Tax or Other Tax arising from a Change in Law, only
to the extent the Administrator or such Purchaser is legally able to do so)
deliver to the Company (with a copy to the Administrator) such properly
completed and executed documentation prescribed by applicable law and reasonably
requested by the Company on the later of (i) 30 Business Days after such request
is made and the applicable forms are provided to the Committed Purchaser or (ii)
30 Business Days before prescribed by applicable law as will permit such
payments to be made without withholding or with an exemption from or reduction
of Indemnified Taxes or Other Taxes. Failure to timely provide such
documentation to the Company shall relieve the Company of any indemnification
responsibility under this Section 7.3.
(f) If the Administrator or the Committed Purchaser receives a refund
solely in respect of Indemnified Taxes or Other Taxes, it shall pay over such
refund to the Company to the extent that such Administrator or Purchaser has
already received indemnity payments or additional amounts pursuant to this
Section 7.3 with respect to such Indemnified Taxes or Other Taxes giving rise to
the refund, net of all out-of-pocket expenses and without interest (other than
interest paid by the relevant Governmental Authority with respect to such
refund); PROVIDED, HOWEVER, that the Company shall, upon request of the
Administrator or the Committed Purchaser, repay such refund (plus interest or
other charges imposed by the relevant Governmental Authority) to the
Administrator or the Committed Purchaser if the Administrator or the Committed
Purchaser is required to repay such refund to such Governmental Authority.
Nothing contained herein shall require the Administrator or the Committed
Purchaser to make its tax returns (or any other information relating to its
taxes which it deems confidential) available to the Company or any other Person.
SECTION 7.4 BREAK FUNDING PAYMENTS. The Company agrees to indemnify
the Committed Purchaser and to hold the Committed Purchaser harmless from any
loss or expense
39
which the Committed Purchaser may sustain or incur as a consequence of (a)
default by the Company in making a borrowing of a Eurodollar Tranche after the
Company has given irrevocable notice requesting the same in accordance with the
provisions of this Supplement, or (b) default by the Company in making any
prepayment in connection with a Decrease after the Company has given irrevocable
notice thereof in accordance with the provisions of Section 2.7 or (c) the
making of a prepayment of a Eurodollar Tranche or CP Tranche prior to the
termination of the Rate Period for such Eurodollar Tranche or CP Tranche, as
applicable. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid or not so borrowed, for the period from the date of such prepayment or
of such failure to borrow to the last day of the Rate Period (or in the case of
a failure to borrow the Rate Period that would have commenced on the date of
such prepayment or of such failure) in each case at the Euro-Rate or CP Rate, as
applicable, for such Eurodollar Tranche or CP Tranche, as applicable, provided
for herein over (ii) the amount of interest (as reasonably determined by the
Committed Purchaser) which would have accrued to the Committed Purchaser on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. This covenant shall survive the
termination of this Supplement and the Agreement and the payment of all amounts
payable hereunder and thereunder. A certificate as to any additional amounts
payable pursuant to the foregoing sentence, showing in reasonable detail the
calculation thereof, submitted by the Committed Purchaser to the Company shall
be conclusive absent manifest error.
SECTION 7.5 MITIGATION OBLIGATIONS. (a) If any Liquidity Purchaser
requests compensation under Section 7.2, or if the Company is required to pay
any additional amount to any such Liquidity Purchaser or any Governmental
Authority for the account of any Alternate Investor pursuant to Section 7.3,
then such Liquidity Purchaser shall use reasonable efforts to designate a
different lending office for funding or booking its obligations under this
Supplement and the Agreement or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Liquidity Purchaser, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 7.2 or 7.3, as the case may be, in
the future and (ii) would not subject such Liquidity Purchaser to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Liquidity Purchaser. The Company hereby agrees to pay all reasonable costs and
expenses incurred by any Liquidity Purchaser in connection with any such
designation or assignment.
(b) If any Liquidity Purchaser requests compensation under Section
7.2, or if the Company is required to pay any additional amount to such
Liquidity Purchaser or any Governmental Authority for the account of such
Liquidity Purchaser pursuant to Section 7.3, or if such Liquidity Purchaser
defaults in its obligations under the Liquidity Agreement, then the Company may,
at its sole expense and effort, upon notice to such Liquidity Purchaser and the
Administrator require such Liquidity Purchaser to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.11), all its interests, rights and obligations under the Liquidity
Agreement to an assignee that shall assume such obligations (which assignee may
be another Liquidity Purchaser, if a Liquidity Purchaser accepts such
assignment); PROVIDED that (i) the Company shall have received the prior written
consent of the
40
Administrator, (ii) such Liquidity Purchaser shall have received payment of
all amounts payable to it hereunder and under the Liquidity Agreement, from the
assignee or the Company (in the case of all amounts payable hereunder) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 7.2 or payments required to be made pursuant to Section 7.3, such
assignment will result in a reduction in such compensation or payments. A
Liquidity Purchaser shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Liquidity
Purchaser or otherwise, the circumstances entitling the Company to require such
assignment and delegation cease to apply.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES, COVENANTS
SECTION 8.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SERVICER. The Company and the Servicer each hereby represents and warrants to
the Trustee, the Administrator and each of the Purchasers that each and every of
their respective representations and warranties contained in the Agreement is
true and correct in all material respects as of the Issuance Date and as of the
date of each Increase (except to the extent that any such representation or
warranty is expressly made as of another date).
SECTION 8.2 COVENANTS OF THE COMPANY AND THE SERVICER. The Company and
the Servicer hereby agree, in addition to their obligations under the Agreement
and the Servicing Agreement, that:
(a) they shall 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;
(b) they shall afford the Trustee, Administrator or any
representatives of the Trustee or the Administrator access to all records
relating to the Receivables at any reasonable time during regular business
hours, upon reasonable prior notice (and without prior notice if an Early
Amortization Event has occurred), for purposes of inspection and shall permit
the Trustee, Administrator or any representative of the Trustee or the
Administrator to visit any of the Company's or the Servicer's, as the case may
be, offices or properties during regular business hours and as often as may
reasonably be desired to discuss the business, operations, properties, financial
and other conditions of the Company or the Servicer with their respective
officers and employees and with their independent certified public accountants;
PROVIDED that the Administrator shall provide the Company or the Servicer, as
the case may be, with reasonable notice prior to any such contact and shall give
the Company or the Servicer the reasonable opportunity to participate in such
discussions; and
(c) neither the Company nor the Servicer shall take any action, nor
permit the Seller to take any action, requiring the satisfaction of the Rating
Agency Condition pursuant to any Transaction Document without the prior written
consent of the Majority Purchasers.
41
SECTION 8.3 COVENANTS OF THE SERVICER. The Servicer hereby agrees
that:
(a) it shall observe each and all of its respective covenants (both
affirmative and negative) contained in the Pooling and Servicing Agreements in
all material respects;
(b) it shall provide to the Administrator, simultaneously with
delivery to the Trustee, all reports, notices, certificates, statements and
other documents required to be delivered to the Trustee pursuant to the
Agreement, the Servicing Agreement and the other Transaction Documents and
furnish to the Administrator promptly after receipt thereof a copy of each
material notice, material demand or other material communication (excluding
routine communications) received by or on behalf of the Company or the Servicer
with respect to the Transaction Documents;
(c) it shall provide notice to the Administrator of the appointment of
a Successor Servicer pursuant to Section 6.2 of the Servicing Agreement; and
(d) it shall operate in good faith to allow the Trustee to use the
Servicer's available facilities, equipment, leasehold agreements, data systems,
records, files and expertise upon the Servicer's termination or default.
SECTION 8.4 OBLIGATIONS UNAFFECTED. The obligations of the Company and
the Servicer to the Administrator and the Committed Purchaser under this
Supplement shall not be affected by reason of any invalidity, illegality or
irregularity of any of the Receivables or any sale of any of the Receivables.
ARTICLE IX
CONDITIONS PRECEDENT
SECTION 9.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF SUPPLEMENT. This
Supplement shall become effective on the date (the "EFFECTIVE DATE") on which
the following conditions precedent have been satisfied:
(a) DOCUMENTS. The Administrator shall have received, with a copy for
the Committed Purchaser, true and complete copies of (i) this Supplement,
executed by a duly authorized officer of each of the Company, the Servicer, the
Trustee, the Administrator and the Committed Purchaser and (ii) each of the
Agreement, the Servicing Agreement and each of the Receivables Sale Agreements,
duly executed by each of the parties thereto, (iii) all documents required to be
delivered in connection with the foregoing, (iv) a VFC Certificate Series 2004-1
in the original principal amount of $25,000,000 issued in favor of the Committed
Purchaser and duly executed and delivered by the Company and duly authenticated
by the Trustee, and (v) evidence satisfactory to the Administrator that the
"Commitment" of Bank One, NA under Series 2003-1 has been reduced to
$127,500,000.
42
(b) ORGANIZATIONAL DOCUMENTS, ORGANIZATIONAL PROCEEDINGS. The
Committed Purchaser shall have received from the Company, each Seller and the
Servicer, true and complete copies of:
(i) the articles of association, articles of incorporation or
other formation documents, including all amendments thereto, of such
Person, certified as of a recent date by the Secretary of State or other
appropriate authority of the state of formation or incorporation, as the
case may be, and a certificate of compliance, of status or of good
standing, as and to the extent applicable, of each such Person as of a
recent date, from the Secretary of State or other appropriate authority of
such jurisdiction;
(ii) a certificate of the Secretary or an Assistant Secretary of
each such Person, dated the Effective Date and certifying (A) that attached
thereto is a true and complete copy of the bylaws and articles of
incorporation or articles of association (or equivalent organizational
documents) of each such Person, as in effect on the Effective Date and at
all times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy of
the resolutions, in form and substance reasonably satisfactory to the
Administrator, of the Board of Directors of each such Person or committees
thereof (and corresponding resolutions of authority for any such committee)
authorizing the execution, delivery and performance of the Series 2004-1
Transaction Documents to which it is a party and the transactions
contemplated thereby, and that such resolutions have not been amended,
modified, revoked or rescinded and are in full force and effect, (C) that
the articles of association, articles of incorporation or other formation
documents of each such Person have not been amended since the date of the
last amendment thereto shown on the certificate of good standing (or its
equivalent) furnished pursuant to clause (i) above and (D) as to the
incumbency and specimen signature of each officer executing any Series
2004-1 Transaction Documents or any other document delivered in connection
herewith or therewith on behalf of each such Person; and
(iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above.
(c) GOOD STANDING CERTIFICATES. The Committed Purchaser shall have
received copies of certificates of compliance, of status or of good standing,
dated as of a recent date, from the Secretary of State or other appropriate
authority of such jurisdiction, with respect to the Company, the Servicer and
each Seller, in each State where the ownership, lease or operation of property
or the conduct of business requires it to qualify as a foreign corporation or
limited liability company, except where the failure to so qualify would not
reasonably be expected to have a Material Adverse Effect.
(d) LEGAL OPINIONS. The Committed Purchaser shall have received
opinions of counsel to the Company and the Servicer, dated the Issuance Date
(or, dated as of an earlier date,
43
with a reliance letter dated as of the Issuance Date as agreed by the Committed
Purchaser and the Servicer), as to corporate, federal tax (tax status of the VFC
Certificates as debt), bankruptcy ("true sale" and "non-substantive
consolidation"), perfection of security and/or ownership interests and other
matters in form and substance reasonably acceptable to the Committed Purchaser
and their counsel.
(e) FEES. The Committed Purchaser shall have received payment of all
fees and other amounts due and payable to it on or before the Effective Date.
(f) MATERIAL ADVERSE CHANGE. No material adverse change shall have
occurred with respect to the business, operations, or condition (financial or
otherwise) of USSC and its Subsidiaries taken as a whole since September 30,
2003.
(g) LOCKBOX AGREEMENTS. The Committed Purchaser shall have received
Lockbox Agreements for each of the Lockbox Accounts identified on Schedule 2 in
form and substance reasonably satisfactory to the Committed Purchaser, duly
executed by the respective parties thereto.
(h) FEE LETTER. The Committed Purchaser shall have received the Fee
Letter, duly executed by the parties thereto.
(i) MONTHLY SETTLEMENT REPORT. The Committed Purchaser shall have
received a Monthly Settlement Report as of February 28, 2004.
ARTICLE X
[RESERVED]
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 RATIFICATION OF AGREEMENT. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
SECTION 11.2 GOVERNING LAW. (a) THIS SUPPLEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
(b) CONSENT TO JURISDICTION. EACH OF THE COMPANY AND THE SERVICER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
00
XXXXXXXXXXXX XX XXX XXXXXX XXXXXX FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
SUPPLEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS SUPPLEMENT
AND EACH OF THE COMPANY AND THE SERVICER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE ADMINISTRATOR OR THE COMMITTED PURCHASER TO BRING PROCEEDINGS
AGAINST THE COMPANY OR THE SERVICER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE COMPANY OR THE SERVICER AGAINST THE ADMINISTRATOR OR
THE COMMITTED PURCHASER OR ANY AFFILIATE OF ADMINISTRATOR OR THE COMMITTED
PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS SUPPLEMENT OR ANY DOCUMENT EXECUTED BY
THE COMPANY OR THE SERVICER PURSUANT TO THIS SUPPLEMENT SHALL BE BROUGHT ONLY IN
A COURT IN CHICAGO, ILLINOIS OR
NEW YORK,
NEW YORK.
(c) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS SUPPLEMENT, ANY DOCUMENT EXECUTED BY THE
COMPANY OR THE SERVICER PURSUANT TO THIS SUPPLEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
SECTION 11.3 FURTHER ASSURANCES. Each of the Company, the Servicer and
the Trustee agrees, from time to time, to do and perform any and all acts and to
execute any and all further instruments required or reasonably requested by the
Administrator more fully to effect the purposes of this Supplement and the sale
of the VFC Certificates hereunder, including, without limitation, in the case of
the Company and the Servicer, the execution of any financing or registration
statements or similar documents or notices or continuation statements relating
to the Receivables and the other Trust Assets for filing or registration under
the provisions of the UCC or similar legislation of any applicable jurisdiction.
SECTION 11.4 PAYMENTS. To the extent proper payment instructions are
provided, each payment to be made hereunder shall be made on the required
payment date in lawful money of the United States and in immediately available
funds, if to the Committed Purchaser, at the office of the Administrator set
forth in Section 11.9.
45
SECTION 11.5 COSTS AND EXPENSES. The Company agrees to pay all
reasonable out-of-pocket costs and expenses of the Administrator (including,
without limitation, reasonable fees and disbursements of one counsel to the
Administrator) 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
Administrator of the obligations and liabilities of the Company and the Servicer
under the Agreement, this Supplement, the other Transaction Documents or any
related document; PROVIDED that any payments made by the Company pursuant to
this subsection shall be made solely from funds available to the Company which
are not otherwise needed to be applied to the payment of any amounts (other than
amounts payable to the Company) pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in excess
of the proceeds to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.
SECTION 11.6 NO WAIVER, CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee, the Administrator or the
Committed 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 11.7 AMENDMENTS. (a) Subject to subsection (c) of this Section
11.7, this Supplement may be amended in writing from time to time by the
Servicer, the Company and the Trustee, with the consent of the Administrator but
without the consent of any holder of any outstanding VFC Certificate, to cure
any ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein or to add any other provisions to
or change in any manner or eliminate any of the provisions with respect to
matters or questions raised under this Supplement which shall not be
inconsistent with the provisions of any Pooling and Servicing Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Officer's
Certificate or, to the extent in the reasonable view of the Company, a question
of law exists, an Opinion of Counsel delivered to the Trustee, adversely affect
in any material respect the interests of the VFC Certificateholder, including
without limitation the tax status of the VFC Certificates or of the Trust. The
Trustee may, but shall not be obligated to, enter into any such amendment
pursuant to this paragraph or paragraph (b) below which affects the Trustee's
rights, duties or immunities under any Pooling and Servicing Agreement or
otherwise.
(b) Subject to subsection (c) of this Section 11.7, this Supplement
may also be amended in writing from time to time by the Servicer, the Company
and the Trustee with the consent of the Administrator 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
Certificateholder (including, without limitation, the acceleration of the
payment of sums payable to or for the account of the Committed Purchaser under
any provision of this Supplement); PROVIDED, HOWEVER, that no such amendment
shall, unless signed or
46
consented to in writing by the Committed Purchaser, (i) extend the time for
payment, or reduce the amount, of any sum payable to or for the account of the
Committed Purchaser under any provision of this Supplement or extend the Series
2004-1 Termination Date, (ii) subject the Committed Purchaser to any additional
obligation (including, without limitation, any change in the determination of
any amount payable by any Purchaser), (iii) increase the Purchase Limit or
change the amount of any interest or fees or the voting requirements required
for any action under this subsection or any other provision of this Supplement,
(iv) change the tax characteristics of the VFC Certificates or of the Trust, (v)
consent to or permit the assignment or transfer by the Company of any of its
rights or obligations under this Supplement or the Agreement; (vi) change the
definition of "Eligible Receivable," "Default Ratio," "Delinquency Ratio," or
"Dilution Ratio" or "Aggregate Receivables Amount"; or (vii) amend or modify any
defined term (or any defined term used directly or indirectly in such defined
term) used in the foregoing clauses (i) through (vi) in a manner that would
circumvent the intention of the restrictions set forth in such clauses.
(c) Any amendment hereof can be effected without the Administrator's
being party thereto; PROVIDED, HOWEVER, that no such amendment, modification or
waiver of this Supplement that affects rights or duties of the Administrator
shall be effective unless the Administrator shall have given its prior written
consent thereto.
(d) No amendment hereof shall be effective until the Rating Agency
Condition is satisfied with respect thereto.
SECTION 11.8 SEVERABILITY. If any provision hereof is void or
unenforceable in any jurisdiction, such voidness or unenforceability shall not
affect the validity or enforceability of (i) such provision in any other
jurisdiction or (ii) any other provision hereof in such or any other
jurisdiction.
SECTION 11.9 NOTICES. All notices, requests and demands to or upon any
party hereto to be effective shall be given (i) in the case of the Company, the
Servicer and the Trustee, in the manner set forth in Section 10.4 of the
Agreement and (ii) in the case of the Administrator and the Committed Purchaser
in writing, and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand or three days after being
deposited in the mail, postage prepaid, or, in the case of facsimile notice,
when received, addressed as follows in the case of the Administrator, and the
Committed Purchaser; or to such other address as may be hereafter notified by
the respective parties hereto:
If to the Administrator:
Fifth Third Bank,
as Administrator
00 Xxxxxxxx Xxxxxx Xxxxx
M.D. 109047
Xxxxxxxxxx, Xxxx 00000
47
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Committed Purchaser:
Fifth Third Bank,
as Administrator
00 Xxxxxxxx Xxxxxx Xxxxx
M.D. 109047
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(with a copy to the Administrator)
SECTION 11.10 SUCCESSORS AND ASSIGNS. This Supplement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights under this Supplement without the prior written consent of the
Administrator and the Committed Purchaser may not assign or transfer any of its
rights under this Supplement except as described below. The Committed Purchaser
may assign its rights under this Supplement without the prior written consent of
the Company to Fifth Third, any Affiliate of Fifth Third (other than a director
or officer of Fifth Third), any Liquidity Purchaser or other Program Support
Provider or any Person that is: (i) in the business of issuing Commercial Paper
and (ii) associated with or administered by Fifth Third or any Affiliate of
Fifth Third. The Administrator shall give prior written notice of any assignment
of the Committed Purchaser's rights and obligations (including ownership of the
VFC Certificate to any Person other than a Program Support Provider). The
Committed Purchaser may at any time grant to one or more Liquidity Providers
party to the Liquidity Agreement, or to any other Program Support Provider,
participating interests in its Series 2004-1 Purchaser Invested Amount. In the
event of any such grant by the Committed Purchaser of a participating interest
to a Liquidity Purchaser or other Program Support Provider, the Committed
Purchaser shall remain responsible for the performance of its obligations
hereunder. The Company agrees that each Liquidity Purchaser or other Program
Support Provider shall be entitled to the benefits of ARTICLE VII. Only
assignments to Persons other than a Program Support Provider shall be subject to
SECTION 11.11.
SECTION 11.11 SECURITIES LAWS; ASSIGNMENTS. (a) The Committed
Purchaser represents and warrants to the Company that it is a "qualified
institutional buyer" within the meaning of Rule 144A promulgated under the
Securities Act and agrees that its that its VFC Certificate will be acquired
for investment only and not with a view to any public distribution thereof,
and that the Committed Purchaser will not offer to sell or otherwise dispose
of its VFC
48
Certificate (or any interest therein) in violation of any of the registration
requirements of the Securities Act or any applicable state or other
securities laws. The Committed Purchaser acknowledges that it has no right to
require the Company to register its VFC Certificate under the Securities Act
or any other securities law. The Committed Purchaser hereby confirms and
agrees that in connection with any transfer by it of an interest in the VFC
Certificate, the Committed Purchaser has not engaged and will not engage in a
general solicitation or general advertising including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio or television, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(b) Any sale subject to the terms of this Section 11.11(a) shall be
made only upon the satisfaction of all applicable requirements under Section 5.3
of the Agreement, in the ordinary course of its business and in accordance with
applicable law, in each case pursuant to a commitment transfer supplement,
substantially in the form of Exhibit E (the "COMMITMENT TRANSFER SUPPLEMENT"),
executed by such purchaser, the Committed Purchaser and delivered to the
Administrator for its acceptance and recording in the Register. Notwithstanding
the foregoing, the Committed Purchaser shall not so sell its rights hereunder,
(x) if such sale would result in there being more than 20 beneficial owners of
the VFC Certificates for the purposes of the 1940 Act or is not otherwise
permitted under subsection 5.3(e) of the Agreement, (y) unless the Committed
Purchaser reasonably believes that such purchaser is a "qualified institutional
buyer" within the meaning of Rule 144A promulgated under the Securities Act and
(z) unless, prior to such sale, the purchaser of such rights shall have executed
and delivered to the Administrator and the Transfer Agent and Registrar an
Assignment/Participation Certification. Upon such execution, delivery,
acceptance and recording, (A) the Company shall sign, on behalf of the Trust,
and shall direct the Trustee in writing to duly authenticate, and the Trustee,
upon receiving such direction, shall so authenticate, a new VFC Certificate in
the name and the denomination determined pursuant to the related Commitment
Transfer Supplement and set forth in such written direction and shall deliver
such VFC Certificate to such purchaser (or its designated agent or nominee) in
accordance with such written direction, and (B) from and after the Transfer
Issuance Date determined pursuant to such Commitment Transfer Supplement, (1)
the purchaser thereunder shall be a party hereto and, to the extent provided in
such Commitment Transfer Supplement, have the rights and obligations of the
Committed Purchaser hereunder with a "Commitment" as set forth therein and (2)
the Committed Purchaser shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Supplement.
(c) The Administrator shall maintain at its address referred to in
Section 11.9 a copy of each Commitment Transfer Supplement delivered to it.
(d) Upon its receipt of an executed Commitment Transfer Supplement,
the Administrator shall (i) promptly accept such Commitment Transfer Supplement
and (ii) on the Transfer Issuance Date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Servicer and the Company.
49
SECTION 11.12 [Reserved]
SECTION 11.13 COUNTERPARTS. This Supplement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.
SECTION 11.14 NO BANKRUPTCY PETITION. (a) The Administrator and the
Committed 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 2004-1
Amortization Period and (ii) the last day of the amortization period of any
other Outstanding Series, it will not institute against, or join any other
Person in instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other similar proceedings
under any federal or state bankruptcy or similar law.
(b) The Company, the Servicer, the Trustee, the Administrator and each
Alternate Investor hereby covenants and agrees that, prior to the date which is
one year and one day after the payment in full of all outstanding Commercial
Paper, it will not institute against, or join any other Person in instituting
against, the Committed Purchaser any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other similar proceedings under any
federal or state bankruptcy or similar law.
SECTION 11.15 COMMITTED PURCHASER'S LIABILITIES. Notwithstanding
anything to the contrary contained in this Supplement, the obligations of the
Committed Purchaser under this Supplement and all other Transaction Documents
are solely the corporate obligations of the Committed Purchaser. No recourse
shall be had against any stockholder, employee, officer, director or
incorporator of the Committed Purchaser; PROVIDED, that this Section 11.15 shall
not relieve any such Person of any liability it might otherwise have for its own
gross negligence or willful misconduct.
SECTION 11.16 RECOURSE TO THE COMPANY. Notwithstanding any limitation
on recourse contained in this Supplement, the Company shall immediately pay to
the Administrator when due, for the account of the Committed Purchaser on a full
recourse basis, (i) such fees as set forth in the Fee Letter, (ii) all amounts
payable as Series 2004-1 Monthly Interest, (iii) all amounts payable as Dilution
Adjustments, Transfer Deposit Amounts, or payable pursuant to Section 2.6 of the
Agreement (which shall be immediately due and payable by the Company and applied
to reduce outstanding Series 2004-1 Invested Amount), (iv) all amounts payable
pursuant to Article VII and Section 2.10, if any, (v) all Program Costs, (vi)
all Servicer costs and expenses, including the Servicing Fee, in connection with
servicing, administering and collecting the Receivables, and (vii) all Default
Fees (collectively, the "RECOURSE OBLIGATIONS"). If any Person fails to pay any
of the Recourse Obligations when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid.
50
SECTION 11.17 RATING AGENCY CONDITION. Unless and until the VFC
Certificates shall be rated by an applicable rating agency, no action permitted
to be taken hereunder by any party shall be subject to satisfaction of the
Rating Agency Condition.
SECTION 11.18 WAIVER OF NOTICE AND OPINIONS. The Trustee hereby waives
the following requirements of Section 5.10 of the Agreement: (i) that the
Trustee receive at least 30 days prior written notice from the Company of the
issuance of this Supplement and the VFC Certificate, (ii) that the Company
deliver to the Trustee a Tax Opinion (as defined in the Agreement) addressed to
the Trustee and the Trust and (iii) that the Company deliver to the Trustee a
General Opinion (as defined in the Agreement) addressed to the Trustee and the
Trust.
51
IN WITNESS WHEREOF, the Company, the Servicer, the Trustee, the
Administrator, and the Committed Purchaser have caused this Series 2004-1
Supplement to be duly executed by their respective officers as of the day and
year first above written.
USS RECEIVABLES COMPANY, LTD.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: XXXXX X. XXXXXX
Title: TREASURER
UNITED STATIONERS FINANCIAL SERVICES
LLC, as Servicer,
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: XXXXX X. XXXXXX
Title: TREASURER
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Trustee,
By: /s/ Xxxx X. Xxxx
-------------------------------------
Name: Xxxx X. Xxxx
Title: Attorney-In-Fact
FIFTH THIRD BANK,
as Committed Purchaser and as
Administrator,
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
S-1
EXHIBIT A
TO SERIES 2004-1
SUPPLEMENT
UNITED STATIONERS RECEIVABLES MASTER TRUST
VFC CERTIFICATE, SERIES 2004-1
REGISTERED
NO. VFC- 1
THIS VFC CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (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, REFERRED TO HEREIN.
This VFC Certificate evidences a fractional undivided interest in the
assets of the
UNITED STATIONERS RECEIVABLES MASTER TRUST
the corpus of which consists of receivables representing amounts payable for
merchandise or services, which receivables have been purchased by USS
Receivables Company, Ltd., a Cayman Islands limited liability company, which in
turn transferred and assigned such receivables to the United Stationers
Receivables Master Trust.
Exhibits Page 1
This certifies that
FIFTH THIRD BANK
(the "VFC CERTIFICATEHOLDER") is the registered owner of a fractional undivided
interest in the assets of the United Stationers Receivables Master Trust (the
"TRUST"), created pursuant to the Second Amended and Restated
Pooling Agreement
dated as of March 28, 2003 (as may from time to time be amended, restated,
supplemented or otherwise modified, the "
POOLING AGREEMENT"), by and among USS
Receivables Company, Ltd., a Cayman Islands limited liability company (the
"COMPANY"), United Stationers Financial Services LLC, an Illinois limited
liability company ("USFS"), as servicer, and XX Xxxxxx Trust Company (as
successor in interest to Bank One, NA (Main Office Chicago), not in its
individual capacity but solely as trustee (in such capacity, the "TRUSTEE") for
the Trust, as supplemented by the Series 2004-1 Supplement, dated as of March
25, 2004 (as amended, supplemented or otherwise modified from time to time, the
"SUPPLEMENT", collectively, with the
Pooling Agreement, the "AGREEMENT"), by and
among the Company, USFS, as servicer (except where otherwise noted therein),
Fifth Third Bank (Chicago), National Association, a national banking
association, as administrator for the Fifth Third Conduit Program and as
committed purchaser, and the Trustee. The corpus of the Trust consists of
receivables (the "RECEIVABLES") representing amounts payable for merchandise 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 XX Xxxxxx Trust Company, 000 X. Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Global Corporate Trust Services. 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.
USFS, the Company, each VFC Certificateholder and the Trustee intend,
for federal, state and local income and franchise tax purposes only, the VFC
Certificates to be evidence of indebtedness of the Company secured by the
Receivables. The VFC Certificateholder, by virtue of the acceptance hereof,
assents and is bound by such intent.
This VFC Certificate is one in a Series of Investor Certificates
entitled "United Stationers Receivables Master Trust, VFC Certificates, Series
2004-1" (the "VFC CERTIFICATES") representing a fractional undivided interest in
the Trust including the right to receive (i) the Invested Percentage (expressed
as a decimal) of Collections received with respect to the Receivables and all
other funds on deposit in the Collection Account and (ii) all other funds on
deposit in the Series
Exhibits Page 2
Collection Subaccounts and any subaccounts thereof (collectively, the "VFC
CERTIFICATEHOLDERS' INTEREST"). The Trust's assets are allocated in part to the
VFC Certificateholders and to the Company as owner of the right to receive
Collections allocated to the VFC Certificateholders' Interest and not required
to be distributed to or for the benefit of the Purchasers (the "SERIES 2004-1
SUBORDINATED INTEREST") with the remainder allocated to the Certificateholders
of other Series of Investor Certificates and to the Company (the "EXCHANGEABLE
COMPANY INTEREST"). The Company may, in accordance with the procedures set forth
in the Agreement, request an adjustment of the Exchangeable Company Interest 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
2004-1 Subordinated Interest or one or more newly issued Series of Investor
Certificates and the related newly created Series 2004-1 Subordinated Interest,
if any.
Interest on and principal of the Purchaser Invested Amount shall be
distributed to the VFC Certificateholder at the times, and in the amounts set
forth in the Agreement. Distributions with respect to this VFC Certificate shall
be paid by the Trustee in immediately available funds to the VFC
Certificateholder at the office of the Administrator by wire transfer provided
by the Trustee. 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.
This VFC Certificate does not represent an obligation of, or an
interest in, the Company, USFS 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.
The Company, the Trustee, the Paying Agent, the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name this
VFC Certificate is registered as the owner hereof for all purposes.
It is expressly understood and agreed by the Company and the VFC
Certificateholder that (a) 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, (b) the
representations, undertakings and agreements made on the part of the Trustee 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, (c) nothing herein contained shall be
construed as creating any liability of the Trustee, individually or personally,
to
Exhibits Page 3
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 willful misconduct or 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 (d) 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 2004-1 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 rights of the holder of this
VFC Certificate or the obligations of the Company, USFS 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.
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.
Exhibits Page 4
IN WITNESS WHEREOF, the Company has caused this VFC Certificate to be
duly executed and delivered.
Dated: March 25, 2004
USS RECEIVABLES COMPANY, LTD., as
authorized pursuant to Section 5.1 of
the Agreement
By:
-------------------------------------
Title
Exhibits Page 5
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the VFC Certificates described in the within-mentioned
Agreement.
XX XXXXXX TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: OR By:
------------------------------------- --------------------------
Authorized Signatory Authenticating Agent
By:
-------------------------
Authorized Signatory
Exhibits Page 6
Schedule I
to VFC
Certificate
INCREASE IN DECREASE IN
SERIES 2004-1 SERIES 2004-1 SERIES 2004-1
INVESTED INVESTED INVESTED NOTATION
DATE AMOUNT AMOUNT AMOUNT MADE BY
Exhibits Page 7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF
------------------------------------------------- ASSIGNEE(S):
-------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
------------------------------------------------------
------------------------------------------------------
the within certificate and all rights thereunder,
and hereby irrevocably constitutes and appoints
------------------------------------------------------
attorney, with full power of substitution in the premises, to transfer said
certificate on the books kept for registration thereof.
Dated: _______________________________
Note: The signature(s) to this
Assignment must correspond with the
name(s) as written on the face of the
within certificate in every particular,
without alteration or enlargement or any
change whatever.
(1) A Non-U.S. Person as defined in the Internal Revenue Code of 1986, as
amended the "CODE") must certify to the Trustee in writing as to its
Non-U.S. Person status and such further information as may be required
under the Code or reasonably requested by the Trustee.
Exhibits Page 8
EXHIBIT B
TO SERIES 2004-1
SUPPLEMENT
FORM OF [ASSIGNMENT] [PARTICIPATION] CERTIFICATION
XX Xxxxxx Trust Company
000 X. Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTENTION: ASSET BACKED FINANCE
Ladies and Gentlemen:
In connection with our proposed entrance into a[n] [assignment]
[participation] (the "Participation") in respect of the VFC Certificate held by
[Name of Purchaser] (the ["Participation"] ["Assignment"]), and pursuant to the
provisions of the Second Amended and Restated
Pooling Agreement, dated as of
March 28, 2003, by and among XX Xxxxxx Trust Company (as successor in interest
to Bank One, NA (Main Office Chicago)), as Trustee (in such capacity, the
"Trustee"), and USS Receivables Company, Ltd. (the "Company") and United
Stationers Financial Services LLC ("USFS"), as servicer, and the
Certificateholders thereto (the "
Pooling Agreement"; capitalized terms used
herein and not otherwise defined are used as defined in the
Pooling Agreement),
and the Series 2004-1 Supplement, dated as of March 25, 2004 among the Company,
USFS, as servicer (except where otherwise noted therein), the Trustee and the
Committed Purchasers from time to time parties thereto (the "Supplement"), we
confirm that:
1. Certain terms of the [Assignment] [Participation] are as follows:
(1) The effective date of the [Assignment] [Participation] is
___________, _______.
(2) The expected maturity date of the [Assignment]
[Participation] is _____________.
(3) The portion of the VFC Certificate and commitment under the
Supplement being [assigned] [participated] is _____%.
2. We have acquired the [Assignment] [Participation] described
herein for our own account and we are and will remain the sole beneficial owner
of such [Assignment] [Participation], and any interest therein, at all times.
3. We understand that we may not at any time grant any assignment]
Exhibits Page 9
[participation] or other interest in the [Assignment] [Participation] or
otherwise subdivide our interest therein, and we further understand that we
may not sell, assign, trade, pledge or otherwise transfer the [Assignment]
[Participation] except in accordance with and to the extent permitted under
Section 11.10 or 11.11 of the Supplement or 2.6 of the
Pooling Agreement.
4. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment in
the VFC Certificate and are able to bear the economic risk of such investment.
We have, independently and without reliance upon the Administrator or any other
Committed Purchaser, and based on such documents and information as we have
deemed appropriate, made our own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Trust, the Company and USFS and made our own decision to
purchase our interest in the VFC Certificate, and will, independently and
without reliance upon the Administrator or any other Committed Purchaser, and
based on such documents and information as we shall deem appropriate at the
time, continue to make our own analysis, appraisals and decisions in taking or
not taking action under the Supplement and the Pooling Agreement, and to make
such investigation as we deem necessary to inform our self as to the business,
operations, property, financial and other condition and creditworthiness of the
Trust, the Company and USFS. We are an "accredited investor", as defined in Rule
501, promulgated by the SEC under the Securities Act and a "qualified
institutional investor," as defined in Rule 144A, promulgated by the SEC under
the Securities Act. We understand that the offering and sale of the VFC
Certificate has not been and will not be registered under the Securities Act and
has not and will not be registered or qualified under any applicable "blue sky"
law, and that the offering and sale of the VFC Certificate has not been reviewed
by, passed on or submitted to any federal or state agency or commission,
securities exchange or other regulatory body. We are acquiring an interest in
the VFC Certificate without a view to any distribution, resale or other transfer
thereof except as contemplated in the following sentence. In addition to the
foregoing, we will not resell or otherwise transfer any interest or
participation in the VFC Certificate, except in accordance with Section 11.11 of
the Supplement. In connection therewith, we hereby agree that we will not resell
or otherwise transfer the VFC Certificate or any interest therein unless the
purchaser thereof provides to the addressee hereof a letter substantially in the
form hereof.
[7. [The VFC Certificate to be held by us will be deemed to be held
beneficially by a single person for purposes of the 1940 Act.] [The VFC
Certificate to be held by us will be deemed to be held beneficially by a total
of ____________ persons for purposes of the 1940 Act.]](1)
----------
(1) To be included in assignments only.
Exhibits Page 10
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[ASSIGNEE] [PARTICIPANT]
By:
-------------------------------------
Name:
Title:
Exhibits Page 11
EXHIBIT C
TO SERIES 2004-1
SUPPLEMENT
FORM OF NOTICE OF INCREASE
------------, -----------
[Name and Address of
the Administrator]
Telecopier:
Attention:
Ladies and Gentlemen:
Reference is hereby made to the Series 2004-1 Supplement, dated as of
March 25, 2004, (as may from time to time be amended, modified or supplemented,
the "SUPPLEMENT"), among USS Receivables Company, Ltd. (the "COMPANY"), United
Stationers Financial Services, LLC ("USFS"), as servicer (except where otherwise
noted therein), Fifth Third Bank, as committed purchaser ("COMMITTED
PURCHASER"), and XX Xxxxxx Trust Company, as Trustee (in such capacity, the
"TRUSTEE"), and to the Second Amended and Restated Pooling Agreement, dated as
of March 28, 2003 (as may from time to time be amended, modified or
supplemented, the "POOLING AGREEMENT") among the Company, USFS, and the Trustee.
Capitalized terms used in this Notice of Increase and not otherwise defined
herein shall have the meanings assigned thereto in the Supplement.
This letter constitutes the notice required in connection with any
Increase pursuant to subsection 2.5(a) of the Supplement.
USFS, on behalf of the Company, and the Company hereby request that an
Increase be made by the Committed Purchaser on _____________, _____ in the
aggregate amount of $_____________.
The Servicer hereby represents and warrants as of the date of such
Increase after giving effect thereto, the conditions set forth in subsections
2.5(a) and (c) of the Supplement with respect to such Increase have been
satisfied.
Exhibits Page 12
IN WITNESS WHEREOF, the undersigned has caused this notice to be
executed by its duly authorized officers as of the date first above written on
behalf of the Company or USFS, as applicable, and not individually.
UNITED STATIONERS FINANCIAL SERVICES,
LLC, as Servicer
By:
-------------------------------------
Name:
Title:
USS RECEIVABLES COMPANY, LTD.
By:
-------------------------------------
Name:
Title:
Exhibits Page 13
EXHIBIT C-1
TO SERIES 2004-1
SUPPLEMENT
FORM OF NOTICE OF DECREASE
------------, -----------
[Name and Address of
the Administrator]
Telecopier:
Attention:
Ladies and Gentlemen:
Reference is hereby made to the Series 2004-1 Supplement, dated as of
March 25, 2004, (as may from time to time be amended, modified or supplemented,
the "SUPPLEMENT"), among USS Receivables Company, Ltd. (the "COMPANY"), United
Stationers Financial Services, LLC ("USFS"), as servicer (except where otherwise
noted therein), Fifth Third Bank, as committed purchaser ("COMMITTED
PURCHASER"), and XX Xxxxxx Trust Company, as Trustee (in such capacity, the
"TRUSTEE"), and to the Second Amended and Restated Pooling Agreement, dated as
of March 28, 2003 (as may from time to time be amended, modified or
supplemented, the "POOLING AGREEMENT") among the Company, USFS, and the Trustee.
Capitalized terms used in this Notice of Decrease and not otherwise defined
herein shall have the meanings assigned thereto in the Supplement.
This letter constitutes the notice required in connection with any
Decrease pursuant to subsection 2.7(a) of the Supplement.
USFS, on behalf of the Company, and the Company hereby request that a
Decrease in the Series 2004-1 Invested Amount be made on ____________, ______ in
the aggregate amount of $_____________ by the distribution of such amount by the
Servicer to the Committed Purchaser, in accordance with its Series 2004-1
Purchaser Invested Amount from funds on deposit in the Series 2004-1 Collection
Subaccount. The Decrease will be made in available funds (by 12:00 noon Chicago
time) to [specify account number]. After giving effect to the Decrease requested
hereby, the aggregate Series 2004-1 Invested Amount is $_______________.
Exhibits Page 14
IN WITNESS WHEREOF, the undersigned has caused this notice to be
executed by its duly authorized officers as of the date first above written on
behalf of the Company or USFS, as applicable, and not individually.
UNITED STATIONERS FINANCIAL SERVICES,
LLC, as Servicer
By:
-------------------------------------
Name:
Title:
USS RECEIVABLES COMPANY, LTD.
By:
-------------------------------------
Name:
Title:
Exhibits Page 15
EXHIBIT D
TO SERIES 2004-1
SUPPLEMENT
FORM OF MONTHLY SETTLEMENT REPORT
[As agreed between Fifth Third and the Servicer]
Exhibits Page 16
EXHIBIT E
TO SERIES 2004-1
SUPPLEMENT
FORM OF COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of ________ ___, 200_ among
[COMMITTED PURCHASER] (the "TRANSFEROR"), each purchaser listed as an Acquiring
Purchaser on the signature pages hereof (each, an "ACQUIRING PURCHASER"), [IF
ANY ACQUIRING PURCHASER IS NOT AN EXISTING PURCHASER OR AN AFFILIATE: USS
RECEIVABLES COMPANY, LTD., a Cayman Islands limited liability company (the
"COMPANY"), UNITED STATIONERS FINANCIAL SERVICES, LLC, an Illinois limited
liability company on ("USFS")] and FIFTH THIRD BANK, as Administrator (in such
capacity, the "ADMINISTRATOR"), for the Committed Purchasers under the
Supplement described below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Commitment Transfer Supplement is being executed and
delivered in accordance with subsection 11.11(b) of the Series 2004-1
Supplement, dated as of March 25, 2004 (as may from time to time be amended,
supplemented or otherwise modified in accordance with the terms thereof, the
"SUPPLEMENT"; terms defined therein being used herein as therein defined), among
the Company, USFS, Fifth Third Bank, as the Initial Purchaser, the Transferor,
the other Committed Purchasers from time to time parties thereto, and XX Xxxxxx
Trust Company, as the Trustee (in such capacity, the "TRUSTEE"), and the Second
Amended and Restated Pooling Agreement, dated as of March 28, 2003 (as may from
time to time be amended, supplemented or otherwise modified, the "POOLING
AGREEMENT"), among the Company, USFS and the Trustee;
WHEREAS, each Acquiring Purchaser (if it is not already an existing
Committed Purchaser) wishes to become Committed Purchaser party to the
Supplement; and
WHEREAS, the Transferor is selling and assigning to each Acquiring
Purchaser, rights, obligations and commitments under the Supplement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
5. Upon the execution and delivery of this Commitment Transfer
Supplement by each Acquiring Purchaser, [IF ANY ACQUIRING PURCHASER IS NOT THEN
AN EXISTING PURCHASER OR AN AFFILIATE: the Company, USFS,] and the Transferor
(the date of such execution and delivery, the "TRANSFER ISSUANCE DATE"), each
Acquiring Purchaser
Exhibits Page 17
shall be an Committed Purchaser party to the Supplement for all purposes
thereof.
6. The Transferor acknowledges receipt from each Acquiring Purchaser
of an amount equal to the purchase price, as agreed between the Transferor and
such Acquiring Purchaser (the "PURCHASE PRICE"), of the portion being purchased
by such Acquiring Purchaser (such Acquiring Purchaser's "PRO RATA SHARE") of the
Transferor's Series 2004-1 Purchaser Invested Amount. The Transferor hereby
irrevocably sells, assigns and transfers to each Acquiring Purchaser, without
recourse, representation or warranty, and each Acquiring Purchaser hereby
irrevocably purchases, takes and assumes from the Transferor, such Acquiring
Purchaser's Pro Rata Share of the Transferor's Series 2004-1 Purchaser Invested
Amount.
7. The Transferor has made arrangements with each Acquiring
Purchaser with respect to (i) the portion, if any, to be paid, and the date or
dates for payment, by the Transferor to such Acquiring Purchaser of any
Commitment Fees heretofore received by the Transferor pursuant to the Supplement
prior to the Transfer Issuance Date and (ii) the portion, if any, to be paid,
and the date or dates for payment, by such Acquiring Purchaser to the Transferor
of Commitment Fees or Series 2004-1 Monthly Interest received by such Acquiring
Purchaser pursuant to the Supplement from and after the Transfer Issuance Date.
8. From and after the Transfer Issuance Date, amounts that would
otherwise be payable to or for the account of the Transferor pursuant to the
Supplement shall, instead, be payable to or for the account of the Transferor
and the Acquiring Purchasers, as the case may be, in accordance with their
respective interests as reflected in this Commitment Transfer Supplement,
whether such amounts have accrued prior to the Transfer Issuance Date or accrue
subsequent to the Transfer Issuance Date.
9. Prior to or concurrently with the execution and delivery hereof,
the Administrator will, at the expense of the Transferor, provide to each
Acquiring Purchaser (if it is not already an existing Committed Purchaser party
to the Supplement) photocopies of all documents delivered to the Administrator
on the Issuance Date in satisfaction of the conditions precedent set forth in
the Supplement.
10. Each of the parties to this Commitment Transfer Supplement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Commitment Transfer Supplement.
11. By executing and delivering this Commitment Transfer Supplement,
the Transferor and each Acquiring Purchaser confirm to and agree with each other
as follows: (i) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned hereby free and clear of any
adverse claim, the Transferor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Supplement or the execution,
Exhibits Page 18
legality, validity, enforceability, genuineness, sufficiency or value of the
Supplement, the Pooling Agreement, the VFC Certificate, Series 2004-1 or any
instrument or document furnished pursuant thereto; (ii) the Transferor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Trust, the Company or USFS or the performance or
observance by the Trust, the Company or USFS of any of their obligations under
the Supplement, the Pooling Agreement or any other instrument or document
furnished pursuant hereto; (iii) each Acquiring Purchaser confirms that it has
received a copy of the Supplement, the Pooling Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Commitment Transfer Supplement; (iv)
each Acquiring Purchaser will, independently and without reliance upon the
Administrator, the Transferor or any other Committed 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 the
Supplement and the Pooling Agreement; and (v) each Acquiring Purchaser agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Supplement are required to be performed by it as an
Committed Purchaser. Schedule I hereto sets forth the revised Pro Rata Shares of
the Transferor and each Acquiring Purchaser as well as administrative
information with respect to each Acquiring Purchaser.
12. This Commitment Transfer Supplement shall be governed by, and
construed in accordance with, the laws of the State of
New York.
Exhibits Page 19
IN WITNESS WHEREOF, the parties hereto have caused this Commitment
Transfer Supplement to be executed by their respective duly authorized officers
as of the date first set forth above.
[NAME OF SELLING COMMITTED
PURCHASER], as
Transferor
By:
------------------------------
Title:
[NAME OF ACQUIRING PURCHASER], as
Acquiring Purchaser
By:
------------------------------
Title:
FIFTH THIRD BANK, as
Administrator
By:
------------------------------
Title:
[IF NECESSARY:
CONSENTED AND ACKNOWLEDGED:
USS RECEIVABLES COMPANY, LTD.
By:
------------------------------
Title:
Exhibits Page 20
SCHEDULE I
LIST OF ADDRESSES FOR NOTICES
AND OF COMMITMENT PERCENTAGES
FIFTH THIRD BANK, as
Administrator
Fifth Third Bank
00 Xxxxxxxx Xxxxxx Xxxxx
M.D. 109047
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxx
Telecopier: 000-000-0000
[TRANSFEROR]
Address:
Prior Pro Rata Share:
Revised Pro Rata Share:
[ACQUIRING PURCHASER]
Address:
[Prior] Pro Rata Share:
[Revised Pro Rata Share:]
Exhibits Page 21
Schedule 1
LIST OF COMMITMENTS
Name of Committer Purchaser Commitment
--------------------------- ----------
Fifth Third Bank $ 25,000,000
Sch. 1-1
Schedule 2
Lockbox Agreements
PNC Bank
--------
Xxxxxxx Xxxxxx 000000 Xxxxxxxxxxxx, Xxxxxxxxxxxx
Lockbox Number 910284 Pasadena, California
Xxxxxxx Xxxxxx 000000 Xxxxxxx, Xxxxxxxx
Lockbox Number 676502 Dallas, Texas
Lockbox Account Number 0000000
US Bank
-------
Lockbox Number 952418 St. Louis, Missouri
Lockbox Account Number 152302004717
Sch. 2-1
