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WESCO RECEIVABLES CORP.
as Company,
WESCO DISTRIBUTION, INC.
as Servicer,
THE CHASE MANHATTAN BANK,
as Funding Agent,
PARK AVENUE RECEIVABLES CORPORATION,
as Initial Purchaser
THE CHASE MANHATTAN BANK,
as an APA Bank
and
THE CHASE MANHATTAN BANK,
as Trustee
-------------------------
SERIES 1998-1 SUPPLEMENT
Dated as of June 5, 1998
to
POOLING AGREEMENT
Dated as of June 5, 1998
-------------------------
WESCO RECEIVABLES MASTER TRUST
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions............................................... 2
ARTICLE II
DESIGNATION OF CERTIFICATES; PURCHASE AND SALE
OF THE VFC CERTIFICATES
SECTION 2.1 Designation............................................... 25
SECTION 2.2. The Series 1998-1 Interests............................... 25
SECTION 2.3. Purchases of Interests in the VFC Certificates............ 25
SECTION 2.4. Delivery.................................................. 26
SECTION 2.5. Procedure for Initial Issuance and for Increasing the
Series 1998-1 Invested Amount............................. 26
SECTION 2.6. Sale by the Initial Purchaser of its Series 1998-1
Purchaser Invested Amount to the APA Banks................ 29
SECTION 2.7. Procedure for Decreasing the Series 1998-1 Invested Amount;
Optional Termination...................................... 31
SECTION 2.8. Reductions of the Commitments............................. 32
SECTION 2.9. Interest; Fees............................................ 33
SECTION 2.10. Indemnification by the Company and the Servicer........... 34
ARTICLE III
ARTICLE III OF THE AGREEMENT
SECTION 3A.2. Establishment of Trust Accounts........................... 35
SECTION 3A.3. Daily Allocations. ....................................... 37
SECTION 3A.4. Determination of Interest................................. 39
SECTION 3A.5. Determination of Series 1998-1 Monthly Principal.......... 41
SECTION 3A.6. Applications.............................................. 42
ARTICLE IV
DISTRIBUTIONS AND REPORTS
SECTION 4A.1. Distributions............................................. 44
SECTION 4A.2. Reports................................................... 44
SECTION 4A.3. Statements and Notices.................................... 44
ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS
SECTION 5.1. Additional Early Amortization Events...................... 45
ARTICLE VI
SERVICING FEE
SECTION 6.1. Servicing Compensation.................................... 49
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION 7.1. Illegality................................................ 49
SECTION 7.2. Increased Costs........................................... 49
SECTION 7.3. Taxes..................................................... 51
SECTION 7.4. Break Funding Payments.................................... 54
SECTION 7.5. Alternate Rate of Interest................................ 54
SECTION 7.6. Mitigation Obligations.................................... 55
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES, COVENANTS
SECTION 8.1. Representations and Warranties of the Company and the
Servicer.................................................. 56
SECTION 8.2. Covenants of the Company and the Servicer................. 56
SECTION 8.3. Covenants of the Servicer................................. 57
SECTION 8.4. Representations and Warranties of the APA Banks and any
Acquiring APA Bank........................................ 57
SECTION 8.5. Obligations Unaffected.................................... 58
ARTICLE IX
CONDITIONS PRECEDENT
SECTION 9.1. Conditions Precedent to Effectiveness of Supplement....... 58
ARTICLE X
THE FUNDING AGENT
SECTION 10.1. Appointment............................................... 62
SECTION 10.2. Delegation of Duties...................................... 62
SECTION 10.3. Exculpatory Provisions.................................... 62
SECTION 10.4. Reliance by Funding Agent................................. 63
SECTION 10.5. Notice of Servicer Default or Early Amortization Event or
Potential Early Amortization Event........................ 63
SECTION 10.6. Non-Reliance on the Funding Agent and Other Purchasers.... 64
SECTION 10.7. Indemnification........................................... 64
SECTION 10.8. The Funding Agent in Its Individual Capacity.............. 65
SECTION 10.9. Successor Funding Agent................................... 65
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Agreement................................. 65
SECTION 11.2. Governing Law............................................. 65
SECTION 11.3. Further Assurances........................................ 66
SECTION 11.4. Payments.................................................. 66
SECTION 11.5. Costs and Expenses........................................ 66
SECTION 11.6. No Waiver; Cumulative Remedies............................ 66
SECTION 11.7. Amendments................................................ 67
SECTION 11.8. Severability.............................................. 68
SECTION 11.9. Notices................................................... 68
SECTION 11.10. Successors and Assigns.................................... 69
SECTION 11.11. Participations; Assignments............................... 69
SECTION 11.12. Adjustments; Set-off...................................... 73
SECTION 11.13. Counterparts.............................................. 74
SECTION 11.14. No Bankruptcy Petition.................................... 74
SECTION 11.15. Limitation on Addition and Termination of Sellers......... 74
ARTICLE XII
FINAL DISTRIBUTIONS
SECTION 12.1. Certain Distributions..................................... 76
EXHIBITS
Exhibit A Form of VFC Certificate, Series 1998-1
Exhibit B [Reserved]
Exhibit C Form of Commitment Transfer Supplement
Exhibit D Form of Daily Report
Exhibit E Form of Monthly Settlement Statement
Exhibit F Form of Notice of Increase
Exhibit G Form of Participation Certification
Exhibit H Form of U.C.C. Certificate
SCHEDULES
Schedule 1 Commitments
Schedule 2 Trust Accounts
Schedule 3 Default Ratio Trigger
SERIES 1998-1 SUPPLEMENT, dated as of June 5, 1998 (as amended,
supplemented or otherwise modified from time to time, this "Supplement"), among
WESCO Receivables Corp., a Delaware corporation (the "Company"), WESCO
Distribution, Inc., a Delaware corporation ("WESCO"), as servicer (except where
otherwise noted) (in such capacity, the "Servicer"), Park Avenue Receivables
Corporation, a Delaware corporation (including its successors and assigns and
excluding, however, the APA Banks as assignees pursuant to Section 2.6, the
"Initial Purchasers"), the several banks or financial institutions parties to
this Supplement as of the Issuance Date and the other banks or financial
institutions from time to time parties hereto pursuant to Section 11.11(b)
(collectively, the "APA Banks"; each, individually, an "APA Bank"), The Chase
Manhattan Bank, a New York banking corporation ("Chase"), in its capacity as
Funding Agent (the "Funding Agent"), and The Chase Manhattan Bank, in its
capacity as Trustee (the "Trustee") under the Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the Company, the Servicer and the Trustee have entered into
a Pooling Agreement, dated as of June 5, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Agreement");
WHEREAS, the Agreement provides, among other things, that the
Company, the Servicer and the Trustee may at any time and from time to time
enter into supplements to the Agreement for the purpose of authorizing the
issuance on behalf of the Trust by the Company for execution and redelivery to
the Trustee for authentication of one or more Series of Investor Certificates;
and
WHEREAS, the Company, the Servicer, the Trustee, the Funding Agent,
the Initial Purchaser and the APA Banks wish to supplement the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. (a) The following words and phrases shall
have the following meanings with respect to Series 1998-1 and the definitions of
such terms are applicable to the singular as well as the plural form of such
terms and to the masculine as well as the feminine and neuter genders of such
terms:
"ABR": shall mean, for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Reference Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Reference Rate" shall mean
the rate of interest per annum publicly announced (or, if not announced
publicly, quoted internally) from time to time by the Funding Agent as its
reference rate in effect at its principal office in New York, New York;
"Base CD Rate"
2
shall mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the C/D Reserve Percentage and (b) the
C/D Assessment Rate; "Three-Month Secondary CD Rate" shall mean, for any
day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.15(519) during the week following
such day), or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Funding Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it; and "Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day of such
transactions received by the Funding Agent from three federal funds
brokers of recognized standing selected by it. Any change in the ABR due
to a change in the Reference Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Reference Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Accrual Period" shall mean the period from and including a
Distribution Date, or, in the case of the initial Accrual Period, the
Issuance Date, to but excluding the succeeding Distribution Date.
"Accrued Expense Amount" shall mean, for each Business Day during an
Accrual Period, the sum of (i) the Daily Interest Deposit for such
Business Day, (ii) the Daily Commitment Fee Deposit for such Business Day,
(iii) the Daily Facility Fee Deposit for such Business Day, (iv) the Daily
Servicing Fee Deposit for such Business Day, (v) any fees or other amounts
due in connection with the purchase of the Required Currency Hedge and
(vi) all Program Costs which have accrued since the preceding Business
Day.
"Acquiring APA Bank" shall have the meaning assigned in subsection
11.11(b).
"Additional Interest" shall have the meaning assigned in subsection
3A.4(b).
"Adjusted Liquidity Price" shall mean, in determining the Purchase
Price of the Initial Purchaser's Series 1998-1 Purchaser Invested Amount
on the APA Bank Purchase Date, an amount equal to:
PI [OC + (NDR/1.05)]
where:
3
PI = the Invested Percentage on the APA Bank Purchase
Date;
OC = the sum of (i) any and all amounts due and owing
to the Company in respect of Seller Repurchase
Payments and Seller Adjustment Payments pursuant
to the Transaction Documents and (ii) (without
duplication) any and all amounts due and owing to
the Trust as Transfer Deposit Amounts pursuant to
Section 2.5(b) of the Pooling Agreement on the APA
Bank Purchase Date; and
NDR = the aggregate outstanding Principal Amount of all
Receivables, that are not Defaulted Receivables.
Each of the foregoing shall be determined from the most recent Daily
Report received from the Servicer.
"Aged Receivables Ratio" shall mean, as of the last day of each
Settlement Period, the percentage equivalent of a fraction, (i) the
numerator of which shall be the sum of (A) the aggregate unpaid balance of
Receivables, other than Construction Receivables and BEAR Receivables,
that were 121-150 days past their respective original invoice dates as of
such last day plus the aggregate unpaid balance of Construction
Receivables that were 151-180 days past their respective original invoice
dates as of such last day plus the aggregate unpaid balance of BEAR
Receivables that were 91-120 days past their respective original invoice
dates as of such last day, and (B) the aggregate amount of Receivables of
the Sellers which were charged off as uncollectible prior to the day which
is, in the case of Receivables other than Construction Receivables and
BEAR Receivables, 121 days after their respective original invoice dates
and, in the case of BEAR Receivables, 91 days after their respective
original invoice dates and, in the case of Construction Receivables, 151
days after their respective original invoice dates, in each case during
such Settlement Period, and (ii) the denominator of which shall be the
aggregate Principal Amount of Receivables other than BEAR Receivables and
Construction Receivables originated by the Sellers during the fourth prior
Settlement Period (excluding the Settlement Period ended on such day) plus
the aggregate Principal Amount of BEAR Receivables originated by the
Sellers during the third prior Settlement Period (excluding the Settlement
Period ended on such day) plus the aggregate Principal Amount of
Construction Receivables originated by the Sellers during the fifth prior
Settlement Period (excluding the Settlement Period ended on such day).
"Agent" shall mean the Funding Agent.
"Aggregate Commitment Amount" shall mean, with respect to any day,
the aggregate amount of the Commitments of all APA Banks on such day, as
reduced from time to time pursuant to Section 2.8.
"APA Banks" shall have the meaning specified in the recitals hereto.
4
"APA Bank Purchase Date" shall mean either the date of the Purchase
or, if the APA Banks fund the Series 1998-1 Invested Amount on the
Issuance Date pursuant to Section 2.3, the Issuance Date.
"Applicable Margin" shall mean on any date of determination (i) for
each Eurodollar Tranche, 2.25% per annum, (ii) for each Floating Tranche,
1.25% per annum or (iii) if the APA Banks are obligated to purchase, and
have so purchased, all right, title and interest of the Initial Purchaser
in its Series 1998-1 Purchaser Invested Amount due to the occurrence of a
PARCO Wind-Down Event described in clauses (ii), (iii) or (iv) of the
definition thereof, other than an event described in (ii) or (iv) which is
directly attributable to the Initial Purchaser's investment in the VFC
Certificates (a) for each Eurodollar Tranche, 1.50% per annum, or (b) for
each Floating Tranche, 0.75% per annum.
"Article VII Costs" shall mean any amounts due pursuant to Article
VII.
"Assignment/Participation Certification" shall mean an assignment or
participation certification, as the case may be, in substantially the form
of Exhibit G hereto.
"Available Pricing Amount" shall mean, on any Business Day, the sum
of (i) the Unallocated Balance plus (ii) the Increase, if any, on such
date.
"Base Daily Interest Expense" shall mean (i) for any day prior to
the APA Bank Purchase Date in any Accrual Period, the product of (A) the
Series 1998-1 Invested Amount divided by 360 and (B) the CP Rate for such
day and (ii) for the APA Bank Purchase Date and any day thereafter in any
Accrual Period, the sum of (A) the product of (x) the sum of (a) the
portion of the Series 1998-1 Invested Amount (calculated with respect to
all APA Banks without regard to clauses (d) and (e) of the definition of
Series 1998-1 Purchaser Invested Amount) allocable to the Floating Tranche
on such day and (b) for any day during the period from and including the
APA Bank Purchase Date to but excluding the Distribution Date immediately
succeeding the APA Bank Purchase Date, divided by 365 (or 366, as the case
may be) and (y) the ABR plus the Applicable Margin in effect on such day,
(B) the product of (x) the portion of the Series 1998-1 Invested Amount
(calculated with respect to all Purchasers without regard to clauses (d)
and (e) of the definition of Series 1998-1 Purchaser Invested Amount)
allocable to Eurodollar Tranches on such day divided by 360 and (y) the
weighted average Eurodollar Rate plus the Applicable Margin on such day in
effect with respect thereto and (C) on the APA Bank Purchase Date, the
Unaccrued Discount Payment Amount; provided, however, that for any such
day during the continuance of an Early Amortization Period, the "Base
Daily Interest Expense" for such day shall be equal to the greater of (i)
the sum of the amounts calculated pursuant to clause (ii) above and (ii)
the product of (x) the Series 1998-1 Invested Amount on such day divided
by 365 (or 366, as the case may be) and (y) the ABR plus the Applicable
Margin in effect on such day plus 2.0%.
"Benefitted Purchaser" shall have the meaning assigned in Section
11.12.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States or any successor thereto.
5
"Carrying Cost Reserve Ratio" shall mean, as of any Settlement
Report Date and continuing until (but not including) the next Settlement
Report Date, an amount (expressed as a percentage) equal to (a) the
product of (i) 2.00 times Days Sales Outstanding as of such day and (ii)
1.3 times a rate per annum equal to the ABR plus the Applicable Margin as
of such earlier Settlement Report Date, divided by (b) 365 (or 366, as the
case may be).
"C/D Assessment Rate" shall mean for any day pertaining to a
Floating Tranche, the net annual assessment rate (rounded upwards, if
necessary, to the next 1/100 of 1%) in effect on such day that is payable
by a member of the Bank Insurance Fund classified as "well-capitalized"
and within supervisory subgroup "B" (or a comparable successor risk
classification) within the meaning of 12 C.F.R. Part 327 (or any successor
provision) to the Federal Deposit Insurance Corporation for insurance by
such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change
in any law, rule or regulation, it is no longer possible to determine the
Assessment Rate as aforesaid, then the Assessment Rate shall be such
annual rate as shall be determined by the Funding Agent to be
representative of the cost of such insurance to the APA Banks.
"C/D Reserve Percentage" for any day pertaining to a Floating
Tranche, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of
the Board) in respect of new negotiable non-personal time deposits in
Dollars of over $100,000 having a maturity of 30 days or more.
"Certificate Rate" shall mean, on any date of determination, the
weighted average (weighted based on the respective outstanding amounts of
the Floating Tranche and each Eurodollar Tranche) of the ABR in effect on
such day and the Eurodollar Rates in effect on such day plus, in each
case, the respective Applicable Margins.
"Change in Control" shall mean the occurrence of any event the
result of which causes the Company not to be a direct, wholly owned
Subsidiary of WESCO.
"Change in Law" shall mean (a) the adoption of any law, rule or
regulation after the Issuance Date, (b) any change in law, rule or
regulation or in the interpretation or application thereof by any
Governmental Authority after the Issuance Date or (c) compliance by any
Purchaser with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the
Issuance Date.
"Chase" shall have the meaning specified in the preamble hereto.
"Clean-Up Call Amount" shall mean the Clean-Up Call Percentage of
the maximum Series 1998-1 Invested Amount at any time during the Series
1998-1 Revolving Period.
"Clean-Up Call Percentage" shall mean 10%.
"Commercial Paper" shall mean the short-term promissory notes of the
Initial Purchaser issued in the United States commercial paper market.
6
"Commitment" shall mean, as to any APA Bank, its obligation to
purchase a VFC Certificate on the Issuance Date, to acquire the Initial
Purchaser's VFC Certificate and to maintain and, subject to certain
conditions, increase, its Series 1998-1 Purchaser Invested Amount, in each
case, in an aggregate amount not to exceed at any one time outstanding the
amount set forth opposite such APA Bank's name on Schedule 1 under the
caption "Commitment", as such amount may be reduced from time to time as
provided herein; collectively, as to all APA Banks, the "Commitments".
"Commitment Expiry Date" shall mean June 4, 2004 (as may be extended
for an additional 364 days from time to time in writing by PARCO, the
Funding Agent and the APA Banks).
"Commitment Fee" shall have the meaning assigned in subsection
2.9(b).
"Commitment Fee Rate" shall have the meaning assigned in the Fee
Letter.
"Commitment Percentage" shall mean, as to any APA Bank and as of any
date, the percentage equivalent of a fraction, the numerator of which is
such APA Bank's Commitment as set forth on Schedule 1 and the denominator
of which is the Aggregate Commitment Amount as of such date.
"Commitment Period" shall mean the period commencing on the Issuance
Date and terminating on the Commitment Termination Date.
"Commitment Reduction" shall have the meaning assigned in subsection
2.8(a).
"Commitment Termination Date" shall mean the earlier to occur of (i)
the date on which the Aggregate Commitment Amount 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(a).
"CP Rate" shall mean for any day the weighted average of the
interest rates (or if issued at a discount, the weighted average of the
rates, after converting to interest-bearing equivalents) on all
outstanding Commercial Paper issued by the Initial Purchaser to fund the
Initial Purchaser's Series 1998-1 Purchaser Invested Amount.
"CP Rate Period" shall mean, with respect to any CP Tranche, a
period of days not to exceed 60 days commencing on a Business Day selected
in accordance with subsection 3A.4(c); provided that if a CP Rate Period
would end on a day that is not a Business Day, such CP Rate Period shall
end on the next succeeding Business Day.
"CP Tranche" shall mean a portion of the Series 1998-1 Invested
Amount for which the Series 1998-1 Monthly Interest is calculated by
reference to a particular Discount and a particular CP Rate Period.
"Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of June 5, 1998, among WESCO, the several lenders from
time to time parties
7
thereto, and The Chase Manhattan Bank, as Administrative Agent, as the
same may be amended, supplemented or otherwise modified from time to time.
"Daily Commitment Fee Deposit" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Commitment Fee Expense for each
day since the preceding Business Day plus (ii) the aggregate amount of all
previously accrued Daily Commitment Fee Expense that has not yet been
deposited in the Series 1998-1 Non-Principal Collection Sub-subaccount.
"Daily Commitment Fee Expense" shall mean, (i) during the Series
1998-1 Revolving Period, for any day in any Accrual Period, the product of
(A) the excess of the Aggregate Commitment Amount over the aggregate
Series 1998-1 Purchaser Invested Amounts of the APA Banks on such day
multiplied by (B) the Commitment Fee Rate divided by 360, (ii) during the
Series 1998-1 Amortization Period, for any day prior to the APA Bank
Purchase Date in any Accrual Period, the product of (A) the Series 1998-1
Invested Amount on such day multiplied by (B) the Commitment Fee Rate
divided by 360 and (iii) during the Series 1998-1 Amortization Period, for
the APA Bank Purchase Date or any day thereafter in any Accrual Period,
zero.
"Daily Facility Fee Deposit" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Facility Fee Expense for each day
since the preceding Business Day plus (ii) the aggregate amount of all
previously accrued Daily Facility Fee Expense that has not yet been
deposited in the Series 1998-1 Non-Principal Collection Sub-subaccount.
"Daily Facility Fee Expense" shall mean, (i) for any day in any
Accrual Period prior to the APA Bank Purchase Date, the product of (A) (1)
for any day prior to the date on which the Series 1998-1 Amortization
Period commences, the Aggregate Commitment Amount on such day and (2) for
any day on which the Series ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Period commences and for
any day thereafter, the Series 1998-1 Invested Amount on such day, in each
case, multiplied by (B) the Facility Fee Rate divided by 360 and (ii) for
the APA Bank Purchase Date or any day thereafter in any Accrual Period,
zero.
"Daily Interest Deposit" shall mean, for any Business Day, an amount
equal to (i) the amount of Daily Interest Expense for each day since the
preceding Business Day plus (ii) the aggregate amount of all previously
accrued Daily Interest Expense that has not yet been deposited in the
Series 1998-1 Non-Principal Collection Sub-subaccount plus (iii) the
aggregate amount of all Additional Interest for each day since the
preceding Business Day.
"Daily Interest Expense" shall mean, for any Business Day, an amount
equal to (i) the amount of accrued and unpaid Base Daily Interest Expense
in respect of such day plus (ii) the aggregate amount of all previously
accrued and unpaid Base Daily Interest Expense plus (iii) the aggregate
amount of all accrued and unpaid Additional Interest.
"Daily 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
8
Fee Expense that has not yet been deposited in the Series 1998-1
Non-Principal Collection Sub-subaccount.
"Daily Servicing Fee Expense" shall mean, for any day in any Accrual
Period the Series 1998-1 Interests' pro rata portion (determined in
accordance with Section 6.1) of the Servicing Fee accruing for such day.
"Days Sales Outstanding" or "DSO" shall mean, in respect of (x) BEAR
Receivables, (y) Construction Receivables or (z) Receivables that are not
BEAR Receivables or Construction Receivables, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, the number of days equal to the product of (a) 91 and (b) the amount
obtained by dividing (i) the aggregate Principal Amount of such
Receivables referred to above in (x), (y) or (z), as the case may be, that
were Eligible Receivables as of the last day of the immediately preceding
Settlement Period by (ii) the aggregate Principal Amount of such
Receivables generated by the Sellers for the three Settlement Periods
immediately preceding such earlier Settlement Report Date.
"Decrease" shall have the meaning assigned in Section 2.7.
"Default Ratio" shall mean, as of the last day of each Settlement
Period, the percentage equivalent of a fraction, (i) the numerator of
which shall be the sum of (A) the aggregate unpaid balance of Receivables
that were 91-120 days past their original invoice dates as of such last
day, and (B) the aggregate amount of Receivables which were charged off as
uncollectible prior to the day which is 91 days after their respective
original invoice dates, and (ii) the denominator of which shall be the
aggregate Principal Amount of Receivables originated during the third
prior Settlement Period (excluding the Settlement Period ended on such
day).
"Defaulted Receivables" shall mean Receivables, other than
Construction Receivables and BEAR Receivables, that are not aged more than
121 days past their original invoice date plus the aggregate outstanding
Principal Amount of all Construction Receivables that are not aged more
than 151 days past their original invoice date plus the aggregate
outstanding Principal Amount of all BEAR Receivables that are not aged
more than 91 days past their original invoice date plus any Receivable,
other than a Construction Receivable or a BEAR Receivable, which becomes a
Charged-Off Receivable prior to 121 days past its original invoice date as
of the APA Bank Purchase Date plus any Construction Receivable which
becomes a Charged-Off Receivable prior to 151 days past its original
invoice date as of the APA Bank Purchase Date plus any BEAR Receivable,
which becomes a Charged-Off Receivable prior to 91 days past its original
invoice date as of the APA Bank Purchase Date plus the Aggregate Uncleared
Funds Amount; provided that for the purposes of computing the Principal
Amount of Receivables, Canadian Dollar Receivables shall be converted to
U.S. Dollars using the Valuation Price.
"Defaulting APA Bank" shall have the meaning assigned in subsection
2.6(c).
"Dilution Period" shall mean, in respect of (x) BEAR Receivables,
(y) Construction Receivables or (z) Receivables that are not BEAR
Receivables or Construction Receivables, as of any Settlement Report Date
and continuing until (but not
9
including) the next Settlement Report Date, the quotient of (i) the
product of (A) the aggregate Principal Amount of such Receivables referred
to above in (x), (y) or (z), as the case may be, which were originated by
the Sellers during the Settlement Period immediately preceding such
earlier Settlement Report Date and (B) one-thirtieth of Days Sales
Outstanding in respect of such Receivables and (ii) the Aggregate
Receivables Amount in respect of such Receivables as of the last day of
the Settlement Period preceding such earlier Settlement Report Date.
"Dilution Ratio" shall mean, for each Settlement Period, an amount
(expressed as a percentage) equal to the aggregate amount of Dilution
Adjustments made during such Settlement Period divided by the aggregate
Principal Amount of Receivables which were originated by the Sellers
during the preceding Settlement Period.
"Dilution Reserve Ratio" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, an amount (expressed as a percentage) which is calculated as
follows:
DRR = [(c * d) + [(e-d) * (e/d)]] * f
Where:
DRR = Dilution Reserve Ratio;
c = 2.0;
d = the average of the Dilution Ratio during the period of twelve
consecutive Settlement Periods ending prior to such earlier
Settlement Report Date;
e = the highest Dilution Ratio for any Settlement Period during
the period of twelve consecutive Settlement Periods ending
prior to such earlier Settlement Report Date; and
f = the Dilution Period.
"Discount" shall mean, with respect to any Commercial Paper, the
interest or discount component thereof.
"Early Amortization Event" shall have the meanings assigned in
Section 5.1 of this Supplement and Section 7.1 of the Agreement.
"Early Amortization Period" shall have the meaning assigned in
Section 5.1 of this Supplement and Section 7.1 of the Agreement.
"Effective Date" shall have the meaning assigned in Section 9.1.
"Eligible Assignee" shall mean any financial institution that is a
United States Person (within the meaning of Section 7701(a)(30) of the
Internal Revenue Code) and that has a short term debt rating of at least
A-1 from S&P and P-1 from Moody's.
10
"Eurocurrency Reserve Requirements": for any day pertaining to a
Eurodollar Tranche, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal,
special and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate" shall mean, with respect to each day during
each Eurodollar Period pertaining to a Eurodollar Tranche, the rate per
annum determined by the Funding Agent to the rate of interest per annum
(rounded upward if necessary to the nearest 1/16 of 1%) notified to the
Funding Agent by Chase as the rate of interest at which Dollar deposits in
the approximate amount of the portion of the Series 1998-1 Invested Amount
allocable to such Eurodollar Tranche as of such day and having a maturity
comparable to the Eurodollar Period applicable to such Eurodollar Tranche
would be offered to prime banks in the London interbank market at their
request at or about 11:00 a.m. (London time) on the second Business Day
prior to the commencement of such Eurodollar Period.
"Eurodollar Period" shall mean, with respect to any Eurodollar
Tranche:
(a) initially, the period commencing on the Issuance
Date or conversion date, as the case may be, with respect to such
Eurodollar Tranche and ending one month thereafter (or such other
period which is acceptable to the Purchaser and which in no event
will be less than 15 days); and
(b) thereafter, each period commencing on the last day
of the immediately preceding Eurodollar Period applicable to such
Eurodollar Tranche and ending one month thereafter (or such other
period which is acceptable to the Purchaser and which in no event
will be less than 15 days);
provided that all Eurodollar Periods must end on the next Distribution
Date and all of the foregoing provisions relating to Eurodollar Periods
are subject to the following:
(1) if any Eurodollar Period would otherwise end on a day that
is not a Business Day, such Eurodollar Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Eurodollar Period into another calendar
month, in which event such Eurodollar Period shall end on the
immediately preceding Business Day;
(2) any Eurodollar Period that would otherwise extend beyond
the Scheduled Revolving Termination Date shall end on the Scheduled
Revolving Termination Date; and
(3) any Eurodollar Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Eurodollar Period) shall end on the last Business Day of the
calendar month at the end of such Eurodollar Period.
11
"Eurodollar Rate" shall mean, with respect to each day during each
Eurodollar Period pertaining to a portion of the Series 1998-1 Invested
Amount allocated to a Eurodollar Tranche, a rate per annum determined for
such day in accordance with the following formula (rounded upwards, if
necessary, to the nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche" shall mean a portion of the Series 1998-1
Invested Amount for which the Series 1998-1 Monthly Interest is calculated
by reference to a Eurodollar Rate determined by reference to a particular
Eurodollar Period.
"Excluded Taxes" shall have the meaning assigned in subsection
7.3(a).
"Facility Fee" shall have the meaning assigned in subsection 2.9(c).
"Facility Fee Rate" shall have the meaning assigned in the Fee
Letter.
"Fee Letter" shall mean that certain Fee Letter, dated as of the
date hereof, among the Company, the Funding Agent and the Initial
Purchaser and acknowledged by the Trustee.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Funding Agent from three federal funds
brokers of recognized standing selected by it.
"Financial Covenants" shall mean collectively, each as specified in
the Credit Agreement, as in effect as of the date hereof, without giving
effect to any modification, change or amendment thereafter, unless
specifically approved in writing by the Required APA Banks, (i) the
leverage ratio covenant as specified in subsection 6.14 thereof, (ii) the
consolidated net cash interest expense coverage ratio covenant as
specified in subsection 6.15 thereof and (iii) the working capital
covenant as specified in subsection 6.16 thereof.
"Floating Tranche" shall mean, on or after the APA Bank Purchase
Date, that portion of the Series 1998-1 Invested Amount not allocated to a
Eurodollar Tranche for which the Series 1998-1 Monthly Interest is
calculated by reference to the ABR.
"Funding Agent" shall have the meaning specified in the recitals
hereto.
"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).
12
"Initial Purchaser" shall have the meaning specified in the recitals
hereto.
"Initial Series 1998-1 Invested Amount" shall have the meaning
assigned in subsection 2.5(a).
"Interest Shortfall" shall have the meaning assigned in subsection
3A.4(b).
"Invested Percentage" shall mean, with respect to any Business Day
(i) during the Series 1998-1 Revolving Period, the percentage equivalent
of a fraction, the numerator of which is the Series 1998-1 Allocated
Receivables Amount as of the end of the immediately preceding Business Day
and the denominator of which is the Aggregate Receivables Amount as of the
end of the immediately preceding Business Day and (ii) during the Series
1998-1 Amortization Period, the percentage equivalent of a fraction, the
numerator of which is the Series 1998-1 Allocated Receivables Amount as of
the end of the last Business Day of the Series 1998-1 Revolving Period
(provided that if during the Series 1998-1 Amortization Period, the
amortization periods of all other Outstanding Series which were
outstanding prior to the commencement of the Series 1998-1 Amortization
Period commence, then, from and after the date the last of such Series
commences its Amortization Period, the numerator shall be the Series
1998-1 Allocated Receivables Amount as of the end of the Business Day
preceding such date) and the denominator of which is the greater of (A)
the Aggregate Receivables Amount as of the end of the immediately
preceding Business Day and (B) the sum of the numerators used to calculate
the Invested Percentage for all Outstanding Series on the Business Day for
which such percentage is determined.
"Issuance Date" shall mean June 5, 1998.
"Loss Reserve Ratio" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) which is calculated as follows:
LRR = [(a * b)/c] * d
Where:
LRR = Loss Reserve Ratio;
a = the aggregate Principal Amount of Receivables, other than
Construction Receivables and BEAR Receivables, originated by
the Sellers during the two Settlement Periods immediately
preceding such earlier Settlement Report Date; plus the
aggregate Principal Amount of BEAR Receivables originated by
the Sellers during the two Settlement Periods immediately
preceding such earlier Settlement Report Date plus the
aggregate Principal Amount of Construction Receivables
originated by the Sellers during the two Settlement Periods
immediately preceding such earlier Settlement Report Date;
b = (i) after the earlier of (x) such time as fourteen Settlement
Periods have occurred since the Cut-Off Date or (y) such time
as the Servicer shall have delivered to the Funding Agent
fourteen months of historical aging data
13
showing separate aging of Receivables 91-120, 121-150 and 151-
180 days, respectively, past their original invoice date, the
highest three-month rolling average of the Aged Receivables
Ratio that occurred during the period of twelve consecutive
Settlement Periods preceding such earlier Settlement Report
Date, or (ii) before such time, the highest of (a) 1.5 times
the Aged Receivables Ratio reported for the month of April
1998, (b) the average of the Aged Receivables Ratios reported
for the months of April 1998 and May 1998 and (c) the highest
three-month average of the Aged Receivables Ratio reported
over any three consecutive months since the Cut-Off Date.
c = the Aggregate Receivables Amount as of the last day of the
Settlement Period preceding such earlier Settlement Report
Date; and
d = 2.0
"Majority Purchasers" shall mean, (i) on any day prior to the APA
Bank Purchase Date, the Initial Purchaser and the Required APA Banks and
(ii) on the APA Bank Purchase Date and any day thereafter, the Required
APA Banks.
"Maximum Commitment Amount" shall mean $306,000,000.
"Minimum Ratio" shall mean 15%.
"Monthly Interest Payment" shall have the meaning assigned in
subsection 3A.6(a).
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service or any successor
thereto.
"Non-Defaulting APA Bank" shall have the meaning assigned in
subsection 2.6(c).
"Optional Termination Date" shall have the meaning assigned in
subsection 2.7(d).
"Optional Termination Notice" shall have the meaning assigned in
subsection 2.7(d).
"Other Taxes" shall have the meaning assigned in subsection 7.3(b).
"Outstanding Balance" shall mean, with respect to any Receivable at
any time, the then outstanding principal amount thereof, excluding any
accrued and outstanding finance, interest, late or similar charges related
thereto.
"PARCO Insolvency Event" shall mean the occurrence of any one or
more of the following: (i) any proceeding shall have been instituted by
the Initial Purchaser seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of any order for relief or the appointment
of a receiver,
14
trustee or other similar official for it or any substantial part of its
property, or (ii) any proceeding of the type described in the foregoing
clause (i) shall be instituted against the Initial Purchaser and shall
have remained undismissed for a period of sixty (60) consecutive days, or
an order granting relief requested in any such proceeding shall be
entered.
"PARCO Residual Amount" shall have the meaning assigned in
subsection 2.6(e).
"PARCO Wind-Down Event" shall mean the occurrence of any of the
following events:
(i) on the fifteenth Business Day prior to the Commitment Expiry
Date, the Commitments of the APA Banks have not been extended
for at least an additional 364 days;
(ii) the providers of the Initial Purchaser's program liquidity
and/or letter of credit facilities shall have given notice
that an event of default has occurred and is continuing under
their respective agreements with the Initial Purchaser or
shall have given notice that their commitments shall not be
extended thereunder;
(iii) the Initial Purchaser has notified the Funding Agent, the
Company and Trustee that it has elected not to fund the Series
1998-1 Invested Amount or any Increase pursuant to subsection
2.5(b);
(iv) the Commercial Paper shall not be rated at least A-1 by S&P
and P-1 by Moody's, respectively;
(v) the average of the Dilution Ratio for the two previous
Settlement Periods shall exceed 7.3%;
(vi) the average of the Default Ratio for the two previous
Settlement Periods shall exceed the "Default Ratio Trigger"
(as determined in accordance with Schedule 3);
(vii) the average Days Sales Outstanding of Receivables for the two
previous Settlement Periods shall exceed 55 days; and
(viii) an Early Amortization Period has commenced;
provided, however, in the case of the events described in clauses (v),
(vi) and (vii) above, the Funding Agent at its sole discretion may waive
such events as PARCO Wind-Down Events and shall notify the Rating Agencies
in writing of such waiver.
"Participants" shall have the meaning assigned in subsection
11.11(e).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
15
"Potential PARCO Wind-Down Event" shall mean any event or
circumstance that with notice, the lapse of time, or both, would become a
PARCO Wind-Down Event.
"Program Costs" shall mean, for any Business Day, the sum of (i) the
product of (A) all unpaid fees and expenses due and payable to counsel to,
and independent auditors of, the Company (other than fees and expenses
payable on or in connection with the closing of the issuance of the Series
1998-1 Interests) and (B) a fraction, the numerator of which is the
Aggregate Commitment Amount on such Business Day and the denominator of
which is the sum of (x) the Aggregate Invested Amounts on such Business
Day (other than the Series 1998-1 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 Series, and (ii) all unpaid fees and expenses due
and payable to any Rating Agencies rating the VFC Certificates; provided,
however, that the amount of Program Costs payable pursuant to Section
3A.6(b)(iv) shall not exceed $100,000 in the aggregate in any fiscal year
of the Servicer.
"Purchase" shall mean the assignment by the Initial Purchaser to the
APA Banks of the Initial Purchaser's Series 1998-1 Purchaser Invested
Amount pursuant to Section 2.6.
"Purchase Price" shall mean, on the APA Bank Purchase Date, an
amount equal to the lesser of (i) the Initial Purchaser's Series 1998-1
Purchaser Invested Amount (calculated without regard to clauses (d) and
(e) of the definition of Series 1998-1 Purchaser Invested Amount) and (ii)
the Adjusted Liquidity Price on such date, in each case as increased by
the sum of (1) the excess of (x) all accrued and unpaid Discount on all
outstanding Commercial Paper issued to fund the Initial Purchaser's Series
1998-1 Purchaser Invested Amount from the issuance date(s) thereof to but
excluding the APA Bank Purchase Date, over (y) amounts on deposit in the
Series 1998-1 Accrued Interest Collection Sub-subaccount, plus (2) the
aggregate Discount to accrue on all outstanding Commercial Paper issued to
fund the Initial Purchaser's Series 1998-1 Purchaser Invested Amount from
and including the APA Bank Purchase Date, to and excluding the maturity
date of each CP Tranche.
"Purchase Price Deficit" shall have the meaning assigned in
subsection 2.6(c).
"Purchaser" shall mean, prior to the APA Bank Purchase Date, the
Initial Purchaser and, on and after the APA Bank Purchase Date, the APA
Banks and each Acquiring APA Bank.
"Rating Agency" and "Rating Agencies" shall mean Moody's, S&P or any
other nationally recognized statistical rating organization from which a
rating for the Commercial Paper was requested by the Initial Purchaser and
is currently in effect.
"Rating Agency Condition" shall mean, with respect to any action,
that (i) each Rating Agency shall have been given prior notice thereof and
that each of the Rating Agencies shall have notified the Initial Purchaser
and the Funding Agent in writing that such action will not result in a
reduction or withdrawal of the then current rating of the
16
Commercial Paper and (ii) the Funding Agent shall have given their prior
written consent to such action.
"Record Date" shall mean the first Business Day prior to each
Distribution Date.
"Reduction Percentage" shall mean the percentage equivalent of a
fraction, the numerator of which is the PARCO Residual Amount and the
denominator of which is the sum of the PARCO Residual Amount and the
Adjusted Liquidity Price on the APA Bank Purchase Date.
"Reference Rate" shall have the meaning assigned in the definition
of ABR herein.
"Register" shall have the meaning assigned in subsection 11.11(c).
"Required APA Banks" shall mean APA Banks having Commitment
Percentages in the aggregate at least equal to 66-2/3% or, if the
Commitments have been terminated, holding at least 66-2/3% of the
outstanding Series 1998-1 Invested Amount; provided that the Commitment of
any Defaulting APA Bank that has not paid all amounts due and owing by it
in respect of the purchase it was obligated to make shall not be included
in the Aggregate Commitment Amount for purposes of this definition.
"Sale Notice" shall mean an irrevocable written notice given by an
authorized signatory or authorized officer of the Initial Purchaser (or on
behalf of the Initial Purchaser by Chase, in its capacity as the Initial
Purchaser's administrative agent) to the Funding Agent committing to sell,
assign and transfer to the APA Banks, the Initial Purchaser's Series
1998-1 Purchaser Invested Amount, which notice shall designate (i) the APA
Bank Purchase Date, (ii) the Initial Purchaser's Series ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) the Purchase Price (including a calculation of the
Purchase Price), (iv) that no PARCO Insolvency Event has occurred and (v)
wire transfer instructions specifying the account(s) into which the
proceeds of the Purchase Price shall be deposited.
"Scheduled Revolving Termination Date" shall mean the last day of
the Settlement Period ending in April of the year of the Commitment Expiry
Date.
"Series 1998-1" shall mean Series 1998-1, the Principal Terms of
which are set forth in this Supplement.
"Series 1998-1 Accrued Interest Sub-subaccount" shall have the
meaning assigned in subsection 3A.2(a).
"Series 1998-1 Adjusted Invested Amount" shall mean, as of any date
of determination, (i) the Series 1998-1 Invested Amount on such date,
minus (ii) the amount on deposit in the Series 1998-1 Principal Collection
Sub-subaccount on such date.
"Series 1998-1 Allocable Charged-Off Amount" shall mean, with
respect to any Special Allocation Settlement Report Date, the "Allocable
Charged-Off Amount", if any, which has been allocated to Series 1998-1.
17
"Series 1998-1 Allocable Recoveries Amount" shall mean, with respect
to any Special Allocation Settlement Report Date, the "Allocable
Recoveries Amount", if any, which has been allocated to Series 1998-1.
"Series 1998-1 Allocated Receivables Amount" shall mean, on any date
of determination, the lower of (i) the Series 1998-1 Target Receivables
Amount on such day and (ii) the product of (x) the Aggregate Receivables
Amount on such day and (y) the percentage equivalent of a fraction the
numerator of which is the Series 1998-1 Target Receivables Amount on such
day and the denominator of which is the Aggregate Target Receivables
Amount on such day.
"Series 1998-1 Amortization Period" shall mean the period commencing
on the Business Day following the earliest to occur of (i) the date on
which an Early Amortization Period is declared to commence or
automatically commences, (ii) the Optional Termination Date and (iii) the
Scheduled Revolving Termination Date and ending on the earlier of (i) the
date when the Series 1998-1 Invested Amount shall have been reduced to
zero and all accrued interest and other amounts owing on the VFC
Certificates and to the Funding Agent and the Purchasers hereunder shall
have been paid in full and (ii) the Series 1998-1 Termination Date.
"Series 1998-1 Canada/Canadian Dollar Collection Subaccount" shall
have the meaning specified in subsection 3A.2(a).
"Series 1998-1 Canada/U.S. Dollar Collection Subaccount" shall have
the meaning specified in subsection 3A.2(a).
"Series 1998-1 Collection Subaccount" shall have the meaning
assigned in subsection 3A.2(a).
"Series 1998-1 Interests" shall mean, collectively, the VFC
Certificates and the Series 1998-1 Subordinated Interest.
"Series 1998-1 Invested Amount" shall mean, as of any date of
determination, the sum of the Series 1998-1 Purchaser Invested Amounts of
all Purchasers on such date.
"Series 1998-1 Monthly Interest" shall have the meaning assigned in
subsection 3A.4(a).
"Series 1998-1 Monthly Principal Payment" shall have the meaning
assigned in Section 3A.5.
"Series 1998-1 Monthly Servicing Fee" shall have the meaning
assigned in Section 6.1.
"Series 1998-1 Non-Principal Collection Sub-subaccount" shall have
the meaning assigned in subsection 3A.2(a).
"Series 1998-1 Principal Collection Sub-subaccount" shall have the
meaning assigned in subsection 3A.2(a).
18
"Series 1998-1 Purchaser Invested Amount" shall mean, with respect
to the Initial Purchaser on the Issuance Date or, if the Initial Purchaser
shall not fund the Initial Series 1998-1 Invested Amount, any APA Bank, an
amount equal to the Initial Series 1998-1 Invested Amount or such APA
Bank's Commitment Percentage of the Initial Series 1998-1 Invested
Amount, and with respect to the Initial Purchaser or any other Purchaser
on any date of determination thereafter, an amount equal to (a) the
Initial Purchaser's or such other Purchaser's Series 1998-1 Purchaser
Invested Amount on the immediately preceding Business Day (or, with
respect to the day as of which such other Purchaser acquires an interest
in the Series 1998-1 Invested Amount, whether pursuant to Section 2.6, by
executing a counterpart hereof, a Commitment Transfer Supplement or
otherwise, the portion of the transferor's Series 1998-1 Purchaser
Invested Amount being purchased), plus (b) the amount of any increases in
such Purchaser's Series 1998-1 Purchaser Invested Amount pursuant to
Section 2.5 made on such day, minus (c) the amount of any distributions to
such Purchaser in respect of principal received and applied on such day
minus (d) the aggregate Series 1998-1 Allocable Charged-Off Amount applied
to such Purchaser on or prior to such date pursuant to subsection
3A.5(b)(ii) plus (e) (but only to the extent of any unreimbursed
reductions made pursuant to clause (d) above) the aggregate Series 1998-1
Allocable Recoveries Amount applied to such Purchaser on or prior to such
date pursuant to subsection 3A.5(c)(i).
"Series 1998-1 Ratio" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
the greater of (i) the sum of the Loss Reserve Ratio and the Dilution
Reserve Ratio and (ii) the Minimum Ratio, in each case, then in effect.
"Series 1998-1 Required Reserves" shall mean, (x) as of any date of
determination during the Series 1998-1 Revolving Period, an amount equal
to the sum of:
(a) an amount equal to the product of (A) the Series 1998-1
Adjusted Invested Amount on such day (after giving effect to any
increase or decrease thereof on such day) and (B) a fraction, the
numerator of which is the Series 1998-1 Ratio, and the denominator
of which is one minus the Series 1998-1 Ratio;
(b) the product of (i) the Series 1998-1 Invested Amount on
such day (after giving effect to any increase or decrease thereof on
such day) and (ii) a fraction, the numerator of which is the
Carrying Cost Reserve Ratio in effect for the Accrual Period in
which such day falls, and the denominator of which is one minus the
Series 1998-1 Ratio; and
(c) the product of (i) the aggregate Principal Amount of
Receivables in the Trust on such day, (ii) a fraction, the numerator
of which is the Series 1998-1 Invested Amount on such day, and the
denominator of which is the sum of the Aggregate Invested Amount on
such day (after giving effect to any increase or decrease thereof on
such day), and (iii) a fraction, the numerator of which is the
Servicing Reserve Ratio, and the denominator of which is one minus
the Series 1998-1 Ratio;
and (y) on any date of determination during the Series 1998-1 Amortization
Period, an amount equal to the Series 1998-1 Required Reserves on the last
Business Day of the
19
Series 1998-1 Revolving Period; provided, in the case of this clause (y),
that such amount shall be adjusted on each Special Allocation Settlement
Report Date, if any, to the extent required as set forth in Section
3A.5(b)(i) and Section 3A.5(c)(ii).
"Series 1998-1 Revolving Period" shall mean the period commencing on
the Issuance Date and terminating on the earliest to occur of the close of
business on (i) the date on which an Early Amortization Period is declared
to commence or automatically commences, (ii) the Optional Termination
Date, (iii) the Scheduled Revolving Termination Date and (iv) the
Commitment Termination Date.
"Series 1998-1 Subordinated Interest Amount" shall mean, for any
date of determination, an amount equal to (i) the Series 1998-1 Allocated
Receivables Amount minus (ii) the Series 1998-1 Adjusted Invested Amount.
"Series 1998-1 Subordinated Interest Reduction Amount" shall have
the meaning assigned in subsection 2.7(b).
"Series 1998-1 Subordinated Interest" shall have the meaning
assigned in subsection 2.2(b).
"Series 1998-1 Target Receivables Amount" shall mean, on any date of
determination, the sum of (i) the Series 1998-1 Adjusted Invested Amount
on such day and (ii) the Series 1998-1 Required Reserves for such day.
"Series 1998-1 Termination Date" shall mean the Distribution Date
that occurs nine months following the Scheduled Revolving Termination
Date.
"Servicer Indemnified Person" shall have the meaning specified in
subsection 2.10(b).
"Servicing Reserve Ratio" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, an amount (expressed as a percentage) equal to (i) the product of
(A) the Servicing Fee Percentage and (B) 2.0 times Days Sales Outstanding
as of such earlier Settlement Report Date, divided by (ii) 360.
"Taxes" shall have the meaning assigned in subsection 7.3(a).
"Transaction Parties" shall have the meaning assigned in subsection
2.6(d).
"Transfer Issuance Date" shall mean the date on which a Commitment
Transfer Supplement becomes effective pursuant to the terms of such
Commitment Transfer Supplement.
"Transferee" shall have the meaning assigned in subsection 11.10(f).
"Trust Accounts" shall have the meaning assigned in subsection
3A.2(a).
"U.C.C. Certificate" shall mean a certificate substantially in the
form of Exhibit H to this Supplement.
20
"Unaccrued Discount Payment Amount" shall mean the portion of the
Purchase Price determined in accordance with clause (2) of the definition
thereof.
"Unallocated Balance" shall mean, as of (i) any Business Day prior
to the APA Bank Purchase Date, the portion of the Series 1998-1 Invested
Amount allocated to any CP Tranche the CP Rate Period in respect of which
expires on such Business Day and (ii) the APA Bank Purchase Date or any
Business Day thereafter, the sum of (A) the portion of the Series 1998-1
Invested Amount for which interest is then being calculated by reference
to the ABR and (B) the portion of the Series 1998-1 Invested Amount
allocated to any Eurodollar Tranche the Eurodollar Period in respect of
which expires on such Business Day.
"VFC Certificate" shall mean a VFC Certificate, Series 1998-1,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"VFC Certificateholders" shall mean the Purchasers.
"VFC Certificateholders' Interest" shall have the meaning assigned
in subsection 2.2(a).
"WESCO" shall have the meaning specified in the preamble hereto.
(b) If any term or provision contained herein conflicts with or is
inconsistent with any term, definition or provision contained in the Agreement,
the terms and provisions of this Supplement shall govern. All capitalized terms
not otherwise defined herein are defined in the Agreement. All Article, Section
or subsection references herein shall mean Article, Section or subsections of
this Supplement, except as otherwise provided herein. Unless otherwise stated
herein, the context otherwise requires or such term is otherwise defined in the
Agreement, each capitalized term used or defined herein shall relate only to the
Series 1998-1 Interests and no other Series of Investor Certificates issued by
the Trust.
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 1998-1" and (ii) an interest designated as the "Series
1998-1 Subordinated Interest."
SECTION 2.2. The Series 1998-1 Interests. (a) The VFC Certificates
shall represent fractional undivided interests in the Trust, including the right
to receive distributions from (i) the Invested Percentage (expressed as a
decimal) of Collections received with respect to the Receivables and all other
funds on deposit in the Collection Accounts and (ii) all other funds on deposit
in the Series Collection Subaccounts and any subaccounts thereof (collectively,
the "VFC Certificateholders' Interest").
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(b) The "Series 1998-1 Subordinated Interest" shall be a fractional
undivided interest in the Trust, consisting of the right to receive Collections
with respect to the Receivables allocated to the VFC Certificateholders'
Interest and not required to be distributed to or for the benefit of the
Purchasers. The Exchangeable Company Interest and any other Series of Investor
Certificates outstanding shall represent the ownership interest in the remainder
of the Trust not allocated pursuant hereto to the VFC Certificateholders'
Interest or the Series 1998-1 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, (i) on the Issuance
Date, (A) the Initial Purchaser may, in its sole discretion, purchase a VFC
Certificate in an amount equal to the Initial Series 1998-1 Invested Amount or
(B) if the Initial Purchaser shall have notified the Funding Agent that it has
elected not to purchase a VFC Certificate on the Issuance Date, each APA Bank
hereby severally agrees to purchase on the Issuance Date a VFC Certificate in an
amount equal to such APA Bank's Commitment Percentage of the Initial Series
1998-1 Invested Amount and (ii) thereafter, (A) if the Initial Purchaser shall
have purchased a VFC Certificate on the Issuance Date, the Initial Purchaser
may, in its sole discretion, maintain its VFC Certificate, subject to increase
or decrease during the Series 1998-1 Revolving Period, in accordance with the
provisions of this Supplement and (B) if the APA Banks shall have purchased VFC
Certificates on the Issuance Date or, in any case, on or after the APA Bank
Purchase Date, the APA Banks hereby severally agree to maintain their respective
VFC Certificates, subject to increase or decrease during the Series 1998-1
Revolving Period, in accordance with the provisions of this Supplement. The
Company hereby agrees to maintain ownership of the Series 1998-1 Subordinated
Interest, subject to increase or decrease during the Series 1998-1 Revolving
Period, in accordance with the provisions of this Supplement. Payments by the
Initial Purchaser or the APA Banks, as the case may be, in respect of the VFC
Certificates shall be made in immediately available funds on the Issuance Date
to the Funding Agent for payment to the Company.
(b) Subsequent Purchases. Subject to the terms and conditions of
this Supplement, each Acquiring APA Bank hereby severally agrees to maintain its
VFC Certificate, subject to increase or decrease during the Series 1998-1
Revolving Period, in accordance with the provisions of this Supplement.
(c) Maximum Series 1998-1 Purchaser Invested Amount. Notwithstanding
anything to the contrary contained in this Supplement, at no time shall the
Series 1998-1 Purchaser Invested Amount (calculated without regard to clauses
(d) and (e) of the definition thereof) of any APA Bank exceed such APA Bank's
Commitment at such time.
SECTION 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 (i) the VFC Certificates in such
names and such denominations and deliver such VFC Certificates to the Funding
Agent, on behalf of the Initial Purchaser, or the APA Banks, as the case may be,
in accordance with such written directions. The VFC Certificates shall be issued
in minimum denominations of $1,000,000 and in integral multiples of $100,000 in
excess
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thereof. The Trustee shall ▇▇▇▇ on its books the actual Series 1998-1 Invested
Amount and Series 1998-1 Subordinated Interest Amount outstanding on any date of
determination, which, absent manifest error, shall constitute prima facie
evidence of the outstanding Series 1998-1 Invested Amount and Series 1998-1
Subordinated Interest Amount from time to time.
SECTION 2.5. Procedure for Initial Issuance and for Increasing the
Series 1998-1 Invested Amount. (a) Subject to subsection 2.5(c), (i) on the
Business Day designated in writing as provided herein (the "Issuance Date"), the
Initial Purchaser may agree, in its sole discretion, and each APA Bank hereby
agrees to purchase a VFC Certificate in accordance with Section 2.3 and (ii) on
any Business Day during the Commitment Period, the Initial Purchaser may agree,
in its sole discretion, and each APA Bank hereby agrees that the Series 1998-1
Invested Amount may be increased by increasing such Purchaser's Series 1998-1
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
1998-1 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 Funding Agent
(with a copy to the Trustee) irrevocable written notice (effective upon
receipt), substantially in the form of Exhibit F hereto, of such request no
later than (i) 1:00 p.m., New York City time, two Business Days prior to the
Issuance Date or such Increase Date, as the case may be, in the case of any
Increase Date occurring prior to the APA Bank Purchase Date or (ii) (x) if the
Initial Series 1998-1 Invested Amount or Increase Amount is to be priced solely
with reference to the ABR, on or prior to 12:00 noon, New York City time, on the
Issuance Date or such Increase Date, as the case may be, or (y) if all or a
portion of the Initial Series 1998-1 Invested Amount or Increase Amount is to be
allocated to a Eurodollar Tranche, 1:00 p.m., New York City time, three Business
Days prior to the Issuance Date or such Increase Date, as the case may be, in
the case of any Increase Date occurring on or after the APA Bank Purchase Date;
provided, further, that the provisions of this subsection shall not restrict the
allocations of Collections pursuant to Article III. Such notice shall state (x)
the Issuance Date or the Increase Date, as the case may be, (y) the initial
invested amount (the "Initial Series 1998-1 Invested Amount"), or the proposed
amount of such Increase (the "Increase Amount"), as the case may be, and (z) on
and after the APA Bank Purchase Date, what portions thereof will be allocated to
a Eurodollar Tranche and the Floating Tranche.
(b) If, prior to the APA Bank Purchase Date, the Initial Purchaser
elects not to fund any portion of a requested Increase, the Initial Purchaser
shall notify the Funding Agent thereof and deliver a Sale Notice in accordance
with Section 2.6 and each APA Bank shall purchase its Commitment Percentage of
the Initial Purchaser's Series 1998-1 Purchaser Invested Amount in accordance
with Section 2.6 and fund such Increase in an amount equal to its Commitment
Percentage of such Increase; provided, however that an APA Bank shall not be
obligated to fund any portion of an Increase that would cause its Series 1998-1
Purchaser Invested Amount to exceed its Commitment.
(c) The Purchasers shall not be required to make the initial
purchase of VFC Certificates on the Issuance Date or to increase their
respective Series 1998-1 Purchaser Invested Amounts on any Increase Date
hereunder unless:
(i) the related aggregate initial purchase amount or Increase
Amount is equal to $1,000,000 or an integral multiple of $100,000 in
excess thereof;
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(ii) after giving effect to the initial purchase amount or
Increase Amount, (A) the Series 1998-1 Invested Amount would not exceed
the Maximum Commitment Amount on the Issuance Date or such Increase Date,
as the case may be, and (B) the Series 1998-1 Allocated Receivables Amount
would not be less than the Series 1998-1 Target Receivables Amount on the
Issuance Date or such Increase Date, as the case may be;
(iii) no Early Amortization Event or Potential Early
Amortization Event shall have occurred and be continuing;
(iv) in the case of any funding by the Initial Purchaser, no
PARCO Wind-Down Event or Potential PARCO Wind-Down Event shall have
occurred and be continuing; and
(v) all of the representations and warranties made by each of
the Company and the Servicer in each Transaction Document to which it is a
party are true and correct in all material respects on and as of the
Issuance Date or such Increase Date, as the case may be, as if made on and
as of such date (except to the extent such representations and warranties
are expressly made as of another date).
The Company's acceptance of funds in connection with (x) the Purchasers' initial
purchase of VFC Certificates on the Issuance Date and (y) each Increase
occurring on any Increase Date shall constitute a representation and warranty by
the Company to the Purchasers as of the Issuance Date or such Increase Date
(except to the extent such representations and warranties are expressly made as
of another date or relate to particular receivables), as the case may be, that
all of the conditions contained in this subsection 2.5(c) have been satisfied.
(d) After receipt by the Funding Agent of the notice required by
subsection 2.5(a) from the Servicer or the Company on behalf of the Trust, the
Funding Agent shall, so long as the conditions set forth in subsections 2.5(a)
and (c) are satisfied, promptly provide telephonic notice (i) prior to the APA
Bank Purchase Date, to the Initial Purchaser, and (ii) on and after the APA Bank
Purchase Date, to each APA Bank, of the Increase Date and of the portion of the
Increase Amount allocable to such APA Bank (which shall equal such APA Bank's
Commitment Percentage of the Increase Amount). If the Initial Purchaser elects
to fund an Increase, the Initial Purchaser agrees to pay in immediately
available funds the amount of such Increase on the related Increase Date to the
Funding Agent for payment to the Trust for deposit in the Series 1998-1
Principal Collection Sub-subaccount. On or after the APA Bank Purchase Date,
each APA Bank agrees to pay in immediately available funds such APA Bank's
Commitment Percentage of each Increase on the related Increase Date to the
Funding Agent for payment to the Trust for deposit in the Series 1998-1
Principal Collection Sub-subaccount.
SECTION 2.6. Sale by the Initial Purchaser of its Series 1998-1
Purchaser Invested Amount to the APA Banks. (a) On any date during the
Commitment Period, the Initial Purchaser may, in its own discretion, and the
Initial Purchaser shall upon the occurrence of a PARCO Wind-Down Event, in each
case, by delivering a Sale Notice to the Funding Agent, the Company and the
Trustee, sell to the APA Banks (in accordance with their respective Commitment
Percentages) and each APA Bank hereby agrees to purchase its Commitment
Percentage of all right, title and interest of the Initial Purchaser in its
Series 1998-1 Purchaser Invested Amount. Any Sale Notice shall be delivered by
the Initial Purchaser to the Funding Agent, the Company and the Trustee prior to
12:30 p.m., New York City time, on the APA Bank
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Purchase Date and shall constitute an irrevocable offer by the Initial Purchaser
to sell 100% of its Series 1998-1 Purchaser Invested Amount at the Purchase
Price. Any Sale Notice shall be deemed to be a representation and warranty by
the Initial Purchaser that no PARCO Insolvency Event shall have occurred and be
continuing. Each APA Bank hereby agrees to purchase from the Initial Purchaser
such APA Bank's Commitment Percentage of the Initial Purchaser's Series 1998-1
Purchaser Invested Amount for a purchase price equal to such APA Bank's
Commitment Percentage of the Purchase Price on the APA Bank Purchase Date (which
date, subject to subsection 2.6(b), may be the same as the date of the Sale
Notice). Notwithstanding anything to the contrary set forth in this Supplement,
no APA Bank shall have any obligation to purchase the Initial Purchaser's Series
1998-1 Purchaser Invested Amount if, on such Purchase Date, any PARCO Insolvency
Event shall have occurred and be continuing.
(b) If, at or prior to 12:30 p.m., New York City time, on any
Business Day, the Initial Purchaser delivers the Sale Notice to the Funding
Agent specifying that the APA Bank Purchase Date shall be the same date as the
date of the Sale Notice, the Funding Agent shall, by no later than 1:00 p.m.,
New York City time, notify (by telecopy or by telephone call promptly confirmed
in writing by telecopy) each APA Bank of the receipt and content of the Sale
Notice. Each APA Bank shall purchase its Commitment Percentage of the Initial
Purchaser's VFC Certificate by depositing its Commitment Percentage of the
Purchase Price in immediately available funds into the account(s) specified by
the Initial Purchaser in the Sale Notice no later than 2:00 p.m., New York City
time. If the Initial Purchaser delivers the Sale Notice to the Funding Agent
after 12:30 p.m., New York City time, on any Business Day or the Initial
Purchaser delivers the Sale Notice to the Funding Agent specifying that the APA
Bank Purchase Date shall be a date other than the date of the Sale Notice, the
Funding Agent shall promptly advise (by telecopy or by telephone call promptly
confirmed in writing by telecopy) each APA Bank of the receipt and content of
the Sale Notice. Notwithstanding the fact that the APA Bank Purchase Date may
occur on a date which is later than the date on which the Sale Notice is
delivered to the Funding Agent, the several obligations of each APA Bank to make
such purchase and to make payment of the amounts required to be paid by it
pursuant to subsection 2.6(a) shall arise immediately upon receipt by the
Funding Agent of the Sale Notice. Upon payment of the Purchase Price as provided
herein and delivery to the Trustee by the Funding Agent of the Initial
Purchaser's VFC Certificate, the Company shall sign, on behalf of the Trust, and
shall direct the Trustee in writing to duly authenticate, and the Trustee, upon
receiving such direction, shall so authenticate, a new VFC Certificate in the
name of each APA Bank and in a denomination equal to such APA Bank's Commitment
Percentage as set forth in such written direction and shall deliver such VFC
Certificate to each such APA Bank in accordance with such written direction.
(c) If, by 2:00 p.m., New York City time, one or more APA Banks
(each, a "Defaulting APA Bank," and each APA Bank other than the Defaulting APA
Bank being referred to as a "Non-Defaulting APA Bank") fails to make its
Commitment Percentage of the Purchase Price available to the Funding Agent
pursuant to subsection 2.6(b) (the aggregate amount not so made available to the
Funding Agent being herein called the "Purchase Price Deficit"), then the
Funding Agent shall, by no later than 2:30 p.m., New York City time, instruct
each Non-Defaulting APA Bank to pay, by no later than 3:00 p.m., New York City
time, in immediately available funds, to the account designated by the Funding
Agent, an amount equal to the lesser of (x) such Non-Defaulting APA Bank's
proportionate share (based upon the relative Commitments of the Non-Defaulting
APA Banks) of the Purchase Price Deficit and (y) its unused Commitment. A
Defaulting APA Bank shall forthwith, upon demand, pay to the Funding Agent for
the ratable benefit of the Non-Defaulting APA Banks all amounts paid by
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each Non-Defaulting APA Bank on behalf of such Defaulting APA Bank, together
with interest thereon, for each day from the date a payment was made by a
Non-Defaulting APA Bank until the date such Non-Defaulting APA Bank has been
paid such amounts in full, at a rate per annum equal to the sum of the Federal
Funds Effective Rate plus 2%. In addition, without prejudice to any other rights
that the Initial Purchaser may have under applicable law, each Defaulting APA
Bank shall pay to the Initial Purchaser forthwith upon demand, the difference
between the Defaulting APA Bank's unpaid Commitment Percentage of the Purchase
Price and the amount paid with respect thereto by the Non-Defaulting APA Banks,
together with interest thereon, for each day from the date of the Funding
Agent's request for such Defaulting APA Bank's Commitment Percentage of the
Purchase Price pursuant to Section 2.6(b) until the date the requisite amount is
paid to the Initial Purchaser in full, at a rate per annum equal to the sum of
the Federal Funds Effective Rate plus 2%.
(d) The transfer of the Initial Purchaser's VFC Certificate pursuant
to this Section 2.6 shall be without recourse or warranty, express or implied,
except that the Initial Purchasers represent that such VFC Certificate is free
and clear of adverse claims created by or arising as a result of claims against
the Initial Purchaser. By executing and delivering a Sale Notice pursuant to
Section 2.6(a), (i) the Initial Purchaser makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the VFC Certificate or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the VFC Certificate, or any other agreement, instrument or other document
furnished pursuant thereto or in connection therewith, including without
limitation any Transaction Document, and (ii) the Initial Purchaser makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Trust, the Trustee, the Servicer, each Sub-Servicer,
each Seller or any Obligor (collectively, the "Transaction Parties") or the
Funding Agent, or the performance or observance by the Transaction Parties of
any of their respective obligations under the VFC Certificate or the Transaction
Documents.
(e) If the Adjusted Liquidity Price on the APA Bank Purchase Date is
less than the Series 1998-1 Invested Amount on the APA Bank Purchase Date (the
amount of such insufficiency, the "PARCO Residual Amount"), each APA Bank agrees
that (i) on each Distribution Date after the APA Bank Purchase Date on which
interest is distributed to VFC Certificateholders pursuant to subsection
3A.6(a), the Funding Agent shall distribute to the Initial Purchaser its
Reduction Percentage of such interest payments and (ii) on each Distribution
Date after the APA Purchase Date on which amounts in reduction of the Series
1998-1 Invested Amount are distributed to VFC Certificateholders pursuant to
Section 2.7 or subsection 3A.6(c), the Funding Agent shall distribute to the
Initial Purchaser its Reduction Percentage of such amounts only after the Series
1998-1 Invested Amount has been paid in full.
SECTION 2.7. Procedure for Decreasing the Series 1998-1 Invested
Amount; Optional Termination. (a) On any Business Day during the Series 1998-1
Revolving Period or the Series 1998-1 Amortization Period (except for
Distribution Dates during the Series 1998-1 Amortization Period (which shall be
governed by subsection 3A.6(c))), upon the written request of the Servicer or
the Company on behalf of the Trust, the Series 1998-1 Invested Amount may be
reduced (a "Decrease") by the distribution by the Trustee to the Funding Agent
for the pro rata benefit of the Purchasers in accordance with their respective
Series 1998-1 Purchaser Invested Amounts of funds on deposit in the Series
1998-1 Principal Collection Sub-subaccount on such day in an amount not to
exceed the amount of such funds on deposit on such day; provided that the
Servicer shall have given the Funding Agent (with a copy to the Trustee)
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irrevocable written notice (effective upon receipt), prior to 1:00 p.m., New
York City time, (i) on the second Business Day prior to such Decrease, in the
case of any Decrease occurring prior to the APA Bank Purchase Date and (ii) (A)
if the Decrease relates solely to a Floating Tranche, on the Business Day of
such Decrease or (B) if all or any portion of the Decrease relates to a
Eurodollar Tranche, on the Business Day that is three Business Days prior to
such Decrease, and which notice shall state the amount of such Decrease;
provided, further, that (x) such Decrease shall be in an amount equal to
$1,000,000 and integral multiples of $100,000 in excess thereof or if the Series
1998-1 Invested Amount is less than $1,000,000 then such Decrease shall equal
the Series 1998-1 Invested Amount, and (y) prior to the APA Bank Purchase Date,
such Decrease shall be in an amount no greater than the Unallocated Balance on
such day.
(b) Simultaneously with any such Decrease during the Series 1998-1
Revolving Period, the Series 1998-1 Subordinated Interest Amount shall be
reduced by an amount (the "Series 1998-1 Subordinated Interest Reduction
Amount") such that the Series 1998-1 Subordinated Interest Amount shall equal
the Series 1998-1 Required Reserves after giving effect to such Decrease. During
the Series 1998-1 Revolving Period, after the distribution described in
subsection (a) above has been made, and the Series 1998-1 Subordinated Interest
Amount shall have been reduced by the Series 1998-1 Subordinated Interest
Reduction Amount, a distribution shall be made to the owner of the Series 1998-1
Subordinated Interest out of remaining funds on deposit in the Series 1998-1
Principal Collection Sub-subaccount in an amount equal to the lesser of (x) the
Series 1998-1 Subordinated Interest Reduction Amount and (y) the amount of such
remaining funds on deposit in the Series 1998-1 Principal Collection
Sub-subaccount.
(c) On or after the APA Bank Purchase Date, any reduction in the
Series 1998-1 Invested Amount on any Business Day shall be allocated first to
reduce the Unallocated Balance and then to reduce the portion of the Series
1998-1 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, an Early Amortization Event or a Potential Early Amortization
Event shall have occurred and be continuing, the Company shall have the right to
deliver an irrevocable written notice (an "Optional Termination Notice") to the
Trustee, the Servicer and the Rating Agencies in which the Company declares that
the Series 1998-1 Revolving Period shall terminate on the date (the "Optional
Termination Date") set forth in such notice (which date, in any event, shall be
the last day of a Settlement Period which is not less than 10 days from the date
on which such notice is delivered).
(ii) From and after the Optional Termination Date, the Series 1998-1
Amortization Period shall commence for all purposes under this Agreement and the
other Transaction Documents. The Trustee shall give prompt written notice of its
receipt of an Optional Termination Notice to the Purchasers and each Rating
Agency.
SECTION 2.8. Reductions of the Commitments. (a) On any Business Day
during the Series 1998-1 Revolving Period, the Company, on behalf of the Trust,
may, upon three Business Days' prior written notice to the Funding Agent
(effective upon receipt) (with copies to the Servicer and the Trustee) reduce or
terminate the Commitments (a "Commitment Reduction") in an aggregate amount
equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof;
provided that no such termination or reduction shall be permitted if, after
giving
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effect thereto and to any reduction in the Series 1998-1 Invested Amount on such
date, the Series 1998-1 Invested Amount would exceed the Aggregate Commitment
Amount then in effect. Each APA Banks's Commitment shall be reduced by such APA
Bank's Commitment Percentage of the amount of such Commitment Reduction.
(b) On any Business Day subsequent to the APA Bank Purchase Date, if
an Early Amortization Period has commenced, the Aggregate Commitment Amount
shall be reduced to the Series 1998-1 Invested Amount. Each APA Bank's
Commitment shall be reduced by an amount equal to such APA Bank's Commitment
Percentage times the amount of such reduction.
(c) Once reduced, the Commitments may not be subsequently
reinstated. Upon effectiveness of any such reduction, the Funding Agent shall
prepare a revised Schedule 1 to reflect the reduced Commitment of each APA Bank
and Schedule 1 of this Supplement shall be deemed to be automatically superseded
by such revised Schedule 1. The Funding Agent shall distribute such revised
Schedule 1 to the Company, the Servicer, the Trustee and each APA Bank.
SECTION 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 Trustee (acting at the written direction of the Servicer
upon which the Trustee may conclusively rely) shall distribute pursuant to
subsection 3A.6(b), from amounts on deposit in the Series 1998-1 Non-Principal
Collection Sub-subaccount, to the Funding Agent, for the pro rata account of the
APA Banks in accordance with their respective Commitment Percentages, on each
Distribution Date, a commitment fee with respect to each Accrual Period ending
on such date (the "Commitment Fee") (i) during the Series 1998-1 Revolving
Period at the Commitment Fee Rate of the average daily excess of the Aggregate
Commitment Amount over the average aggregate Series 1998-1 Purchaser Invested
Amounts of the APA Banks during such Accrual Period and (ii) during the Series
1998-1 Amortization Period at the Commitment Fee Rate of the average daily
Series 1998-1 Invested Amount during such Accrual Period; provided however, that
no Commitment Fee will be payable hereunder for any Accrual Period or portion
thereof during the Series 1998-1 Amortization Period that commences on or after
the APA Bank Purchase Date. The Commitment Fee shall be payable (i) monthly in
arrears on each Distribution Date and (ii) on the Commitment Termination Date.
To the extent that funds on deposit in the Series 1998-1 Non-Principal
Collection Sub-subaccount at any such date are insufficient to pay the
Commitment Fee due on such date, the Servicer shall so notify the Company and
the Company shall immediately pay the Funding Agent the amount of any such
deficiency.
(c) The Trustee (acting at the written direction of the Servicer
upon which the Trustee may conclusively rely) shall distribute pursuant to
subsection 3A.6(b), from amounts on deposit in the Series 1998-1 Non-Principal
Collection Sub-subaccount, to the Funding Agent, for the account of the Initial
Purchaser, on each Distribution Date prior to the APA Bank Purchase Date and on
the Distribution Date immediately succeeding the APA Bank Purchase Date, a
facility fee (the "Facility Fee") with respect to each Accrual Period ending on
such date (or, in the case of the Distribution Date immediately succeeding the
APA Bank Purchase Date, the period from and including the immediately preceding
Distribution Date to but excluding the APA Bank Purchase Date) (i) during the
Series 1998-1 Revolving Period, at the Facility Fee Rate of the average daily
Aggregate Commitment Amount during such period and (ii) during the Series 1998-1
Amortization Period, at the Facility Fee Rate of the average daily Series 1998-1
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Invested Amount during such period. The Facility Fee shall be payable (i)
monthly in arrears on each Distribution Date prior to the APA Bank Purchase Date
and (ii) on the Distribution Date immediately succeeding the APA Bank Purchase
Date. To the extent that funds on deposit in the Series 1998-1 Non-Principal
Collection Sub-subaccount at any such date are insufficient to pay the Facility
Fee due on such date, the Servicer shall so notify the Company and the Company
shall immediately pay the Funding Agent the amount of any such deficiency.
(d) Calculations of per annum rates and fees under this Supplement
shall be made on the basis of a 360- (or 365-/366-, in the case of interest on
the Floating Tranche based on the ABR) day year with respect to Commitment Fees,
Facility Fees and interest rates. Each determination of the Eurodollar Rate by
the Funding Agent shall be conclusive and binding upon each of the parties
hereto in the absence of manifest error.
SECTION 2.10. Indemnification by the Company and the Servicer. (a)
The Company agrees to indemnify and hold harmless the Trustee, the Funding
Agent, each Purchaser and each of their respective officers, directors, agents
and employees (each, a "Company indemnified person") from and against any loss,
liability, expense, damage or injury suffered or sustained by (a "Claim") such
Company indemnified person by reason of (i) any acts, omissions or alleged acts
or omissions arising out of, or relating to, activities of the Company pursuant
to any Pooling and Servicing Agreement or the other Transaction Documents to
which it is a party, (ii) a breach of any representation or warranty made or
deemed made by the Company (or any of its officers) in any Pooling and Servicing
Agreement or other Transaction Documents or (iii) a failure by the Company to
comply with any applicable law or regulation or to perform its covenants,
agreements, duties or obligations required to be performed or observed by it in
accordance with the provisions of any Pooling and Servicing Agreement or the
other Transaction Documents, including, but not limited to, any judgment, award,
settlement, reasonable attorneys' fees and other reasonable costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim, except to the extent such loss, liability, expense, damage
or injury (A) resulted from the gross negligence, bad faith or wilful misconduct
of such Company indemnified person or its officers, directors, agents,
principals, employees or employers, (B) resulted solely from a default by an
Obligor with respect to any Receivable or (C) include any income or franchise
taxes imposed on (or measured by) any Company indemnified person's net income;
provided that any payments made by the Company pursuant to this subsection shall
be made solely from funds available to the Company which are not otherwise
required to be applied to the payment of any amounts (other than amounts payable
to the Company) pursuant to any Pooling and Servicing Agreements, shall be
non-recourse other than with respect to such funds, and shall not constitute a
claim against the Company to the extent that insufficient funds exist to make
such payment.
(b) The Servicer agrees to indemnify and hold harmless the Trustee,
the Funding Agent, each Purchaser and each of their respective officers,
directors, agents and employees (each, a "Servicer Indemnified Person") from and
against any Claim by reason of (i) any Claims by third parties against any
Seller Indemnified Person resulting from any acts, omissions or alleged acts or
omissions arising out of, or relating to, activities of the Servicer pursuant to
any Pooling and Servicing Agreement or the other Transaction Documents to which
it is a party, (ii) a breach of any representation or warranty made or deemed
made by the Servicer (or any of its officers) in any Pooling and Servicing
Agreement or other Transaction Document or (iii) a failure by the Servicer to
comply with any applicable law or regulation or to perform its covenants,
agreements, duties or obligations required to be performed or observed by it in
accordance with the provisions of any Pooling and Servicing Agreement or the
other Transaction
29
Documents, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other reasonable costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim, except to the extent such loss, liability, expense, damage or injury
resulted from the gross negligence, bad faith or wilful misconduct of such
Servicer Indemnified Person or its officers, directors, agents, principals,
employees or employers.
ARTICLE III
ARTICLE III OF THE AGREEMENT
Section 3.1 of the Agreement and each other section of Article III
of the Agreement relating to another Series shall read in their entirety as
provided in the Agreement. Article III of the Agreement (except for Section 3.1
thereof and any portion thereof relating to another Series) shall read in its
entirety as follows and shall be exclusively applicable to the Series 1998-1
Interests:
SECTION 3A.2. Establishment of Trust Accounts. (a) The Trustee shall
cause to be established and maintained in the name of the Trustee, on behalf of
the Trust, (i) for the benefit of the Purchasers and (ii) in the case of clauses
(A) and (B) below, for the benefit, subject to the prior and senior interest of
the Purchasers, of the owner of the Series 1998-1 Subordinated Interest, (A) a
subaccount of the U.S. Dollar Collection Account (the "Series 1998-1 Collection
Subaccount"), which subaccount is the Series Collection Subaccount with respect
to Series 1998-1; (B) two subaccounts of the Series 1998-1 Collection
Subaccount: (1) the Series 1998-1 Principal Collection Sub-subaccount and (2)
the Series 1998-1 Non-Principal Collection Sub-subaccount (respectively, the
"Series 1998-1 Principal Collection Sub-subaccount" and the "Series 1998-1
Non-Principal Collection Sub-subaccount"); (C) a subaccount of the
Canada/Canadian Dollar Collection Account (the "Series 1998-1 Canada/Canadian
Dollar Collection Subaccount") and a subaccount of the Canada/U.S. Dollar
Collection Account (the "Series 1998-1 Canada/U.S. Dollar Collection
Subaccount") and (D) a subaccount of the Series 1998-1 Non-Principal Collection
Sub-subaccount (the "Series 1998-1 Accrued Interest Sub-subaccount"; all
accounts established pursuant to this subsection 3A.2(a) and listed on Schedule
2, collectively, the "Trust Accounts"), each Trust Account to bear a designation
indicating that the funds deposited therein are held for the benefit of the
Persons (and, for each such Person, to the extent) set forth in clauses (i) and
(ii) above. The Trustee shall possess all right, title and interest in all funds
from time to time on deposit in, and all Eligible Investments credited to, the
Trust Accounts and in all proceeds thereof. The Trust Accounts shall be under
the sole dominion and control of the Trustee for the exclusive benefit of the
Persons (and, for each such Person, to the extent) set forth in clauses (i) and
(ii) above.
(b) All Eligible Investments in the Trust Accounts shall be held by
the Trustee, on behalf of the Certificateholders, for the exclusive benefit of
the Purchasers and, subject to the prior interest of the Purchasers, the owner
of the Series 1998-1 Subordinated Interest; provided, however, that funds on
deposit in a Trust Account which is a Sub-subaccount of a Collection Account
may, at the direction of the Company, be invested together with funds held in
other Sub-subaccounts of the Collection Account. In the absence of written
direction from the Company all funds held in any Trust Account will remain
uninvested. After giving effect to any distribution to the Company pursuant to
subsection 3A.3(b), amounts on deposit and available for investment in the
Series 1998-1 Principal Collection Sub-subaccount, the Series 1998-1
30
Canada/U.S. Dollar Collection Subaccount and the Series 1998-1 Canada/Canadian
Dollar Collection Subaccount shall be invested by the Trustee at the written
direction of the Company in Eligible Investments that mature, or that are
payable or redeemable upon demand of the holder thereof, (i) in the case of any
such investment made during the Series 1998-1 Revolving Period, on or prior to
the next Business Day and (ii) in the case of any such investment made during
the Series 1998-1 Amortization Period, on or prior to the Business Day
immediately preceding the next Distribution Date. Amounts on deposit and
available for investment in the Series 1998-1 Non-Principal Collection
Sub-subaccount and the Series 1998-1 Accrued Interest Sub-subaccount shall be
invested by the Trustee at the written direction of the Company in Eligible
Investments that mature, or that are payable or redeemable upon demand of the
holder thereof, on or prior to the Business Day immediately preceding the next
Distribution Date. As of the Business Day immediately preceding such next
Distribution Date, (x) all interest and other investment earnings (net of losses
and investment expenses) on funds deposited in the Series 1998-1 Accrued
Interest Sub-subaccount shall be deposited in the Series 1998-1 Non-Principal
Collection Sub-subaccount and (y) all interest and investment earnings (net of
losses and investment expenses) on funds deposited in the Series 1998-1
Principal Collection Sub-subaccount, the Series 1998-1 Canada/U.S. Dollar
Collection Subaccount and the Series 1998-1 Canada/Canadian Dollar Collection
Subaccount shall be deposited in the Series 1998-1 Non-Principal Collection
Sub-subaccount. In the absence of written direction from the Company all funds
held in any Trust Account will remain uninvested.
SECTION 3A.3. Daily Allocations. In accordance with the written
direction of the Servicer, and based solely on the Daily Report upon which the
Trustee may conclusively rely:
(a) The portion of the Aggregate Daily Collections allocated to the
Series 1998-1 Interests pursuant to Article III of the Agreement shall be
allocated and distributed on each Business Day as set forth in this Article III
by the Trustee as follows:
(i) an amount equal to the Accrued Expense Amount for such day
(or, during the Series 1998-1 Revolving Period, such greater amount as the
Company may request in writing) shall be transferred from the Series
1998-1 Collection Subaccount; provided that if the amount on deposit in
the Series 1998-1 Collection Subaccount is less than the Accrued Expense
Amount required to be transferred to the Series 1998-1 Non-Principal
Collection Sub-subaccount, then an amount equal to the shortfall shall be
retained, first, in the Series 1998-1 Canada/U.S. Dollar Collection
Subaccount and, second, to the extent of any remaining shortfall, in the
Series 1998-1 Canada/Canadian Dollar Collection Subaccount; and provided
further that, on each Distribution Date, such retained amounts shall be
transferred to the Series 1998-1 Non-Principal Collection Sub-subaccount;
(ii) any remaining funds on deposit in the Series 1998-1
Collection Subaccount, the Series 1998-1 Canada/Canadian Dollar Collection
Subaccount and the Series 1998-1 Canada/U.S. Dollar Collection Subaccount
shall be transferred by the Trustee to the Series 1998-1 Principal
Collection Sub-subaccount; provided that during the Series 1998-1
Revolving Period, amounts on deposit in the Series 1998-1 Canada/Canadian
Dollar Collection Subaccount and the Series 1998-1 Canada/U.S. Dollar
Collection Subaccount shall be transferred, in the order of priority set
forth in subsection 3.1(d)(vii) of the Agreement, to the Series 1998-1
Principal Collection Sub-subaccount only to the extent such amounts are
required to be distributed otherwise than to or upon the order of the
Company as provided in subsection (b)(i) below; and provided further that
on any day on which the principal amount of Commercial Paper
31
shall be payable by the Initial Purchaser, upon the request of the
Servicer or, after the commencement of an Early Amortization Period, the
Funding Agent, the Trustee shall distribute to the Funding Agent an amount
equal to the principal amount of such maturing Commercial Paper, first,
from amounts on deposit in the Series 1998-1 Collection Subaccount and
second, if the amount on deposit in the Series 1998-1 Collection
Subaccount is less than the principal amount of such maturing Commercial
Paper, from amounts on deposit in the Series 1998-1 Canada/U.S. Dollar
Collection Subaccount and the Series 1998-1 Canada/Canadian Dollar
Collection Subaccount in the order of priority set forth in subsection
3.1(d)(vii) of the Agreement, up to the amount of the shortfall;
(b)(i) On each Business Day during the Series 1998-1 Revolving
Period (including Distribution Dates), after giving effect to (x) all
allocations, transfers and distributions of Aggregate Daily Collections on such
Business Day and any retention of funds in the Series 1998-1 Canada/U.S. Dollar
Collection Subaccount and the Series 1998-1 Canada/Canadian Dollar Collection
Subaccount and (y) any deposit resulting from an Increase, if any, pursuant to
subsection 2.5(c) on such Business Day, amounts on deposit in the Series 1998-1
Principal Collection Sub-subaccount, the Series 1998-1 Canada/U.S. Dollar
Collection Subaccount and the Series 1998-1 Canada/Canadian Dollar Collection
Subaccount shall be distributed by the Trustee to or upon the order of the
Company (but only to the extent that the Trustee has received a Daily Report
which reflects the receipt of the Collections on deposit therein) not later than
2:00 p.m., New York City time, in accordance with directions contained in the
Daily Report; provided that such distribution shall be made only if no Early
Amortization Event or Potential Early Amortization Event in each case set forth
in Section 7.1 of the Agreement or in subsections (a), (d) (but only with
respect to a Servicer Default set forth in subsection 6.1(e) of the Servicing
Agreement), (g), (i) or (j) of Section 5.1 of this Supplement has occurred and
is continuing and only to the extent that, if after giving effect to such
distribution, the Series 1998-1 Target Receivables Amount would not exceed the
Series 1998-1 Allocated Receivables Amount; provided further that if notice of
any Liens of the type described in subsection (j) of Section 5.1 of this
Supplement shall be filed against WESCO, the Company or the Trust that, in any
one instance or in the aggregate secures an amount that is less than $1,000,000,
the Trustee shall withhold from such distribution the aggregate amount secured
by such Liens, until there shall have been delivered to the Trustee and each
Rating Agency proof of the release of, or payment of the amounts secured by,
such Liens; provided further that if the Company or the Servicer, on behalf of
the Company, shall have given the Funding Agent irrevocable written notice
(effective upon receipt) at least two Business Days prior to such day, in the
case of any notice given prior to the APA Bank Purchase Date, on such day, in
the case of any notice given on or after the APA Bank Purchase Date with respect
to the Floating Tranche, or at least three Business Days prior to such day, in
the case of any notice given on or after the APA Bank Purchase Date with respect
to the Eurodollar Tranche, the Company or the Servicer may instruct the Trustee
in writing (specifying the related amount) to withdraw all or a portion of such
amounts on deposit in the Series 1998-1 Principal Collection Sub-subaccount and
apply such withdrawn amounts toward the reduction of the Series 1998-1 Invested
Amount and the Series 1998-1 Subordinated Interest Amount in accordance with
Section 2.7. Amounts distributed to the Company hereunder shall be deemed to be
paid first from Collections received directly by the Servicer and second from
Collections received in the Lockboxes.
(ii) On each Business Day during the Series 1998-1 Amortization
Period (including Distribution Dates), funds deposited in the Series 1998-1
Principal Collection Sub-subaccount shall be invested in Eligible Investments
that mature on or prior to the Business Day
32
immediately preceding the next Distribution Date and shall be distributed on
such Distribution Date in accordance with subsection 3A.6(c). Except as set
forth in subsection 3A.6(c), no amounts on deposit in the Series 1998-1
Principal Collection Sub-subaccount shall be distributed by the Trustee to the
Company or the owner of the Series 1998-1 Subordinated Interest during the
Series 1998-1 Amortization Period.
(c) On each Business Day, an amount equal to the Daily Interest
Deposit for such day shall be transferred by the Trustee from the Series 1998-1
Non-Principal Collection Sub-subaccount to the Series 1998-1 Accrued Interest
Sub-subaccount.
(d) The allocations to be made pursuant to this Section 3A.3 are
subject to the provisions of Sections 2.5, 2.7, 7.2 and 9.1 of the Agreement.
SECTION 3A.4. Determination of Interest. (a) (i) The amount of interest
distributable with respect to the VFC Certificates ("Series 1998-1 Monthly
Interest") on each Distribution Date shall be the amount of Daily Interest
Expense accrued during the Accrual Period ending on such Distribution Date.
(ii) If a change in the CP Rate, the weighted average
Eurodollar Rate or the ABR on or after any Settlement Report Date or any
withdrawal pursuant to the proviso in subsection 3A.3(a)(ii) results in a
change in Series 1998-1 Monthly Interest for the Accrual Period ending on
the Distribution Date immediately succeeding such Settlement Report Date,
the Servicer shall amend the Monthly Settlement Statement to reflect the
adjustment in the Series 1998-1 Monthly Interest for such Accrual Period
caused by such change or withdrawal and any consequent adjustments and the
Servicer shall also provide written notification to the Trustee of any
such change. Any amendment to the Monthly Settlement Statement pursuant to
this subsection 3A.4(a)(ii) shall be completed by 1:00 p.m. on the day
preceding the next Distribution Date.
(b) On each Distribution Date, the Servicer shall determine the
excess, if any (the "Interest Shortfall"), of (i) the Series 1998-1 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 ABR plus 2.0% and (C) such Interest Shortfall
(or the portion thereof which has not been paid to the Purchasers) shall be
payable as provided herein with respect to the VFC Certificates on each
Distribution Date following such Distribution Date, to but excluding the
Distribution Date on which such Interest Shortfall is paid to the VFC
Certificateholders.
(c) On any Business Day, the Company may, subject to subsection
3A.4(e), elect to allocate all or any portion of the Available Pricing Amount
(i), prior to the APA Bank Purchase Date, to one or more CP Tranches with CP
Rate Periods commencing on such Business Day by giving the Funding Agent
irrevocable written or telephonic (confirmed in writing) notice thereof, which
notice must be received by the Funding Agent prior to 1:00 p.m., New York City
time, two Business Days prior to such Business Day or (ii) on or after the APA
Bank Purchase Date, to one or more Eurodollar Tranches with Eurodollar Periods
commencing on such Business Day by giving the Funding Agent irrevocable written
or telephonic (confirmed in writing) notice thereof, which notice must be
received by the Funding Agent prior to 1:00 p.m.,
33
New York City time, three Business Days prior to such Business Day. Such notice
shall specify (i) the applicable Business Day, (ii) the CP Rate Period for each
CP Tranche or the Eurodollar Period for each Eurodollar Tranche, as the case may
be, to which a portion of the Available Pricing Amount is to be allocated and
(iii) the portion of the Available Pricing Amount being allocated to each such
CP Tranche or Eurodollar Tranche, as the case may be. On or after the APA Bank
Purchase Date, the Funding Agent shall notify each APA Bank of the contents of
each such notice promptly upon receipt thereof. Prior to the APA Bank Purchase
Date, the Company shall allocate the Series 1998-1 Invested Amount so that the
aggregate amounts allocated to outstanding CP Rate Periods at all times equal
the Series 1998-1 Invested Amount.
(d) Any reduction in the Series 1998-1 Invested Amount on any
Business Day shall be allocated in the following order of priority:
First, to reduce the Unallocated Balance, as appropriate; and
Second, to reduce the portion of the Series 1998-1 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.
(e) Notwithstanding anything to the contrary contained in this
Section 3A.4, (i) prior to the APA Bank Purchase Date, (A) the Initial Purchaser
shall approve the length of each CP Rate Period and the portion of the Series
1998-1 Invested Amount allocated to such CP Rate Period, (B) the Initial
Purchaser may select, in its sole discretion, any new CP Rate Period if (x) the
Company fails to provide notice of a new CP Rate Period on a timely basis or (y)
the Funding Agent, on behalf of the Initial Purchaser, determines, in its sole
discretion, that the CP Rate Period requested by the Company is unavailable or
for any reason commercially undesirable, (C) the portion of the Series 1998-1
Invested Amount allocable to each CP Tranche must be in an amount equal to
$1,000,000 or an integral multiple of $100,000 in excess thereof and (D) no more
than twenty CP Tranches shall be outstanding at any one time and (ii) on and
after the APA Bank Purchase Date, (A) the portion of the Series 1998-1 Invested
Amount allocable to each Eurodollar Tranche must be in an amount equal to
$500,000 or an integral multiple of $500,000 in excess thereof, (B) no more than
20 Eurodollar Tranches shall be outstanding at any one time, (C) after the
occurrence and during the continuance of any Early Amortization Event or
Potential Early Amortization Event in each case set forth in Section 7.1 of the
Agreement or in subsections (a), (d) (but only with respect to a Servicer
Default set forth in subsection 6.1(e) of the Servicing Agreement), (g), (i),
(j) or (k) of Section 5.1 of this Supplement, the Company may not elect to
allocate any portion of the Available Pricing Amount to a Eurodollar Tranche and
(D) after the end of the Series 1998-1 Revolving Period, the Company may not
select any Eurodollar Period that does not end on or prior to the next
succeeding Distribution Date.
SECTION 3A.5. Determination of Series 1998-1 Monthly Principal. (a)
Payments of Series 1998-1 Principal. The amount (the "Series 1998-1 Monthly
Principal Payment") distributable from the Series 1998-1 Principal Collection
Sub-subaccount on each Distribution Date during the Series 1998-1 Amortization
Period shall be equal to the amount on deposit in such account on the
immediately preceding Settlement Report Date; provided, however, that the Series
1998-1 Monthly Principal Payment on any Distribution Date shall not exceed the
Series 1998-1 Invested Amount on such Distribution Date after giving effect to
the reductions and increases pursuant to paragraphs (b) and (c) below. In
addition, on the last day of any Eurodollar Period that is not a Distribution
Date, the Trustee, at the written direction of the
34
Servicer, shall distribute from amounts on deposit in the Series 1998-1 Accrued
Interest Sub-subaccount an amount equal to the interest due on the Eurodollar
Tranche on the last day of such Eurodollar Period.
(b) Reductions to Series 1998-1 Principal. If, on any Special
Allocation Settlement Report Date, the Series 1998-1 Allocable Charged-Off
Amount is greater than zero for the related Settlement Period, the Trustee shall
(in accordance with written directions from the Servicer, upon which the Trustee
may conclusively rely) make the following allocations of such amounts in the
following order of priority:
(i) the Series 1998-1 Required Reserves shall be reduced (but
not below zero) by an amount equal to the Series 1998-1 Allocable
Charged-Off Amount (which shall also be reduced by the amount so applied);
and
(ii) then, to the extent that the Series 1998-1 Allocable
Charged-Off Amount is greater than zero following the application in
clause (i) above, the Series 1998-1 Invested Amount shall be reduced (but
not below zero) by such remaining Series 1998-1 Allocable Charged-Off
Amount (which shall also be reduced by the amount so applied).
(c) Increases to Series 1998-1 Principal. If, on any Special
Allocation Settlement Report Date, the Series 1998-1 Allocable Recoveries Amount
is greater than zero for the related Settlement Period, the Trustee shall (in
accordance with written directions from the Servicer upon which the Trustee may
conclusively rely) make the following allocations (after giving effect to the
applications in paragraph (b) of such amount in the following order of
priority):
(i) the Series 1998-1 Invested Amount shall be increased (but
only to the extent of any previous reductions of the Series 1998-1
Invested Amount pursuant to subsection 3A.5(b)(ii)) by the amount of the
Series 1998-1 Allocable Recoveries Amount (which shall also be reduced by
the amount so applied);
(ii) then, to the extent that the Series 1998-1 Allocable
Recoveries Amount is greater than zero following the applications in
clause (i) above, the Series 1998-1 Required Reserves shall be increased
(but only to the extent of any previous reductions of the Series 1998-1
Required Reserves pursuant to subsection 3A.5(b)(i)) by such remaining
Series 1998-1 Allocable Recoveries Amount (which shall also be reduced by
the amount so applied).
SECTION 3A.6. Applications. (a) (i) On each Distribution Date, based
solely on the Monthly Settlement Statement, the Trustee shall distribute to the
Purchasers, from amounts on deposit in the Series 1998-1 Accrued Interest
Sub-subaccount, an amount equal to the Series 1998-1 Monthly Interest payable on
such Distribution Date (such amount, the "Monthly Interest Payment"), plus the
amount of any Monthly Interest Payment previously due but not distributed to the
Purchasers on a prior Distribution Date, plus the amount of any Additional
Interest for such Distribution Date and any Additional Interest previously due
but not distributed to the Purchasers on a prior Distribution Date, provided
that the Monthly Interest Payment will be reduced by distributions made pursuant
to clause (ii);
(ii) on any day during an Accrual Period, the Funding Agent
may request the Trustee to distribute from the Series 1998-1 Accrued
Interest Sub-subaccounts, an
35
amount sufficient to pay the discount component of Commercial Paper notes
issued by PARCO to fund the Series 1998-1 Invested Amount and maturing on
such day.
(b) On each Distribution Date, based solely on the Monthly
Settlement Statement, the Trustee shall apply funds on deposit in the Series
1998-1 Non-Principal Collection Sub-subaccount in the following order of
priority to the extent funds are available:
(i) an amount equal to the Series 1998-1 Monthly Servicing Fee
for the Accrual Period ending on such Distribution Date shall be withdrawn
from the Series 1998-1 Non-Principal Collection Sub-subaccount by the
Trustee and paid to the Servicer or, if WESCO or any Affiliate thereof is
not the Servicer, an amount equal to the Series 1998-1 Monthly Servicing
Fee shall be paid to the Person acting as Successor Servicer (less, in
each case, any amounts payable to the Trustee pursuant to Section 8.5 of
the Agreement, which shall be paid to the Trustee);
(ii) an amount equal to the Facility Fee for the Accrual
Period ending on such Distribution Date shall be withdrawn from the Series
1998-1 Non-Principal Collection Sub-subaccount by the Trustee and paid to
the Funding Agent, for the account of the Initial Purchaser;
(iii) an amount equal to the Commitment Fee for the Accrual
Period ending on such Distribution Date shall be withdrawn from the Series
1998-1 Non-Principal Collection Sub-subaccount by the Trustee and paid to
the Funding Agent, for the pro rata account of the APA Banks, in
accordance with their respective Commitment Percentages; and
(iv) an amount equal to any unpaid Program Costs due and
payable shall be withdrawn from the Series 1998-1 Non-Principal Collection
Sub-subaccount by the Trustee and paid to the Persons owed such amounts.
Any remaining amounts on deposit in the Series 1998-1 Non-Principal Collection
Sub-subaccount (in excess of the Accrued Expense Amount as of such day) not
allocated pursuant to clauses (i) through (v) above shall be paid to the owner
of the Series 1998-1 Subordinated Interest; provided, however, that during the
Series 1998-1 Amortization Period, such remaining amounts shall be deposited in
the Series 1998-1 Principal Collection Sub-subaccount for distribution in
accordance with subsection 3A.6(c).
(c) During the Series 1998-1 Amortization Period, the Trustee shall
apply, on each Distribution Date, amounts on deposit in the Series 1998-1
Principal Collection Sub-subaccount in the following order of priority:
(i) an amount equal to the Series 1998-1 Monthly Principal
Payment for such Distribution Date shall be distributed from the Series
1998-1 Principal Collection Sub-subaccount to the Purchasers; and
(ii) if, following the repayment in full of the Series 1998-1
Invested Amount, and the PARCO Residual Amount, if any, any amounts are
owed to the Trustee, the Purchasers or any other Person hereunder, such
amounts shall be transferred from the Series 1998-1 Principal Collection
Sub-subaccount and paid to the Trustee, the Purchasers or such other
Person; and
36
(iii) following the repayment in full of the Series 1998-1
Invested Amount and the PARCO Residual Amount, if any, and of all of the
amounts set forth in clause (ii), the remaining amount on deposit in the
Series 1998-1 Principal Collection Sub-subaccount on such Distribution
Date, if any, shall be distributed to the owner of the Series 1998-1
Subordinated Interest;
(iv) following the APA Bank Purchase Date, to the extent that
funds received as the Purchase Price are not used to repay Commercial
Paper, the Initial Purchaser shall invest such funds in Eligible
Investments which mature on or prior to the day prior to the maturity of
its Commercial Paper and any funds resulting from earnings on such
Eligible Investments shall be distributed to the Series 1998-1
Non-Principal Collection Sub-subaccount.
Further, on any other Business Day during the Series 1998-1
Amortization Period, funds may be distributed from the Series 1998-1 Principal
Collection Sub-subaccount to the Purchasers in accordance with Section 2.7(a) of
this Supplement.
ARTICLE IV
DISTRIBUTIONS AND REPORTS
Article IV of the Agreement (except for any portion thereof relating
to another Series) shall read in its entirety as follows and the following shall
be exclusively applicable to the VFC Certificates:
SECTION 4A.1. Distributions. (a) On each Distribution Date, the
Trustee shall distribute to each Purchaser its applicable pro rata share (based
on each such Purchaser's Series 1998-1 Invested Amount) of the amount to be
distributed to the Purchasers pursuant to Article III.
(b) All allocations and distributions hereunder shall be in
accordance with the Daily Report and the Monthly Settlement Statement and shall
be made in accordance with the provisions of Section 11.4 hereof and subject to
Section 3.1(g) of the Agreement.
SECTION 4A.2. Reports. The Servicer shall provide the Funding Agent
and the Trustee with a Daily Report in accordance with subsection 4.1 of the
Servicing Agreement. The Funding Agent shall make copies of the Daily Report
available to the Purchaser at its reasonable request at the Funding Agent's
office in New York, New York.
SECTION 4A.3. Statements and Notices. (a) Monthly Settlement
Statements. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and the Funding Agent (commencing with the Settlement Report Date
occurring on June 15, 1998) a Monthly Settlement Statement in the Form of
Exhibit E setting forth, among other things, the Loss Reserve Ratio, the
Dilution Reserve Ratio, the Minimum Ratio, the Carrying Cost Reserve Ratio, the
Servicing Reserve Ratio and the components of the calculation thereof, the
Series 1998-1 Monthly Interest, the Additional Interest, the Series 1998-1
Monthly Servicing Fee, the Commitment Fee and the Series 1998-1 Monthly
Principal Payment, each as recalculated for the period until the next succeeding
Settlement Report Date. The Funding Agent shall forward a copy of each Monthly
Settlement Statement to any Purchaser upon request by such Purchaser. The
Company and the Servicer will deliver copies of all notices, reports, statements
and other
37
documents delivered by it pursuant to the Pooling and Servicing Agreements to
each Rating Agency. A copy of any such items may be obtained by any
Certificateholder upon a written request delivered to the Trustee at the
Corporate Trust Office.
(b) Annual Certificateholders' Tax Statement. On or before January
31 of each calendar year (or such earlier date as required by applicable law),
beginning with calendar year 1999, the Trustee shall furnish, or cause to be
furnished, to each Person who at any time during the preceding calendar year was
a Purchaser, a statement prepared by the Company containing the aggregate amount
distributed to such Person for such calendar year or the applicable portion
thereof during which such Person was a Purchaser, together with such other
information as is required to be provided by an issuer of indebtedness under the
Internal Revenue Code and such other customary information as the Company deems
necessary or desirable to enable the Purchasers to prepare their tax returns.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall have been prepared by the
Servicer and provided to the Trustee or the Funding Agent and to the Purchasers,
in each case pursuant to any requirements of the Internal Revenue Code as from
time to time in effect.
(c) Early Amortization Event/Distribution of Principal Notices. Upon
the occurrence of an Early Amortization Event or Potential Early Amortization
Event with respect to Series 1998-1, the Company or the Servicer, as the case
may be, shall give prompt written notice thereof to the Trustee and the Funding
Agent. As promptly as reasonably practicable after its receipt of notice of the
occurrence of an Early Amortization Event with respect to Series 1998-1, the
Trustee shall give notice thereof (i) to each Rating Agency (which notice shall
be given in writing not later than the second Business Day after such receipt)
and (ii) to the Funding Agent, who in turn shall give notice to each Purchaser.
In addition, on the Business Day preceding each day on which a distribution of
principal is to be made during the Series 1998-1 Amortization Period, the
Servicer shall direct the Funding Agent to send notice to each Purchaser, which
notice shall set forth the amount of principal to be distributed on the related
date to the Purchasers with respect to the outstanding VFC Certificates.
ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS
SECTION 5.1. Additional Early Amortization Events. If any one of the
events specified in Section 7.1 of the Agreement (after any grace periods or
consents applicable thereto) or any one of the following events (each, an "Early
Amortization Event") shall occur during the Series 1998-1 Revolving Period with
respect to the Series 1998-1 Interests:
(a) (i) failure on the part of the Servicer to direct any payment or
deposit to be made or failure of any payment or deposit to be made in
respect of interest owing on any VFC Certificates or the Commitment Fee
within two Business Days of the date such interest or Commitment Fee is
due, (ii) failure on the part of the Servicer to direct any payment or
deposit to be made in respect of principal owing on any VFC Certificates
on the date such principal is due or (iii) failure on the part of the
Servicer to direct any payment or deposit to be made, or of the Company to
make any payment or deposit in respect of any other amounts owing by the
Company, under any Pooling and Servicing Agreement within two Business
Days of the date such other amount is due or such deposit is required to
be made;
38
(b) (i) failure on the part of the Company to duly observe or
perform in any material respect any of the covenants or agreements of the
Company set forth in Sections 2.7(b) or (l) or Section 2.8 of the
Agreement or (ii) failure on the part of the Company to duly observe or
perform in any material respect any other covenants or agreements of the
Company set forth in any Pooling and Servicing Agreement, which failure
continues unremedied 30 days after the earlier of the date on which a
Responsible Officer of the Company or the Servicer has knowledge thereof
and the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Company by the Trustee, or to
the Company and the Trustee by the Funding Agent or Purchasers
representing 25% or more of the Series 1998-1 Invested Amount.
(c) any representation or warranty made or deemed made by the
Company in any Pooling and Servicing Agreement to or for the benefit of
the Purchasers (i) proves to have been incorrect in any material respect
when made or when deemed made and (ii) continues to be incorrect until 30
days after the earlier of the date on which a Responsible Officer of the
Company or the Servicer has knowledge thereof and the date on which notice
of such failure, requiring the same to be remedied, has been given by the
Trustee to the Company or by Purchasers representing 25% or more of the
Series 1998-1 Invested Amount to the Company and the Trustee; provided,
however, that an Early Amortization Event with respect to the Series
1998-1 Interests shall not be deemed to have occurred under this paragraph
if the incorrectness of such representation or warranty gives rise to an
obligation to repurchase the related Receivables and the Company has
repurchased the related Receivable or all such Receivables, if applicable,
in accordance with the provisions of any Pooling and Servicing Agreement
within two Business Days of the day on which the Company was obligated to
do so;
(d) a Servicer Default with respect to the Servicer shall have
occurred and be continuing;
(e) a Purchase Termination Event (as defined in the Receivables Sale
Agreement) shall have occurred with respect to WESCO and be continuing
under the Receivables Sale Agreement;
(f) a Change in Control shall have occurred;
(g) the Series 1998-1 Allocated Receivables Amount shall be less
than the Series 1998-1 Target Receivables Amount for more than five
Business Days;
(h) any of the Agreement, the Servicing Agreement, this Supplement
or the Receivables Sale Agreements shall cease, for any reason, to be in
full force and effect in any material respect, or the Company, any Seller,
the Servicer, any Sub-Servicer or any Affiliate of any thereof shall so
assert in writing;
(i) the Trust shall for any reason cease to have a valid and
perfected first priority undivided ownership or security interest in
substantially all of the Filing Trust Assets (subject to no other Liens
other than Permitted Liens described in clause (i) of the definition
thereof), or any of WESCO, the Company or any Affiliate of either thereof
shall so assert; or
39
(j) 15 days shall have elapsed after there shall have been filed
against WESCO, the Company or the Trust (i) a notice of federal tax Lien
from the Internal Revenue Service or (ii) a notice of Lien from the PBGC
under Section 412(n) of the Internal Revenue code or Section 302(f) of
ERISA for a failure to make a required installment or other payment to a
plan to which either of such sections applies and, in any one instance or
in the aggregate, the amount secured by such Liens exceeds $1,000,000,
unless in each case there shall have been delivered to the Trustee and
each Rating Agency proof of the release of, or payment of amounts secured
by, such Lien;
(k) there shall have been filed against WESCO, the Company 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, unless in each case there shall
have been delivered to the Trustee and each Rating Agency proof of the
release of, or payment of amounts secured by, such Lien;
(l) (i) WESCO or any of its Subsidiaries shall default in the
payment of any of its outstanding Indebtedness (including, without
limitation, Indebtedness outstanding under the Credit Agreement) or in the
observance or performance of any agreement or condition relating to such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause
such Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance of such Indebtedness, prior to its stated
maturity; or (ii) after the occurrence of either of the events described
in paragraphs (v) or (vi) of the definition of PARCO Wind-Down Event,
WESCO or any of its subsidiaries shall default in the observance or
performance of any of the Financial Covenants, the effect of which default
or other event or condition is to cause, or to permit the holder or
holders of the Indebtedness outstanding under the Credit Agreement or any
trustee or agent on its or their behalf to cause, such Indebtedness to
become due, or to require the prepayment, repurchase, redemption or
defeasance of such Indebtedness, prior to its stated maturity; provided,
however, that no Early Amortization Event with respect to any Indebtedness
other than Indebtedness outstanding under the Credit Agreement shall be
deemed to occur under this paragraph unless the aggregate amount of such
Indebtedness in respect of which any default or other event or condition
referred to in this paragraph shall have occurred shall be equal to at
least $20,000,000;
(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 the
Servicer or any properties, revenues or rights of either thereof which
could reasonably be expected to have a Material Adverse Effect;
(n) one or more judgments or decrees shall be entered against the
Servicer or the Company involving in the aggregate a liability (not paid
or fully covered by insurance) of (i) in the case of the Servicer,
$20,000,000 or (ii) in the case of the Company, $25,000, or more and such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(o) any event of the type described in Section 7.1(a) of the
Agreement shall occur with respect to the Servicer of any Sub-Servicer;
40
then, in the case of (x) any event described in Section 7.1 of the Agreement and
paragraphs (h), (i) and (o) above, automatically without any notice or action on
the part of the Trustee or Purchasers, an early amortization period shall
immediately commence or (y) any other event described above, after the
applicable grace period (if any) set forth in such subsections, the Trustee may,
and at the written direction of the Required APA Banks shall, by written notice
then given to the Company and the Servicer, declare that an early amortization
period has commenced as of the date of such notice with respect to Series 1998-1
(any such period under clause (x) or (y) above, an "Early Amortization Period");
provided however, that in the case of the event described in clause (g) above,
if an Early Amortization Period has not been declared within ten Business Days
after the occurrence of such event, then an Early Amortization Period shall
occur automatically unless, (i) prior to the end of such ten Business Day
period, the Series 1998-1 Allocated Receivables Amount shall no longer be less
than the Series 1998-1 Target Receivables Amount and (ii) so long as the Series
1998-1 Allocated Receivables Amount continues to be equal to or greater than the
Series 1998-1 Target Receivables Amount, the Majority Purchasers shall have
waived the occurrence of such event.
ARTICLE VI
SERVICING FEE
SECTION 6.1. Servicing Compensation. A monthly servicing fee (the
"Series 1998-1 Monthly Servicing Fee") shall be payable to the Servicer on each
Distribution Date for the preceding Settlement Period in an amount equal to the
product of (a) the Servicing Fee and (b) a fraction the numerator of which is
the daily average Aggregate Commitment Amount for such Settlement Period and the
denominator of which is the sum of (i) the Aggregate Invested Amounts (other
than the Series 1998-1 Invested Amount and the Invested Amount in respect of any
variable funding certificate of any other Outstanding Series) on the first day
of such Settlement Period and (ii) the Aggregate Commitment Amount on the first
day of such Settlement Period plus the Aggregate Commitment amount for any
variable funding certificate of any other Outstanding Series.
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION 7.1. Illegality. Notwithstanding any other provision herein,
if, after the Issuance Date, the adoption of or any change in any Requirement of
Law or in the interpretation, administration or application thereof shall make
it unlawful for any APA Bank to make or maintain its portion of the VFC
Certificateholders' Interest in any Eurodollar Tranche and such APA Bank shall
notify in writing the Funding Agent, the Trustee and the Company, then the
portion of each Eurodollar Tranche applicable to such APA Bank shall thereafter
be calculated by reference to the ABR. If any such change in the method of
calculating interest occurs on a day which is not the last day of the Eurodollar
Period with respect to any Eurodollar Tranche, the Company shall pay to the
Funding Agent for the account of such APA Bank the amounts, if any, as may be
required pursuant to Section 7.4.
SECTION 7.2. Increased Costs. (a) If any Change in Law (except with
respect to Taxes which shall be governed by Section 7.3) shall:
41
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any APA Bank (except any such reserve
requirement reflected in the Eurodollar Rate); or
(ii) impose on any APA Bank or the London interbank market any
other condition affecting the Transaction Documents or the funding of
Eurodollar Tranches by such APA Bank;
and the result of any of the foregoing shall be to increase the cost to such APA
Bank of making, converting into, continuing or maintaining Eurodollar Tranches
(or maintaining its obligation to do so) or to reduce any amount received or
receivable by such APA Bank hereunder (whether principal, interest or
otherwise), then the Company will pay to such APA Bank such additional amount or
amounts as will compensate such APA Bank for such additional costs incurred or
reduction suffered.
(b) If any APA Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such APA Bank's capital or the capital of any corporation controlling such
APA Bank as a consequence of its obligations hereunder to a level below that
which such APA Bank or such corporation could have achieved but for such Change
in Law (taking into consideration such APA Bank's or such corporation's policies
with respect to capital adequacy), then from time to time, the Company shall pay
to such APA Bank such additional amount or amounts as will compensate such APA
Bank for any such reduction suffered.
(c) A certificate of an APA Bank setting forth the amount or amounts
necessary to compensate such APA Bank as specified in subsections (a) and (b) of
this Section 7.2 shall be delivered to the Company (with a copy to the Funding
Agent) and shall be conclusive absent manifest error. The agreements in this
Section shall survive the termination of this Supplement and the Agreement and
the payment of all amounts payable hereunder and thereunder.
(d) Failure or delay on the part of any APA Bank to demand
compensation pursuant to this Section 7.2 shall not constitute a waiver of such
APA Bank's right to demand such compensation; provided, however, that the
Company shall not be required to compensate an APA Bank pursuant to this Section
7.2 for any increased costs or reductions incurred more than 270 days prior to
the date that such APA Bank notifies the Company of the Change in Law giving
rise to such increased costs or reductions and of such APA Bank's intention to
claim compensation therefor; provided further that, if the Change in Law giving
rise to such increased costs or reductions is retroactive, then the 270-day
period referred to above shall be extended to include the period of retroactive
effect thereof.
SECTION 7.3. Taxes. (a) Any and all payments made by the Company to
the Funding Agent or the APA Banks (including any Acquiring APA Bank) hereunder
or under the other Transaction Documents shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (i) in the case of the Funding Agent or any APA Bank, taxes that would
not be imposed but for a connection between such APA Bank or the Funding Agent
(as the case may be) and the jurisdiction imposing such tax, other than a
connection arising solely by virtue of the activities of such APA Bank or the
Funding Agent (as the case may be) pursuant to or in respect of this Agreement
or under any other Transaction Document or any transaction
42
contemplated hereunder or thereunder; (ii) any taxes imposed on the Funding
Agent or such APA Bank as a result of payments not related to the VFC
Certificates or this Supplement; (iii) any taxes that would not have been
imposed but for the failure of the Funding Agent or such APA Bank, as
applicable, to provide and keep current to the extent required by law any
certification or other documentation required to be furnished by the Funding
Agent or such APA Bank under Subsection 7.3(f) of this Supplement; (iv) any
taxes imposed as a result of a change (other than a change mandated by law or
this Agreement) by the Funding Agent or any APA Bank of the office in which any
VFC Certificate is held, accounted for or booked; and (v) any Withholding Taxes
(as defined in Subsection 7.3(g) below) except to the extent provided in
Subsection 7.3(g) below (all such excluded taxes being referred to hereinafter
as "Excluded Taxes" and all such taxes, levies, imposts, deductions, charges,
withholdings and liabilities other than Excluded Taxes being hereinafter
referred to as "Taxes"). If any Taxes shall be required by law to be deducted
from or in respect of any sum payable hereunder or under any other Transaction
Document to any APA Bank or the Funding Agent, (i) the sum payable by the
Company shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 7.3) such APA Bank or the Funding Agent, as the case may be,
receives an amount equal to the sum 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 taxing authority or
other authority in accordance with applicable law.
(b) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Transaction Document
(hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each APA Bank and the Funding Agent
for the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 7.3) paid by
such APA Bank or the Funding Agent, as the case may be, and any liability
(including penalties, interest and expenses including reasonable attorney's fees
and expenses) arising therefrom or with respect thereto whether or not such
Taxes or Other Taxes were correctly or legally asserted. A certificate as to the
amount of such payment or liability prepared by a APA Bank or the Funding Agent,
absent manifest error, shall be final, conclusive and binding for all purposes,
provided that if the Company reasonably believes that such Taxes were not
correctly or legally asserted, such APA Bank or the Funding Agent, as the case
may be shall use reasonable efforts to cooperate with the Company to obtain a
refund of such Taxes or Other Taxes. Such indemnification shall be made within
10 days after the date any APA Bank or the Funding Agent, as the case may be,
makes written demand therefor. If a APA Bank or the Funding Agent shall become
aware that it is entitled to receive a refund in respect of Taxes or Other
Taxes, it shall promptly notify the Company of the availability of such refund
and shall, within 30 days after receipt of a request by the Company, pursue or
timely claim such refund at the Company's expense. If any APA Bank or the
Funding Agent receives a refund in respect of any Taxes or Other Taxes for which
such APA Bank or the Funding Agent has received payment from the Company
hereunder, it shall promptly repay such refund (plus any interest received) to
the Company (but only to the extent of indemnity payments made, or additional
amounts paid, by the Company under this Section 7.3 with respect to the Taxes or
Other Taxes giving rise to such refund), provided that the Company, upon the
request of such APA Bank or Funding Agent, agrees to return such refund (plus
any penalties, interest or other charges required to be paid) to such APA Bank
or the Funding Agent in the event such APA Bank or the Funding Agent is required
to repay such refund to the relevant
43
taxing authority. Nothing contained herein shall require the Funding Agent or an
APA Bank (or Transferee) to make its tax returns (or any other information
relating to its taxes which it deems confidential) available to the Company or
any other Person.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Company in respect of any payment to any APA Bank or the
Funding Agent, the Company will furnish to the Funding Agent at its address
referred to in Section 11.9, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 7.3
shall survive the payment in full of principal and interest hereunder and the
termination of the Trust.
(f) The Funding Agent and each of the APA Banks (or Transferees)
agrees that, prior to the date on which the first interest payment on a VFC
Certificate is due hereunder, it will deliver to the Servicer and the Trustee
(i) if the Funding Agent or such APA Bank is not incorporated under the laws of
the United States or any State thereof (a "Non-U.S. Person"), two duly completed
copies of the United States Internal Revenue Service Form 4224 or successor
applicable or required form and (ii) an Internal Revenue Service Form W-8 or W-9
or successor applicable or required form. The Funding Agent and each APA Bank
also agrees to deliver to the Servicer and the Trustee two further copies of the
said Form 4224 and Form W-8 or W-9, or successor applicable forms or other
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Servicer and
the Trustee and such extensions or renewals thereof as may reasonably be
requested by the Servicer or the Trustee, unless in any such case the Funding
Agent or such APA Bank is unable to deliver any such form due to a change in law
prior to the date on which any such delivery would otherwise be required which
renders any such form inapplicable. Notwithstanding any provision of this
Supplement or the Agreement to the contrary, the Servicer and the Trustee shall
be entitled to withhold or cause such withholding, and additional amounts in
respect of Taxes need not be paid under this Section 7.03, with respect to the
Funding Agent, a APA Bank, a Participant or an Acquiring APA Bank in the event
that such Person fails to provide all of the forms and statements required
pursuant to this paragraph (f) to the Servicer and the Trustee.
(g) None of the Trustee, the Servicer or the Company shall withhold
with respect to any payments to the Funding Agent or the APA Banks pursuant to
Section 1446 of the Code (a "Withholding Tax") unless such withholding is
required pursuant to a written determination received by the Trustee, the
Servicer or the Company from the Internal Revenue Service. Following such
determination, notwithstanding anything to the contrary in this Section 7.3,
each APA Bank or Participant which is not created or organized under the laws of
the United States or any State thereof (including the District of Columbia)
agrees that, upon written notice by the Trustee or the Company to such APA Bank
or Participant, as the case may be, that the Trustee, the Servicer or the
Company intends to withhold Withholding Tax (such determination being a
"Withholding Event"):
(i) such APA Bank or Participant shall for tax years for which the
APA Bank or Participant has already filed United States federal income tax
returns (each a "Prior Tax Year") prior to proper notice of such
Withholding Event and as a condition to the obligations of the Servicer
and the Trustee pursuant to Subsection 7.3(a), provide (A) a signed
Officer's Certificate of such APA Bank or Participant stating that amounts
paid
44
hereunder have been included in such APA Bank's or Participant's United
States federal income tax returns for each such Prior Tax Year, which
certificate may be relied on by the Trustee and Company in asserting to
the Internal Revenue Service the applicability of Section 1463 of the Code
with respect to its liability for any Withholding Tax for each such Prior
Tax Year and (B) provide information to the Trustee and the Company or, at
the option of such APA Bank or Participant, to the Internal Revenue
Service in support of the application of Section 1463 of the Code for each
such Prior Tax Year; and
(ii) if Section 1463 of the Code is not applicable for any prior Tax
Year of such APA Bank or Participant because such APA Bank or Participant
did not properly pay the United States federal income tax due on amounts
payable on its VFC Certificates or hereunder during such Prior Tax Year,
the APA Bank or Participant shall indemnify the Trust, the Trustee and the
Company for any Withholding Tax (and any interest and penalties thereon)
payable by the Trustee, the Company, the Servicer or the Trust on such
amounts that are attributable to such Prior Tax Year and with respect to
which such APA Bank or Participant did not properly pay such United States
federal income tax.
(h) Any payments made by the Company pursuant to this Section 7.3
shall be made solely from funds available to the Company which are not otherwise
required to be applied to the payment of any amounts (other than amounts payable
to the Company) pursuant to any Pooling and Servicing Agreements, shall be
non-recourse other than with respect to funds in excess of the funds needed to
make such payment, and shall not constitute a claim against the Company to the
extent that insufficient funds exist to make such payment.
SECTION 7.4. Break Funding Payments. The Company agrees to indemnify
each APA Bank and to hold each APA Bank harmless from any loss or expense which
such APA Bank may sustain or incur as a consequence of (a) default by the
Company in making a borrowing of, conversion into or continuation of a
Eurodollar Tranche after the Company has given irrevocable notice requesting the
same in accordance with the provisions of this Supplement, or (b) default by the
Company in making any prepayment in connection with a Decrease after the Company
has given irrevocable notice thereof in accordance with the provisions of
Section 2.7 of this Supplement or (c) the making of a prepayment of a Eurodollar
Tranche prior to the termination of the Eurodollar Period for such Eurodollar
Tranche. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the Eurodollar Period (or in the case of a failure to borrow, convert or
continue, the Eurodollar Period that would have commenced on the date of such
prepayment or of such failure) in each case at the Eurodollar Rate for such
Eurodollar Tranche provided for herein over (ii) the amount of interest (as
reasonably determined by such APA Bank) which would have accrued to such APA
Bank on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market; provided that any
payments made by the Company pursuant to this subsection shall be made solely
from funds available to the Company which are not otherwise required to be
applied to the payment of any amounts (other than amounts payable to the
Company) pursuant to any Pooling and Servicing Agreements, shall be non-recourse
other than with respect to funds in excess of the funds needed to make such
payment, and shall not constitute a claim against the Company to the extent that
insufficient funds exist to make such payment. This covenant shall survive the
termination of this Supplement and the Agreement and the payment of all amounts
payable hereunder and
45
thereunder. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by any APA Bank to the Company shall be conclusive
absent manifest error.
SECTION 7.5. Alternate Rate of Interest. If prior to the
commencement of any Eurodollar Period:
(a) the Funding Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Eurodollar Period,
or
(b) the Funding Agent is advised by the Majority Purchasers that the
Eurodollar Rate for such Eurodollar Period will not adequately and fairly
reflect the cost to such Purchasers of making or maintaining the
Eurodollar Tranches during such Eurodollar Period,
then the Funding Agent shall forthwith give telecopy or telephonic notice
thereof to the Company, the Trustee and the Purchasers, whereupon until the
Funding Agent notifies the Company and the Trustee that the circumstances giving
rise to such notice no longer exist, the Available Pricing Amount shall not be
allocated to any Eurodollar Tranche.
SECTION 7.6. Mitigation Obligations. (a) If any APA Bank requests
compensation under Section 7.2, or if the Company is required to pay any
additional amount to any APA Bank or any Governmental Authority for the account
of any APA Bank pursuant to Section 7.3, then such APA Bank shall use reasonable
efforts to designate a different lending office for funding or booking its
obligations under this Supplement and the Agreement or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such APA Bank, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 7.2 or 7.3, as the case
may be, in the future and (ii) would not subject such APA Bank to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
APA Bank. The Company hereby agrees to pay all reasonable costs and expenses
incurred by any APA Bank in connection with any such designation or assignment.
(b) If any APA Bank requests compensation under Section 7.2, or if
the Company is required to pay any additional amount to any APA Bank or any
Governmental Authority for the account of any APA Bank pursuant to Section 7.3,
or if any APA Bank defaults in its obligations hereunder, then the Company may,
at its sole expense and effort, upon notice to such APA Bank and the Funding
Agent, require such APA Bank to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 11.11), all
its interests, rights and obligations under this Supplement to an assignee that
shall assume such obligations (which assignee may be another APA Bank, if an APA
Bank accepts such assignment); provided that (i) the Company shall have received
the prior written consent of the Funding Agent, which consent shall not
unreasonably be withheld, (ii) such APA Bank shall have received payment of an
amount equal to its Series 1998-1 Purchaser Invested Amount, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such Series 1998-1 Purchaser Invested Amount and
accrued interest and fees) or the Company (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 7.2 or payments required to be made pursuant to Section 7.3, such
assignment will result in a reduction in such compensation or payments. An APA
Bank shall not be required to make any such assignment
46
and delegation if, prior thereto, as a result of a waiver by such APA Bank or
otherwise, the circumstances entitling the Company to require such assignment
and delegation cease to apply.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES, COVENANTS
SECTION 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 Funding Agent and each of the Purchasers that each and every of
their respective representations and warranties contained in the Agreement is
true and correct in all material respects as of the Issuance Date and as of the
date of each Increase.
SECTION 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 not terminate the Agreement unless in compliance with
the terms of the Agreement and each Supplement relating to an Outstanding
Series;
(b) within 60 days of the date hereof, they will (i) deliver to the
Trustee executed copies of software licenses or sublicenses, in a form
reasonably acceptable to the Trustee, which grant to the Trustee the right
to utilize any of the software owned or licensed by the Servicer that is
necessary to perform the collection and administrative functions to be
performed by the Trustee under the Transaction Documents, (ii) deliver to
the Trustee executed copies of any landlord waivers, in a form reasonably
acceptable to the Trustee, that may be necessary to grant to the Trustee
access to the leased premises of the Servicer for which the Trustee may
require access to perform the collection and administrative functions to
be performed by the Trustee under the Transaction Documents, except to the
extent the Company or the Servicer, as the case may be, owns such property
and (iii) have taken all actions reasonably requested by the Trustee in
connection with, and to ensure completion of, each of the Servicer Site
Review and the Standby Liquidation System;
(c) they shall afford the Funding Agent or any representatives of
the Funding Agent access to all records relating to the Receivables at any
reasonable time during regular business hours, upon reasonable prior
notice (and without prior notice if an Early Amortization Event has
occurred), according to the Servicer's normal security and confidentiality
requirements, for purposes of inspection and shall permit the Funding
Agent or any representative of the Funding Agent to visit any of the
Company's or the Servicer's, as the case may be, offices or properties
during regular business hours and as often as may reasonably be desired to
discuss the business, operations, properties, financial and other
conditions of the Company or the Servicer with their respective officers
and employees and with their independent certified public accountants;
provided that Funding Agent shall notify the Company or the Servicer, as
the case may be, prior to any contact with such accountants and shall give
the Company or the Servicer the opportunity to participate in such
discussions;
47
(d) neither the Company nor the Servicer shall take any action, nor
permit any Seller to take any action, requiring the satisfaction of the
Rating Agency Condition pursuant to any Transaction Document without the
prior written consent of the Majority Purchasers; and
(e) it shall cooperate in good faith to allow the Trustee to use the
Servicer's available facilities and expertise upon the Servicer's
termination or default.
SECTION 8.3. Covenants of the Servicer. The Servicer hereby agrees
that:
(a) it shall provide to the Funding Agent on the Initial Closing
Date and in the case of an addition of a Seller, prior to the related Seller
Addition Date (as defined in the Receivables Sale Agreement), evidence that each
Seller, or such Seller, as the case may be, maintains disaster recovery systems
and back-up computer and other information management systems that are
reasonably satisfactory to the Funding Agent;
(b) it shall provide to the Funding Agent, simultaneously with
delivery to the Trustee or the Rating Agencies, all reports, notices,
certificates, statements and other documents required to be delivered to the
Trustee or the Rating Agencies pursuant to the Agreement, the Servicing
Agreement and the other Transaction Documents and furnish to the Funding Agent
promptly after receipt thereof a copy of each material notice, material demand
or other material communication (excluding routine communications) received by
or on behalf of the Company or the Servicer with respect to the Transaction
Documents; and
(c) it shall provide notice to the Funding Agent of the appointment
of a Successor Servicer pursuant to Section 6.2 of the Servicing Agreement.
SECTION 8.4. Representations and Warranties of the APA Banks and any
Acquiring APA Bank. Each APA Bank and any Acquiring APA Bank represents,
warrants and covenants to the Company that:
(a) it is not a trust, estate, partnership or "S Corporation"
(within the meaning of Section 1361(a) of the Code) for United States federal
income tax purposes, or if it is such an entity, the value of the entity's
interest in the VFC Certificates is less than 50% of the total value of all the
entity's assets;
(b) it has not acquired and agrees that it will not sell, trade or
transfer any interest in a VFC Certificate or cause a Participation or any other
interest in a VFC Certificate or this Supplement, to be marketed on or through
an "established securities market" within the meaning of Section 7704(b)(1) of
the Code (and the Treasury regulations promulgated thereunder) including,
without limitation, an over-the-counter market or an interdealer quotation
system that regularly disseminates firm buy or sell quotations;
(c) it is the sole beneficial owner of its VFC Certificates and it
will remain the sole beneficial owner of such VFC Certificates until such time
as such VFC Certificates, or any Participation or other interest therein, are
sold, assigned or otherwise transferred in accordance with Section 11.11 of this
Supplement; and
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(d) it will not sell, assign or transfer any VFC Certificate, or any
Participation or other interest therein, except as allowed and to the extent
permitted under Section 11.11 of this Supplement.
SECTION 8.5. Obligations Unaffected. The obligations of the Company
and the Servicer to the Funding Agent and the Purchasers under this Supplement
shall not be affected by reason of any invalidity, illegality or irregularity of
any of the Receivables or any sale of any of the Receivables.
ARTICLE IX
CONDITIONS PRECEDENT
SECTION 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 Funding Agent shall have received an original
copy for the Initial Purchaser and each APA Bank, each executed and
delivered in form and substance satisfactory to it of (i) the Agreement,
executed by a duly authorized officer of each of the Company, the Servicer
and the Trustee, (ii) this Supplement, executed by a duly authorized
officer of each of the Company, the Servicer, the Trustee, the Funding
Agent, the Initial Purchaser and the APA Banks and (iii) the other
Transaction Documents, each duly executed by the parties thereto.
(b) Corporate Documents; Corporate Proceedings of the Company and
Servicer. The Funding Agent shall have received, with a copy for the
Initial Purchaser and each APA Bank, from the Company, each Seller and the
Servicer, true and complete copies of:
(i) the certificate of incorporation, including all
amendments thereto, of such Person, certified as of a recent date by
the Secretary of State or other appropriate authority of the state
of incorporation, as the case may be, and a certificate of
compliance, of status or of good standing, as and to the extent
applicable, of each such Person as of a recent date, from the
Secretary of State or other appropriate authority of such
jurisdiction;
(ii) a certificate of the Secretary of such Person,
dated the Effective Date and certifying (A) that attached thereto is
a true and complete copy of the by-laws of such Person, as in effect
on the Effective Date and at all times since a date prior to the
date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of the resolutions, in
form and substance reasonably satisfactory to the Funding Agent, of
the Board of Directors of such Person or committees thereof
authorizing the execution, delivery and performance of the
Transaction Documents to which it is a party and the transactions
contemplated thereby, and that such resolutions have not been
amended, modified, revoked or rescinded and are in full force and
effect, (C) that the certificate of incorporation of such Person has
not been amended since the date of the last amendment thereto shown
on the certificate of good standing (or
49
its equivalent) furnished pursuant to clause (i) above and (D) as to
the incumbency and specimen signature of each officer executing any
Transaction Documents or any other document delivered in connection
herewith or therewith on behalf of such Person; and
(iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to clause (ii) above.
(c) Good Standing Certificates. The Funding Agent shall have
received copies of certificates of compliance, of status or of good
standing, dated as of a recent date, from the Secretary of State or other
appropriate authority of such jurisdiction, with respect to the Company,
the Servicer and each Seller, in each State where the ownership, lease or
operation of property or the conduct of business requires it to qualify as
a foreign corporation, except where the failure to so qualify would not
have a material adverse effect on the business, operations, properties or
condition (financial or otherwise) of the Company, the Servicer or such
Seller, as the case may be.
(d) Consents, Licenses, Approvals, Etc. The Funding Agent shall have
received, with a counterpart for the Initial Purchaser and each APA Bank,
certificates dated the date hereof of a Responsible Officer of the
Company, the Servicer and each Seller either (i) attaching copies of all
material consents, licenses and approvals required in connection with the
execution, delivery and performance by the Company, the Servicer or such
Seller, as the case may be, of this Supplement or the Receivables Sale
Agreements, as the case may be, and the validity and enforceability of
this Supplement and the Agreement against the Company and the Servicer and
the Receivables Sale Agreements against such Seller, and such consents,
licenses and approvals shall be in full force and effect or (ii) stating
that no such consents, licenses or approvals are so required.
(e) No Litigation. The Funding Agent shall have received
confirmation that there is no pending or, to their knowledge after due
inquiry, threatened action or proceeding affecting WESCO or any of its
Subsidiaries before any Governmental Authority that could reasonably be
expected to have a Material Adverse Effect with respect to WESCO and its
Subsidiaries taken as a whole.
(f) Lien Searches. The Funding Agent shall have received a written
search report listing all effective financing statements that name the
applicable Seller or the Company as debtor or assignor and that are filed
in the jurisdictions in which filings were made pursuant to paragraph (h)
below and in any other jurisdictions that the Funding Agent determines are
necessary or appropriate, together with copies of such financing
statements (none of which, except for those described in paragraph (g)
below shall cover any Receivables or Receivables Property), and tax and
judgment lien searches showing no such liens that are not permitted by the
Transaction Documents
(g) UCC Certificate. The Funding Agent shall have received from each
Seller and the Company a UCC Certificate, completed in a manner
satisfactory to the Funding Agent, duly executed by a Responsible Officer
of such Seller or the Company, as the case may be, and dated the Issuance
Date.
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(h) Filings, Registrations and Recordings. Any documents (including,
without limitation, financing statements) required to be filed in order
(i) to perfect the sale of the Receivables by each Seller to the Company
pursuant to the Receivables Sale Agreements and (ii) to create, in favor
of the Trustee, a perfected ownership/security interest in the Trust
Assets under the Agreement with respect to which an ownership/security
interest may be perfected by a filing under the UCC or other comparable
statute, shall, in each case, have been properly prepared and executed for
immediate filing in each office in each jurisdiction listed in the
Agreement or the Receivables Sale Agreements, as the case may be, and such
filings are the only filings required in order to perfect the sale of the
Receivables to the Company under the Receivables Sale Agreements or to the
Trust, under the Agreement, as the case may be, in the jurisdictions
listed therein. The Funding Agent shall have received evidence reasonably
satisfactory to it of each such filing, registration or recordation and
reasonably satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto.
(i) Legal Opinions. The Funding Agent shall have received, with a
counterpart for the Initial Purchaser and each APA Bank and the Trustee,
opinions of counsel to the Company and the Servicer, dated the Issuance
Date, as to corporate, tax, bankruptcy ("true sale" and "non-substantive
consolidation"), perfection and priority of security and/or ownership
interests and other matters in form and substance acceptable to the
Funding Agent and their counsel.
(j) Fees. The Funding Agent shall have received payment of all fees
and other amounts due and payable to it, the Initial Purchaser or the APA
Banks on or before the Effective Date, pursuant to the Fee Letter.
(k) Establishment of Accounts. The Funding Agent (x) shall have
received evidence reasonably satisfactory to it that the Collection
Accounts, the Collection Concentration Accounts, the Lockbox Accounts, the
Eligible Segregated Account and all other Trust Accounts shall have been
established in accordance with the terms and provisions of the Pooling and
Servicing Agreements, and (y) shall otherwise be satisfied with the
arrangements for collection of the Receivables pursuant thereto.
(l) Policies. The Funding Agent shall have received, with sufficient
copies for the Initial Purchaser and each APA Bank, a copy of the Policies
of each Seller, which shall be satisfactory in form and substance to the
Funding Agent.
(m) Financial Statements. The Funding Agent shall have received,
with a counterpart for the Initial Purchaser, each APA Bank and the
Trustee, on or prior to the Effective Date consolidated balance sheets,
consolidated statements of income, consolidated and consolidating
statements of shareholders' equity and consolidated statements of cash
flows of WESCO and its consolidated Subsidiaries as of and for the Fiscal
Years ended December 31, 1995, and December 31, 1996 and December 31,
1997, in each case audited by and accompanied by the opinion of Coopers &
▇▇▇▇▇▇▇ L.L.P., which shall be satisfactory in form and substance to the
Funding Agent, the Initial Purchaser and the Trustee.
(n) Execution of the Credit Agreement. The Credit Agreement shall
have been executed prior to or on the date hereof.
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(o) Insurance. The Funding Agent shall have received, with a
counterpart for each Purchaser and the Trustee, on or prior to the
Effective Date a schedule listing all policies of product liability
insurance maintained by each Seller and certification by a Responsible
Officer of such Seller with respect thereto.
(p) Back-up Servicing Arrangements. The Funding Agent shall have
received evidence that each Seller maintains disaster recovery systems and
back-up computer and other information management systems that, in the
Funding Agent's reasonable judgment, are sufficient to protect such
Seller's business against material interruption or loss or destruction of
its primary computer and information management systems.
(q) Representations and Warranties. The representations and
warranties of the Company and the Servicer in the Agreement and this
Supplement shall be true and correct in all material respects.
ARTICLE X
THE FUNDING AGENT
SECTION 10.1. Appointment. Each Purchaser hereby irrevocably
designates and appoints the Funding Agent as the agent of such Purchaser under
this Supplement and each such Purchaser irrevocably authorizes the Funding
Agent, in such capacity, to take such action on its behalf under the provisions
of this Supplement and to exercise such powers and perform such duties as are
expressly delegated to the Funding Agent by the terms of this Supplement,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Supplement, the
Funding Agent shall not have any duties or responsibilities except those
expressly set forth herein, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Supplement or otherwise exist against the
Funding Agent.
SECTION 10.2. Delegation of Duties. The Funding Agent may execute
any of its duties under this Supplement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel (who may be counsel
for the Company or the Servicer), independent public accountants and other
experts selected by it concerning all matters pertaining to such duties. The
Funding Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys in-fact selected by it with reasonable care.
SECTION 10.3. Exculpatory Provisions. Neither the Funding Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with the Agreement or this
Supplement (x) with the consent or at the request of the Majority Purchasers or
(y) in the absence of its own gross negligence or willful misconduct or (ii)
responsible in any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by the Company or any officer thereof
contained in this Supplement or any other Transaction Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Funding Agent under or in connection with, this Supplement or
any other Transaction Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Supplement or any other
Transaction Document or for any failure of the Company to perform its
obligations hereunder or thereunder. The Funding Agent shall not be
52
under any obligation to any Purchaser to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Supplement or any other Transaction Document, or to inspect the
properties, books or records of the Company.
SECTION 10.4. Reliance by Funding Agent. The Funding Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Certificate,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company or the Servicer),
independent accountants and other experts selected by the Funding Agent and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts. The
Funding Agent may deem and treat the payee of any Certificate as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Funding Agent. The Funding Agent
shall be fully justified in failing or refusing to take any action under this
Supplement or any other Transaction Document unless it shall first receive such
advice or concurrence of the Majority Purchasers as it deems appropriate or it
shall first be indemnified to its satisfaction by the Purchasers against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Funding Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Supplement
and the other Transaction Documents in accordance with a request of the Majority
Purchasers, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Purchasers.
SECTION 10.5. Notice of Servicer Default or Early Amortization Event
or Potential Early Amortization Event. The Funding Agent shall not be deemed to
have knowledge or notice of the occurrence of any Servicer Default with respect
to the Servicer or any Early Amortization Event or Potential Early Amortization
Event hereunder unless the Funding Agent has received notice from a Purchaser,
the Company or the Servicer referring to the Agreement or this Supplement,
describing such Servicer Default or Early Amortization Event or Potential Early
Amortization Event and stating that such notice is a "notice of a Servicer
Default with respect to the Servicer" or a "notice of an Early Amortization
Event or Potential Early Amortization Event", as the case may be. In the event
that the Funding Agent receives such a notice, the Funding Agent shall give
notice thereof to the Purchasers, the Trustee, the Company and the Servicer. The
Funding Agent shall take such action with respect to such Servicer Default or
Early Amortization Event or Potential Early Amortization Event as shall be
reasonably directed by the Majority Purchasers, provided that unless and until
the Funding Agent shall have received such directions, the Funding Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Servicer Default or Early Amortization Event or
Potential Early Amortization Event as it shall deem advisable in the best
interests of the Purchasers.
SECTION 10.6. Non-Reliance on the Funding Agent and Other
Purchasers. Each Purchaser expressly acknowledges that neither the Funding Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Funding Agent hereinafter taken, including any review of the affairs of the
Company, shall be deemed to constitute any representation or warranty by the
Funding Agent to any Purchaser. Each Purchaser represents to the Funding Agent
that it has, independently and without reliance upon the Funding Agent or any
other Purchaser, and based
53
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and made its
own decision to enter into this Supplement. Each Purchaser also represents that
it will, independently and without reliance upon the Funding Agent or any other
Purchaser, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Supplement and the other
Transaction Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly required to be furnished to the Purchasers by the
Funding Agent hereunder, the Funding Agent shall not have any duty or
responsibility to provide any Purchaser with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Company which may come into the
possession of the Funding Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
SECTION 10.7. Indemnification. The Purchasers agree to indemnify the
Funding Agent in its capacity as such (to the extent not reimbursed by the
Company and the Servicer and without limiting the obligation of the Company and
the Servicer to do so), ratably according to their respective Series 1998-1
Purchaser Invested Amounts in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time be imposed on, incurred by or asserted
against the Funding Agent in any way relating to or arising out of the
Commitments, this Supplement, any of the other Transaction Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Funding
Agent under or in connection with any of the foregoing; provided that no
Purchaser shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Funding Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of all amounts payable hereunder.
SECTION 10.8. The Funding Agent in Its Individual Capacity. The
Funding Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Company, the Servicer or any
of their Affiliates as though the Funding Agent were not the Funding Agent
hereunder. With respect to any VFC Certificate held by the Funding Agent, the
Funding Agent shall have the same rights and powers under this Supplement and
the other Transaction Documents as any Purchaser and may exercise the same as
though it were not the Funding Agent, and the terms "APA Bank" and "Purchaser"
shall include the Funding Agent in its individual capacity.
SECTION 10.9. Successor Funding Agent. The Funding Agent may resign
as Funding Agent upon 10 days' notice to the Purchaser and the Company, such
resignation not to be effective until a successor funding agent is appointed. If
the Funding Agent shall resign as Funding Agent under this Supplement, then the
Majority Purchasers shall appoint from among the Purchasers a successor
administrative agent for the Purchasers, which successor administrative agent
shall be approved by the Company and the Servicer (which approval shall not be
unreasonably withheld), whereupon such successor administrative agent shall
succeed to the rights, powers and duties of the Funding Agent, and the term
"Funding Agent" shall mean such successor administrative agent effective upon
such appointment and approval, and the
54
former Funding Agent's rights, powers and duties as Funding Agent shall be
terminated, without any other or further act or deed on the part of such former
Funding Agent or any of the parties to this Supplement. After any retiring
Funding Agent's resignation as Funding Agent, the provisions of this Article 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Funding Agent under this Supplement.
ARTICLE XI
MISCELLANEOUS
SECTION 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. THIS SUPPLEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 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 Funding Agent or the Majority Purchasers more fully to effect the
purposes of this Supplement and the sale of the VFC Certificates hereunder,
including, without limitation, in the case of the Company and the Servicer, the
execution of any financing or registration statements or similar documents or
notices or continuation statements relating to the Receivables and the other
Trust Assets for filing or registration under the provisions of the U.C.C. or
similar legislation of any applicable jurisdiction.
SECTION 11.4. Payments. Each payment to be made hereunder shall be
made on the required payment date in lawful money of the United States and in
immediately available funds, if to the Purchasers, at the office of the Funding
Agent set forth in Section 11.9. Except in the circumstances described in
subsection 2.6(c), then on each Distribution Date, the Funding Agent shall remit
in like funds to each Purchaser its applicable pro rata share (based on each
such Purchaser's Series 1998-1 Purchaser Invested Amount) of each such payment
received by the Funding Agent for the account of the Purchasers.
SECTION 11.5. Costs and Expenses. The Company agrees to pay all
reasonable out-of-pocket costs and expenses of the Funding Agent (including,
without limitation, reasonable fees and disbursements of one counsel to the
Funding Agent) in connection with (i) the preparation, execution and delivery of
this Supplement, the Agreement and the other Transaction Documents and
amendments or waivers of any such documents and (ii) the enforcement by the
Funding Agent of the obligations and liabilities of the Company and the Servicer
under the Agreement, this Supplement, the other Transaction Documents or any
related document; provided that any payments made by the Company pursuant to
this subsection shall be made solely from funds available to the Company which
are not otherwise required to be applied to the payment of any amounts (other
than amounts payable to the Company) pursuant to
55
any Pooling and Servicing Agreements, shall be non-recourse other than with
respect to funds in excess of the funds needed to make such payment, and shall
not constitute a claim against the Company to the extent that insufficient
proceeds exist to make such payment.
SECTION 11.6. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Trustee, the Funding Agent or any
Purchaser, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 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 Funding Agent but
without the consent of any holder of any outstanding VFC Certificate, to cure
any ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein or to add any other provisions to
or change in any manner or eliminate any of the provisions with respect to
matters or questions raised under this Supplement which shall not be
inconsistent with the provisions of any Pooling and Servicing Agreement;
provided, however, that such action shall not, as evidenced by an Officer's
Certificate or, to the extent in the reasonable view of the Company, a question
of law exists, an Opinion of Counsel delivered to the Trustee, adversely affect
in any material respect the interests of the VFC Certificateholders. The Trustee
may, but shall not be obligated to, enter into any such amendment pursuant to
this paragraph or paragraph (b) below which affects the Trustee's rights, duties
or immunities under any Pooling and Servicing Agreement or otherwise.
(b) Subject to subsection (c) of this Section 11.7, this Supplement
may also be amended in writing from time to time by the Servicer, the Company
and the Trustee with the consent of the Majority Purchasers for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Supplement or of modifying in any manner the rights of the
VFC Certificateholders (including, without limitation, the acceleration of the
payment of sums payable to or for the account of the Purchasers under any
provision of this Supplement); provided, however, that no such amendment shall,
unless signed or consented to in writing by all Purchasers, (i) extend the time
for payment, or reduce the amount, of any sum payable to or for the account of
any Purchaser under any provision of this Supplement or extend the Series 1998-1
Termination Date, (ii) subject any Purchaser to any additional obligation
(including, without limitation, any change in the determination of any amount
payable by any Purchaser) or (iii) change the Aggregate Commitment Amount, the
amount of any interest or fees or the percentage of Purchasers which shall be
required for any action under this subsection or any other provision of this
Supplement.
(c) Any amendment hereof can be effected without the Funding Agent's
being party thereto; provided, however, that no such amendment, modification or
waiver of this Supplement that affects rights or duties of the Funding Agent
shall be effective unless the Funding Agent shall have given its prior written
consent thereto.
(d) No amendment hereof shall be effective until the Rating Agency
Condition has been satisfied (unless Series 1998-1 has not been rated, in which
case this subsection 11.7(d) shall not apply).
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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 10.5 of the
Agreement and (ii) in the case of the Funding Agent, the Initial Purchaser, each
APA Bank and the Rating Agencies (if the Series 1998-1 has been rated), in
writing, and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand or three days after being
deposited in the mail, postage prepaid, or, in the case of facsimile notice,
when received, (A) in the case of each APA Bank, at its address set forth on
Schedule 1 hereto, (B) addressed as follows in the case of the Funding Agent and
(C) addressed to the Rating Agencies (if the Series 1998-1 has been rated) as
notified by such Rating Agencies; or to such other address as may be hereafter
notified by the respective parties hereto:
Funding Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S&P: Standard & Poor's Ratings Service
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset-Backed Surveillance Group
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Moody's: ▇▇▇▇▇'▇ Investors Service
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Initial Purchaser: Park Avenue Receivables Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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 all of
the Purchasers, the Initial Purchaser may not assign or transfer any of its
rights under this Supplement except as set forth in Section 2.6 and each APA
57
Bank may not assign or transfer any of its rights under this Supplement except
as set forth in Section 11.11.
SECTION 11.11. Participations; Assignments. (a) Any APA Bank may,
upon prior written notice to the Funding Agent and the Rating Agencies and the
satisfaction of all applicable requirements under Section 5.3 of the Agreement
and in accordance with applicable law, assign to one or more assignees (any such
assignee shall be referred to herein as an "Acquiring APA Bank") all or a
portion of its interests, rights and obligations under this Supplement and the
Transaction Documents; provided, however, that no such assignment shall be
permitted (i) except in the case of an assignment to another APA Bank, without
the Company's prior written consent to such assignment (which consent shall not
be unreasonably withheld or delayed), (ii) if such assignment is not otherwise
permitted under subsection 5.3(e) of the Agreement, (iii) if such assignment is
for any amount less than $5,000,000, (iv) if such Acquiring APA Bank is not an
Eligible Assignee, (iv) if such assignment would cause there to be more than 30
Targeted Holders of the VFC Certificates at any time, and (v) unless the parties
to each such assignment shall execute and deliver to the Funding Agent a
commitment transfer supplement (each, a "Commitment Transfer Supplement"),
substantially in the form of Exhibit C, together with a processing and
recordation fee of $3,500, and the Acquiring APA Bank, if it shall not be a APA
Bank, shall deliver to the Funding Agent an administrative questionnaire in the
form provided by the Funding Agent. Upon acceptance and recording pursuant to
paragraph (e) of this Section 11.11, from and after the effective date specified
in each Commitment Transfer Supplement, which effective date shall be at least
five Business Days after the execution thereof, (A) the Acquiring APA Bank
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Commitment Transfer Supplement, have the rights and obligations of an
APA Bank under this Supplement and (B) the assigning APA Bank thereunder shall,
to the extent of the interest assigned by such Commitment Transfer Supplement,
be released from its obligations under this Supplement and the other Transaction
Documents (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of an assigning APA Bank's rights and obligations under
this Supplement and the other Transaction Documents, such APA Bank shall cease
to be a party hereto but shall continue to be entitled to receive Article VII
Costs, as well as any fees accrued for its account and not yet paid).
(b) By executing and delivering a Commitment Transfer Supplement,
the assigning APA Bank thereunder and the Acquiring APA Bank thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning APA Bank warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim and that its Commitment, and the outstanding balances of its VFC
Certificates, in each case without giving effect to assignments thereof which
have not become effective, are as set forth in such Commitment Transfer
Supplement; (ii) except as set forth in (i) above, such assigning APA Bank makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Supplement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Supplement, any other Transaction Document or any
other instrument or document furnished pursuant hereto or thereto, or the
financial condition of the Seller, the Company or the Servicer, or the
performance or observance by the Seller, the Company or the Servicer of any of
its obligations under this Supplement, any other Transaction Document or any
other instrument or document furnished pursuant hereto or thereto; (iii) such
Acquiring APA Bank represents and warrants that it is legally authorized to
enter into such Commitment Transfer Supplement; (iv) such Acquiring APA Bank
confirms that it has received a copy of this Supplement and such other documents
and information as it has deemed
58
appropriate to make its own credit analysis and decision to enter into such
Commitment Transfer Supplement; (v) such Acquiring APA Bank will independently
and without reliance upon the Funding Agent, the Trustee, the assigning APA Bank
or any other APA Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Supplement or any other Transaction
Document; (vi) such Acquiring APA Bank appoints and authorizes the Funding Agent
and the Trustee to take such action as agent on its behalf and to exercise such
powers under this Supplement as are delegated to the Funding Agent and the
Trustee, respectively, by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such Acquiring APA Bank agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Supplement are required to be performed by it as a APA Bank.
(c) Notwithstanding and in addition to the provisions of Section 5.3
of the Agreement, the Funding Agent shall maintain at one of its offices in The
City of New York a copy of each Commitment Transfer Supplement delivered to it
and a register for the recordation of the names and addresses of the APA Banks,
and the Commitments of, and the principal amount of the VFC Certificates issued
to, each APA Bank pursuant to the terms hereof from time to time (the
"Register"). Notwithstanding the provisions of Section 5.5 of the Agreement, the
entries in the Register as provided in this subsection 11.11(c) shall be
conclusive and the Company, the Servicer, the APA Banks, the Paying Funding
Agent, the Transfer Funding Agent and Registrar, the Funding Agent and the
Trustee shall treat each person whose name is recorded in the Register pursuant
to the terms hereof as an APA Bank hereunder for all purposes of this
Supplement, notwithstanding notice to the contrary. However, in accordance with
Section 5.5 of the Agreement, in determining whether the holders of the
requisite Fractional Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, VFC Certificates
owned by the Company, the Servicer or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only VFC Certificates which
a Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. VFC Certificates so owned by the Company, the Servicer or any
Affiliate thereof which have been pledged in good faith shall not be disregarded
and may be regarded as outstanding if the pledgee establishes to the
satisfaction of the trustee the pledgee's right so to act with respect to such
VFC Certificates and that the pledgee is not the Company, the Servicer or any
Affiliate thereof. The Register shall be available for inspection by the
Company, the Servicer, the APA Banks and the Trustee, at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of a copy of the written consent of the Company
(if required under Section 11.11(a) above) and a duly completed Commitment
Transfer Supplement executed by an assigning APA Bank and an Acquiring APA Bank,
an administrative questionnaire completed in respect of the Acquiring APA Bank
(unless the Acquiring APA Bank shall already be a APA Bank hereunder) and the
processing and recordation fee referred to in paragraph (a) above, the Funding
Agent shall (i) accept such Commitment Transfer Supplement, (ii) record the
information contained therein in the Register and (iii) give prompt written
notice thereof to the APA Banks, the Company, the Servicer and the Trustee. No
assignment shall be effective unless and until it has been recorded in the
Register as provided in this paragraph (d).
(e) Any APA Bank may sell participations to one or more banks or
other entities (the "Participants") in all or a portion of its rights and
obligations under this Supplement and the other Transaction Documents (including
all or a portion of its Commitment and VFC
59
Certificates); provided that any Participant shall, prior to entering into a
Participation, execute and deliver to the Company and the Trustee an
Assignment/Participation Certification; and provided further, that (i) such APA
Bank's obligations under this Agreement shall remain unchanged, (ii) such APA
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Participants shall be entitled to
receive Article VII Costs, and shall be required to provide the tax forms and
certifications described in Section 7.3(f), to the same extent as if they were
APA Banks, provided that no such Participant shall be entitled to receive any
greater amount of Article VIII Costs than an APA Bank would have been entitled
to receive in respect of the amount of the Participation sold by such APA Bank
to such Participant had no sale occurred, (iv) the Company, the Servicer, the
other APA Banks, the Funding Agent and the Trustee, shall continue to deal
solely and directly with such APA Bank in connection with such APA Bank's rights
and obligations under this Supplement, and such APA Bank shall retain the sole
right to enforce its rights under VFC Certificates and to approve any amendment,
modification or waiver of any provision of this Supplement (other than
amendments, modifications or waivers decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the VFC
Certificates, extending any scheduled principal payment date or date fixed for
the payment of interest on the VFC Certificates or increasing or extending the
Commitments) (v) the sum of the aggregate amount of any Commitment or portion
thereof subject to each such Participation plus the portion of the Series 1998-1
Invested Amount represented by an VFC Certificates subject to such Participation
shall not be less than $5,000,000 and (vi) such Participation shall not cause
there to more than 30 Targeted Holders of the VFC at any time. Each APA Bank
that grants a participation to a Non-U.S. Person pursuant to this Subsection
shall provide the Company and the Trustee with appropriately executed copies of
Internal Revenue Service Form 4224 with respect to each Participant (i) prior to
any such disposition and (ii) upon the occurrence of any event which would
require the amendment or resubmission of any such form previously provided
hereunder. No Participant may grant a subparticipation in a VFC Certificate or
this Supplement under any circumstances.
(f) Any APA Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.11, disclose to the Acquiring APA Bank or Participant (each, a "Transferee")
or proposed Acquiring APA Bank or Participant any information relating to the
Seller, the Servicer, the Trust or the Company furnished to such APA Bank by or
on behalf of such entities; provided that if any such information is subject to
a confidentiality agreement between such APA Bank and the Company or the
Servicer, the Transferee or prospective Transferee shall have agreed to be bound
by the terms and conditions of such confidentiality agreement.
(g) The Company shall not assign or delegate any of its rights or
duties hereunder other than to the Servicer without the prior written consent of
the Funding Agent, the Trustee and each APA Bank, and any attempted assignment
without such consent shall be null and void.
(h) If, pursuant to this Supplement, any interest in this Supplement
or in a VFC Certificate is transferred to any Transferee which is a Non-U.S.
Person, the APA Bank making such transfer shall cause such Transferee,
concurrently with the effectiveness of such Transfer, (i) to furnish to the
assigning APA Bank (and, in the case of any Acquiring APA Bank, the Funding
Agent, the Company and the Trustee), with copies to the Servicer, United States
Internal Revenue Service Form 4224 (or successor applicable forms) unless a
change in law has occurred prior to the date on which such delivery would
otherwise be required which renders such form inapplicable and (ii) to agree
(for the benefit of the APA Banks, the Funding Agent,
60
the Servicer, the Company and the Trustee) to provide the assigning APA Bank
(and, in the case of any Acquiring APA Bank, the Funding Agent, the Company and
the Trustee) a new Form 4224 (or successor applicable forms) upon the expiration
or obsolescence of any previously delivered form and comparable statements in
accordance with applicable United States laws and regulations and amendments
duly executed and completed by such Transferee unless a change in law has
occurred prior to the date on which such form inapplicable, and to comply from
time to time with all applicable United States laws and regulations with regard
to such withholding tax exemption.
(i) Notwithstanding any other provisions herein, no transfer or
assignment of any interests or obligations of any APA Bank hereunder or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would result in a prohibited transaction under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA or cause the Trust Assets to be
regarded as "plan assets" pursuant to 29 C.F.R. ss. 2510.3-101, or require the
Company or the Seller to file a registration statement with the Securities and
Exchange Commission or to qualify under the "blue sky" laws of any state.
SECTION 11.12. Adjustments; Set-off. (a) If any Purchaser (a
"Benefitted Purchaser") shall at any time receive in respect of its Series
1998-1 Invested Amount any distribution of principal, interest, Commitment Fees
or other fees, or any interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off or otherwise) in a
greater proportion than any such distribution received by any other Purchaser,
if any, in respect of such other Purchaser's Series 1998-1 Invested Amount, or
interest thereon, such Benefitted Purchaser shall purchase for cash from the
other Purchasers such portion of each such other Purchaser's interest in the VFC
Certificates, or shall provide such other Purchasers with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Purchaser to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Purchasers; provided, however, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Purchaser, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. The Company agrees that each Purchaser so purchasing a portion of the
VFC Certificateholders' Interest may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Purchaser were the direct holder of such portion.
(b) In addition to any rights and remedies of the Purchasers
provided by law, each Purchaser shall have the right, without prior notice to
the Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Company hereunder or under the VFC Certificates to set-off and appropriate and
apply against any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Purchaser to
or for the credit or the account of the Company. Each Purchaser agrees promptly
to notify the Company and the Funding Agent after any such set-off and
application made by such Purchaser; provided that the failure to give such
notice shall not affect the validity of such set-off and application.
SECTION 11.13. Counterparts. This Supplement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of
61
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 Funding Agent and
each Purchaser hereby covenants and agrees that, prior to the date which is one
year and one day after the later of (i) the last day of the Series 1998-1
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 Funding Agent and
each APA Bank hereby covenants and agrees that, prior to the date which is one
year and one day after the payment in full of all outstanding Commercial Paper,
it will not institute against, or join any other Person in instituting against,
the Initial Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other similar proceedings under any federal or state
bankruptcy or similar law.
SECTION 11.15. Limitation on Addition and Termination of Sellers.
(a) Notwithstanding anything to the contrary contained in the Receivables Sale
Agreements, no Seller or Seller Division shall be added thereunder unless each
of the following conditions shall have been satisfied:
(i) (x) in the case of a proposed addition of a Seller, each of the
conditions set forth in Section 3.02 of each of the Receivables Sale
Agreements, and (y) in the case of a proposed addition of a Seller
Division, the conditions set forth in subsections (c), (g), (h), (i), (j),
(k) and (l) (in each case, applied to the applicable New Division as if it
were a proposed additional Seller) of Section 3.02 of each of the
Receivables Sale Agreements, shall have been satisfied.
(ii) The Company shall have received copies of the Policies of such
additional Seller (or such Seller Division, as the case may be, if
different from the Policies of the Seller of which it is a New Division),
which Policies shall be in form and substance satisfactory to the Company.
(iii) The Company shall have received confirmation (A) that there is
no pending or, to its knowledge after due inquiry, threatened action or
proceeding affecting such additional Seller (or such Seller Division, as
the case may be) before any Governmental Authority (I) that could
reasonably be expected to have a Material Adverse Effect or (II) that
purports to affect the legality, validity or enforceability of this
Supplement, the Agreement or any other Transaction Document or any of the
transactions contemplated hereby or thereby.
(iv) The Company and the Trustee shall have received evidence that
the Rating Agency Condition shall have been satisfied with respect to the
addition of such Seller (or addition of such Seller Division, as the case
may be); provided that such satisfaction of the Rating Agency Condition
(and such receipt of evidence thereof) shall not be required with respect
to the addition of up to three Subsidiaries of WESCO (and/or New
Divisions) as Sellers (or Seller Divisions) during any calendar year, each
of which Subsidiaries (or New Divisions) meets the following criteria: (x)
such Subsidiary
62
(or New Division) is in the same line of business as the existing Sellers
as of the related Seller Addition Date (as defined in the Receivables Sale
Agreements) and (y) as of such date, immediately prior to giving effect to
such addition (the "Measurement Date"), the ratio (expressed as a
percentage) of (A) the aggregate Principal Amount of what would constitute
all Eligible Receivables of such Subsidiary (or New Division) at the end
of the Business Day immediately preceding the Measurement Date if it were
a Seller (or Seller Division) minus the amount which would constitute the
Overconcentration Amount applicable to such Receivables on the Measurement
Date if such Subsidiary (or New Division) were a Seller (or Seller
Division) to (B) the sum of the Aggregate Receivables Amount as of the end
of such day plus the amount described pursuant to clause (A) is less than
10 percent.
(v) The Trustee shall have received Opinions of Counsel of outside
counsel addressed to the Trustee covering matters with respect to such
Seller as were covered in the opinions delivered on the Issuance Date with
respect to the original Sellers, including "true-sale" and non-substantive
consolidation opinions (only in the case of the addition of an Additional
Seller).
(vi) The Company and the Trustee shall have received a certificate
prepared by a Responsible Officer of the Servicer certifying that after
giving effect to the addition of such Seller (or such Seller Division, as
the case may be), the Aggregate Target Receivables Amount shall equal the
Aggregate Allocated Receivables Amount on the related Seller Addition
Date.
(b) Notwithstanding anything to the contrary contained in the
Receivables Sale Agreements, the Company shall not consent to any request made
pursuant to Section 9.13 thereof, nor shall any Seller which is the subject of
such request be terminated under the Receivables Sale Agreements, in each case
unless (i) no Early Amortization Event, Potential Early Amortization Event or
Potential Purchase Termination Event (as defined in the Receivables Sale
Agreements) (other than with respect to the Seller to be so terminated) has
occurred and is continuing (both before and after giving effect to such
termination) and (ii) the Trustee shall have received prior notice of such
termination (which notice shall be accompanied by a pro forma Daily Report
confirming that the Aggregate Target Receivables Amount equals or exceeds the
Aggregate Allocated Receivables Amount, each calculated after giving effect to
such termination and excluding all Receivables originated by the Seller to be
terminated).
(c) Upon the termination of a Seller pursuant to the applicable
section of the Receivables Sale Agreements and the foregoing paragraph (b), all
calculations for purposes of Series 1998-1 (including, without limitation, for
purposes of the pro forma calculations pursuant to paragraph (b) above) shall
exclude in each case the Receivables originated by such terminated Seller.
ARTICLE XII
FINAL DISTRIBUTIONS
SECTION 12.1. Certain Distributions. (a) Not later than 2:00 p.m.,
New York City time, on the Distribution Date following the date on which the
proceeds from the disposition of the Receivables pursuant to subsection 7.2(b)
of the Agreement are deposited into
63
the Series 1998-1 Non-Principal Collection Sub-subaccount and the Series 1998-1
Principal Collection Sub-subaccount, the Trustee shall distribute such amounts
pursuant to Article III of this Supplement.
(b) Notwithstanding anything to the contrary in this Supplement or
the Agreement, any distribution made pursuant to this Section shall be deemed to
be a final distribution pursuant to Section 9.3 of the Agreement with respect to
the VFC Certificates.
IN WITNESS WHEREOF, the Company, the Servicer, the Trustee, the
Funding Agent and the Initial Purchasers have caused this Series 1998-1
Supplement to be duly executed by their respective officers as of the day and
year first above written.
WESCO RECEIVABLES CORP.
By: /s/ [ILLEGIBEL]
-------------------------------
Name:
Title:
WESCO DISTRIBUTION, INC., in its individual capacity
and as Servicer
By: /s/ [ILLEGIBEL]
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Funding Agent
By:
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, not in its individual
capacity but solely as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: TRUST OFFICER
IN WITNESS WHEREOF, the Company, the Servicer, the Trustee, the
Funding Agent and the Initial Purchasers have caused this Series 1998-1
Supplement to be duly executed by their respective officers as of the day and
year first above written.
WESCO RECEIVABLES CORP.
By:
-------------------------------
Name:
Title:
WESCO DISTRIBUTION, INC., in its individual capacity
and as Servicer
By:
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Funding Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK, not in its individual
capacity but solely as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: TRUST OFFICER
PARK AVENUE RECEIVABLES CORPORATION,
as the Initial Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
THE CHASE MANHATTAN BANK, as an APA Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Schedule 1
Commitments
ABA Bank/Address Commitment
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ $_______________
Schedule 2
Trust Accounts
================================================================================
Account Account Number
--------------------------------------------------------------------------------
Series 1998-1 Canada/Canadian Dollar Collection 06900397976
Subaccount
--------------------------------------------------------------------------------
Series 1998-1 Canada/U.S. Dollar Collection Subaccount 06907331313
--------------------------------------------------------------------------------
Series 1998-1 Collection Subaccount 507-895649
--------------------------------------------------------------------------------
Series 1998-1 Principal Collection Sub-subaccount 507-895657
--------------------------------------------------------------------------------
Series 1998-1 Non-Principal Collection Sub-subaccount 507-895665
--------------------------------------------------------------------------------
Series 1998-1 Accrued Interest Sub-subaccount 507-895673
================================================================================
Schedule 3
The Default Ratio Trigger shall initially be 6.5%, provided however that at such
time as the Servicer shall have delivered to the Funding Agent twelve months of
historical aging data the Default Ratio Trigger shall be recalculated as
follows:
Default Ratio Trigger = A + B + a Margin
Acceptable to the Funding Agent
where:
A= The average of the Default Ratio for the twelve month period
ending with April 1998.
B= 2 times the standard deviation of the Default Ratio for such
twelve month period.