EXECUTION COPY
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USS RECEIVABLES COMPANY, LTD.
UNITED STATIONERS SUPPLY CO.,
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 and as Securities Intermediary
_________________________
Series 1998-1 SUPPLEMENT
Dated as of April 3, 1998
to
POOLING AGREEMENT
Dated as of April 3, 1998
_________________________
UNITED STATIONERS RECEIVABLES MASTER TRUST
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
DESIGNATION OF CERTIFICATES; PURCHASE AND SALE
OF THE VFC CERTIFICATES . . . . . . . . . . . . . . 20
SECTION 2.1. Designation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.2. The Series 1998-1 Interests . . . . . . . . . . . . . . . . . . . 20
SECTION 2.3. Purchases of Interests in the VFC Certificates . . . . . . . . . . 21
SECTION 2.4. Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.5. Procedure for Initial Issuance and for Increasing the Series
1998-1 Invested Amount . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.6. Sale by the Initial Purchaser of its Series 1998-1 Purchaser
Invested Amount to the APA Banks . . . . . . . . . . . . . . . . . 24
SECTION 2.7. Procedure for Decreasing the Series 1998-1 Invested Amount;
Optional Termination . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.8. Reductions of the Commitments . . . . . . . . . . . . . . . . . . 27
SECTION 2.9. Interest, Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.10. Indemnification by the Company and the Servicer . . . . . . . . . 28
ARTICLE III
ARTICLE III OF THE AGREEMENT . . . . . . . . . . . . . 29
SECTION 3A.2. Establishment of Trust Accounts . . . . . . . . . . . . . . . . . 30
SECTION 3A.3. Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3A.4. Determination of Interest . . . . . . . . . . . . . . . . . . . . 32
SECTION 3A.5. Determination of Series 1998-1 Monthly Principal . . . . . . . . . 34
SECTION 3A.6. Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IV
DISTRIBUTIONS AND REPORTS . . . . . . . . . . . . . . 37
SECTION 4A.1. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4A.2. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4A.3. Statements and Notices . . . . . . . . . . . . . . . . . . . . . . 37
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ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS . . . . . . . . . . . 38
SECTION 5.1. Additional Early Amortization Events . . . . . . . . . . . . . . . 38
ARTICLE VI
SERVICING FEE . . . . . . . . . . . . . . . . . 41
SECTION 6.1. Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII
CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . 41
SECTION 7.1. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.2. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.4. Break Funding Payments . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.5. Alternate Rate of Interest . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.6. Mitigation Obligations . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES, COVENANTS . . . . . . . . . . 46
SECTION 8.1. Representations and Warranties of the Company and the Servicer . . 46
SECTION 8.2. Covenants of the Company and the Servicer . . . . . . . . . . . . 46
SECTION 8.3. Covenants of the Servicer . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.4. Obligations Unaffected . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE IX
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . 47
SECTION 9.1. Conditions Precedent to Effectiveness of Supplement . . . . . . . 47
ARTICLE X
THE FUNDING AGENT . . . . . . . . . . . . . . . . 50
SECTION 10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.2. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.3. Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.4. Reliance by Funding Agent . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.5. Notice of Servicer Default or Early Amortization Event or Close
Up Potential Early Amortization Event . . . . . . . . . . . . . . 51
SECTION 10.6. Non-Reliance on the Funding Agent and Other Purchasers . . . . . . 52
SECTION 10.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.8. The Funding Agent in Its Individual Capacity . . . . . . . . . . . 53
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SECTION 10.9. Successor Funding Agent . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . 53
SECTION 11.1. Ratification of Agreement . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.3. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.4. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.5. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.6. No Waiver, Cumulative Remedies . . . . . . . . . . . . . . . . . . 54
SECTION 11.7. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.8. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.11. Securities Laws; Participations; Assignments . . . . . . . . . . . 56
SECTION 11.12. Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.14. No Bankruptcy Petition . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.15. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE XII
FINAL DISTRIBUTIONS . . . . . . . . . . . . . . . 60
SECTION 12.1. Certain Distributions . . . . . . . . . . . . . . . . . . . . . . 60
EXHIBITS
Exhibit A VFC Certificate, Series 1998-1
Exhibit B Form of [Assignment] [Participation] Certification
Exhibit C Reserved.
Exhibit D Form of UCC Certificate of United Stationers Supply Co.
Exhibit E Form of Notice of Increase
Exhibit F Form of Monthly Settlement Statement
Exhibit G Form of Commitment Transfer Supplement
SCHEDULES
Schedule 1 Commitments
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Series 1998-1 SUPPLEMENT, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified from time to time, this ("Supplement"), among
USS Receivables Company, Ltd., a Cayman Islands limited liability company (the
"COMPANY"), United Stationers Supply Company ("USSC"), as servicer (except where
otherwise noted) (in such capacity, the "SERVICER"), Park Avenue Receivables
Corporation, a Delaware corporation (including its successors and assigns
(excluding, however, the APA Banks as assignees pursuant to Section 2.6, the
"INITIAL PURCHASER"), the several banks or financial institutions parties to
this Supplement as of the Issuance Date (as defined below) and the other banks
or financial institutions from time to time parties hereto pursuant to
subsection 11.11 (c) (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") and as Securities Intermediary
(the "SECURITIES INTERMEDIARY") under the Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Company, the Servicer and the Trustee have entered into
a Pooling Agreement, dated as of April 3, 1998 (as amended, supplemented or
otherwise modified from time to time, the "AGREEMENT"; capitalized terms used
herein and not otherwise defined are used as defined in the Agreement);
WHEREAS, the Agreement provides, among other things, that the
Company, the Servicer and the Trustee may at any time and from time to time
enter into supplements to the Agreement for the purpose of authorizing the
issuance on behalf of the Trust by the Company for execution and redelivery to
the Trustee for authentication of one or more Series of Investor Certificates;
and
WHEREAS, the Company, the Servicer, the Trustee, the 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:
"ACCRUAL PERIOD" shall mean the period from and including a
Distribution Date, or, in the case of the initial Accrual Period, the
Issuance Date, to but excluding the succeeding Distribution Date.
"ACCRUED EXPENSE AMOUNT" shall mean, for each Business Day during an
Accrual Period, the sum of (i) the Daily Interest Deposit for such Business
Day, (ii) the Daily Commitment Fee Deposit for such Business Day, (iii) the
Daily Utilization Fee Deposit for such Business Day, (iv) the Daily
Servicing Fee Deposit for such Business Day and (v) all Program Costs which
have accrued since the preceding Business Day.
"ACQUIRING APA BANK" shall have the meaning assigned in subsection
11.11(c).
"ADDITIONAL INTEREST" shall have the meaning assigned in subsection
3A.4(b).
"ADJUSTED LIBO 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, an interest rate per
annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to
the LIBO Rate for such Eurodollar Period multiplied by the Statutory
Reserve Rate.
"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:
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
any, (ii) all amounts due and
owing to the Trust as Transfer
Deposit Amounts pursuant to
subsection 2.5(b) of the
Agreement on the APA Bank
Purchase Date and (iii) all
collections received by the
Seller which are due and owing
to PARCO under the Transaction
Documents which have not yet
been remitted to PARCO; and
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NDR = the aggregate outstanding
Principal Amount of all
Receivables that are not
Defaulted Receivables as of the
APA Bank Purchase Date.
Each of the foregoing shall be determined as of the most recent Settlement
Report Date.
"AGED RECEIVABLES RATIO" shall mean, as of the last day of each
Settlement Period, the percentage equivalent of a fraction, the numerator
of which shall be the sum of (a) the aggregate unpaid balance of
Receivables originated by the Sellers that were 60 to 89 days past due and
(b) the aggregate amount of Receivables of such Sellers that were charged
off as uncollectible prior to the day that is 60 days after its original
due date during such Settlement Period, and the denominator of which shall
be the aggregate Principal Amount of Receivables originated by the Sellers
during the third prior Settlement Period (including the Settlement Period
ended on such day).
"AGGREGATE COMMITMENT AMOUNT" shall mean the aggregate amount of the
Commitments of all APA Banks, as reduced from time to time pursuant to
Section 2.8.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day and (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the
effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"APA BANKS" shall have the meaning specified in the introductory
paragraph hereto.
"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, 1.50% per annum and (ii) for each Floating
Tranche, 0.25% per annum; PROVIDED, HOWEVER that, after the occurrence of a
PARCO Wind-Down Event described in clause (i) or (v) of the definition
thereof, the Applicable Margin shall mean on any date of determination for
each Eurodollar Tranche or the Floating Tranche, the applicable rate per
annum set forth below under the caption "Eurodollar Spread" or "Floating
Rate Spread," as the case may be, based upon the Pricing Leverage Ratio (as
defined in, and determined in accordance with, the Credit Agreement under
the definition of Letter of Credit Fee Rate, as in effect on the date
hereof) as of the most recent determination date:
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LEVERAGE EURODOLLAR FLOATING RATE
CATEGORY RATIO SPREAD SPREAD
-------- -------- ---------- -------------
Category 1 greater than 4.50 to 1.00 2.00% 0.75%
Category 2 greater than 4.00 to 1.00 1.75% 0.50%
and less than or equal to
4.50 to 1.00
Category 3 greater than 3.50 to 1.00 1.50% 0.25%
and less than or equal to
4.00 to 1.00
Category 4 greater than 3.00 to 1.00 1.25% 0.00%
and less than or equal to
3.50 to 1.00
Category 5 less than or equal to 3.00 1.00% 0.00%
to 1.00
"ASSIGNMENT/PARTICIPATION CERTIFICATION" shall mean an assignment or
participation certification, as the case may be, in substantially the form
of Exhibit B 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.
"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.
"CARRYING COST RESERVE RATIO" shall mean, as of any Settlement
Report Date and continuing until (but not including) the next Settlement
Report Date, an amount (expressed as a percentage) equal to (a) the
product of (i) 2.0 times Days Sales Outstanding as of such day and (ii)
1.30 times the Alternate Base Rate in effect as of such day divided by
(b) 365.
"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 introductory
paragraph hereto.
"CLAIM" shall have the meaning assigned in subsection 2.10(a).
"COMMERCIAL PAPER" shall mean the short-term promissory notes of the
Initial Purchaser issued in the United States commercial paper market.
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"COMMITMENT" shall mean, as to any APA Bank, its obligation to
purchase a VFC Certificate on the Issuance Date, to acquire a pro rata
share of 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 April 2, 1999 (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 earliest to occur of
(i) the date on which the Aggregate Commitment Amount has been reduced to
zero pursuant to Section 2.8 of this Agreement and (ii) the Commitment
Expiry Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall have the meaning assigned in
subsection 11.11(c).
"COMPANY" shall have the meaning specified in the introductory
paragraph hereto.
"COMPANY INDEMNIFIED PERSON" shall have the meaning assigned in
subsection 2.10(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
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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 that certain Second Amended and
Restated Credit Agreement, dated as of April 3, 1998, among USSC, as
borrower, United Stationers Inc., as guarantor, The Chase Manhattan Bank,
as administrative agent, and Chase Securities Inc., as arranger, 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 INTEREST DEPOSIT" shall mean, for any Business Day, an amount
equal to (i) the amount of Daily Interest Expense for each day since the
preceding Business Day PLUS (ii) the aggregate amount of a previously
accrued Daily Interest Expense that has not yet been deposited in the
Series 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 (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, the Unaccrued Discount Payment Amount divided
by 365 (or 366, as the case may be)
6
and (y) the Alternate Base Rate 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 APA Banks 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 Adjusted LIBO 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 "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 Alternate Base Rate plus the Applicable
Margin in effect on such day plus 2.00%.
"DAILY SERVICING FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Servicing Fee Expense for each day
since the preceding Business Day PLUS (ii) the aggregate amount of all
previously accrued Daily Servicing Fee Expense that has not yet been
deposited in the Series 1998-1 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.
"DAILY UTILIZATION FEE DEPOSIT" shall mean an amount equal to (i)
the amount of Daily Utilization Fee Expense for each day since the
preceding Business Day PLUS (ii) the aggregate amount of all previously
accrued Daily Utilization Fee Expense that has not yet been deposited in
the Series 1998-1 Non-Principal Collection Sub-subaccount.
"DAILY UTILIZATION FEE EXPENSE" shall mean, (i) for any day in any
Accrual Period prior to the APA Bank Purchase Date, the product of (A) the
Series 1998-1 Invested Amount on such day multiplied by (B) the Utilization
Fee Rate divided by 360 and (ii) for any day thereafter, zero.
"DAYS SALES OUTSTANDING" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, the number of days equal to the product of (a) 91 and (b) the amount
obtained by dividing (i) the aggregate Principal Amount of Eligible
Receivables by (ii) the aggregate Principal Amount of Receivables generated
by the Seller for the three Settlement Periods immediately preceding such
earlier Settlement Report Date.
"DECREASE" shall have the meaning assigned in subsection 2.7(a).
"DEFAULTING APA BANK" shall have the meaning assigned in subsection
2.6(c).
"DEFAULT RATIO" shall mean, for any Settlement Period, a ratio
(expressed as a percentage) equal to the quotient of (a) the sum of (i) the
aggregate outstanding Principal
7
Amount of all Receivables which are unpaid in whole or in part for more
than 91 days after their respective due dates on the last day of such
Settlement Period and (ii) the aggregate amount of Disputed Receivables;
and (b) the aggregate outstanding Principal Amount of all Receivables on
such last day.
"DILUTION PERIOD" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
quotient of (i) the product of (A) the aggregate Principal Amount of
Receivables that were originated by the Sellers during the Settlement
Period preceding such earlier Settlement Report Date and (B) the quotient
of (1) Days Sales Outstanding as of such Settlement Report Date and (2) 30
and (ii) the Aggregate Receivables Amount as of the last day of the
Settlement Period preceding such earlier Settlement Report Date.
"DILUTION RATIO" shall mean, as of the last day of each Settlement
Period, an amount (expressed as a percentage) equal to (i) the difference
between (A) the aggregate amount of Dilution Adjustments made during such
Settlement Period and (B) the Dilution Reduction Amount divided by (ii) the
average aggregate Principal Amount of Receivables that were originated by
the Sellers during the last two Settlement Periods (including the
Settlement Period ending on such day).
"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) that is calculated as follows:
DRR = [ (c * d) + (e-d) * (e/d) ] * f
Where:
DRR = Dilution Reserve Ratio;
c = 2.00;
d = the average of the Dilution Ratio that occurred during the
period of twelve consecutive Settlement Periods ending
immediately prior to such earlier Settlement Report Date;
e = the highest average of the Dilution Ratio that occurred
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.
8
"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.
"EURODOLLAR PERIOD" shall mean, with respect to any Eurodollar
Tranche, prior to the Scheduled Revolving Termination Date, a period of
between one month and six months requested by the Company commencing on a
Business Day requested by the Company and agreed to by the Funding Agent;
PROVIDED, HOWEVER, that each such Eurodollar Period shall expire on a
Distribution Date.
"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 an Adjusted LIBO Rate determined by reference to a
particular Eurodollar Period.
"EXCLUDED TAXES" shall mean, with respect to the Funding Agent, any
Purchaser or any other recipient of any payment to be made by or on account
of any increased obligation of the Company hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income (i) by the
United States of America, or (ii) by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is
located, managed or controlled, or, in the case of any APA Bank, in which
its applicable lending office is located, or (iii) by reason of any
connection between the jurisdiction imposing such tax and the Funding
Agent, such recipient or such office other than a connection arising solely
from this Agreement or any other Transaction Document or any transaction
hereunder or thereunder, and (b) any branch profits imposed by the United
States of America or any similar tax imposed by any other jurisdiction in
which the Company is located.
"FEE LETTER" shall mean, collectively, those certain Fee Letters,
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 (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of
9
the quotations for such day of such transactions received by the Funding
Agent from three Federal funds brokers of recognized standing selected by
it.
"FLOATING TRANCHE" shall mean, on or after the APA Bank Purchase
Date, that portion of the Series 1998-1 Invested Amount not allocated to a
Eurodollar Tranche for which the Series 1998-1 Monthly Interest is
calculated by reference to the Alternate Base Rate.
"FUNDING AGENT" shall have the meaning specified in the introductory
paragraph 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).
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INITIAL PURCHASER" shall have the meaning specified in the
introductory paragraph 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 with
respect to such 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 with respect to such
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 have the meaning assigned in subsection
2.5(a).
10
"LIBO RATE" shall mean, with respect to each day during each
Eurodollar Period pertaining to a Eurodollar Tranche, the rate appearing on
Page 3750 of the Telerate Service (or on any successor or substitute page
of such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Funding Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m. (London time) on the second Business Day prior to
the commencement of such Eurodollar Period, as the rate for dollar deposits
with a maturity comparable to the Eurodollar Period applicable to such
Eurodollar Tranche. In the event that such rate is not available at such
time for any reason, then the "LIBO RATE" with respect to each day during
such Eurodollar Period pertaining to such Eurodollar Tranche shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable
to such Eurodollar Period are offered by the principal London office of the
Funding Agent in immediately available funds in the London interbank market
at approximately 11:00 a.m. (London time) on the second Business Day prior
to the commencement of such Eurodollar Period.
"LOSS RESERVE RATIO" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) that is calculated as follows:
LRR = (a * b)/c * d * e
Where:
LRR = Loss Reserve Ratio;
a = the aggregate Principal Amount of Receivables originated by
the Sellers during the three Settlement Periods immediately
preceding such earlier Settlement Report Date;
b = the highest three-month rolling average of the Aged
Receivables Ratio that occurred during the period of twelve
consecutive Settlement Periods ending prior to such earlier
Settlement Report Date;
c = the Aggregate Receivables Amount as of the last day of the
Settlement Period immediately preceding such earlier
Settlement Report Date; and
d = 2.00.
e = Payment Terms Factor
"LOSS-TO-LIQUIDATION RATIO" shall mean, for any Settlement Period, a
ratio (expressed as a percentage) equal to the quotient of (a) the
difference, if any, between (i) the aggregate Principal Amount of
Charged-Off Receivables with respect to such Settlement Period and the
immediately preceding two Settlement Periods and (ii) the
11
aggregate amount of Recoveries during such two Settlement Periods, and (b)
the aggregate amount of Collections during such two Settlement Periods.
"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 $163,000,000.
"MINIMUM RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
sum of (i) 10% and (ii) 2.5% for each customer designated as a Special
Obligor.
"MONTHLY INTEREST PAYMENT" shall have the meaning assigned in
subsection 3A.6(a).
"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 mean any and all current or future stamp or
documentary taxes or other excise or property taxes, charges or similar
levies arising from any payment made under the Transaction Documents or
from the execution, delivery or enforcement of, or otherwise with respect
to, any Transaction Document.
"PARCO INSOLVENCY EVENT" shall mean the occurrence of any one or
more of the following: (i) any proceeding shall have been instituted by the
Initial Purchaser seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of any order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its
property, or (ii) any proceeding of the type described in the foregoing
clause (i) shall be instituted against the Initial Purchaser and shall have
remained undismissed for a period of sixty (60) consecutive days, or an
order granting relief requested in any such proceeding shall be entered.
"PARCO RESIDUAL AMOUNT" shall have the meaning assigned in
subsection 2.6(e).
"PARCO WIND-DOWN EVENT" shall mean the occurrence of any of the
following events:
12
(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) PARCO has notified the Company that it no longer wishes to
provide funding to the Company;
(iv) the Commercial Paper shall not be rated at least A-1 by S&P
and P-1 by Moody's, respectively; and
(v) an Early Amortization Event shall have occurred and be
continuing.
"PARTICIPANTS" shall have the meaning assigned in subsection
11.11(b).
"PAYMENT TERMS FACTOR" shall mean 1.017.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"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.
"PRIME RATE" shall mean the rate of interest per annum publicly
announced from time to time by the Funding Agent as its prime rate in
effect at its principal office in New York, New York; each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.
"PROGRAM COSTS" shall mean, for any Business Day, the sum of (i) all
expenses, indemnities and other amounts due and payable to the Purchasers
and the Funding Agent under the Agreement or this Supplement (including,
without limitation, any Article VII Costs) and (ii) the product of (A) all
unpaid fees and expenses due and payable to counsel to, and independent
auditors of, the Company (other than fees and expenses payable on or in
connection with the closing of the issuance of the Series 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;
13
PROVIDED, HOWEVER, that the amount of Program Costs payable pursuant to
subsection 3A.6(b)(iv) shall not exceed $75,000 in the aggregate in any
fiscal year of the Servicer.
"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 Invested Amount) and (ii) the Adjusted
Liquidity Price on such date, in each case as increased by the sum of (1)
all accrued and unpaid Discount on all outstanding Commercial Paper issued
to fund the Initial Purchaser's Series 1998-1 Purchaser Invested Amount
from the issuance date(s) thereof to but excluding the APA Bank Purchase
Date PLUS (2) the aggregate Discount to accrue on all outstanding
Commercial Paper issued to fund the Initial Purchaser's Series 1998-1
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 10 days' (or such shorter
period as shall be acceptable to each Rating Agency) prior notice thereof
and that each of the Rating Agencies shall have notified the Initial
Purchaser and the Funding Agent in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Commercial
Paper and (ii) the Required APA Banks shall have given their prior written
consent to such action.
"RECORD DATE" shall mean the first Business Day prior to each
Distribution Date.
"REDUCTION PERCENTAGE" shall mean the percentage equivalent of a
fraction, the numerator of which is the PARCO Residual Amount and the
denominator of which is the sum of the PARCO Residual Amount and the
Adjusted Liquidity Price on the APA Bank Purchase Date.
"REGISTER" shall mean a register maintained by the Funding Agent for
recording transfers of the Commitments.
14
"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.
"REPORTED PERIOD" shall mean, with respect to Series 1998-1, each
Business Day.
"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 details showing
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 on or immediately before January 31, 2001.
"SECURITIES INTERMEDIARY" shall have the meaning specified in the
introductory paragraph hereto.
"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.
"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
15
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 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 NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have
the meaning assigned in subsection 3A.2(a).
"SERIES 1998-1 PERIODIC SERVICING FEE" shall have the meaning
assigned in Section 6.1.
"SERIES 1998-1 PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in subsection 3A.2(a).
"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
16
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) and 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 (i) the Series 1998-1
Adjusted Invested Amount on such day (after giving effect to any
increase or decrease thereof on such day) and (ii) the percentage
equivalent of 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), (ii) the Carrying Cost Reserve Ratio in effect on such day and
(iii) the percentage equivalent of a fraction, the numerator of
which is one 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) the Series 1998-1
Invested Amount on such day (after giving effect to any increase or
decrease thereof on such day) DIVIDED BY the Aggregate Invested
Amount on such day, (iii) the Servicing Reserve Ratio in effect on
such day and (iv) the percentage equivalent of a fraction, the
numerator of which is one 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 Series 1998-1 Revolving Period; PROVIDED, in each case,
that such amount shall be adjusted on each Special Allocation Settlement
Report Date, if any, to the extent required as set forth in subsection
3A.5(b)(i) and subsection 3A.5(c)(ii).
17
"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
and (iii) the Commitment Termination Date.
"SERIES 1998-1 SUBORDINATED INTEREST" shall have the meaning
assigned in subsection 2.2(b).
"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 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 in July 2, 2001.
"SERIES 1998-1 TRANSACTION DOCUMENTS" shall mean this Supplement,
the Receivables Sale Agreement, the Pooling Agreement and the Servicing
Agreement.
"SERVICER" shall have the meaning specified in the introductory
paragraph hereto.
"SERVICER INDEMNIFIED PERSON" shall have the meaning assigned 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.
"STATUTORY RESERVE RATE" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Funding Agent is subject for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to Regulation D.
Eurodollar Tranches shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available
18
from time to time to any Purchaser under such Regulation D or comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the reserve percentage.
"SUPPLEMENT" shall have the meaning specified in the introductory
paragraph hereto.
"TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"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 is not 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.
"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 11.11(f).
"TRUST ACCOUNTS" shall have the meaning assigned in subsection
3A.2(a).
"TRUSTEE" shall have the meaning specified in the introductory
paragraph hereto.
"UCC CERTIFICATE" shall mean a certificate substantially in the form
of Exhibit D to this Supplement.
"UNACCRUED DISCOUNT PAYMENT AMOUNT" shall mean the portion of the
Purchase Price determined in accordance with clause (2) of the definition
thereof.
"UNALLOCATED BALANCE" shall mean, as of (i) any Business Day prior
to the APA Bank Purchase Date, the portion of the Series 1998-1 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
19
by reference to the Alternate Base Rate 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.
"USI CHANGE IN CONTROL" shall have the meaning assigned to the term
"Change of Control" in Section 1.01 of the Credit Agreement.
"USCC" shall have the meaning specified in the introductory
paragraph hereto.
"UTILIZATION FEE" shall have the meaning assigned in subsection
2.9(c).
"UTILIZATION FEE RATE" shall have the meaning assigned in the Fee
Letter.
"VFC CERTIFICATE" shall mean a VFC Certificate, Series 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).
(b) If any term or provision contained herein conflicts with or
is inconsistent with any term, definition or provision contained in the
Agreement, the terms and provisions of this Supplement shall govern. All
Article, Section or subsection references herein shall mean Article, Section or
subsections of this Supplement, except as otherwise provided herein. Unless
otherwise stated herein, the context otherwise requires or such term is
otherwise defined in the Agreement, each capitalized term used or defined herein
shall relate only to the Series 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 (i) the Invested Percentage (expressed as a decimal) of Collections
received with respect to the Receivables and all other funds on deposit in the
Collection Account and (ii) all other funds on deposit in the Series Collection
Subaccounts and any subaccounts thereof (collectively, the "VFC
CERTIFICATEHOLDERS' INTEREST").
20
(b) The "SERIES 1998-1 SUBORDINATED INTEREST" shall be a fractional
undivided interest in the Trust retained by the Company, consisting of the right
to receive Collections with respect to the Receivables allocated to the VFC
Certificateholders' Interest and not required to be distributed to or for the
benefit of the 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 and 2.5, (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
21
authenticate (i) the VFC Certificates in such names and such denominations and
deliver such VFC Certificates to the Funding Agent, on behalf of the Initial
Purchaser, or the APA Banks, as the case may be, in accordance with such written
directions. The VFC Certificates shall be issued in minimum denominations of
$1,000,000 and in integral multiples of $100,000 in excess thereof. The Trustee
shall ▇▇▇▇ 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 date
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 E hereto, of such request no
later than (i) 11:00 a.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 Alternate Base Rate, 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.
22
(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;
(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, the Servicer and the Seller in each Transaction Document to
which it is a party are true and correct in all material respects on and as
of the Issuance Date or such Increase Date, as the case may be, as if made
on and as of such date (except to the extent such representations and
warranties are expressly made as of another date).
The Company's acceptance of funds in connection with (x) the initial purchase of
VFC Certificates on the Issuance Date and (y) each Increase occurring on any
Increase Date shall constitute a representation and warranty by the Company to
the 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), 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,
23
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 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
24
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(s) 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 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 subsection 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 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 subsection 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 Seller, the Servicer, 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
25
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 Bank
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 to the Trustee, 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 Amount 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)
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, in the case of any Decrease occurring prior to the APA Bank
Purchase Date, 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 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
26
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.
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 a minimum aggregate
amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof;
PROVIDED that no such termination or reduction shall be permitted if, after
giving effect thereto and to any reduction in the Series 1998-1 Invested Amount
on such date, the Series 1998-1 Invested Amount would exceed the Aggregate
Commitment Amount then in effect. Each APA Bank's Commitment shall be reduced
by such APA Bank's Commitment Percentage of the amount of such Commitment
Reduction.
(b) On any 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 such APA Banks Commitment Percent of 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
27
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
utilization fee (the "UTILIZATION 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) at the Utilization Fee Rate of the average Series 1998-1 Invested Amount
during such period. The Utilization 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 Utilization 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 Prime Rate) day year with respect to
Commitment Fees, Utilization Fees and interest rates. Each determination of the
Adjusted LIBO 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 APA Bank, 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
28
the Company (or any of its officers) in any Pooling and Servicing Agreement or
other Transaction Document 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 needed to be
applied to the payment of any amounts (other than amounts payable to the
Company) pursuant to any Pooling and Servicing Agreements, shall be non-recourse
other than with respect to proceeds in excess of the proceeds 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.
(b) The Servicer agrees to indemnify and hold harmless the Trustee,
the Funding Agent, each APA Bank, 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 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 material 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 in any material respect 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
Servicer 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 Servicer indemnified person's net income.
ARTICLE III
ARTICLE III OF THE AGREEMENT
Section 3.1 of the Agreement and each other section of Article III
of the Agreement relating to another Series shall read in their entirety herein
as provided in the
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Agreement. Article III of the Agreement (except for Section 3.1 thereof and any
portion thereof relating to another Series) shall read in its entirety herein as
follows and shall be exclusively applicable to the Series 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 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") and (C) 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), 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
delivered to the Trustee in accordance with the definition of "Delivery" and
shall be held by the Trustee or its nominee (including the Securities
Intermediary) 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 Servicer, be
invested together with funds held in other sub-subaccounts of the Collection
Account. After giving effect to any distribution to the Company pursuant to
subsection 3A.3(b), amounts on deposit and available for investment in the
Series 1998-1 Principal Collection Sub-subaccount shall be invested by the
Trustee at the written direction of the Servicer 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 Servicer 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
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earnings (net of losses and investment expenses) on funds deposited in the
Series 1998-1 Principal Collection Sub-subaccount shall be deposited in the
Series 1998-1 Non-Principal Collection Sub-subaccount. If the Servicer fails to
give the Trustee investment instructions with respect to amounts on deposit in
any Series 1998-1 Collection Subaccount or any subaccount thereof, such amounts
shall remain uninvested.
(c) Any securities intermediary maintaining a securities account
for the Trustee for the benefit of the Purchasers, and The Chase Manhattan Bank
as initial Securities Intermediary, hereby represents that it is as of the date
hereof and shall be for so long as it is the Securities Intermediary hereunder a
bank or broker-dealer that (i) in the ordinary course of its business maintains
securities accounts for others and is acting in that capacity hereunder and (ii)
maintains a Participant's Securities Account (as defined in the United States
Regulations) with a Federal Reserve Bank. The Securities Intermediary shall
agree (and The Chase Manhattan Bank as initial Securities Intermediary hereby
agrees) with the parties hereto that (x) the Collection Account (including any
sub-accounts thereof) is a securities account to which financial assets may be
credited, (y) the Trustee shall be entitled to exercise rights that comprise
such financial assets and too exercise the ordinary rights of an entitlement
holder, (z) the "securities intermediary's jurisdiction" as defined in the UCC
of the Securities Intermediary with respect to the Eligible Investments credited
to the Collection Account (including any sub-accounts thereof) shall be the
State of New York. The Securities Intermediary shall represent and covenant
(and The Chase Manhattan Bank hereby represents and covenants) that it is not
and will not be (as long as it is the Securities Intermediary hereunder) a party
to any agreement that is inconsistent with the provisions of this Agreement.
The Securities Intermediary shall covenant (and The Chase Manhattan Bank hereby
covenants) that it will not take any action inconsistent with the provisions of
this Agreement applicable to it. It is the intent of the Trustee, the Servicer
and the Company that the Collection Account (including any sub-accounts thereof)
shall be a securities account of the Trustee and not an account of the Company
or the Servicer. If despite such intent, the Collection Account (including any
sub-accounts thereof) is determined to be an account of the Company or the
Servicer, then the Securities Intermediary agrees to comply with entitlement
orders originated by the Trustee without further consent by the Company or the
Servicer.
SECTION 3A.3. ALLOCATIONS. In accordance with the written direction
of the Servicer, upon which the Trustee may conclusively rely:
(a) The portion of the Aggregate Daily Collections allocated to the
Series 1998-1 Interests pursuant to Article III of the Agreement shall be
allocated and distributed as set forth in this Article III by the Trustee as
follows:
(i) on each Business Day, an amount equal to the Accrued Expense
Amount for such day (or, during the Series 1998-1 Revolving Period, such
greater amount as the Company may request in writing) shall be transferred
from the Series 1998-1 Collection Subaccount to the Series 1998-1
Non-Principal Collection Sub-subaccount; and
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(ii) following the transfers pursuant to clause (i) above, any
remaining funds on deposit in the Series 1998-1 Collection Subaccount shall
be transferred by the Trustee to the Series 1998-1 Principal Collection
Sub-subaccount.
(b)(i) On each Business Day that is not a Distribution Date during
the Series 1998-1 Revolving Period, after giving effect to (x) all allocations
of Aggregate Daily Collections 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 shall be distributed by
the Trustee to the Company to such accounts or such persons as the Company may
direct in writing (which directions may consist of standing instructions
provided by the Company that shall remain in effect until changed by the Company
in writing); PROVIDED that such distribution shall be made only if no Early
Amortization Event or Potential Early Amortization Event has occurred and is
continuing and only to the extent that, if after giving effect to such
distribution, the Series 1998-1 Target Receivables Amount would not exceed the
Series 1998-1 Allocated Receivables Amount; PROVIDED FURTHER that if the Company
or the Servicer, on behalf of the Company, shall have given the Funding Agent
irrevocable written notice (effective upon receipt) at least two Business Days
prior to such day, in the case of any notice given prior to the APA Bank
Purchase Date, on such day, in the case of any notice given on or after the APA
Bank Purchase Date with respect to the Floating Tranche, or at least three
Business Days prior to such day, in the case of any notice given on or after the
APA Bank Purchase Date with respect to a 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 2.6.
(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,
at the written direction of the Servicer pursuant to subsection 3A.2(b), that
mature on or prior to the Business Day immediately preceding the next
Distribution Date and shall be distributed on such Distribution Date in
accordance with subsection 3A.6(c). Except as set forth in subsection 3A.6(c),
no amounts on deposit in the Series 1998-1 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, 2.6, 7.2, 9.1 and 9.4 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
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Distribution Date shall be the amount of Daily Interest Expense accrued during
the Accrual Period ending on such Distribution Date as calculated by the
Servicer.
(ii) If a change in the CP Rate, the weighted average Adjusted
LIBO Rate or the Alternate Base Rate on or after any Settlement Report Date
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 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 Alternate Base Rate PLUS 2.0% and (C) such
Interest Shortfall (or the portion thereof which has not been paid to the
Purchasers) shall be payable as provided herein with respect to the VFC
Certificates on each Distribution Date following such Distribution Date, to but
excluding the Distribution Date on which such Interest Shortfall is paid to the
VFC Certificateholders.
(c) On any Business Day, the Company may, subject to subsection
3A.4(e), elect to allocate all or any portion of the Available Pricing Amount
(i) prior to the APA Bank Purchase Date, to one or more CP Tranches with CP Rate
Periods commencing on such Business Day by giving the Funding Agent irrevocable
written or telephonic (confirmed in writing) notice thereof, which notice must
be received by the Funding Agent prior to 1:00 p.m., New York City time, two
Business Days prior to such Business Day or (ii) on or after the APA Bank
Purchase Date, to one or more Eurodollar Tranches with Eurodollar Periods
commencing on such Business Day by giving the Funding Agent irrevocable written
or telephonic (confirmed in writing) notice thereof, which notice must be
received by the Funding Agent prior to 1:00 p.m., New York City time, three
Business Days prior to such Business Day. Such notice shall specify (i) the
applicable Business Day, (ii) the CP Rate Period for each CP Tranche or the
Eurodollar Period for each Eurodollar Tranche, as the case may be, to which a
portion of the Available Pricing Amount is to be allocated and (iii) the portion
of the Available Pricing Amount being allocated to each such CP Tranche or
Eurodollar Tranche, as the case may be. On or after the APA Bank Purchase Date,
the Funding Agent shall notify each APA Bank of the contents of each such notice
promptly upon receipt thereof. Prior to the APA Bank Purchase Date, the Company
shall allocate the Series 1998-1 Invested Amount so that the aggregate amounts
allocated to outstanding CP Rate Periods at all times equal the Series 1998-1
Invested Amount.
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(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
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 ten CP
Tranches shall be outstanding at any one time and (ii) on and after the APA Bank
Purchase Date, (A) the portion of the Series 1998-1 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 five Eurodollar
Tranches shall be outstanding at any one time, (C) after the occurrence and
during the continuance of any Early Amortization Event or Potential Early
Amortization Event, 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, as determined by the Servicer, shall be equal to the amount on deposit
in such account on the immediately preceding Settlement Report Date; PROVIDED,
HOWEVER, that the Series 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. 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 of
this Supplement.
(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:
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(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);
(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) The Trustee (acting at the written
direction of the Servicer upon which the Trustee may conclusively rely) shall on
each Distribution Date 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.
(b) On each Distribution Date, 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 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;
35
(ii) an aggregate amount equal to the Utilization 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 any amounts owing to the Trustee pursuant
to Section 8.5 of the Agreement, shall be withdrawn from the Series 1998-1
Non-Principal Collection Sub-subaccount by the Trustee and paid to itself;
(iv) an amount equal to the Series 1998-1 Periodic 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 USSC or any Affiliate thereof is not the
Servicer, an amount equal to the Series 1998-1 Periodic 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); and
(v) 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 Subsubaccount 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;
(ii) if, following the repayment in full of the Series 1998-1
Invested Amount, any amounts are owed to the Trustee, the Purchasers or any
other Person hereunder, such amounts shall be transferred from the Series
1998-1 Principal Collection Sub-subaccount and paid to the Trustee, the
Purchasers or such other Person; and
(iii) following the repayment in full of the Series 1998-1 Invested
Amount 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.
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ARTICLE IV
DISTRIBUTIONS AND REPORTS
Article IV of the Agreement (except for any portion thereof relating
to another Series) shall read in its entirety herein as follows and the
following shall be exclusively applicable to the VFC Certificates:
SECTION 4A.1. DISTRIBUTIONS. (a) on each Distribution Date, the
Trustee shall distribute to 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 Monthly Settlement Statement, upon which the Trustee may
conclusively rely, and shall be made in accordance with the provisions of
Section 11.4 hereof and subject to Section 3.1(h) of the Agreement.
SECTION 4A.2. Reserved.
SECTION 4A.3. STATEMENTS AND NOTICES. (a) MONTHLY SETTLEMENT
STATEMENTS. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and the Funding Agent (commencing with the Settlement Report Date
occurring on April 15, 1998) a Monthly Settlement Statement in the Form of
Exhibit F 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
Periodic 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
Trustee shall have no obligation whatsoever to verify the accuracy of any
information contained within the Monthly Settlement Statement, including any
calculations contained therein. A copy of any such items may be obtained by any
holder of a Certificate upon a written request delivered to the Trustee at the
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 Company on behalf of the Trustee shall
furnish, or cause to be furnished, to each Person who at any time during the
preceding calendar year was a Purchaser, a statement prepared by the Company
containing the aggregate amount distributed to such Person for such calendar
year or the applicable portion thereof during which such Person was a Purchaser,
together with such other information as is required to be provided by an issuer
of indebtedness under the Internal Revenue Code and such other customary
information as the Company deems necessary or desirable to enable the Purchasers
to prepare their tax returns. Such obligation of the Company shall be deemed to
have been satisfied to the extent that substantially comparable information
shall have been prepared by the Servicer and provided to the Trustee or the
Funding
37
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 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
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 the expiration of
any grace periods or consents applicable thereto) or any one of the following
events (each, an "EARLY AMORTIZATION EVENT") shall occur during the Series
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
or (ii) failure on the part of the Servicer to direct any payment or
deposit to be made or of the Company to make any payment or deposit in
respect of any other amounts owing by the Company under any Pooling and
Servicing Agreement within five Business Days of the date such other amount
is due or such deposit is required to be made;
(b) (i) failure on the part of the Company to duly observe or
perform in any material respect any of the covenants or agreements of the
Company set forth in Section 2.7 and 2.8 of the Agreement or (ii) failure
on the part of the Company duly to observe or perform in any material
respect any other covenants or agreements of the Company set forth in any
Pooling and Servicing Agreement, which failure continues unremedied 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 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;
38
(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 materially 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 the Pooling and Servicing Agreements
within ten 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 or the Servicer shall have resigned;
(e) a Purchase Termination Event (as defined in the Receivables
Sale Agreement) shall have occurred and be continuing under the Receivables
Sale Agreement;
(f) a USI Change in Control shall have occurred, or any Seller, the
Servicer, any Sub-Servicer or the Company shall cease to be a directly or
indirectly wholly-owned, Subsidiary of United Stationers Inc.;
(g) any of the Agreement, the Servicing Agreement, this Supplement
or the Receivables Sale Agreement shall cease, for any reason, to be in
full force and effect, or the Company, the Seller or the Servicer or any
Affiliate of any thereof shall so assert in writing;
(h) the Trust shall for any reason cease to have a valid and
perfected first priority undivided ownership or security interest in the
Trust Assets, as a whole (subject to no other Liens other than Permitted
Liens, or any of USSC, the Company or any Affiliate of either thereof shall
so assert in writing;
(i) there shall have been filed against USSC, the Company or the
Trust (i) a notice of federal tax Lien from the Internal Revenue Service,
(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 or (iii) a notice of any other Lien the existence of which could
reasonably be expected to have a Material Adverse Effect on the business,
operations or financial condition of such Person, and, in each case, 40
days shall have elapsed without such notice having been effectively
withdrawn or such Lien having been released or discharged;
39
(j) an Event of Default under the Credit Agreement shall have
occurred and the lender parties thereto shall have caused the indebtedness
thereunder to come due prior to its stated maturity;
(k) 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 with respect to such Person;
(l) (i) one or more judgments for the payment of money (to the
extent not bonded or covered by insurance to the reasonable satisfaction of
the Required APA Banks) shall be rendered against the Company (A) in an
aggregate amount greater than $50,000 or (B) that, individually or in the
aggregate, have resulted or could reasonably be expected to result in a
Material Adverse Effect or (ii) one or more judgments for the payment of
money (to the extent not bonded or covered by insurance to the reasonable
satisfaction of the Funding Agent) shall be rendered against the Servicer,
any Sub-Servicer, any Seller or any combination thereof (A) in an aggregate
amount greater than $7,500,000 or (B) that, individually or in the
aggregate, have resulted or could reasonably be expected to result in a
Material Adverse Effect and, in either case, the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of the Company, the
Servicer, any Sub-Servicer or any Seller to enforce any such judgment;
(m) as at the end of any Settlement Period, the average
Loss-to-Liquidation Ratio for the two preceding Settlement Periods
(including such Settlement Period then ended) shall exceed 1.0%;
(n) as at the end of any Settlement Period, the average Default
Ratio for the two preceding Settlement Periods (including such Settlement
Period then ended) shall exceed 2.75%;
(o) as at the end of any Settlement Period, the average Dilution
Ratio for the two preceding Settlement Periods (including such Settlement
Period then ended) shall exceed 4.25%;
(p) for any Settlement Period, Days Sales Outstanding shall be
more than 40 days; or
(q) the Series 1998-1 Allocated Receivables Amount shall be less
than the Series 1998-1 Target Receivables Amount for a period of two
consecutive business days.
then, in the case of (x) any event described in Section 7.1 of the Agreement,
after the applicable grace period (if any) set forth in such Section, and
paragraphs (h) and (i) above automatically
40
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 expiration of the applicable grace period (if any) set forth in
such subsections, the Funding Agent 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").
Notwithstanding the foregoing, a delay or failure in performance
referred to in clause (a) above for a period of five Business Days after the
expiration of the applicable grace period, or in clause (b) above for a period
of 30 Business Days after the expiration of the applicable grace period, will
not constitute an Early Amortization Event if such delay or failure could not
have been prevented by the exercise of reasonable diligence by the Company and
such delay or failure was caused by a Force Majeure Delay. The Company will
nevertheless be required to use its best efforts to perform its obligations in a
timely manner in accordance with the terms of the Transaction Documents, and the
Company shall promptly give the Trustee an Officer's Certificate notifying it of
any such delay or failure.
ARTICLE VI
SERVICING FEE
SECTION 6.1. SERVICING COMPENSATION. A periodic servicing fee (the
"SERIES 1998-1 PERIODIC 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; PROVIDED, HOWEVER,
that if an Early Amortization Event has occurred and is continuing and USSC or
any Affiliate thereof is Servicer, payment of the Series 1998-1 Periodic
Servicing Fee shall be deferred until the Series 1998-1 Invested Amount has been
paid in full.
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION 7.1. ILLEGALITY. Notwithstanding any other provision
herein, if any Change in Law shall make it unlawful for any 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 Alternate
41
Base Rate. 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:
(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 Adjusted LIBO 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 in reasonable
detail 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
provided that such Certificate is delivered in good faith and in a manner
generally consistent with such APA Bank's standard practice. The agreements in
this Section shall survive the termination of this Supplement and the Agreement
and the payment of all amounts payable hereunder and thereunder for a period of
nine months.
(d) Failure or delay on the part of any APA Bank to demand
compensation pursuant to this Section 7.2 shall not constitute a waiver of such
APA Bank's right to demand such compensation; PROVIDED that the Company shall
not be required to compensate an APA Bank pursuant to this Section 7.2 for any
increased costs or reductions incurred more than 270 days prior to the date that
such APA Bank notifies the Company of the Change in Law giving
42
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 by or on account of
any obligation of the Company hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if
the Company shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 7.3) the Funding Agent or such
APA Bank receives an amount equal to the sum that it would have received had
no such deductions been made, (ii) the Company shall make such deductions and
(iii) the Company shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Subject to paragraph (e) of this Section 7.3, the Company
shall indemnify the Funding Agent and each APA Bank within the later of 10 days
after written demand therefor and the Distribution Date next following such
demand for the full amount of any Indemnified Taxes or Other Taxes paid by the
Funding Agent or such APA Bank on or with respect to any payment by or on
account of any obligation of the Company hereunder or under any other
Transaction Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 7.3) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Company by the Funding Agent or an APA Bank shall be conclusive absent manifest
error. Any payments made by the Company pursuant to this subsection shall be
made solely from funds available to the Company which are not otherwise needed
to be applied to the payment of any amounts (other than amounts payable to the
Company) pursuant to any Pooling and Servicing Agreements, shall be non-recourse
other than with respect to proceeds in excess of the proceeds to make such
payment, and shall not constitute a claim against the Company to the extent that
insufficient proceeds exist to make such payment. The agreements in this
subsection shall survive the termination of this Supplement and the Agreement
and the payment of all amounts payable hereunder and thereunder for a period of
nine months.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Company to a Governmental Authority, the Company
shall deliver to the Funding Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Funding Agent.
(e) The Funding Agent and each APA Bank shall (but with respect
to any Indemnified Tax or Other Tax arising from a Change in Law, only to the
extent the Funding
43
Agent or such APA Bank is legally able to do so) deliver to the Company (with a
copy to the Funding Agent) such properly completed and executed documentation
prescribed by applicable law and reasonably requested by the Company on the
later of (i) 30 Business Days after such request is made and the applicable
forms are provided to such APA Bank or (ii) 30 Business Days before prescribed
by applicable law as will permit such payments to be made without withholding or
with an exemption from or reduction of Indemnified Taxes or Other Taxes.
Failure to timely provide such documentation to the Company shall relieve the
Company of any indemnification responsibility under this Section 7.3.
(f) If the Funding Agent or an APA Bank (or a Transferee)
receives a refund solely in respect of Taxes or Other Taxes, it shall pay over
such refund to the Company to the extent that such Funding Agent or APA Bank (or
Transferee) has already received indemnity payments or additional amounts
pursuant to this Section 7.3 with respect to such Taxes or Other Taxes giving
rise to the refund, net of all out-of-pocket expenses and without interest
(other than interest paid by the relevant Governmental Authority with respect to
such refund); PROVIDED, HOWEVER, that the Company shall, upon request of the
Funding Agent or such APA Bank (or Transferee), repay such refund (plus interest
or other charges imposed by the relevant Governmental Authority) to the Funding
Agent or such APA Bank (or Transferee) if the Funding Agent or such APA Bank (or
Transferee) is required to repay such refund to such Governmental Authority.
Nothing contained herein shall require the Funding Agent or an APA Bank (or
Transferee) to make its tax returns (or any other information relating to its
taxes which it deems confidential) available to the Company or any other Person.
SECTION 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 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 Adjusted LIBO 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 needed to be applied
to the payment of any amounts (other than amounts payable to the Company)
pursuant to any Pooling and Servicing Agreements, shall be non-recourse other
than with respect to proceeds in excess of the proceeds to make such payment,
and shall not constitute a claim against the Company to the extent that
insufficient
44
proceeds exist to make such payment. This covenant shall survive the
termination of this Supplement and the Agreement and the payment of all amounts
payable hereunder and thereunder for a period of nine months. A certificate as
to any additional amounts payable pursuant to the foregoing sentence, showing in
reasonable detail the calculation thereof, 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 Adjusted LIBO Rate for such Eurodollar Period,
or
(b) the Funding Agent is advised by the Majority Purchasers that
the Adjusted LIBO 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,
45
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 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 (except to the extent that any such representation or
warranty is expressly made as of another date).
SECTION 8.2. COVENANTS OF THE COMPANY AND THE SERVICER. The
Company and the Servicer hereby agree, in addition to their obligations under
the Agreement and the Servicing Agreement, that:
(a) they shall observe in all material respects each and every
of their respective covenants (both affirmative and negative) contained in
the Agreement, the Servicing Agreement, this Supplement and all other
Transaction Documents to which each is a party;
(b) they shall afford the Trustee, Funding Agent or any
representatives of the Trustee or 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), for purposes of inspection and shall
permit the Trustee, Funding Agent or any representative of the Trustee or
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 the Funding Agent shall provide
the Company or the Servicer, as the case may be, with reasonable notice
prior to any such contact and shall give the Company or the Servicer the
reasonable opportunity to participate in such discussions; and
(c) neither the Company nor the Servicer shall take any action,
nor permit the Seller to take any action, requiring the satisfaction of the
Rating Agency Condition
46
pursuant to any Transaction Document without the prior written consent of
the Majority Purchasers.
SECTION 8.3. COVENANTS OF THE SERVICER. The Servicer hereby agrees
that:
(a) it shall observe each and all of its respective covenants
(both affirmative and negative) contained in the Pooling and Servicing
Agreements in all material respects;
(b) it shall provide to the Funding Agent and the Rating
Agencies, simultaneously with delivery to the Trustee, all reports, notices,
certificates, statements and other documents required to be delivered to the
Trustee pursuant to the Agreement, the Servicing Agreement and the other
Transaction Documents and furnish to the 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;
(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; and
(d) it shall operate in good faith to allow the Trustee to use
the Servicer's available facilities, equipment, leasehold agreements, data
systems, records, files and expertise upon the Servicer's termination or
default.
SECTION 8.4. OBLIGATIONS UNAFFECTED. The obligations of the
Company and the Servicer to the 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, with a
copy for the Initial Purchaser, true and complete copies of (i) the
Agreement, executed by a duly authorized officer of each of the Company,
the Servicer and the Trustee, (ii) the Servicing Agreement, executed by a
duly authorized officer of each of the Company, the Servicer and the
Trustee, (iii) the Receivables Sale Agreement, executed by a duly
authorized officer of each of the Company and the Seller, (iv) 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 (v) the other Transaction Documents, each duly executed by
the parties thereto.
47
(b) ORGANIZATIONAL DOCUMENTS, ORGANIZATIONAL PROCEEDINGS OF THE
COMPANY AND SERVICER. The Funding Agent shall have received from the
Company, the Seller and the Servicer, with a copy for the Initial
Purchaser, true and complete copies of:
(i) the articles of association, articles of incorporation or
other formation documents, including all amendments thereto, of such
Person, certified as of a recent date by the Secretary of State or
other appropriate authority of the state of formation or
incorporation, as the case may be, and a certificate of compliance,
of status or of good standing, as and to the extent applicable, of
each such Person as of a recent date, from the Secretary of State or
other appropriate authority of such jurisdiction;
(ii) a certificate of the Secretary or an Assistant Secretary
of each such Person, dated the Effective Date and certifying (A)
that attached thereto is a true and complete copy of the by laws and
articles of incorporation or articles of association of each such
Person, as in effect on the Effective Date and at all times since a
date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of the
resolutions, in form and substance reasonably satisfactory to the
Funding Agent, of the Board of Directors of each such Person or
committees thereof authorizing the execution, delivery and
performance of the Series 1998-1 Transaction Documents to which it
is a party and the transactions contemplated thereby, and that such
resolutions have not been amended, modified, revoked or rescinded
and are in full force and effect, (C) that the articles of
association, article of incorporation or other formation documents
of each such Person has not been amended since the date of the last
amendment thereto shown on the certificate of good standing (or its
equivalent) furnished pursuant to clause (i) above and (D) as to the
incumbency and specimen signature of each officer executing any
Series 1998-1 Transaction Documents or any other document delivered
in connection herewith or therewith on behalf of each such Person;
and
(iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to clause (ii) above.
(c) GOOD STANDING CERTIFICATES. The 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 the Seller, in each State where the ownership, lease or
operation of property or the conduct of business requires it to qualify as
a foreign corporation or limited liability company, except where the
failure to so qualify would not reasonably be expected to have a material
adverse effect on the business, operations, properties or condition
(financial or otherwise) of the Company, the Servicer or the Seller, as the
case may be.
48
(d) CONSENTS, LICENSES, APPROVALS, ETC. The Funding Agent shall
have received, with a copy for the Initial Purchaser, certificates dated
the date hereof of a Responsible Officer of the Company, the Servicer and
the 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 the Seller, as the case may be,
of this Supplement or the Receivables Sale Agreement, as the case may be,
and the validity and enforceability of this Supplement and the Agreement
against the Company and the Servicer and the Receivables Sale Agreement
against the 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 USSC or any of its
Subsidiaries before any Governmental Authority that could reasonably be
expected to have a Material Adverse Effect with respect to USSC 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 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
reasonably necessary or appropriate, together with copies of such financing
statements (none of which, except for those described in paragraph (h)
below shall cover any Receivables), 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
the Seller and the Company a UCC Certificate, completed in a manner
satisfactory to the Funding Agent, duly executed by a Responsible Officer
of the Seller or the Company, as the case may be, and dated the Issuance
Date.
(h) FILINGS, REGISTRATIONS AND RECORDINGS. Any documents
(including, without limitation, financing statements) required to be filed
in order (i) to perfect the sale of the Receivables by the Seller to the
Company pursuant to the Receivables Sale Agreement and (ii) to create, in
favor of the Trustee, a perfected ownership/security interest in the Trust
Assets under the Agreement with respect to which an ownership/security
interest may be perfected by a filing under the UCC or other comparable
statute, shall, in each case, have been properly prepared and executed for
immediate filing in each office in each jurisdiction listed in the
Agreement or the Receivables Sale Agreement, as the case may be, and such
filings are the only filings required in order to perfect the sale of the
Receivables to the Company under the Receivables Sale Agreement or to the
Trust, under the Agreement, as the case may be, in the jurisdictions listed
therein. The Funding Agent shall have received evidence reasonably
satisfactory to it of each such filing, registration or recordation and
reasonably satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto.
49
(i) LEGAL OPINIONS. The Funding Agent shall have received, with
a counterpart for the Initial Purchaser and the Trustee, opinions of
counsel to the Company and the Servicer, dated the Issuance Date, as to
corporate, federal tax (tax status of the VFC Certificates as debt),
bankruptcy ("true sale" and "non-substantive consolidation"), perfection
and priority of security and/or ownership interests and other matters in
form and substance reasonably 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.
(k) ESTABLISHMENT OF ACCOUNTS. The Funding Agent (x) shall have
received evidence reasonably satisfactory to it that the Collection Account
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 a
copy for the Initial Purchaser, a copy of the Policies, which shall be
reasonably satisfactory in form and substance to the Funding Agent.
(m) MATERIAL ADVERSE CHANGE. No material adverse change shall
have occurred with respect to the business, operations, property or
condition (financial or otherwise) of USSC and its Subsidiaries taken as a
whole since December 31, 1997.
ARTICLE X
THE FUNDING AGENT
SECTION 10.1. APPOINTMENT. Each Purchaser and APA Bank hereby
irrevocably designates and appoints the Funding Agent as the agent of such
Purchaser and APA Bank, respectively, under this Supplement and each such
Purchaser and APA Bank 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. In its capacity as
agent of each Purchaser and APA Bank, the Funding Agent shall act with the same
due care as it does with respect to its own investments. Subject to the
foregoing sentence or 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 or APA Bank, 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
50
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 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
CLOSE UP 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
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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 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 have no 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 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
52
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 Purchasers. If the Funding
Agent shall resign as Funding Agent under this Supplement, then the Majority
Purchasers shall appoint from among the Purchasers a successor administrative
agent for the Purchasers, which successor administrative agent shall be approved
by the Company and the Servicer (which approval shall not be unreasonably
withheld), whereupon such successor administrative agent shall succeed to the
rights, powers and duties of the Funding Agent, and the term "Funding Agent"
shall mean such successor administrative agent effective upon such appointment
and approval, and the former Funding Agent's rights, powers and duties as
Funding Agent shall be terminated, without any other or further act or deed on
the part of such former Funding Agent 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.
53
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 UCC or
similar legislation of any applicable jurisdiction.
SECTION 11.4. PAYMENTS. To the extent proper payment instructions
are provided, each payment to be made hereunder shall be made on the required
payment date in lawful money of the United States and in immediately available
funds, if to the Purchasers, at the office of the Funding Agent set forth in
Section 11.9. Except as provided in subsection 2.6(e), 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 needed to be applied to the payment of any amounts (other than
amounts payable to the Company) pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in excess
of the proceeds to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.
SECTION 11.6. NO WAIVER, CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee, the 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
54
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, including without limitation the tax
status of the VFC Certificates or of the Trust, or the APA Banks. 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 and each APA Bank,
(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), (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 or (iv) change the tax
characteristics of the VFC Certificates or of the Trust.
(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 is satisfied with respect thereto.
SECTION 11.8. SEVERABILITY. If any provision hereof is void or
unenforceable in any jurisdiction, such voidness or unenforceability shall not
affect the validity or enforceability of (i) such provision in any other
jurisdiction or (ii) any other provision hereof in such or any other
jurisdiction.
SECTION 11.9. NOTICES. All notices, requests and demands to or
upon any party hereto to be effective shall be given (i) in the case of the
Company, the Servicer and the Trustee, in the manner set forth in Section 10.4
of the Agreement and (ii) in the case of the Funding Agent, the Rating Agencies,
the Initial Purchaser and each APA Bank, 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
55
forth on Schedule 1 hereto and (B) addressed as follows in the case of the
Funding Agent, the Rating Agencies and the Initial Purchaser; 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: ▇▇▇▇ Gollenback
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
Bank may not assign or transfer any of its rights under this Supplement except
as set forth in Section 11.11.
SECTION 11.11. SECURITIES LAWS; PARTICIPATIONS; ASSIGNMENTS. (a) Each
Purchaser agrees that its VFC Certificate will be acquired for investment only
and not with a view to any public distribution thereof, and that such Purchaser
will not offer to sell or otherwise dispose of its VFC Certificate (or any
interest therein) in violation of any of the registration requirements of the
Securities Act or any applicable state or other securities laws. Each Purchaser
acknowledges that it has no right to require the Company to register its VFC
Certificate under the Securities Act or any other securities law. Each
Purchaser hereby confirms and agrees that in connection with any transfer by it
of an interest in the VFC Certificate, such Purchaser has not engaged and will
not engage in a general solicitation or general advertising
56
including advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media or broadcast over radio or television,
or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(b) Any APA Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more financial
institutions or other entities ("PARTICIPANTS") participations in its VFC
Certificate and its rights hereunder pursuant to documentation in form and
substance satisfactory to such APA Bank and the Participant; PROVIDED, HOWEVER,
that (i) in the event of any such sale by an APA Bank to a Participant, (A) such
APA Bank's obligations under this Supplement shall remain unchanged, (B) such
APA Bank shall remain solely responsible for the performance thereof and (C) the
Company shall continue to deal solely and directly with such APA Bank in
connection with its rights and obligations under the Pooling and Servicing
Agreements, (ii) no APA Bank shall sell any participating interest under which
the Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, any Pooling and Servicing Agreement, except to the
extent that the approval of such amendment, consent or waiver otherwise would
require the unanimous consent of all APA Banks hereunder, (iii) no sale by an
APA Bank to a Participant shall be given effect if such sale would result in
there being more than 20 Targeted Holders with respect to the VFC Certificates
or is not otherwise permitted under subsection 5.3(e) of the Agreement, and (iv)
each Participant shall, prior to becoming a Participant, execute and deliver to
the Funding Agent an Assignment/Participation Certification. The Company agrees
that each APA Bank is entitled, in its own name, to enforce for the benefit of,
or as agent for, any Participant any and all rights, claims and interest of such
Participant in respect of the Trust and the Company's obligations under this
Supplement. A Participant shall have the right to receive Article VII Costs but
only to the extent that the related selling APA Bank would have had such right
absent the sale of the related participation.
(c) Any APA Bank may, upon the satisfaction of all applicable
requirements under Section 5.3 of the Agreement, in the ordinary course of its
business and in accordance with applicable law, at any time sell all or any part
of its rights and obligations under this Supplement and the VFC Certificate to
(i) its Affiliates and to any other APA Bank and (ii) upon prior written notice
to the Funding Agent, one or more banks or other entities (an "ACQUIRING APA
BANK"), in each case pursuant to a commitment transfer supplement, substantially
in the form of Exhibit G (the "COMMITMENT TRANSFER SUPPLEMENT"), executed by
such Acquiring APA Bank, such assigning APA Bank and the Funding Agent (and, in
the case of an Acquiring APA Bank that is not then an existing APA Bank or an
Affiliate thereof, by the Company and the Servicer), and delivered to the
Funding Agent for its acceptance and recording in the Register with notice
delivered to each Rating Agency. Notwithstanding the foregoing, no APA Bank
shall so sell its rights hereunder (other than to its Affiliate or any other APA
Bank) without the prior written consent of the Company, which consent shall not
be unreasonably withheld, and no APA Bank shall sell its rights hereunder (w) if
such sale would result in there being more than 20 Targeted Holders with respect
to the VFC Certificates or more than 20 beneficial owners of the VFC
Certificates for the purposes of the 1940 Act or is not otherwise permitted
under subsection 5.3(e) of the Agreement, (x) if such Acquiring APA Bank is not
an Eligible Assignee, (y) unless such APA Bank reasonably believes that such
Acquiring APA Bank is a "qualified institutional buyer" within the meaning of
Rule 144A promulgated under the Securities Act and
57
(z) unless, prior to such sale, the purchaser of such rights shall have executed
and delivered to the Funding Agent and the Transfer Agent and Registrar an
Assignment/Participation Certification. Upon such execution, delivery,
acceptance and recording, (A) the Company shall sign, on behalf of the Trust,
and shall direct the Trustee in writing to duly authenticate, and the Trustee,
upon receiving such direction, shall so authenticate, a new VFC Certificate in
the name and the denomination determined pursuant to the related Commitment
Transfer Supplement and set forth in such written direction and shall deliver
such VFC Certificate to the Acquiring APA Bank in accordance with such written
direction, and (B) from and after the Transfer Issuance Date determined pursuant
to such Commitment Transfer Supplement, (1) the Acquiring APA Bank thereunder
shall be a party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of an APA Bank hereunder with a
Commitment as set forth therein and (2) the transferor APA Bank thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Supplement. Such Commitment Transfer
Supplement shall be deemed to amend this Supplement (including the Schedules
attached hereto) to the extent, and only to the extent, necessary to reflect the
addition of such Acquiring APA Bank as an "APA Bank" and the resulting
adjustment of Commitment Percentages arising from the purchase by such Acquiring
APA Bank of all or a portion of the rights and obligations of such transferor
APA Bank under this Supplement and the VFC Certificates.
(d) The Funding Agent shall maintain at its address referred to in
Section 11.9 a copy of each Commitment Transfer Supplement delivered to it.
(e) Upon its receipt of a Commitment Transfer Supplement executed by
a transferor APA Bank and an Acquiring APA Bank (and, in the case of a
Transferee that is not then an existing APA Bank or an Affiliate thereof, by the
Company and the Servicer) and a processing fee of $3,500, the Funding Agent
shall (i) promptly accept such Commitment Transfer Supplement and (ii) on the
Transfer Issuance Date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the Initial Purchaser, the APA Banks, the Servicer and the
Company.
(f) The Company and the Servicer each authorizes each APA Bank to
disclose to any Participant or Acquiring APA Bank (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such APA Bank's
possession concerning the Company, the Servicer or the Receivables which has
been delivered to such APA Bank by the Company or the Servicer pursuant to this
Supplement or which has been delivered to such APA Bank by or on behalf of the
Company in connection with such APA Bank's credit evaluation of the Company, the
Servicer, the Trust and the Trust Assets prior to becoming a party to this
Supplement; PROVIDED, HOWEVER, the Transferee or prospective Transferee shall
have agreed to be bound by the terms and conditions of Section 11.15.
(g) Notwithstanding any other provisions herein, no transfer or
assignment of any interests or obligations of any APA Bank hereunder or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would result in a prohibited transaction under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA or cause the Trust Assets to be
regarded as plan assets pursuant to 29 C.F.R. Section 2510.3-101.
58
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 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
59
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. CONFIDENTIALITY. Each APA Bank agrees to keep
information obtained by it pursuant hereto and the other Transaction Documents
identified as confidential in writing at the time of delivery confidential in
accordance with such APA Bank's customary practices and agrees that it will only
use such information in connection with the transactions contemplated by the
Pooling and Servicing Agreements and not disclose any of such information other
than (a) to such APA Bank's employees, representatives, directors, attorneys,
auditors, agents, professional advisors, trustees or affiliates who are advised
of the confidential nature of such information, (b) to the extent such
information that is in the public domain at the time of disclosure, (c) to the
extent disclosure is required by law (including applicable securities laws),
regulation, subpoena or judicial order or process (PROVIDED that notice of such
requirement or order shall be promptly furnished to the Company or the Servicer
unless such notice is legally prohibited) or requested or required by bank,
securities, insurance or investment company regulations or auditors or any
administrative body or commission to whose jurisdiction such APA Bank may be
subject, (d) to any rating agency to the extent required in connection with any
rating to be assigned to such APA Bank, (e) to Transferees or prospective
Transferrees who agree to be bound by the provisions of this Section 11.15, or
(f) with the Company's or the Servicer's prior written consent. The agreements
in this Section 11.15 shall survive the termination of this Supplement and the
Agreement and the payment of all amounts payable hereunder and thereunder.
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 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.
60
IN WITNESS WHEREOF, the Company, the Servicer, the Trustee, the
Funding Agent, the Initial Purchaser and the APA Banks have caused this Series
1998-1 Supplement to be duly executed by their respective officers as of the day
and year first above written.
USS RECEIVABLES COMPANY, LTD.
by
---------------------------------
Name:
Title:
UNITED STATIONERS SUPPLY CO., as
Servicer,
by
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, not in its individual
capacity but solely as Trustee
and as Securities Intermediary,
by
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Funding Agent,
by
---------------------------------
Name:
Title:
PARK AVENUE RECEIVABLES CORPORATION, as Initial
Purchaser,
by
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as an APA Bank,
by
---------------------------------
Name:
Title:
BANK OF AMERICA, NATIONAL TRUST
AND SAVINGS ASSOCIATION
by
---------------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY
by
---------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
by
---------------------------------
Name:
Title:
DEUTSCHE FINANCIAL SERVICES
CORPORATION
by
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
by
---------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
by
---------------------------------
Name:
Title: