EXECUTION COPY
STONE RECEIVABLES CORPORATION
ISSUER
STONE CONTAINER CORPORATION
INITIAL SERVICER
MARINE MIDLAND BANK
TRUSTEE
and
BANKERS TRUST COMPANY
ADMINISTRATIVE AGENT
-----------------------------------------
SERIES 1995-1 SUPPLEMENT
dated as of March 14, 1995
to
MASTER TRUST INDENTURE AND SECURITY AGREEMENT
dated as of March 14, 1995
-----------------------------------------
$220,000,000 FLOATING RATE CLASS A
RECEIVABLES-BACKED NOTES, SERIES 1995-1,
$40,000,000 FLOATING RATE CLASS B
RECEIVABLES-BACKED NOTES, SERIES 1995-1,
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS; INCORPORATION OF TERMS OF
THE INDENTURE
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Incorporation of Terms and Conditions of
the Indenture . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
DESIGNATION; MATTERS RELATING TO THE SERIES 1995-1 NOTES
SECTION 2.01 Designation . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.02 Limitations on the Sale or Transfer of
Series 1995-1 Notes . . . . . . . . . . . . . . . . . 10
SECTION 2.03 Delivery of Settlement Statements and
Daily Reports to Placement Agents . . . . . . . . . . 17
ARTICLE III
CONDITIONS TO ISSUANCE OF NOTES
SECTION 3.01 Conditions to Issuance. . . . . . . . . . . . . . . . . 17
ARTICLE IV
PAYMENTS
SECTION 4.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.02 Interest. . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.03 Optional Redemption; Prepayments. . . . . . . . . . . . 18
SECTION 4.04 Application of Payments between Senior
and Subordinated Classes of Series
1995-1 Notes. . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V
PAY-OUT EVENTS
SECTION 5.01 Pay-Out Events. . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 Governing Law . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.02 Execution in Counterparts . . . . . . . . . . . . . . . 26
SECTION 6.03 Effect of Unenforceable Provisions. . . . . . . . . . . 26
SECTION 6.04 Amendment, Waiver, Etc. . . . . . . . . . . . . . . . . 26
SECTION 6.05 The Trustee and The Administrative Agent. . . . . . . . 27
SECTION 6.06 Instructions in Writing . . . . . . . . . . . . . . . . 27
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EXHIBITS
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Exhibit A -- Form of Floating Rate Class A Receivables-Backed Notes,
Series 1995-1
Exhibit B -- Form of Floating Rate Class B Receivables-Backed Notes,
Series 1995-1
Exhibit C -- Form of Investor Letter (Institutional Accredited Investors)
Exhibit D -- Form of Noteholder Reg S Certification
Exhibit E -- Form of Transferee Reg S Certification
Exhibit F -- Form of Depositary Reg S Certification
Exhibit G -- Form of Transfer to Regulation S Certification
Exhibit H -- Form of Placement Agent Exchange Instructions
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SERIES 1995-1 SUPPLEMENT
THIS SERIES 1995-1 SUPPLEMENT, dated as of March 14, 1995 (this
"SUPPLEMENT"), is made by and among STONE RECEIVABLES CORPORATION, a Delaware
corporation, as issuer (the "Issuer"), STONE CONTAINER CORPORATION, a Delaware
corporation, as initial Servicer (in such capacity, together with any successor
in such capacity, the "SERVICER"), MARINE MIDLAND BANK, as Trustee (in such
capacity, together with any successor in such capacity, the "TRUSTEE"), and
BANKERS TRUST COMPANY, as Administrative Agent (in such capacity, together with
any successor in such capacity, the "ADMINISTRATIVE AGENT).
Pursuant to the Master Trust Indenture and Security Agreement dated as
of March 14, 1995 (as the same may be amended, restated, supplemented or
otherwise modified from time to time and as supplemented hereby, the
"INDENTURE"), among the Issuer, the Servicer, the Trustee and the Administrative
Agent, the Issuer may from time to time, among other things, issue one or more
Series of Notes secured by the Pledged Assets. Certain terms applicable to any
such Series of Notes are to be set forth in a Supplement.
Pursuant to this Supplement, the Issuer shall create for
authentication and delivery by or on behalf of the Administrative Agent a Series
of Fixed Principal Notes and shall specify certain terms thereof.
ARTICLE I
DEFINITIONS; INCORPORATION OF TERMS OF
THE INDENTURE
SECTION 1.01 DEFINITIONS. (a) Capitalized terms that are used but
not defined herein shall have the meanings assigned in APPENDIX A to the
Indenture. In addition, this Supplement shall be interpreted in accordance with
the conventions set forth in PARTS B, C and D of APPENDIX A to the Indenture.
Except as expressly provided otherwise herein, references herein to an
"Article," "Section," "Exhibit" or "clause" refer to an Article, Section,
Exhibit or clause of or to this Supplement.
(b) Each capitalized term defined herein relates only to the Series
1995-1 Notes and to no other Series of Notes issued by the Issuer. Whenever
used in this Supplement, the following words and phrases shall have the
following meanings:
"144A GLOBAL NOTES" is defined in SECTION 2.01(b).
"ALTERNATIVE REQUIRED RESERVE RATIOS" means, at any time with respect
to either the Series 1995-1, Class A Notes or the Series 1995-1, Class B Notes,
the sum of (a) the Alternative Loss Reserve Ratio with respect to such Class and
(b) the Alternative Dilution Reserve Ratio with respect to such Class, in each
case, as set forth in the most recent Settlement Statement.
"APPLICABLE RATING AGENCIES" means each nationally recognized rating
agency that, at the request of the Issuer, from time to time maintains a credit
rating of the Series 1995-1, Class A Notes or the Series 1995-1, Class B Notes.
"APPLICABLE RATINGS FACTOR" means (a) with respect to the Series
1995-1 Class A Notes, 2.5 and (b) with respect to the Series 1995-1, Class B
Notes, 1.5.
"APPLICABLE RESERVE RATIO" means, at any time with respect to the
Series 1995-1, Class A Notes or the Series 1995-1, Class B Notes, an amount
calculated in the then effective Settlement Statement to be the greatest of:
(a) the Minimum Reserve Ratio with respect to such Class;
(b) the Required Reserve Ratio calculated in such Settlement
Statement with respect to such Class;
(c) the Alternative Required Reserve Ratio calculated in such
Settlement Statement with respect to such Class; or
(d) the sum of either (x) for purposes of the calculation of the
Required Reserves for the Series 1995-1, Class B Notes, 9% or (y) for
purposes of the calculation of the Required Reserves for the Series 1995-1,
Class A Notes, 16%, in each case, plus the product of:
(i) the average of the Dilution Ratios during the period of
twelve consecutive Calculation Periods ending on the most recent Cut-
Off Date;
(ii) a fraction, having (A) a numerator equal to the aggregate
amount payable pursuant to all invoices generated by the Sellers
during the preceding Calculation Period ended on the most recent Cut-
Off Date (as calculated on such Cut-Off Date) and (B) a denominator
equal to the aggregate Unpaid Balance of all Eligible Receivables, as
calculated on the most recent Cut-Off Date; and
(iii) 1.15.
"APPLICABLE Z-VALUE" means (a) for purposes of calculating the
Alternative Dilution Reserve Ratio or the Alternative Loss Ratio Reserve as
elements of the Class A Required Reserves, 2.58 and (b) for purposes of
calculating the Alternative Dilution Reserve Ratio or the Alternative Loss Ratio
Reserve as elements of the Class B Required Reserves, 1.0.
"BENEFIT PLAN" shall mean any "employee benefit plan" as defined in
and which is subject to ERISA or any "plan" as defined in Section 4975 of the
Internal Revenue Code.
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"CASTLEWOOD" means Castlewood Funding Corporation, a Delaware
corporation.
"CEDEL" means CEDEL Bank, Societe Anonyme.
"CLASS A INITIAL ISSUANCE AMOUNT" means $220,000,000.
"CLASS B INITIAL ISSUANCE AMOUNT" means $40,000,000.
"CONTROLLED ACCUMULATION AMOUNT" means, for any Payment Date with
respect to the Accumulation Period, an amount equal to one-third of the unpaid
principal balance of the Series 1995-1 Notes outstanding immediately prior to
the commencement of the Accumulation Period.
"DEPOSITARY REG S CERTIFICATION" is defined in SECTION 2.02(d)(i).
"EUROCLEAR" means the Euroclear System.
"EURODOLLAR PERIOD" means each period that commences on a Payment Date
(or, if no Payment Date has yet occurred, the Series Sale Date) and ends on the
day immediately preceding the next Payment Date.
"EXCHANGE DATE" is defined in SECTION 2.01(b).
"EXISTING PROGRAM AGENT" means collectively, Caisse Nationale de
Credit Agricole, as facility agent and Citibank, N.A., as collateral agent.
"EXISTING PROGRAM DOCUMENTS" means, collectively, (i) the StoneFin
Credit Agreement, the StoneFin Master Program Agreement and all other
instruments, documents and agreements executed and delivered by StoneFin to or
for the benefit of the Existing StoneFin Lenders, Castlewood or the Existing
Program Agent pursuant to or in connection with either such agreement (other
than the Receivables Purchase Agreement dated as of August 15, 1991 (as amended)
among StoneFin and the "Sellers" named therein)) and (ii) the StoneFin II Credit
Agreement, the StoneFin II Master Program Agreement and all other instruments,
documents and agreements executed and delivered by StoneFin II to or for the
benefit of the Existing StoneFin II Lenders, South Shore or the Existing Program
Agent pursuant to or in connection with either such agreement (other than the
Receivables Purchase Agreement dated as of August 18, 1992 (as amended) among
StoneFin II and the "Sellers" named therein)).
"EXISTING PROGRAM OBLIGATIONS" means all amounts owing by Stone
Container (as successor by the Merger to Stone-Fin and StoneFin II) to
Castlewood, the Existing StoneFin Lenders, South Shore, the Existing Stone Fin
II Lenders and/or the Existing Program Agent under the Existing Program
Documents or in
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connection with the transactions contemplated thereby, including, without
limitation, for interest, principal and fees.
"EXISTING STONEFIN LENDERS" means those financial institutions parties
to the StoneFin Credit Agreement as lenders.
"EXISTING STONEFIN II LENDERS" means those financial institutions
parties to the StoneFin II Credit Agreement as lenders.
"EXPECTED FINAL PAYMENT DATE" means, with respect to the Series 1995-1
Notes, March 15, 2000.
"INSTITUTIONAL ACCREDITED INVESTOR" has the meaning given to
institutional "accredited investor" in Rule 501(a)(1), (2), (3) or (7) of the
Securities Act.
"LIBOR" means, with respect to any Eurodollar Period, the offered
rates for deposits in United States dollars having a maturity of one month (the
"Index Maturity") commencing on the related LIBOR Determination Date (as
hereinafter defined) which (subject to the circumstances described below)
appears on the Reuters Screen LIBO Page (as hereinafter defined) as of
approximately 11:00 a.m., London time, on such LIBOR Determination Date. "LIBOR
DETERMINATION DATE" will be the date that is two London business days prior to
the first day of such Eurodollar Period. If at least two such offered rates
appear on the Reuters Screen LIBO Page, LIBOR will be the arithmetic mean
(rounded upwards, if necessary, to the nearest one-sixteenth of a percent) of
such offered rates. The Issuer will determine LIBOR based on the foregoing
procedure and shall report its determination to the Administrative Agent who
shall verify such calculation. If fewer than two such quotations appear, LIBOR
with respect to such Eurodollar Period will be determined at approximately
11:00 a.m., London time, on such LIBOR Determination Date on the basis of the
rate at which deposits in United States dollars having the Index Maturity are
offered to prime banks in the London interbank market by four major banks in the
London interbank market selected by the Administrative Agent and in a principal
amount equal to an amount of not less than $1,000,000 and that is representative
for a single transaction in such market at such time. The Administrative Agent
will request the principal London office of each of such banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR will
be the arithmetic mean (rounded upwards as aforesaid) of such quotations. If
fewer than two quotations are provided, LIBOR with respect to such Eurodollar
Period will be the arithmetic mean (rounded upwards as aforesaid) of the rates
quoted at approximately 11:00 a.m., New York City time, on such LIBOR
Determination Date by three major banks in New York, New York selected by the
Administrative Agent for loans in United States dollars to leading European
banks having the Index Maturity and in a principal amount equal to the amount of
not less than $1,000,000 and that is representative for a single
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transaction in such market at such time; PROVIDED, HOWEVER, that if the banks
selected as aforesaid are not quoting as mentioned in this sentence, LIBOR in
effect for the applicable Eurodollar Period will be LIBOR in effect for the
immediately preceding Eurodollar Period. For purposes of calculating LIBOR, a
"LONDON BUSINESS DAY" will be any Business Day on which dealings in deposits in
United States dollars are transacted in the London interbank market and "REUTERS
SCREEN LIBO PAGE" will be the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO page on
that service for the purpose of displaying London interbank offered rates of
major banks).
"MATURITY DATE" means the earlier to occur of (i) the Stated Maturity
Date and (ii) either (a) in the case of the Series 1995-1, Class A Notes, the
fourth Payment Date following the commencement of the Pay-Out Period with
respect to such Class or the Liquidation Period and (b) in the case of the
Series 1995-1, Class B Notes, the fifth Payment Date following the commencement
of the Pay-Out Period with respect to such Class or the Liquidation Period.
"MEMBER ORGANIZATION" is defined in SECTION 2.01(b).
"MINIMUM RESERVE RATIO" means (a) for purposes of calculating the
Applicable Reserve Ratio as an element of determining the Required Reserves for
the Series 1995-1, Class A Notes, 19% and (b) for purposes of calculating the
Applicable Reserve Ratio as an element of determining the Required Reserves for
the Series 1995-1, Class B Notes, 11%.
"NOTEHOLDER REG S CERTIFICATION" is defined in SECTION 2.02(d)(i).
"NOTE PURCHASE AGREEMENT" means that certain Purchase Agreement dated
as of March 2, 1995 (as the same may be amended, restated, supplemented or
otherwise modified from time to time) among the Issuer and each of the Placement
Agents.
"PAR DATE" means March 15, 1999.
"PAY-OUT EVENT" with respect to Series 1995-1, shall have the meaning
set forth in SECTION 5.01.
"PLACEMENT AGENT EXCHANGE INSTRUCTIONS" is defined in SECTION
2.02(d)(iv).
"PLACEMENT AGENTS" means BT Securities Corporation, Bankers Trust
International PLC, Chemical Securities Inc., and Citicorp Securities, Inc.
"PREPAYMENT BASE RATE" is defined in SECTION 4.03(d).
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"PREPAYMENT PREMIUM" means, with respect to any redemption of any
Class that entitles the Noteholders of that Class to receive a Prepayment
Premium, an amount equal to the present value of the amount of interest that
would have accrued on the amount of principal prepaid through the Par Date at an
interest rate equal to the applicable Prepayment Spread, with such amount being
discounted on a monthly basis at a rate equal to the applicable Prepayment Base
Rate, as of the date of such redemption.
"PREPAYMENT SPREAD" is defined in SECTION 4.03(d).
"QUALIFIED INSTITUTIONAL BUYER" has the meaning given such term in
Rule 144A.
"REGULATION S" shall mean Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTES" is defined in SECTION 2.01(b).
"REGULATION S TEMPORARY GLOBAL NOTES" is defined in SECTION 2.01(b).
"REQUIRED RESERVE RATIO" means, at any time with respect to either the
Series 1995-1, Class A Notes or the Series 1995-1, Class B Notes, the sum of (a)
the Loss Reserve Ratio with respect to such Class and (b) the Dilution Reserve
Ratio with respect to such Class, in each case, as set forth in the most recent
Settlement Statement.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"SALE," "SELL" and "SOLD" are defined in SECTION 2.02(a).
"SCHEDULED ACCUMULATION COMMENCEMENT DATE" means the close of business
on December 15, 1999.
"SERIES 1995-1, CLASS A NOTE" means any one of the Floating Rate Class
A Receivables-Backed Notes, Series 1995-1 executed by the Issuer and
authenticated by or on behalf of the Administrative Agent that is substantially
in the form of EXHIBIT A and is issued pursuant to this Supplement; and "SERIES
1995-1, CLASS A NOTES" means all such Notes, collectively.
"SERIES 1995-1, CLASS A NOTE RATE" means, at any time during a
Eurodollar Period, a rate equal to LIBOR for such Eurodollar Period plus 0.35%
PER ANNUM, calculated on the basis of a 360-day year for the actual number of
days (including the first day but excluding the last day) that occur in the
applicable Eurodollar Period for which such interest is payable.
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"SERIES 1995-1, CLASS B NOTE" means any one of the Floating Rate Class
B Receivables-Backed Notes, Series 1995-1 executed by the Issuer and
authenticated by or on behalf of the Administrative Agent that is substantially
in the form of EXHIBIT B and is issued pursuant to this Supplement; and "SERIES
1995-1, CLASS B NOTES" means all such Notes, collectively.
"SERIES 1995-1, CLASS B NOTE RATE" means, at any time during a
Eurodollar Period, a rate equal to LIBOR for such Eurodollar Period plus 0.70%
PER ANNUM, calculated on the basis of a 360-day year for the actual number of
days (including the first day but excluding the last day) that occur in the
applicable Eurodollar Period for which such interest is payable.
"SERIES 1995-1 NOTES" means, collectively, the Series 1995-1, Class A
Notes and the Series 1995-1, Class B Notes.
"SERIES 1995-1 OUTSTANDING PRINCIPAL BALANCE" means, at any time, the
aggregate Outstanding Principal Balance of all of the Series 1995-1 Notes
outstanding as of such time.
"SERIES SALE DATE" means, with respect to the Series 1995-1 Notes,
March 14, 1995.
"SOUTH SHORE" means South Shore Funding Corporation, a Delaware
corporation.
"STATED MATURITY DATE" means, with respect to the Series 1995-1 Notes,
December 15, 2000.
"STONEFIN CREDIT AGREEMENT" means that certain Revolving Credit
Agreement dated as of August 15, 1991 (as the same has been amended, modified or
otherwise supplemented) among Castlewood, the Existing StoneFin Lenders and the
Existing Program Agent.
"STONEFIN MASTER PROGRAM AGREEMENT" means that certain Master Program
Agreement dated as of August 15, 1991 (as the same has been amended, modified or
otherwise supplemented) among Castlewood, StoneFin and the "Sellers" named
therein.
"STONEFIN II CREDIT AGREEMENT" means that certain Revolving Credit
Agreement dated as of August 18, 1992 (as the same has been amended, modified or
otherwise supplemented) among South Shore, the Existing StoneFin II Lenders and
the Existing Program Agent.
"STONEFIN II MASTER PROGRAM AGREEMENT" means that certain Master
Program Agreement dated as of August 18, 1992 (as the same has been amended,
modified or otherwise supplemented) among South Shore, StoneFin II and the
"Sellers" named therein.
"TRANSFER TO REGULATION S CERTIFICATION" is defined in SECTION
2.02(d)(iii).
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"TRANSFEREE REG S CERTIFICATION" is defined in SECTION 2.02(d)(i).
"UNRESTRICTED GLOBAL NOTE" is defined in SECTION 2.01(b).
"U.S. PERSON" means any Person that is a "U.S. Person" as such term is
defined in Regulation S.
SECTION 1.02 INCORPORATION OF TERMS AND CONDITIONS OF THE INDENTURE.
This Supplement hereby incorporates by reference the terms and provisions of the
Indenture as if such terms and conditions were set forth in full herein. As
supplemented by this Supplement, the Indenture is hereby in all respects
ratified and confirmed and the Indenture, as so supplemented by this Supplement,
shall be read, taken and construed as one and the same agreement. In the event
of any conflict or inconsistency between the terms of this Supplement and the
terms of the Indenture as such terms apply to any of the Series 1995-1 Notes,
the terms of this Supplement shall control with respect to the Series 1995-1
Notes.
ARTICLE II
DESIGNATION; MATTERS RELATING TO THE SERIES 1995-1 NOTES
SECTION 2.01 DESIGNATION. (a) There is hereby created a series of
Fixed Principal Notes to be issued pursuant to the Indenture and this Supplement
to be known as "Series 1995-1 Notes," which shall consist of a senior tranche to
be known as the "Floating Rate Class A Receivables-Backed Notes, Series 1995-1"
and a subordinated tranche to be known as the "Floating Rate Class B
Receivables-Backed Notes, Series 1995-1." The Series 1995-1 Notes shall be
issued in a minimum denomination of $500,000 and in integral multiples of
$100,000 in excess thereof. No Series 1995-1 Note may be subdivided into an
amount of less than $500,000. Subject to the conditions set forth in ARTICLE
III, the Administrative Agent shall authenticate and deliver the Series 1995-1
Notes, to or upon the written order of the Issuer, (i) in the case of the Series
1995-1, Class A Notes, in an aggregate principal amount equal to the Class A
Initial Issuance Amount and (ii) in the case of the Series 1995-1, Class B
Notes, in an aggregate principal amount equal to the Class B Initial Issuance
Amount. Each of the Series 1995-1 Notes shall be authenticated and delivered in
the manner and at the times for authentication and delivery of Fixed Principal
Notes as are specified in ARTICLE VI of the Indenture and the aforementioned
Issuer Order. The Series 1995-1, Class A Notes shall be a Senior Class. The
Series 1995-1, Class B Notes shall be a Subordinated Class.
(b) The Series 1995-1 Notes shall, unless expressly otherwise
provided herein, be issued in Book-Entry Form and shall
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be evidenced by one or more Global Notes registered in the name of the Clearing
Agency or its nominee, which shall initially be Cede & Co., as the nominee of
the Clearing Agency (which shall initially be The Depository Trust Company).
Except as expressly otherwise provided in this Supplement, all Series 1995-1
Notes issued in Book-Entry Form shall be subject to the provisions of Section
6.09 of the Indenture.
Series 1995-1 Notes sold to Qualified Institutional Buyers in reliance
on Rule 144A under the Securities Act shall be represented by a Global Note (the
"144A GLOBAL NOTE"), in registered form, without coupons, and deposited upon the
order of the Issuer with the Administrative Agent as custodian for, and
registered in the name of, Cede & Co., as nominee of the Clearing Agency. A
144A Global Note will bear a legend regarding restrictions on transfer as set
forth in the forms of Series 1995-1 Notes set forth in EXHIBITS A and B hereto.
Series 1995-1 Notes sold outside of the United States of America (and
to Persons other than U.S Persons) in reliance on Regulation S shall be
represented initially by temporary Global Notes (the "REGULATION S TEMPORARY
GLOBAL NOTES"). The Regulation S Temporary Global Notes shall be exchanged on
the later of (i) 40 days after the later of (x) the Series Sales Date and (y)
the completion of the initial distribution of the Series 1995-1 Notes, as
certified by each of the Placement Agents to the Transfer Agent and Registrar
and (ii) the date on which the requisite certifications are due to and are
provided to the Transfer Agent and Registrar as set forth in SECTION 2.01(c)
(the later of clauses (i) and (ii) is referred to herein as the "EXCHANGE DATE")
for permanent Global Notes in respect of such offshore transactions (such
permanent Notes being the "UNRESTRICTED GLOBAL NOTES", and together with the
Regulation S Temporary Global Notes, the "REGULATION S GLOBAL NOTES"). The
Regulation S Global Notes shall be issued in registered form, without coupons,
and deposited upon the order of the Issuer with the Administrative Agent as
custodian for, and registered in the name of, Cede & Co. as nominee of the
Clearing Agency for credit by the Clearing Agency to the account of the
depositaries for Euroclear and Cedel, which depositaries shall, on behalf of
Euroclear and Cedel, hold such interests on behalf of account holders (each a
"MEMBER ORGANIZATION"), which have rights in respect of such Notes credited to
their securities accounts with Euroclear or Cedel from time to time.
(c) The Paying Agent shall make payment of the full amount of
accrued interest in respect of any Regulation S Temporary Global Note to the
Clearing Agency which is the registered holder thereof, without deduction or
withholding, in accordance with the terms hereof and the Indenture.
Notwithstanding the foregoing, a beneficial owner of an interest in a Regulation
S Temporary Global Note (or any interest therein) may receive interest payments
from Euroclear or Cedel, as the case may be, in respect of such Note (or such
interest therein)
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only after delivery by such holder to Euroclear or Cedel, as the case may be, of
a written certification substantially in the form of the Noteholder Reg S
Certification set forth in EXHIBIT D hereto. The delivery by such holder of
such certification shall constitute an irrevocable instruction by such holder to
Euroclear or Cedel, as the case may be, to arrange for the exchange of such
holder's interest in such Regulation S Temporary Global Note for a beneficial
interest in the Unrestricted Global Note after the Exchange Date in accordance
with the immediately succeeding paragraph. The Paying Agent shall have no
responsibility or liability for monitoring whether or not such certifications
have been made, all of which shall be the obligation and responsibility of
Euroclear or Cedel, as applicable.
After (i) the Exchange Date, and (ii) receipt by the Transfer Agent
and Registrar of written instructions from Euroclear or Cedel, as the case may
be, the Transfer Agent and Registrar shall reduce the principal amount of the
applicable Regulation S Temporary Global Note and increase the principal amount
of the Unrestricted Global Note, in each case, by the principal amount of the
beneficial interest in the Regulation S Temporary Global Note to be so
transferred.
Upon return of the entire principal amount of any applicable
Regulation S Temporary Global Note to the Administrative Agent in exchange for
an Unrestricted Global Note or Notes in an equivalent aggregate principal
amount, the Administrative Agent shall cancel such Regulation S Temporary Global
Note by perforation and shall forthwith destroy such Regulation S Temporary
Global Note.
SECTION 2.02 LIMITATIONS ON THE SALE OR TRANSFER OF SERIES 1995-1
NOTES. (a) None of the Series 1995-1 Notes may be sold, transferred or
otherwise disposed of (any such sale, transfer or other disposition, as defined
for purposes of this Section, being called a "SALE", with "SELL" and "SOLD"
having a correlative meaning), except in compliance with the following:
(i) No holder may Sell any of the Series 1995-1 Notes unless
such Sale is made:
(A) to the Issuer;
(B) in the United States of America to a limited number of
Institutional Accredited Investors in a transaction exempt from
the registration requirements of the Securities Act upon delivery
to the Trustee, the Administrative Agent (or any designated agent
of either of the foregoing) and the Issuer of an investor letter,
substantially in the form of EXHIBIT C hereto (or, with respect
to the initial sale thereof to the Placement Agents under the
Note Purchase Agreement, representations in the Note Purchase
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Agreement to the similar effect) and, if requested by the
Trustee, the Administrative Agent (or any designated agent of
either of the foregoing) or the Issuer, an opinion of counsel
confirming the availability of such exemption to any such Sale,
in a form and substance satisfactory to the Trustee, the
Administrative Agent (or any designated agent of either of the
foregoing) or the Issuer, as the case may be;
(C) by a holder to a transferee that such holder reasonably
believes is a Qualified Institutional Buyer purchasing such Notes
for its own account or for the account of another Person that is
a Qualified Institutional Buyer in a transaction exempt from the
registration requirements under the Securities Act pursuant to
Rule 144A, and which proposed transferee is aware that the
proposed Sale is being made in reliance on Rule 144A and to whom
such Sale is being made pursuant to an available exemption from
the registration requirements of applicable state securities
laws;
(D) in the United States of America by a holder to a
transferee to whom such Sale, transfer or disposition is being
made pursuant to the exemption from the registration requirements
under the Securities Act pursuant to Rule 144 under the
Securities Act, and under all applicable state securities laws
and, if requested by the Trustee, the Administrative Agent (or
any designated agent of either of the foregoing) or the Issuer,
prior to the proposed Sale, transfer or disposition, such holder
and the proposed transferee provide the Trustee, the
Administrative Agent (or any designated agent of either of the
foregoing) or the Issuer with an opinion of counsel in form and
substance satisfactory to the Trustee, the Administrative Agent
(or any designated agent of either of the foregoing) or the
Issuer, as the case may be, concerning such proposed Sale,
transfer or disposition and confirming the availability of such
exemption in connection therewith; or
(E) outside of the United States of America by a holder to a
transferee (other than a U.S. Person) and to whom such Sale,
transfer or disposition is being made pursuant to an applicable
exemption from the registration requirements under the Securities
Act pursuant to Regulation S.
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(ii) No Series 1995-1 Notes shall be offered for sale, sold or
delivered, directly or indirectly, nor shall any circular, prospectus,
form of application, or other offering material or advertisement
relating to the Series 1995-1 Notes be distributed or published in or
from any country or jurisdiction, except under circumstances that will
result in compliance with all applicable laws and regulations of any
such country or jurisdiction and the terms and restrictions contained
herein. Without limiting the foregoing in any manner, no holder of
any Series 1995-1 Notes or any other Person acting on behalf of such a
holder shall use any means of general solicitation or distribution in
connection with the marketing, Sale, transfer or other disposition of
such Notes. The Series 1995-1 Notes shall bear a legend regarding the
restrictions on transfer as set forth herein which shall be in
substantially the forms set forth in the forms of the Series 1995-1
Notes attached hereto as EXHIBIT A and B.
(iii) Each holder of any Series 1995-1 Notes will be deemed to
have acknowledged and agreed that (A) the Series 1995-1 Notes have not
been and will not be registered under the Securities Act and may not
be sold, transferred or otherwise disposed of except as permitted in
this SECTION 2.02(a), (B) such holder will notify any purchaser,
pledgee or other transferee of any Series 1995-1 Notes from such
holder of the transfer restrictions referred to in this SECTION
2.02(a), and (C) each Series 1995-1 Note will bear one or more of the
legends set forth in the forms of the Series 1995-1, Class A Notes and
Series 1995-1, Class B Notes attached hereto as EXHIBIT A and B,
respectively.
(iv) Resales, pledges or transfers of Series 1995-1 Notes will
be made as follows: (A) if the applicable Series 1995-1 Notes are
evidenced by Global Notes held through the Clearing Agency in Book-
Entry Form and the resale, pledge or transfer is among Qualified
Institutional Buyers or holders of interests in the Unrestricted
Global Notes, through such system, in accordance with such Clearing
Agency's rules and procedures; or (B) if the applicable Series 1995-1
Notes are in Book-Entry Form and the buyer, pledgee or transferee is
purchasing pursuant to SUBCLAUSE (A), (C) or (D) of SECTION 2.02(a)(i)
or is not a Qualified Institutional Buyer or the Notes are in
definitive form, such resale, pledge or transfer will be effected by
the delivery to the transferee of Definitive Notes registered in the
name of the transferee (or in the name of the transferee's nominee) on
the books maintained by the Transfer Agent and Registrar and any such
resale, pledge or transfer of Definitive Notes shall be conditional
upon the completion of the
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documentation described in the Indenture and this Supplement.
(v) Each Benefit Plan that purchases a Series 1995-1 Note or
interest therein will be deemed to represent and warrant that the
acquisition and holding of such Note or interest therein will not
result in a nonexempt prohibited transaction under ERISA or the
Internal Revenue Code.
(vi) None of the Series 1995-1 Notes may be issued or Sold in a
transaction registered under the Securities Act of 1933.
(b) The Issuer shall make available to any selling holder of Series
1995-1 Notes and any prospective transferee of such Notes such information
as is required under Rule 144A(d)(4) in connection with the resale of any
such Notes, promptly after the same is requested.
(c) Subject to the requirements specified above having been
fulfilled, upon surrender for registration of transfer of any Series 1995-1
Note to the Administrative Agent, the Issuer shall execute, and the
Administrative Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Series 1995-1 Notes
in accordance with the terms hereof and of the Indenture. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the applicable Clearing Agency, in accordance with (x) the terms of
this Supplement (including the restriction on transfer set forth herein)
and the Indenture and (y) the procedures of the Clearing Agency therefor.
(d) Subject to the remaining provisions of this SECTION 2.02(d),
unless and until it is exchanged in whole or in part for Definitive Notes,
a Global Note evidencing any Series 1995-1 Note may not be transferred,
except as a whole by the applicable Clearing Agency to a nominee of the
Clearing Agency or by a nominee of the Clearing Agency to the Clearing
Agency or to another nominee of the Clearing Agency or by the Clearing
Agency or any such Nominee of such Clearing Agency to a successor Clearing
Agency or a nominee of such successor Clearing Agency. Any Series 1995-1
Note authenticated and delivered upon registration of a transfer of, or in
exchange for, or in lieu of, any Global Note evidencing a Series 1995-1
Note, shall also be a Global Note:
(i) For transfers within Regulation S Temporary Global Notes, if
the owner of an interest in a Regulation S Temporary Global Note
wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial
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interest in such Regulation S Temporary Global Note, such transfer may
be effected in accordance with this CLAUSE (i). Upon delivery (x) by
the owner of such beneficial interest in such Regulation S Temporary
Global Note to Euroclear or Cedel, as the case may be, of a
certification in the form set forth in EXHIBIT D (an "NOTEHOLDER REG S
CERTIFICATION"), (y) by the transferee of such beneficial interest in
the Regulation S Temporary Global Note to Euroclear or Cedel, as the
case may be, of a written certification in the form set forth in
EXHIBIT E (a "TRANSFEREE REG S CERTIFICATION"), and (z) by Euroclear
or Cedel, as the case may be, to the Transfer Agent and Registrar of a
certification in the form set forth in EXHIBIT F (a "DEPOSITARY REG S
CERTIFICATION").
(ii) For transfers of an interest in an Unrestricted Global Note
evidencing any Series 1995-1 Note for an interest in a 144A Global
Note, if the owner of a beneficial interest in the Unrestricted Global
Note deposited with the Clearing Agency wishes at any time to exchange
its interest in such Unrestricted Global Note for an interest in the
144A Global Note, or to transfer its interest in such Unrestricted
Global Note to a Person who wishes to take delivery thereof in the
form of an interest in the 144A Global Note, such transferring
beneficial owner may, subject to the rules and procedures of Euroclear
or Cedel and the Clearing Agency, as the case may be, give directions
to Euroclear or Cedel, as applicable, which shall thereafter instruct
the Transfer Agent and Registrar to exchange or cause the exchange or
transfer of such interest for an equivalent beneficial interest in the
144A Global Note. Upon receipt by the Transfer Agent and Registrar of
instructions from Euroclear or Cedel (based on instructions from a
Member Organization) or from a Clearing Agency Participant, as
applicable, or the Clearing Agency, as the case may be, directing the
Transfer Agent and Registrar to credit or cause to be credited a
beneficial interest in the 144A Global Note equal to the beneficial
interest in the Unrestricted Global Note to be exchanged or
transferred (such instructions to contain information regarding the
Clearing Agency Participant account to be credited with such increase,
and, with respect to an exchange or transfer of an interest in the
Unrestricted Global Note, information regarding the Clearing Agency
Participant account to be debited with such decrease), the Transfer
Agent and Registrar shall instruct the Clearing Agency to reduce the
Unrestricted Global Note by the aggregate principal amount of the
beneficial interest in the Unrestricted Global Note to be exchanged or
transferred, and the Transfer Agent and Registrar shall instruct the
Clearing Agency,
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concurrently with such reduction, to increase the principal amount of
the 144A Global Note by the aggregate principal amount of the
beneficial interest in the Unrestricted Global Note to be so exchanged
or transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions (which Person must be a
U.S. Person) a beneficial interest in the 144A Global Note equal to
the reduction in the principal amount of the Unrestricted Global Note.
(iii) For transfers of an interest in a 144A Global Note
evidencing any Series 1995-1 Notes for an interest in a Regulation S
Global Note, if the owner of a beneficial interest in such 144A Global
Note wishes at any time to exchange its interest in such 144A Global
Note for an interest in the Regulation S Global Note, or to transfer
its interest in such 144A Global Note to a Person who wishes to take
delivery thereof in the form of an interest in the Regulation S Global
Note, such transferring beneficial owner may, subject to the rules and
procedures of the Clearing Agency, give directions for the Transfer
Agent and Registrar to exchange or cause the exchange or transfer or
cause the transfer of such interest for an equivalent beneficial
interest in the Regulation S Global Note; it being understood that any
transfers or exchanges of interests in such 144A Global Note being
made prior to the Exchange Date shall be effected by transfers to the
Regulation S Temporary Global Note and any benefical owner or
transferee thereof shall be required to deliver the certifications
required pursuant to SECTION 2.01(b) before such owner's or person's
interest in the Regulation S Temporary Global Note will be exchanged
for an interest in the Unrestricted Global Note in accordance with
SECTION 2.01(c). Upon receipt by the Transfer Agent and Registrar of
(1) instructions given in accordance with the Clearing Agency's
procedures from a Clearing Agency Participant directing the Transfer
Agent and Registrar to credit or cause to be credited a beneficial
interest in the Regulation S Global Note in an amount equal to the
beneficial interest in the 144A Global Note to be exchanged or
transferred, (2) a written order given in accordance with the Clearing
Agency's procedures containing information regarding the account of
the depositaries for Euroclear or Cedel or another Clearing Agency
Participant, as the case may be, to be credited with such increase and
the name of such account, and (3) a certificate in the form of EXHIBIT
G (a "TRANSFER TO REGULATION S CERTIFICATION") attached hereto given
by such transferring beneficial interest, the Transfer Agent and
Registrar shall instruct the Clearing Agency to reduce the 144A Global
Note by the aggregate
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principal amount of the beneficial interest in the 144A Global Note to
be so exchanged or transferred and the Transfer Agent and Registrar
shall instruct the Clearing Agency, concurrently with such reduction,
to increase the principal amount of the Regulation S Global Note by
the aggregate principal amount of the beneficial interest in the 144A
Global Note to be so exchanged or transferred, and to credit or cause
to be credited to the account of the person specified in such
instructions a beneficial interest in the Regulation S Global Note
equal to the reduction in the principal amount of the 144A Global
Note.
(iv) Notwithstanding any other provisions of this SECTION
2.02(d), a Placement Agent for the Series 1995-1 Notes may exchange
beneficial interests in the Regulation S Temporary Global Note held by
it for interests in the 144A Global Note only after delivery by such
Placement Agent of instructions for such exchange substantially in the
form of EXHIBIT H (the "PLACEMENT AGENT EXCHANGE INSTRUCTIONS"). Upon
receipt of the instructions provided in the preceding sentence, the
Transfer Agent and Registrar shall instruct the Clearing Agency to
reduce the principal amount of the Regulation S Temporary Global Note
by the principal amount of the beneficial interest in the Regulation S
Temporary Global Note to be so transferred and shall instruct the
Clearing Agency to increase the principal amount of the 144A Global
Note.
(v) In the event that a Global Note evidencing the Series 1995-1
Notes (or any interests therein) is exchanged for Definitive Notes in
accordance herewith and the Indenture, such Definitive Notes may be
exchanged or transferred for one another only in accordance with such
procedures as are substantially consistent with the provisions of
CLAUSES (i) through (iii) immediately above (including the
certification requirements intended to ensure that such exchanges or
transfers comply with Rule 144A or Regulation S under the Securities
Act, as the case may be) and as may be from time to time adopted by
the Administrative Agent.
(vi) Any Noteholder that holds Series 1995-1 Notes evidenced by
Definitive Notes (other than under Regulation S) may, subject to the
limitations set forth herein, exchange such Definitive Notes for a
book-entry interest in a Series 1995-1 Note (to be substantially in
the form of a 144A Global Note), registered in the name of CEDE & Co.,
as nominee for the Clearing Agency, in accordance with the customary
procedures of the applicable Clearing Agency.
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(vii) No holder of a beneficial interest in any Regulation S
Global Note shall be permitted to exchange any of its interest
thereunder for interests in Definitive Notes other than as permitted
pursuant to SECTION 6.11 of the Indenture.
SECTION 2.03 DELIVERY OF SETTLEMENT STATEMENTS AND DAILY REPORTS TO
PLACEMENT AGENTS. Until the Series 1995-1 Notes shall have been repaid in full
(or such earlier time as shall be agreed upon by the Placement Agents), the
Servicer or the Issuer shall deliver to each of the Placement Agents a copy of
each Settlement Statement and, if requested by any such Placement Agent, each
Daily Report concurrently with the delivery thereof by the Issuer or the
Servicer to the Trustee and/or the Administrative Agent pursuant to subsections
3.04(c) and (b), respectively, of the Indenture.
ARTICLE III
CONDITIONS TO ISSUANCE OF NOTES
SECTION 3.01 CONDITIONS TO ISSUANCE. The Administrative Agent will
not authenticate any Series 1995-1 Notes to be issued hereunder on the Series
Sales Date for Series 1995-1 unless:
(a) the Trustee and the Administrative Agent shall have received
written certification from the Issuer and the Servicer that the Indenture,
the Purchase Agreement, and the Note Purchase Agreement shall have become
effective and continue to be effective on the Series Sales Date for the
Series 1995-1 Notes;
(b) the Trustee and the Administrative Agent shall have received
written certification from the Issuer and the Servicer that all conditions
to the issuance of the Series 1995-1 Notes under Section 6.04 of the
Indenture shall have been satisfied;
(c) on or prior to the Series Sales Date for the Series 1995-1 Notes,
the Merger shall have been consummated and the Trustee and the
Administrative Agent shall have received written confirmation (including by
telecopy) from the Office of the Secretary of State of Delaware confirming
that the Merger Certificate evidencing the effectiveness of the Merger was
accepted and filed in such office;
(d) the Administrative Agent and the Trustee shall have received
fully-executed copies of (x) a pay-off letter executed by the Existing
Program Agent, Southshore and Castlewood evidencing the repayment of all of
the Existing Program Obligations and a discharge of all liens, claims and
encumbrances securing such obligations and (y) all releases
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of any liens, claims or encumbrances filed by any of the foregoing securing
any of the Existing Program Obligations (all of which will be delivered
concurrently with the sale of Series 1995-1 Notes on the Series Sales Date
and the delivery of the proceeds thereof to the Existing Program Agent in
satisfaction and discharge of the Existing Program Obligations), which pay-
off letter and releases shall be sufficient (as evidenced by an Opinion of
Counsel for the Issuer) to release all such liens, claims and encumbrances
securing any of the Existing Program Obligations; and
(e) on the Series Sale Date for the Series 1995-1 Notes, the Trustee
and the Administrative Agent shall have received ratings letters from the
Applicable Rating Agencies confirming that the Series 1995-1, Class A Notes
shall be rated at least "AAA" by each of S&P and Duff & Phelps and the
Series 1995-1, Class B Notes shall be rated at least "BBB" by each of S&P
and Duff & Phelps.
ARTICLE IV
PAYMENTS
SECTION 4.01 PAYMENTS. Except as expressly provided otherwise in
this Supplement, interest and principal shall be distributed in respect of the
Series 1995-1 Notes at the times described in, and in the amounts calculated
pursuant to, ARTICLES IV and V of the Indenture for payments that are to be made
with respect to Fixed Principal Notes.
SECTION 4.02 INTEREST. The Series 1995-1, Class A Notes shall bear
interest on and after the Series Sales Date of such Class of Notes until the
entire Outstanding Principal Balance thereof shall have been repaid in full at
the Series 1995-1, Class A Note Rate. The Series 1995-1, Class B Notes shall
bear interest on and after the Series Sales Date of such Class of Notes until
the entire Outstanding Principal Balance thereof shall have been repaid in full
at the Series 1995-1, Class B Note Rate. Interest with respect to the Series
1995-1 Notes due but not paid on any Payment Date will be due on the next
succeeding Payment Date with additional interest on such amount at the
applicable Note Rate to the extent permitted by law.
SECTION 4.03 OPTIONAL REDEMPTION; PREPAYMENTS. (a) On any Payment
Date prior to the occurrence of the commencement of the Liquidation Period or
the Pay-Out Period with respect to the Series 1995-1 Notes, the Issuer shall
have the right, upon not less than 35 Business Days' prior written notice to the
Trustee and the Administrative Agent, to cause the Series 1995-1 Notes to be
redeemed in full, or, in part, PROVIDED, that (i) any such partial redemption of
the Series 1995-1 Class A Notes shall be in the minimum principal amount of
$22,000,000 or in integral
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multiples of $1,000,000 in excess of such amount and (ii) any such partial
redemption of the Series 1995-1 Class B Notes shall be in the minimum principal
amount of $4,000,000 or in integral multiples of $1,000,000 in excess of such
amount. The price at which such Notes shall be redeemed shall be equal to sum
of (i) the Outstanding Principal Balance (or portion thereof) of such Notes
being redeemed, PLUS (ii) accrued and unpaid interest (and accrued and unpaid
interest with respect to interest amounts that were due but not paid on any
prior Payment Date) on the principal amount of the Notes being so redeemed
through the day preceding the date of such redemption at the Note Rate
applicable to such Notes, PLUS (iii) to the extent that such redemption occurs
prior to the Par Date, the Prepayment Premium, if any, with respect to the
principal amount of such Notes being redeemed. Such price shall be payable to
the holders of the Series 1995-1 Notes being redeemed upon such holders' tender
of the affected Notes to the Administrative Agent for payment thereof. The
Issuer shall, within five Business Days of notifying the Trustee and the
Administrative Agent of such redemption, mail a notice of redemption to the
holders of the Series 1995-1 Notes in accordance with the terms and provisions
of Section 15.04 of the Indenture. Optional redemptions of the Series 1995-1
Notes pursuant to this Section may be funded only out of (1) proceeds of
borrowings or issuances of the Issuer's securities by the Issuer or (2) by the
accumulation of Collections and other proceeds of the Pledged Assets allocable
to the Series 1995-1 Notes to be redeemed, as shall be specified by the Issuer
in the applicable notice of redemption.
(b) If such Notes are to be redeemed through the accumulation of
Collections and other proceeds of the Pledged Assets allocable to the Series
1995-1 Notes, then commencing upon the date specified in such notice to the
Trustee and the Administrative Agent (until an amount equal to the amount of the
affected Notes to be redeemed, plus the related Prepayment Premium, if any,
payable in respect thereof has been so accumulated), the Servicer shall allocate
a portion of the Collections available in the Master Collection Account (after
making any required transfers therefrom to the Carrying Cost Account) to the
Defeasance Account for purposes of such prepayment. The portion of Collections
so allocated and transferred on account of the principal to be prepaid shall be
as set forth in CLAUSE SECOND of Section 4.02(e) of the Indenture, subject to
the further limitations thereon set forth in Section 4.02(e) of the Indenture.
In addition, on each such Business Day a portion of the Collections available
for application pursuant to CLAUSE FIFTH of Section 4.02(e) of the Indenture
equal to the product of (x) such Defeasance Allocation Percentage and (y) the
amount of such available Collections shall be allocated to the Defeasance
Account on account of the Prepayment Premium, if any, payable on account of such
prepayment until the full amount of any such Prepayment Premium has been
provided for. If such redemption is to be effected with the proceeds of
borrowings or the issuance of other securities by the Issuer, such proceeds in
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the amount of the redemption price for such affected Notes shall be remitted by
the Issuer to the Administrative Agent and deposited by the Administrative Agent
directly into the Principal Funding Account with respect to the Series 1995-1
Notes. The redemption of the affected Notes shall be made on the later to occur
of (a) the Payment Date specified in the notice of redemption and (b) if such
Notes are to be redeemed by the accumulation of Collections and proceeds of the
Pledged Assets, the Payment Date on which sufficient funds (including funds to
cover the related Prepayment Premium) have been accumulated in the Defeasance
Account.
(c) In the event of any partial redemption of the Series 1995-1
Notes, the holders of those Notes shall be paid their pro rata share of such
partial redemption calculated in accordance with the Outstanding Principal
Balance of such Notes as of the related Record Date. Notwithstanding anything
contained herein or in the Indenture to the contrary, no Series 1995-1, Class B
Notes may be redeemed (in whole or in part) until the Series 1995-1, Class A
Notes (together with any Prepayment Premium owing in respect thereof) have been
redeemed in full.
(d) The Prepayment Spread for purposes of the Series 1995-1, Class A
Notes is 0.35%, and the Prepayment Spread for purposes of the Series 1995-1,
Class B Notes is 0.70% (as to each such Class, its "PREPAYMENT SPREAD"). The
Prepayment Base Rate with respect to each such Class is LIBOR (the "PREPAYMENT
BASE RATE"), as determined for purposes of the Eurodollar Period commencing on
the Payment Date on which the prepayment is made.
(e) In addition to the foregoing, at any time after the commencement
of the Pay-Out Period for the Series 1995-1 Notes or the Liquidation Period, the
Issuer shall have the right, upon not less than 35 Business Days' prior written
notice to the Trustee and the Administrative Agent, to cause the Series 1995-1
Notes to be redeemed in full (but not in part). Except as otherwise set forth
in the immediately succeeding clause (f), no Prepayment Premium or other penalty
or premium shall be payable with respect to any such optional redemption made
pursuant to this paragraph. The price at which such Notes shall be redeemed
shall be equal to sum of (i) the Series 1995-1 Outstanding Principal Balance as
of the date of such redemption PLUS (ii) accrued and unpaid interest (and
accrued and unpaid interest with respect to interest amounts that were due but
not paid on any prior Payment Date) on the principal amount of the Notes being
so redeemed through the day preceding the date of such redemption at the
applicable Note Rate applicable to such Notes, PLUS (iii) to the extent payable
pursuant to the immediately succeeding paragraph (f), the Prepayment Premium, if
any, with respect to the principal amount of the Notes being redeemed. The
amounts to be paid by the Issuer for the optional redemption of the Series
1995-1 Notes pursuant to this CLAUSE (e) shall be (x) payable only out of
(1) the proceeds of borrowings or the issuance of the Issuer's securities by
the Issuer or (2) the accumulation of
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Collections and other proceeds of the Pledged Assets allocable to the Series
1995-1 Notes to be redeemed, as shall be specified by the Issuer in such notice
of redemption, and (y) remitted and deposited in accordance with SECTION 4.03(b)
(other than with respect to the Prepayment Premium payable pursuant to SECTION
4.03(b)). The Issuer shall, within five (5) Business Days of notifying the
Trustee and the Administrative Agent of such redemption, mail a notice of
redemption to the holders of the Series 1995-1 Notes in accordance with the
terms and provisions of Section 15.04 of the Indenture. The redemption of the
affected Notes pursuant to this Section shall be made on the later to occur of
(A) the Payment Date specified in the notice of redemption and (B) if such Notes
are to be redeemed by the accumulation of collections and proceeds of the
Pledged Assets, the Payment Date on which sufficient funds have been accumulated
in the Defeasance Account. Upon the tender of all of the outstanding Series
1995-1 Notes by the holders thereof, the Paying Agent shall distribute all such
amounts, together with all other funds, if any, on deposit in the Defeasance
Account and the Principal Funding Account allocable to the Series 1995-1 Notes,
to the holders of the Series 1995-1 Notes on such redemption date in repayment
of the principal amount and accrued and unpaid interest owing to such
Noteholders. Following any such redemption, the Noteholders of Series 1995-1
Notes shall have no further rights with respect to the Receivables or the other
Pledged Assets. In the event that the Issuer fails for any reason to deposit
the aggregate redemption amount for the Series 1995-1 as aforesaid in this
CLAUSE (e), payments to or for the account of the Noteholders in respect of the
outstanding Series 1995-1 Notes shall continue to be made as otherwise set forth
herein and in the Indenture.
(f) Notwithstanding anything contained in this Agreement or the
Indenture to the contrary, in the event that the Liquidation Commencement Date
occurs as a result of the Sellers' termination of sales of Receivables to the
Issuer in accordance with Section 8.09 of the Purchase Agreement, the Prepayment
Premium shall continue to be payable with respect to any portion of principal of
the Series 1995-1 Notes which is prepaid (including as a result of an optional
redemption by the Issuer pursuant to clause (e) above) prior to the Par Date.
In the event that any such Prepayment Premium shall be required to be paid in
respect of the Series 1995-1 Notes, a portion of the Collections available for
application pursuant to CLAUSE THIRD of Section 4.02(f) of the Indenture equal
to the product of (x) the Noteholder Allocation Percentage and (y) the amount of
such available Collections shall be allocated to the Master Collection Account
on account of the Prepayment Premium, if any, payable on account of such
prepayment until the full amount of any such Prepayment Premium has been
provided for.
(g) Promptly, and in any case within 5 Business Days, after the
Administrative Agent's receipt of any notice from the Issuer of any full or
partial redemption or prepayment of any of
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the Series 1995-1 Notes pursuant to this SECTION 4.03, the Administrative Agent
shall notify (in writing) each of the Applicable Rating Agencies thereof.
SECTION 4.04 APPLICATION OF PAYMENTS BETWEEN SENIOR AND SUBORDINATED
CLASSES OF SERIES 1995-1 NOTES. Except as otherwise set forth in SECTION 4.03
above with respect to optional redemptions of the Series 1995-1 Notes, on each
Payment Date, the Paying Agent, acting upon written instructions from the
Servicer set forth in the most recent Settlement Statement, will make the
following distributions to the holders of the Series 1995-1 Notes in the
following order of priority from amounts available for allocation thereto as
follows:
(i) to holders of the Series 1995-1, Class A Notes, the sum of (a)
interest accrued on the Series 1995-1, Class A Notes during the immediately
preceding Eurodollar Period and (b) the aggregate amount of shortfalls in
distributions of interest to holders of the Series 1995-1, Class A Notes as
provided in clause (i)(a) for all prior Payment Dates, together with
interest thereon at the applicable Series 1995-1, Class A Note Rate in
effect for each Eurodollar Period during which such shortfall was
outstanding;
(ii) to holders of the Series 1995-1, Class B Notes, the sum of (a)
interest accrued on the Series 1995-1, Class B Notes during the immediately
preceding Eurodollar Period and (b) the aggregate amount of shortfalls in
distributions of interest to holders of the Series 1995-1, Class B Notes as
provided in clause (ii)(a) for all prior Payment Dates, together with
interest thereon at the applicable Series 1995-1, Class B Note Rate in
effect for each Eurodollar Period during which such shortfall was
outstanding;
(iii) to holders of the Series 1995-1, Class A Notes, in reduction of
the outstanding principal balance of the Series 1995-1 Class A Notes, (a)
on the Expected Final Payment Date, in an amount equal to the lesser of (x)
the funds on deposit in the Principal Funding Account allocable to the
Series 1995-1 Notes or (y) the outstanding principal balance of the Series
1995-1, Class A Notes at such time and (b) on each Payment Date occurring
after commencement of the Liquidation Period or a Pay-Out Period
(commencing with the first Payment Date after the Calculation Period in
which the Liquidation Period or the Pay-Out Period, as the case may be,
commences) with respect to the Series 1995-1 Notes, in an amount equal to
the lesser of (x) the Principal Payment Amount for such Payment Date and
(y) the Outstanding Principal Balance of the Series 1995-1, Class A Notes
at such time, until the entire Outstanding Principal Balance of all of the
Series 1995-1, Class A Notes shall have been repaid in full;
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(iv) to holders of the Series 1995-1, Class B Notes, in reduction of
the outstanding principal balance of the Series 1995-1, Class B Notes, (a)
on the Expected Final Payment Date, in an amount equal to the lesser of (x)
the funds on deposit in the Principal Funding Account allocable to the
Series 1995-1 Notes, if any, after application of such funds in accordance
with clause (iii) above and (y) the outstanding principal balance of the
Series 1995-1, Class B Notes at such time, and (b) on each Payment Date
occurring after commencement of the Liquidation Period or a Pay-Out Period
(commencing with the first Payment Date after the Calculation Period in
which the Liquidation Period or the Pay-Out Period, as the case may be,
commences) with respect to the Series 1995-1 Notes, in an amount equal to
the lesser of (x) the Principal Payment Amount for such Payment Date LESS
the amount thereof, if any, applied in accordance with clause (iii) above
and (y) the Outstanding Principal Balance of the Series 1995-1, Class B
Notes at such time, until the entire Outstanding Principal Balance of all
of the Series 1995-1, Class B Notes shall have been repaid in full; and
(v) on each Payment Date occurring after the commencement of the
Liquidation Period, (a) to the holders of the Series 1995-1, Class A Notes,
in reduction of the amount of any accrued and unpaid Prepayment Premiums,
if any, then due and owing thereto, in an amount equal to the lesser of (x)
the Principal Payment Amount for such Payment Date and (y) the aggregate
amount of such accrued and unpaid Prepayment Premiums so owing to such
holders, until the aggregate amount thereof shall have been paid in full,
and (b) to the holders of the Series 1995-1, Class B Notes, in reduction of
the amount of any accrued and unpaid Prepayment Premiums, if any, then due
and owing thereto, in an amount equal to the lesser of (x) the Principal
Payment Amount for such Payment Date and (y) the aggregate amount of such
accrued and unpaid Prepayment Premiums so owing to such holders LESS the
amount thereof, if any, applied in accordance with the immediately
preceding subclause (a), until the aggregate amount thereof shall have been
paid in full.
ARTICLE V
PAY-OUT EVENTS
SECTION 5.01 PAY-OUT EVENTS. Any of the following shall be "Pay-Out
Events" with respect to the Series 1995-1 Notes:
(a) (i) (x) the failure on the part of the Sellers to duly observe or
perform Section 5.01(k), 5.03(a) or 5.03(d) of the Purchase Agreement or
the Issuer to duly observe or perform Section 7.02(e), 7.02(g) or 7.02(h)
or clause (i) or
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(ii) of Section 7.02(f) of the Indenture, which failure has a Material
Adverse Effect and continues unremedied for a period of five Business Days
after the date on which written notice of such failure, requiring same to
be remedied, shall have been given to the Issuer by the Trustee or the
Administrative Agent or to the Issuer, the Trustee and the Administrative
Agent by any holder of the Series 1995-1 Notes, or (y) the failure on the
part of the Issuer or the Servicer to duly observe or perform any other
covenant or agreement of the Issuer or the Servicer (other than as
described in Section 9.01(e) of the Indenture or subclause (x) of this
clause (a)) set forth in any Transaction Document, which failure has a
Material Adverse Effect and continues unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Issuer or the Servicer by the
Trustee or the Administrative Agent or to the Issuer or the Servicer, as
applicable, the Trustee and the Administrative Agent by any holder of the
Series 1995-1 Notes and (ii) the occurrence of a Pay-Out Event has been
declared by the holders of Series 1995-1 Notes evidencing at least 50% of
the Series 1995-1 Outstanding Principal Balance at such time, by notice to
the Administrative Agent, the Trustee, the Issuer and the Servicer after
the expiration of the applicable grace periods set forth above;
(b) (i) any representation or warranty made by a Seller in Section
4.01(e) of the Purchase Agreement or by the Issuer in Section 2.03(a)(i),
(a)(ii)(A), (a)(ii)(B) or (a)(ii)(C) of the Indenture shall prove to have
been incorrect in any material respect when made, and continues to be
incorrect in any material respect for a period of five Business Days after
the date on which written notice of such breach, requiring the same to be
remedied, shall have been given to the Issuer by the Trustee or the
Administrative Agent or to the Issuer, the Trustee and the Administrative
Agent by any holder of the Series 1995-1 Notes, or any other representation
or warranty made by a Seller in the Purchase Agreement or by the Issuer in
the Indenture shall prove to have been incorrect in any material respect
when made, and continues to be incorrect in any material respect for a
period of 30 days after the date on which written notice of such breach,
requiring the same to be remedied, shall have been given to the Issuer by
the Trustee or the Administrative Agent or to the Issuer, the Trustee and
the Administrative Agent by any holder of the Series 1995-1 Notes;
PROVIDED, HOWEVER, that a mistake in representation of a Receivable as an
Eligible Receivable shall not constitute a Pay-Out Event unless and until a
Seller has failed to make any cash payments owed under the Purchase
Agreement in respect of the Noncomplying Receivables and Dilution
Adjustment arising from such misrepresentation and (ii) the occurrence of a
Pay-Out Event has been declared by the holders of Series 1995-1 Notes
evidencing at least 50%
-24-
of the Series 1995-1 Outstanding Principal Balance at such time, by notice
to the Administrative Agent, the Trustee, the Issuer and the Servicer after
the expiration of the applicable grace periods set forth above;
(c) The Majority Noteholders do not declare a Liquidation
Commencement Date with respect to a Liquidation Event described in clause
(e)(A) of Section 9.01 of the Indenture, in which case a Pay-Out Event
shall be deemed to have occurred automatically unless the occurrence of the
Pay-Out Commencement Date is waived by the holders of the Series 1995-1,
Class A Notes evidencing more than 66 2/3% of the Outstanding Principal
Balance of such Class and by the holders of the Series 1995-1, Class B
Notes evidencing 100% of the Outstanding Principal Balance of such Class,
in each case, by notice to the Administrative Agent, the Trustee, the
Issuer and the Servicer, given within the applicable grace period.
(d) The Majority Noteholders do not declare a Liquidation
Commencement Date with respect to a Liquidation Event described in clause
(d) or (e)(B) of Section 9.01 of the Indenture, and the holders of Series
1995-1 Notes evidencing at least 50% of the Series 1995-1 Outstanding
Principal Balance declare that a Pay-Out Event has occurred by notice to
the Administrative Agent, the Trustee, the Issuer and the Servicer.
(e) After deposits to the Principal Funding Account on the Expected
Final Payment Date, the outstanding principal and interest of the Series
1995-1 Notes shall not have been repaid in full.
Notwithstanding the foregoing, a delay in or failure in performance
referred to in SUBSECTION (a) or (b) above for a period of 30 Business Days
after the applicable grace period shall not (unless such delay or failure
continues after such 30 Business Day period) constitute a Pay-Out Event if such
delay or failure could not have been prevented by the exercise of reasonable
diligence by the Issuer, the affected Seller or the Servicer, as applicable, and
such delay or failure was caused by an act of God or the public enemy, riots,
acts of war, acts of terrorism, epidemics, flood, embargoes, weather,
landslides, fire, earthquakes or similar causes. The preceding sentence shall
not relieve the Issuer, the affected Seller or the Servicer, as applicable, from
using its best efforts to perform its obligations in a timely manner in
accordance with the terms hereof and of the other Transaction Documents, and the
Issuer or the Servicer, as applicable, shall promptly give the Trustee and the
Administrative Agent an Officer's Certificate notifying them of such failure or
delay by it or by any affected Seller.
The Administrative Agent will promptly send a copy of each notice,
waiver and/or certificate which it sends or receives
-25-
pursuant to this SECTION 5.01 to each of the Applicable Rating Agencies.
Notwithstanding anything contained herein or in the Indenture to the contrary,
neither the Trustee nor the Administrative Agent shall be deemed to have
knowledge of the occurrence or existence of any Pay-Out Event or Unmatured Pay-
Out Event until a Responsible Officer of such Person receives written notice
thereof.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICT
OF LAWS PRINCIPLES EXCEPT AS CONTEMPLATED IN SECTION 5-1401 OF THE GENERAL
OBLIGATION LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
SECTION 6.02 EXECUTION IN 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 6.03 EFFECT OF UNENFORCEABLE PROVISIONS. If any provision
hereof shall be invalid, illegal or unenforceable in any jurisdiction, the
remaining provisions shall continue to be valid and enforceable and such
provision shall continue to be valid and enforceable in any other jurisdiction.
SECTION 6.04 AMENDMENT, WAIVER, ETC.
(a) This Supplement may be amended from time to time by the Servicer,
the Issuer, the Trustee and the Administrative Agent by a written instrument
signed by each of them, without the consent of any of the holders of any Series
1995-1 Notes, to the extent permitted by Section 14.01 of the Indenture.
(b) The provisions of this Supplement may also be amended, modified
or waived from time to time by the Servicer, the Issuer, the Trustee and the
Administrative Agent with the consent of the Required Series Holders of Series
1995-1 Notes to the extent permitted by Sections 14.02 and 14.03 of the
Indenture, and otherwise with the consent of all holders of the Series 1995-1
Notes, and, in each case, the terms of Sections 14.03 and 14.04 shall apply to
any such amendment, modification or waiver.
(c) Notwithstanding anything contained herein or in the Indenture to
the contrary, no such amendment, modification or
-26-
waiver of this Supplement shall become effective unless a copy thereof shall
have sent to each of the Applicable Rating Agencies and the Rating Agency
Condition shall have been satisfied with respect thereto.
SECTION 6.05 THE TRUSTEE AND THE ADMINISTRATIVE AGENT. Neither the
Trustee nor the Administrative Agent shall responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplement or for or in
respect of the recitals contained herein, all of which recitals are made solely
by the Issuer and the Servicer.
SECTION 6.06 INSTRUCTIONS IN WRITING. All instructions given by the
Issuer or the Servicer, as applicable, to the Trustee and/or the Administrative
Agent pursuant to this Supplement shall in writing, and may be included in a
Daily Report or Settlement Statement.
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IN WITNESS WHEREOF, the Issuer, the initial Servicer, the Trustee, and
the Administrative Agent have caused this Supplement to be duly executed by
their respective officers thereunto duly authorized as of the day and year first
above written.
STONE RECEIVABLES CORPORATION,
as the Issuer
By
---------------------------------
Name: Leslie T. Lederer
Title: Vice President and Secretary
Address: 150 North Michigan Avenue,
17th Floor,
Chicago, Illinois 60601-7568
Attention: Assistant Treasurer
Telephone: (312) 553-1123
Facsimile: (312) 553-0238
STONE CONTAINER CORPORATION
as initial Servicer
By
---------------------------------
Name: Michael B. Wheeler
Title: Vice President and Treasurer
Address: 150 North Michigan Avenue
Chicago, Illinois 60601-7568
Attention: Legal Department
Telephone: (312) 346-6600
Facsimile: (312) 580-2299
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MARINE MIDLAND BANK,
as the Trustee
By
---------------------------------
Name: BarbaraJean McCauley
Title: Assistant Vice President
Address: 140 Broadway, 12th Floor
New York, New York 10005-1180
Attention: Corporate Trust Services
Telephone: (212) 658-6084
Facsimile: (212) 658-6425
BANKERS TRUST COMPANY,
as the Administrative Agent
By
---------------------------------
Name: Melissa J. Kaye
Title: Vice President
Address: Four Albany Street
10th Floor
New York, New York 10006
Attention: Corporate Trust and Agency
Group, Structured Finance
Team, Attention: Kevin Healey
Telephone: (212) 250-8360
Facsimile: (212) 250-6439
-29-
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came Leslie T.
Lederer to me known, who, being by me duly sworn, did depose and say that he is
the Vice President and Secretary of Stone Receivables Corporation, a Delaware
corporation, the corporation described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of said corporation.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-----------------
Commission expires:
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came Michael B.
Wheeler to me known, who, being by me duly sworn, did depose and say that he is
a Vice President and Treasurer of Stone Container Corporation, a Delaware
corporation, the corporation described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of said corporation.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-----------------
Commission expires:
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came BarbaraJean
McCauley to me known, who, being by me duly sworn, did depose and say that she
is an Assistant Vice President of Marine Midland Bank, a New York banking
corporation and trust company, which executed the foregoing instrument; and that
she signed her name thereto by order of the board of directors of said bank.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-----------------
Commission expires:
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came Melissa J.
Kaye to me known, who, being by me duly sworn, did depose and say that she is a
Vice President of Bankers Trust Company which executed the foregoing instrument;
and that she signed her name thereto by order of the board of directors of said
bank.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-----------------
Commission expires: