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Exhibit 10.5
FIRST AMENDMENT TO
INDENTURE AND SERVICING AGREEMENT
(MIDLAND RECEIVABLES-BACKED NOTES, SERIES 1999-1)
This FIRST AMENDMENT TO INDENTURE AND SERVICING AGREEMENT, dated as of
September 22, 2000 (this "Amendment"), is executed by and among MIDLAND
RECEIVABLES 99-1 CORPORATION, as issuer (the "Issuer"), WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, fka Norwest Bank Minnesota, National
Association, as trustee (in such capacity, the "Trustee"), and as backup
Servicer (in such capacity, the "Backup Servicer"), MIDLAND CREDIT MANAGEMENT,
INC., as servicer (the "Servicer"), ASSET GUARANTY INSURANCE COMPANY, as note
insurer (the "Note Insurer"), PFL LIFE INSURANCE COMPANY, LIFE INVESTORS
INSURANCE COMPANY OF AMERICA, RELIANCE STANDARD LIFE INSURANCE COMPANY AND N M
ROTHSCHILD & SONS (AUSTRALIA) LIMITED (the "Noteholders").
RECITALS
A. The Issuer, the Trustee, the Backup Servicer, the Servicer and the Note
Insurer are parties to an Indenture and Servicing Agreement dated as of December
14, 1999 (as amended, supplemented or otherwise modified, the "Indenture and
Servicing Agreement") relating to the Midland Receivables-Backed Notes, Series
1999-1; and
B. The Issuer, the Servicer, the Trustee, the Backup Servicer, the Note
Insurer and the Noteholders agree that certain amendments to the Indenture and
Servicing Agreement are necessary and in the best interests of each party; and
C. The Noteholders are the only holders of the Notes issued by the Issuer
pursuant to the Indenture and Servicing Agreement on the date hereof; and
D. Section 12.01 of the Indenture and Servicing Agreement permits
amendment of the Indenture and Servicing Agreement on the terms and subject to
the conditions provided therein.
NOW THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS. Subject to the terms and conditions set forth
herein, the Indenture and Servicing Agreement is hereby amended as follows:
(a) Section 1.01 is amended by adding the following definitions:
"Bankrupt Sale Net Proceeds" means the portion of Net Proceeds
arising from the sale of Bankrupt Sales Receivables pursuant
to Section 3.13(a).
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(b) Section 1.01 is amended by adding the following definition:
"Bankrupt Sale Receivable" means any Receivable the Obligor of
which is subject to (i) a petition filed by or against the
Obligor, (ii) a decree or order for relief entered by a court
or agency or supervisory authority having jurisdiction in
respect of the Obligor, or (iii) the appointment of a trustee
in bankruptcy, conservator or receiver for the Obligor in any
bankruptcy, insolvency, readjustment of debt or similar
proceeding.
(c) Section 1.01 is amended by replacing the current definition of
"Liquidity" with the following definition:
"Liquidity" shall mean unrestricted cash and/or availability
under one or more committed working capital facilities the
provider of each of which (A) has (i) a short-term rating of
at least A-1 from S&P or P-1 from Moody's and (ii) a long term
rating of at least A from S&P or A2 from Moody's, or (B) is
CTW Funding, LLC ("CTW") or such other provider reasonably
acceptable to the Controlling Party, the terms and conditions
of each of which (including, without limitation, the
conditions precedent to funding) are in all material respects
no less favorable to the Servicer than the terms and
conditions which are customary in the market for committed
commercial lending facilities, or such other terms and
conditions reasonably acceptable to the Controlling Party, and
the remaining term of each of which is at least 6 months or
such lesser period of time acceptable to the Controlling
Party; provided, that, with respect to the revolving facility
provided by CTW pursuant to the Credit and Security Agreement,
dated September 22, 2000, as it may be amended, the undrawn
commitment thereunder will be counted as Liquidity through its
term.
(d) Section 1.01 is amended by replacing the definition of "Net
Proceeds" it with the following definition:
"Net Proceeds" means, with respect to a Receivable, all monies
representing collected available funds, net of checks returned
for insufficient funds, received or otherwise recovered by the
Servicer or Permitted Third Parties on or with respect to a
Receivable or from or for the account of the related Obligor
on such Receivable including, without limitation in connection
with a sale thereof pursuant to Section 3.13. Third-Party Fees
and Third-Party Costs incurred by Permitted Third Parties and
paid in connection with collecting or enforcing a Receivable
will be deducted from collections on any Receivable by either
the applicable Permitted Third-Party or by the Servicer on
their behalf and will not constitute Net Proceeds.
Notwithstanding the foregoing, proceeds from the sale of
accounts pursuant to Section 3.13(b) and Net Seller Recoveries
shall not be Net Proceeds for purposes of
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computing the Servicing Fee or the cumulative amount of Net
Proceeds for purposes of Section 9.01(h) and Exhibit 9.01(h).
(e) Section 1.01 is amended by replacing the current definition of
"Note Rate" with the following definition:
"Note Rate" means 10% per annum, calculated on the basis of a
360-day year consisting of twelve (12) 30-day months.
(f) Section 1.01 is amended by adding the following definition of
"Permitted Third Party":
"Permitted Third Party" means (i) any member of the National
Attorney Network, (ii) any member of American Alliance of
Creditor Attorneys; and (iii) any other Person that the
Controlling Party has agreed in writing to be a Permitted
Third Party.
(g) Article 1.01 is amended by adding the following definition of
"Net Seller Recoveries":
"Net Seller Recoveries" means any and all monies, property,
rights or interests, including, without limitation, any
accounts or receivables directly or indirectly received by the
Issuer on or after September 22, 2000 from BankOne,
Corporation First USA Bank, N.A., MBNA America Bank, N.A., or
Chase Manhattan Bank USA, N.A., or any affiliate of any of the
foregoing (collectively, the "Receivable Sellers") resulting
from claims that the Issuer or Midland may have or had against
any of the Receivable Sellers or that Note Insurer or the
Issuer may have or had as a third-party beneficiary against
any of the Receivable Sellers arising from or relating to the
previous purchase of Receivables by Midland from the
Receivable Sellers that are or were part of the Trust Estate,
net of (i) third-party expenses which, in the aggregate, do
not exceed $75,000 without the consent of the Note Issuer, and
(ii) attorney fees and attorney costs incurred by Midland or
the Issuer in connection with the receipt of such monies,
property, rights or interests.
(h) Section 1.01 is amended by adding the following definition of
"Re-Write Note":
"Re-Write Note " has the meaning set forth in Section 3.15.
(i) Section 1.01 is amended by replacing the current definition of
"Servicing Fee" with the following definition:
"Servicing Fee" means the fee payable to the Servicer,
calculated pursuant to Section 3.05, for services rendered
during the related time period, which shall be equal to (i)
35% of all Net Proceeds received during the related time
period for services rendered
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during such time period that are not (A) Bankrupt Sale Net
Proceeds, or (B) Net Proceeds arising from a sale of
Receivables pursuant to Section 3.13(b), and (ii) 25% of all
Bankrupt Sale Net Proceeds, received during the related time
period. The term "Servicing Fee" shall also mean the
additional amounts payable to a Successor Servicer for
servicing pursuant to Section 9.03, but only to the extent
such amounts do not exceed the amount calculated in accordance
with the preceding sentence; all amounts in excess thereof are
herein called the "Additional Servicing Fee." The Servicer
shall also receive as a "Servicing Fee" $20,000 from the
proceeds of the first sale of Receivables pursuant to Section
3.13(a) occurring after September 22, 2000.
(j) Section 1.01 is amended by adding the following definition of
"Third-Party Costs":
"Third-Party Costs" means all out-of-pocket costs and expenses
incurred by a Permitted Third Party in connection with
collection actions or proceedings related to the enforcement
or collection of any Receivable.
(k) Article 2.01 is hereby amended by adding the following
subsection (e) thereto which shall read as follows:
(e) Midland and the Issuer acknowledge and agree that any Net
Seller Recovery (i) is included as part of the "Contributed
Assets," as defined in the Contribution Agreement, and (ii)
is, and shall be, property of the Issuer free of any right,
claim or interest of Midland, and (iii) is, and shall be, part
of the Trust Estate. Issuer shall immediately advise in
writing the Trustee and the Controlling Party of the receipt
of the Issuer of any Net Seller Recovery and the Issuer shall
(i) within one (1) Business Day of receipt deposit all money
received in respect thereof to the Collection Account, and
(ii) shall execute, deliver and file any and all financing
statements, and deliver such documents and records to the
Trustee as the Controlling Party may reasonably request to
perfect or continue perfection of the Trustee's Security
Interest in such Net Seller Recovery. Any Receivables received
as part of any Net Seller Recovery shall become a Receivable
subject to this Indenture and shall be serviced by the
Servicer pursuant hereto.
(l) Section 2.04(i) is amended by deleting the provision in its
entirety and replacing it with the following provision:
(i) UCC Status. No Receivable is secured by "real property" or
"fixtures" or, except for Re-Write Notes, evidenced by an
"instrument" under, and as defined in, the UCC.
(m) Section 3.03(a)(iv) is amended by deleting the provision in its
entirety and replacing it with the following provision:
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(iv) No Instruments. Except for Re-Write Notes, or in
connection with the Servicer's enforcement or collection of
the Receivables, the Servicer shall take no action to cause
any Receivables to be evidenced by any instruments (as defined
in the UCC) and if any Receivable is so evidenced, except for
Re-Write Notes, such Receivable shall be assigned to the
Servicer as provided in Section 3.04.
(n) Section 3.03(b) is amended by deleting the current provision in
its entirety and replacing it with the following provision:
(b) The Servicer shall not purchase any Receivables under or
in connection with a Consumer Account if after giving effect
to the purchase of such Receivables and the funding of such
purchase the Servicer would have less than $2,000,000 of
Liquidity.
(o) Section 3.05 is amended by:
(i) deleting the first sentence in its entirety and
replacing it with the following sentence:
As compensation for the performance of its obligations
hereunder, the Servicer shall be entitled to receive the
Servicing Fee as provided in Section 4.02 and Section
4.04.
and
(ii) deleting the first parenthetical in the second
(2nd) sentence in its entirety and replacing it with the
following parenthetical:
(other than Third-Party Fees, Third-Party Costs and
those specified in the following proviso)
(p) Article III is amended by deleting the current Section 3.13 and
replacing it with the following:
(a) The Servicer, as agent of the Trustee and the Issuer, may,
without the consent of any Person, sell Bankrupt Sale
Receivables in arm's length transactions with third parties
who are not Affiliates of the Issuer or the Servicer in a
manner consistent with the procedures set forth in Exhibit
3.13(a). The Net Proceeds of all sales of Bankrupt Sale
Receivables must be in immediately available funds.
(b) The Servicer, as agent of the Trustee and the Issues, may
sell any Receivable in arm's length transactions with third
parties who are not Affiliates of the Issuer or the Servicer
upon receipt of the prior written consent from the Controlling
Party. The Servicer shall deliver to the Controlling Party no
later than five (5) Business
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Days preceding the date of such proposed sale, an Officer's
Certificate in the form of Exhibit 3.13(b). The Controlling
Party shall within five (5) Business Days of receipt of the
foregoing notice advise the Servicer and the Trustee of its
consent or withholding consent to the proposed sale. The Net
Proceeds of all sales of such Receivables must be in
immediately available funds.
Exhibit 3.13(a) and Exhibit 3.13(b) to the Amendment are hereby deemed
attached to the Indenture.
(q) Article III is amended by adding the following Section 3.15
entitled "Re-Write Program":
Section 3.15. Re-Write Program. In furtherance of the
collection of the Receivables, the Servicer may accept, on
behalf of the Issuer and subject to the Trustee's security
interest, a promissory note in replacement of any Receivable
(a "Re-Write Note"). The Re-Write Note shall be in compliance
with all applicable laws and, upon execution by the Obligor,
the Servicer shall, within ten (10) days of such execution,
deliver each Re-Write Note to the Trustee. The Trustee shall
hold the Re-Write Note for the sole purpose of perfecting the
Trustee's security interest in the Re-Write Note. If the
Servicer ever needs possession of the Re-Write Note for
amendment, enforcement or return to the Obligor upon final
payment, it shall provide the Trustee with written request for
the applicable Re-Write Note. Upon receipt of such a request,
the Trustee shall promptly provide the Servicer with the
requested Re-Write Note. Unless the Re-Write Note is paid in
full or a lesser amount is accepted by the Servicer in its
reasonable judgment in full satisfaction of the amounts owing
thereunder, the Servicer shall promptly return the Re-Write
Note to the Trustee when the Servicer no longer has immediate
need for the possession thereof.
(r) Section 4.02 is amended by deleting the first sentence in its
entirety and replacing it with the following sentence:
For Net Proceeds received on and after August 1, 2000, if the
amount on deposit in the Collection Account is sufficient to
pay the Trustee Fee (reasonably estimated by the Servicer)
payable on the next two (2) occurring Payment Dates, then
beginning on September 22, 2000 and on each Friday thereafter,
the Servicer shall submit to the Trustee and Note Insurer a
notice of calculation of (i)) the Servicing Fee for the period
beginning with the immediately-preceding Friday through the
immediately-preceding Thursday, plus (ii) accrued and unpaid
Servicing Fee for any time beginning on or after August 1,
2000, and upon receipt of such notice, the Trustee shall send
to the Servicer via wire transfer the owing Servicing Fee as
computed on such notice.
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(s) Section 4.03(a) is amended by deleting the word "and" which
immediately proceeds "(ii)", deleting the period at the end of such
subsection and adding the following provision at the end of the
subsection:
; and (iii) the Servicer shall remit on each Determination
Date the positive amount, if any, by which (A) the payments to
the Servicer of the Servicing Fee for the immediately
preceding Collection Period pursuant to Section 4.02 exceeded
(B) the amount of the Servicing Fee that should be paid to the
Servicer for such Collection Period.
(t) Section 4.04(a) is amended by deleting the current provision in
its entirety and replacing it with the following provision:
(a) On each Determination Date, the Servicer shall calculate
(i) the amount of funds on deposit in each of the Accounts and
the amount of Available Funds, and (ii) as applicable, the
Trustee Fee, the Backup Servicing Fee, the Servicing Fee
calculated with reference to the related Collection Period,
the amounts paid to the Servicer on a weekly basis as payment
of the Servicing Fee during the related Collection Period, a
reconciliation of the Collections from the applicable
Collection Period which were used to pay the Servicing Fee for
the previous Collection Period pursuant to Section 4.02, the
Additional Servicing Fee, the Interest Distributable Amount,
the Required Reserve Amount, the Reserve Fund Reimbursement
Amount, the aggregate Principal Distributable Amount, the
unpaid Note Balance before and after giving effect to any
Principal Distributable Amount, the Prepayment Amount, the
Release Payment, the Facility Fee, and the amount payable by
the Note Insurer pursuant to the Policy, which amounts shall
be set forth in the Monthly Servicer Report for the related
Payment Date. The Servicer shall send the Monthly Servicer
Report to the Trustee and the Note Insurer by 11:00 a.m. New
York, New York time on each such Determination Date.
(u) Section 4.04(b)(ii) is amended by deleting the current provision
in its entirety and replacing it with the following provision:
(ii) to the Servicer, from the Available Funds in the
Collection Account, (A) the amount, if any, by which (i) the
Servicing Fee calculated for the related Collection Period
exceeds, (ii) the aggregate amount previously retained by the
Servicer on a weekly basis for payment of the Servicing Fee
for the related Collection Period pursuant to Section 4.02,
plus (B) all accrued and unpaid Servicing Fees, if any, for
prior Collection Periods (plus an amount equal to any
Transition Fees then owing to the Successor Servicer, if any);
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(v) Section 8.06(c) is amended by deleting the current provision in
its entirety and replacing it with the following provision:
(c) The Backup Servicer shall assume its duties as Successor
Servicer in accordance with Sections 9.02 and 9.03 except upon
determination that the Backup Servicer is legally unable to
perform the duties of the Servicer under this Agreement as
provided in Section 9.03; and neither the Backup Servicer nor
the Trustee shall be held liable for any costs, claims,
damages or liabilities incurred by any Person arising as a
result of the Backup Servicer's failure to perform its duties
as Successor Servicer to the extent such performance is
prevented by applicable law or court order.
(w) Section 8.07(b) is amended by deleting the current provision in
its entirety and replacing it with the following provision:
(b) Outside Parties. Servicer will not engage outside parties
for the collection of Receivables on any basis except
Permitted Third Parties.
(x) Section 9.01(f) is amended by deleting the current provision in
its entirety and replacing it with the following provision:
(f) for the period of time during which Midland acts as
Servicer, Midland's consolidated Stockholder's Equity as
required to be shown on its consolidated financial statements
is less than the amount set forth on Exhibit 9.01(f) attached
hereto for the applicable period;
Exhibit 9.01(f) attached to this Amendment is hereby deemed attached to
the Indenture.
(y) Section 9.01(h) is amended by deleting the current section in
its entirety and replacing it with the following provision:
(h) commencing with the January 2001 Collection Period, and at
the end of each Collection Period thereafter, both (i) the
cumulative amount of Net Proceeds in respect of all
Receivables for such Collection Period and the two preceding
Collection Periods is less than the amount specified in
Exhibit 9.01(h) for such period of three Collection Periods,
and (ii) the cumulative amount of Net Proceeds in respect of
all Receivables for such Collection Period and all preceding
Collection Periods from and after the January 2001 Collection
Period is less than the amount specified in Exhibit 9.01(h)
for such Collection Periods (the lesser of any such deficiency
in (i) and (ii) is a "Cumulative Collections Deficiency");
provided, however, that a Cumulative Collections Deficiency
shall not be a Servicer Default if the Issuer deposits an
amount equal to the Cumulative Collections Deficiency to the
Reserve Account within ten (10) calendar days of the end of
the Collection Period during which the Cumulative Collections
Deficiency occurred.
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Exhibit 9.01(h) attached to this Amendment is hereby deemed attached to
the Indenture.
(z) Section 9.01(m) is amended by deleting the current provision in
its entirety and replacing it with the following provision:
(m) the Servicer fails to have at any time at least $2,000,000
of Liquidity; or
(aa) Section 9.02(a) is amended by deleting the current first two
(2) sentences thereof and replacing them with the following provision:
The rights and obligations of the Servicer shall terminate
upon the earlier of (i) the occurrence and continuation of a
Servicer Default or (ii) the last day of each Collection
Period, unless the Servicer had been appointed by the
Controlling Party on or prior to the first day of such
Collection Period for next occurring Collection Period. If a
Servicer Default shall occur and be continuing, so long as
such Servicer Default has not been cured or waived pursuant to
Section 9.05, the Trustee shall, upon the direction of the
Controlling Party, by notice then given in writing to the
Servicer and the Note Insurer terminate immediately, all (but
not less than all) of the rights and obligations of the
Servicer, as Servicer under this Agreement and the other
Transaction Documents, and in and to the Receivables and
proceeds thereof. If the Controlling Party does not appoint
the Servicer to a successive Collection Period by the first
day of the immediately preceding Collection Period, at the end
of the Collection Period through which the Servicer has
previously been appointed, all (but not less than all) of the
rights and obligations of the Servicer, as Servicer under this
Agreement and the other Transaction Documents, and in and to
the Receivables and proceeds thereof shall be deemed to have
automatically terminated, except for accrued and unpaid
Servicer Fees. Notwithstanding such termination any Permitted
Third Party shall be allowed to continue to service any
Receivable serviced by them at the time of such Termination,
and collect and receive the related Third Party Costs and
Third Party Fees.
(bb) Exhibit A to the Indenture and Servicing Agreement is amended
by deleting the current Exhibit A in its entirety and replacing it with
Exhibit A attached hereto. The Servicer shall also provide a weekly report
to the Trustee and the Note Insurer on the date the weekly Servicer Fee is
due setting forth (i) the collections for the prior week and for the then
current Collection Period; (ii) the Liquidity of the Servicer and (iii)
the computation of the Servicing Fee for such week.
(bb) On the Payment Date occurring on November 15, 2000, and prior
to making any distributions pursuant to Section 4.04(b), the Trustee shall
pay from Available Funds to Mayer Brown & Platt $10,000.00 in payment of
services rendered in representing the Noteholders in connection with this
Amendment.
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SECTION 2. CROSS-ASSIGNMENT. Article XII is amended by adding the
following as a new Section 12.12.
Section 12.12 Cross Assignment. Notwithstanding any provision in
this Indenture and Servicing Agreement, the Issuer shall not receive
any distributions pursuant to Section 4.04(b)(x)(E), Section 4.05(b)
and Section 4.05(d) (collectively, the "99-1 Distributions") during
any period of time that any amount remains payable to the
Noteholders, the Trustee, the Servicer, the Back-up Servicer or the
Note Insurer and any such amounts shall be deposited to or remain on
deposit in the Reserve Account, as applicable. Upon payment in full
of all amounts to the Noteholders, the Trustee, the Servicer, the
Back-up Servicer, and the Note Insurer, the Trustee shall pay (i)
all amounts otherwise payable to the Issuer to the "Trustee" for
deposit under the "Indenture and Servicing Agreement" and the other
"Transaction Documents" to the "Reserve Account" as such terms are
defined in and pursuant to that certain Indenture and Servicing
Agreement dated as of March 31, 1999, among Midland Funding 98-A
Corporation, as "Issuer" ("Funding 98-A"); Wells Fargo Minnesota
Bank N.A., fka Norwest Bank Minnesota, National Association, as
Trustee and Back-Up Servicer; Midland Credit Management, Inc., as
Servicer; and Asset Guaranty Insurance Company, as Note Insurer (the
"99-A Indenture") provided that if at such time all amounts payable
under the 99-A Indenture and the "Transaction Documents" related
thereto, as defined in the 99-A Indenture have been paid to the
"Noteholders," the "Trustee," the "Servicer," the "Back-up Servicer"
and the "Note Insurer" as each are defined in and pursuant to the
99-A Indenture, then amounts payable to the Issuer shall be so paid
to the Issuer pursuant to this Indenture and Servicing Agreement.
Any amounts received by the Trustee from the "Trustee" under the
99-A Indenture shall be deposited by the Trustee into the Reserve
Account, shall for all purposes become part of the Reserve Account,
and shall be held, invested, and disbursed by the Trustee pursuant
to the Indenture and Servicing Agreement. The Issuer is willing to
agree to the terms of this Section 12.12 in consideration of (i) the
amendments made to the terms of the First Amendment hereto, dated as
of September 22, 2000; and (ii) the similar cross-assignment by
Funding 99-A in that certain Third Amendment to Indenture and
Servicing Agreement regarding the 99-A Indenture of even date
therewith, and further agrees that the "Trustee" under the 99-A
Indenture and the "Note Insurer" thereunder are entitled to enforce
the Issuer's rights to have the Trustee make the cross-assignment of
funds to the "Trustee" of the 99-A Indenture required pursuant to
this Section 12.12. The Issuer shall execute any documents and take
any action requested by the Note Insurer to evidence or give effect
to the foregoing cross-assignment.
SECTION 3. EFFECTIVENESS. This amendment provided for by this
Amendment shall become effective as of the date hereof upon the occurrence of
each of the following events:
(a) the Trustee, the Seller, the Servicer, the Note Insurer and
the Noteholders shall have received counterparts of this
Amendment, duly executed by the parties hereto;
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(b) the Issuer shall have executed and filed a UCC-1 Financing
Statement in the States of Delaware and California, to perfect
the security interest granted to the Note Insurer pursuant to
Section 2 of this Amendment;
(c) the Trustee shall have furnished the Rating Agency and the
Placement Agent with written notification of the substance of
this Amendment; and
(d) the Servicer shall have closed and has available the revolving
credit facility provided by CTW Funding, LLC referenced in
Section (d) above.
After this Amendment becomes effective, all amendments herein will be
effective for and after the October 2000 Collection Period.
SECTION 4. EFFECTIVENESS. This amendment provided for by this
Amendment shall become effective as of the date hereof upon the occurrence of
each of the following events:
(a) the Trustee, the Seller, the Servicer and the Note Insurer
shall have received counterparts of this Amendment, duly
executed by the parties hereto; and
(b) the Trustee shall have furnished the Rating Agency and the
Placement Agent with written notification of the substance of
this Amendment.
SECTION 5. REPRESENTATIONS. Each party hereto hereby represents and
warrants that this Amendment has been duly executed and delivered by such party
and constitutes the legal, valid and binding obligation of such party,
enforceable against such party in accordance with its terms except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights and remedies in general.
SECTION 6. REFERENCE. On and after the effective date of this
Amendment, each reference in the Indenture and Servicing Agreement to "this
Agreement", "hereunder", "herein" or words of like import referring to the
Indenture and Servicing Agreement, and each reference in the other Transaction
Documents to the "Indenture and Servicing Agreement", "thereunder", "thereof",
or words of like import referring to the Indenture and Servicing Agreement shall
mean and be a reference to the Indenture and Servicing Agreement as amended by
this Amendment.
SECTION 7. COUNTERPARTS; EFFECTIVENESS; FULL FORCE AND EFFECT. This
Amendment may be executed by one or more of the parties to this Amendment on any
number of separate counterparts (including by facsimile transmission), and all
of said counterparts taken together all shall be deemed to constitute one and
the same instrument. A copy of this Amendment signed by all the parties shall be
lodged with the Trustee. Except as expressly set forth herein, the terms,
provisions and conditions of the Indenture and Servicing Agreement and the other
Transaction Documents shall remain in full force and effect and in all other
respects are hereby ratified and confirmed.
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SECTION 8. REPRESENTATIONS, ENFORCEABILITY AND NO WAIVER.
(a) Each Issuer and the Servicer hereby reaffirm all covenants,
representations and warranties made by it in Indenture and Servicing
Agreement, and (ii) agree that all such covenants, representations and
warranties shall be deemed to have been re-made as of the date of this
Amendment.
(b) Each Issuer and the Servicer hereby represent and warrant that
this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
(c) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any of the
parties hereto under the Indenture and Servicing Agreement or any other
Transaction Document or any other document, instrument or agreement
executed in connection therewith.
SECTION 9. MISCELLANEOUS. The Amendment is not evidence of any
position by the Note Insurer, affirmative or negative, as to whether any action
by the Noteholders, or any other party, is required in addition to the execution
of the Amendment by the Note Insurer. No representation is made by the Note
Insurer as to the necessity or the satisfaction of any additional action or
condition under the Indenture and Servicing Agreement with respect to this
Amendment. This Amendment does not modify the obligations of the Note Insurer
under the Policy as defined in the Indenture and Servicing Agreement. Except as
specifically provided in this Agreement, the terms and conditions of the
Indenture and Servicing Agreement shall remain in full force and effect. Except
as specifically provided in this Amendment, none of the Trustee's, Note
Insurer's or the Noteholders' rights, interests or remedies pursuant to the
Indenture and Servicing Agreement shall be reduced or limited in any way by this
Agreement. This Agreement may be executed in any number of counterparts, each of
which shall be an original, and each of which shall constitute one in the same
Agreement. Time is of the essence of this Agreement.
SECTION 10. HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
SECTION 11. GOVERNING LAW. THIS AMENDMENT 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 UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Indenture
and Servicing Agreement.
SECTION 13. NO OTHER AGREEMENTS. All of the parties to this
Agreement hereby acknowledge and agree that there no other Agreements by or
among any of them with respect to the amendments to the Indenture and Servicing
Agreement other than as set forth in this Amendment.
12
<PAGE> 13
(BALANCE OF PAGE INTENTIONALLY LEFT BLANK)
13
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
MIDLAND RECEIVABLE 99-1 CORPORATION, as Issuer
By: ___________________________________________
Name: Carl C. Gregory III
Title: President
MIDLAND CREDIT MANAGEMENT, INC., as Servicer
By: ___________________________________________
Name: Carl C. Gregory III
Title: President
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, fka NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Trustee and as
Backup Servicer
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
ASSET GUARANTY INSURANCE COMPANY
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
PFL LIFE INSURANCE COMPANY
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
LIFE INVESTORS INSURANCE COMPANY OF AMERICA
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
14
<PAGE> 15
RELIANCE STANDARD LIFE INSURANCE COMPANY
By: ___________________________________________
Louis C. Lucido, Chief Investment Officer
N M ROTHSCHILD & SONS (AUSTRALIA) LIMITED
By: ___________________________________________
Bruce R. Arnold, Head of Debt Capital
Markets
15
<PAGE> 16
EXHIBIT A
MONTHLY SERVICER REPORT
[ATTACHED]
<PAGE> 17
MONTHLY SERVICER REPORT OF
MIDLAND CREDIT MANAGEMENT, INC.
FOR
MIDLAND RECEIVABLES-BACKED NOTES
SERIES 1999-1
Pursuant to the Indenture and Servicing Agreement, dated as of January 18,
2000 (the "Indenture and Servicing Agreement"), among Midland Receivables 99-1
Corp., as Issuer (the "Issuer"), Midland Credit Management, Inc., as servicer
(the "Servicer"), Norwest Bank Minnesota, N.A., as trustee (in such capacity,
the "Trustee") and as Backup Servicer, and Asset Guaranty Insurance Company, as
Note Insurer (the "Note Insurer"), the Servicer submits the following
information for the relevant Dates set forth below with respect to the Midland
Receivables-Backed Notes, Series 1999-1. Capitalized terms used in this
certificate have the meanings set forth in the Indenture and Servicing
Agreement.
Collection Period covered by this Report:
____________________________________ through __________________________________
Determination Date of this Report:
__________________________________________________
Payment Date for this Report:
__________________________________________________
A. AVAILABLE FUNDS:
Amount of funds on deposit and the Available Funds for this Collection
Period:
<TABLE>
<S> <C>
Collections for the Month $
--------------
Refunds From Issuers $
--------------
Bankrupt Sale Proceeds $
--------------
Non-Bankrupt Sale Proceeds $
--------------
less Permitted Third Party Fees and Costs $
--------------
Earnings on Collection Account during the period $
--------------
Note Payment Account at end of Current Month $
--------------
Earnings on Note Payment Account during the period $
--------------
Reserve Account at end of Current Month $
--------------
Earnings on Reserve Account during the period $
--------------
Deposit by Servicer of excess Servicing Fee paid during
prior Collection Period $
--------------
Total Available Funds plus Reserve Account $
--------------
</TABLE>
Page 1 of 6
<PAGE> 18
<TABLE>
<S> <C>
B. TRUSTEE FEE:
(i) the total Trustee Fee accrued with respect to the current Payment
Date - computed on ending note balance of
preceding Payment Date $
--------------
(ii) the total accrued and past due Trustee Fee with
respect to prior Payment Dates $
--------------
(iii) the total amount of Trustee Fees from (i) and (ii) to be paid
on the next Payment Date $
--------------
(iv) Trustee's out-of-pocket expenses $
--------------
(v) the total amount of accrued and unpaid Trustee Fees and
expenses to be carried forward $
--------------
(vi) Remaining Available Funds plus Reserve Account $
--------------
C. SERVICING FEE:
(i) the total Servicing Fee accrued with respect to the current Payment
Date (excluding Servicing Fee on Bankrupt Sale
Proceeds) $
--------------
(ii) Servicing fee on Bankrupt Sale Proceeds accrued with
respect to the current Payment $
--------------
(iii) less Weekly Servicing Fee previously retained $
--------------
(iv) the total accrued and past due Servicing Fee(s) owed
form prior Payment Dates $
--------------
(v) less Acquisition Payment due for the period (See H(i)) $ **
--------------
(vi) Refunds to Debtors Paid by Servicer $
--------------
(vii) the total amount of Servicer Fee(s) from (i) and (ii) to be
paid on the next Payment Date $
--------------
(viii) the total amount of all Servicer Fee(s) to be carried
forward to a subsequent Payment Date $
--------------
(ix) Remaining Available Funds plus Reserve Account $
--------------
In the event of a Servicer Default during the reporting period,
Calculate the amount of Transition Fees owed $
--------------
</TABLE>
Page 2 of 6
<PAGE> 19
<TABLE>
<S> <C>
D. BACKUP SERVICER FEE:
(i) the total Backup Servicer Fee accrued with respect to the current
Payment Date computed on ending note balance of
preceding Payment Date $
--------------
(ii) the total amount of accrued and past due Backup
Servicer Fee(s) with respect to prior Payment Dates $
--------------
(iii) the total amount of all Backup Servicer Fee(s) from (i)
and (ii) to be paid on the next Payment Date $
--------------
(iv) the total amount of accrued and unpaid Backup
Servicer Fee(s) to be carried forward to the next
Payment Date $
--------------
(v) Remaining Available Funds plus Reserve Account $
--------------
E. INTEREST DISTRIBUTABLE AMOUNT:
(i) Interest Distributable Amount for the current Payment Date
computed on note balance on last day of immediately
preceding Collection Period $
--------------
(ii) the total Interest Carryover Shortfall with respect to
Prior Payment Date $
--------------
(iii) the total Interest Distributable Amount and Interest
Carryover Shortfall from (i) and (ii) to be paid on the
next Payment Date $
--------------
(iv) the total amount required from the Reserve Account
to pay (iii) due to deficiencies in Available funds $
--------------
(v) the total amount required form the Note Insurer to
pay (iii) due to deficiencies in the Reserve Account
and Available Funds $
--------------
(vi) the total amount of accrued and unpaid Interest Distributable
Amount(s) and Interest Carryover Shortfall to be carried forward to
the next Payment Date $
--------------
(ix) Remaining Available Funds plus Reserve Account
--------------
</TABLE>
Page 3 of 6
<PAGE> 20
<TABLE>
<S> <C>
F. NOTE INSURER PAYMENTS:
(i) Note Insurer Base Premium accrued with respect to the current
Payment Date computed on Average Daily Balance $
--------------
(ii) the total Note Insurer Obligations payable on
the current Payment Date (if any) $
--------------
(iii)the total amount of all Note Insurer Premiums and
Note Insurer Obligations from (i) and (ii) to be paid on
the next Payment Date $
--------------
(iv) the total amount of accrued and unpaid Note Insurer Base
Premium(s) and Note Insurer Obligations to be carried
forward to the next Payment Date $
--------------
(v) Cumulative Note Insurer Additional Premium accrued
and unpaid with respect to the prior Payment Date
computed on Average Daily Balance $
--------------
(vi) Cumulative Note Insurer Additional Premium accrued
and unpaid with respect to the current Payment Date
computed on Average Daily Balance $
--------------
(vii)Remaining Available Funds plus Reserve Account $
--------------
</TABLE>
G. ACQUISITION PAYMENT:
Are there any Removed Receivables for the reporting period?
Yes No
------ ------
(if "NO" proceed to section "J") (if "YES" complete attached Schedule I)
(i) the total Acquisition Payment due for the current Payment Date
See Line C (iii) ** ** Netted with Service Fee at line C(iii)
------
<TABLE>
<S> <C>
H. NOTE BALANCE PAYMENT:
(i) Remaining Available Funds plus Reserve Account $
--------------
(ii) less Reserve Account balance end of Current Period $
--------------
(iii)amount available for note balance payments $
--------------
(iv) Note Balance at End of Month: $
--------------
(v) Note Balance payment for the current Payment Date: $
--------------
I. NOTE BALANCE AFTER PRINCIPAL PAYMENT $
--------------
</TABLE>
Page 4 of 6
<PAGE> 21
<TABLE>
<S> <C>
J. RESERVE ACCOUNT:
(i) Beginning Balance of Reserve Account $
--------------
(ii) Earnings on Reserve Account for current month $
--------------
(iii)Deposit by Issuer of Cumulative Collections Deficiency $
--------------
(iv) the total Reserve Fund Reimbursement Amount due for $
--------------
the current Payment Date -- Payable to Issuer
(v) the Ending Balance of the Reserve Account after $
--------------
payment to Issuer
K. CUMULATIVE COLLECTIONS & LIQUIDITY
(i) Cumulative Net Collections for current and prior
two Collection Periods (beginning Nov00) $
--------------
(ii) Required three month Cumulative Collections $
--------------
(iii)Cumulative Collections Deficiency (additional deposit $
--------------
to reserve account)
(iv) Liquidity as of the end of the current Collection Period $
--------------
</TABLE>
Page 5 of 6
<PAGE> 22
MIDLAND CREDIT MANAGEMENT, INC.
BY:_______________________________
Date_____________________ Vice President
WIRING INSTRUCTIONS FOR ISSUER:
Wells Fargo Bank, ABA Routing Number 121000248
For Credit To: Midland Credit Management, Inc.
Account No.: 4758372635
WIRING INSTRUCTIONS FOR SERVICER:
Wells Fargo Bank, ABA Routing Number 121000248
For Credit To: Midland Credit Management, Inc.
Account No.: 4758372635
SCHEDULE I
See Servicer's Remittance Date Certificate pursuant to Section 3.04 identifying
all Removed Receivables including name, MCM #, address, acquisition price,
acquisition date, charge-off balance, Net-Proceeds collected of all accounts
removed during the reporting period.
Additional Information:
<TABLE>
<S> <C>
Last day of preceding Collection Period, Note Balance
Preceding Payment Date Ending Note Balance
Average Daily Balance of Preceding Collection Period
Monthly Note Rate, Interest Distributable 0.80250000%
Monthly rate, Trustee Fee 0.00416667%
Note insurer base premium rate, monthly 0.06250000%
Note insurer additional premium rate, monthly 0.27083333%
Monthly rate, Backup Servicer 0.01541667%
</TABLE>
Page 6 of 6
<PAGE> 23
EXHIBIT 3.13(a)
BANKRUPT ACCOUNT SALE PROCEDURES
1. Receivable must be Bankrupt Sale Receivables.
2. Price must be 7.5% of the face amount or greater.
3. Seller only to represent and warrant the following:
1. The Seller is duly organized, existing and in good standing as a
corporation under the laws of the State of Delaware; the Seller's
execution, delivery and performance of the Agreement are within the
Seller's corporate powers and have been duly authorized by all necessary
action; this Agreement is the legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms except
that enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors'
rights generally and by general equity principles; and the Agreement is
not in conflict with the terms of the Seller's charter or bylaws, or of
any material indenture, agreement or undertaking to which the Seller is
bound.
2. The Seller has marketable title to the Receivables free and clear
of any liens or encumbrances (i) by or through it, or (ii) based on
actions or failure to act of Seller.
3. Except for the filing of the UCC Financing Statement and any
approval that has been obtained or notice that has been given, no approval
or other action by, or notice to or filing with, any [Debtor], any
governmental authority or any other entity is required to be obtained by
the Seller in conjunction with the transaction contemplated by the
Agreement.
4. Performance of the Agreement by the Seller will not violate any
order of any court or governmental body having competent jurisdiction or
any law or regulation that applies to the Seller.
5. No action, suit or proceeding against the Seller before any
court, administrative agency or arbitrator, individually or collectively
would reasonably be expected to materially and adversely affect the Buyer.
Upon reasonable request, the Seller will review any action, suit or
proceeding against the Seller with the Buyer to confirm the accuracy of
this representation.
6. The Seller is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions like the decision involved in
the sale of the Accounts, the Seller has made its own review of the
Accounts and the Seller understands the terms and conditions of the sale
of the Accounts.
7. The Seller has not employed any investment banker, broker or
finder in connection with the transaction contemplated by the Agreement
who might be entitled to a fee or commission upon consummation of such
transaction.
8. The location of the Seller's chief place of business and chief
executive office is _______________________.
-2-
<PAGE> 24
9. Each Account is an account or a general intangible, as such term
is defined in Article 9 of the UCC; [and no Account is evidenced by an
instrument, as such term is defined in Section 9-106 of the UCC].
-3-
<PAGE> 25
EXHIBIT 3.13(b)
NOTICE OF PROPOSED SALE OF NON-BANKRUPT ACCOUNTS
This NOTICE OF PROPOSED SALE is given by MIDLAND CREDIT MANAGEMENT, INC.,
as servicer (the "Servicer"), pursuant to Section 3.13(b) of that certain
Indenture and Servicing Agreement, dated as of December 14, 1999, as amended,
supplemented or otherwise modified (the "Indenture"), among Servicer, MIDLAND
RECEIVABLE 99-1 CORPORATION, as Issuer, WELLS FARGO BANK OF MINNESOTA, NATIONAL
ASSOCIATION, FKA NORWEST BANK MINNESOTA, A NATIONAL ASSOCIATION, as Trustee and
Back-up Servicer, and ASSET GUARANTY INSURANCE COMPANY, as Note Insurer. All
capitalized terms that are not defined herein shall have the meaning assigned to
such terms in the Indenture.
1. The Servicer proposes to sell Receivables (the "Sale Receivables")
pursuant to Section 3.13(b) of the Indenture.
2. The pool identification number of the Sale Receivables and the date of
MCM's purchase for each of the Sale Receivables is as set forth on Exhibit A
attached hereto.
3. Attached as Exhibit B to this Notice of Proposed Sale is a true and
complete copy of the offering information distributed to the prospective
purchaser of the Sale Receivables.
4. The sale price for the Sale Receivables is $_______________.
5. The proposed date for the sale is _________________.
6. The original purchase price paid by Midland Credit Management, Inc.
for the Sale Receivables was $__________________.
7. The terms and conditions of the sale are as set forth on Exhibit C
attached hereto.
8. The only representations to be made by the Issuer in connection with
the sale is as set forth on Exhibit D attached hereto.
Executed this _____ day of ___________.
MIDLAND CREDIT MANAGEMENT, INC.
By: _____________________________
Its: _____________________________
-4-
<PAGE> 26
EXHIBIT 9.01(f)
NET WORTH TABLE
<TABLE>
<CAPTION>
-----------------------------------
From and After Amount
-----------------------------------
<S> <C>
September 31, 2000 $ 13,600,000
-----------------------------------
December 31, 2000 12,900,000
-----------------------------------
March 31, 2001 11,700,000
-----------------------------------
June 31, 2001 10,000,000
-----------------------------------
September 31, 2001 7,300,000
-----------------------------------
</TABLE>
-5-
<PAGE> 27
EXHIBIT 9.01(h)
CUMULATIVE NET COLLECTIONS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
COLLECTION PERIOD AMOUNT 3-MONTH CUMULATIVE TOTAL COLLECTIONS
COLLECTIONS
------------------------------------------------------------------------------
<S> <C> <C> <C>
January 2001 $1,374,180 -- $ 1,374,180
------------------------------------------------------------------------------
February 2001 $1,348,830 -- $ 2,723,010
------------------------------------------------------------------------------
March 2001 $1,331,734 $4,054,744 $ 4,054,744
------------------------------------------------------------------------------
April 2001 $1,317,393 $3,997,957 $ 5,372,137
------------------------------------------------------------------------------
May 2001 $1,308,641 $3,957,768 $ 6,680,778
------------------------------------------------------------------------------
June 2001 $1,289,438 $3,915,472 $ 7,970,216
------------------------------------------------------------------------------
July 2001 $1,280,912 $3,878,991 $ 9,251,128
------------------------------------------------------------------------------
August 2001 $1,266,442 $3,836,792 $10,517,570
------------------------------------------------------------------------------
September 2001 $1,251,621 $3,798,975 $11,769,191
------------------------------------------------------------------------------
October 2001 $1,239,954 $3,758,017 $13,009,145
------------------------------------------------------------------------------
November 2001 $1,227,995 $3,719,570 $14,237,140
------------------------------------------------------------------------------
December 2001 $1,215,772 $3,683,721 $15,452,912
------------------------------------------------------------------------------
January 2002 $1,203,190 $3,646,957 $16,656,102
------------------------------------------------------------------------------
February 2002 $1,190,081 $3,609,043 $17,846,183
------------------------------------------------------------------------------
March 2002 $1,179,410 $3,572,681 $19,025,593
------------------------------------------------------------------------------
April 2002 $1,161,907 $3,531,398 $20,187,500
------------------------------------------------------------------------------
May 2002 $1,137,925 $3,479,242 $21,325,425
------------------------------------------------------------------------------
June 2002 $1,115,322 $3,415,154 $22,440,747
------------------------------------------------------------------------------
July 2002 $1,103,914 $3,357,161 $23,544,661
------------------------------------------------------------------------------
August 2002 $1,113,929 $3,333,165 $24,658,590
------------------------------------------------------------------------------
September 2002 $1,110,595 $3,328,438 $25,769,185
------------------------------------------------------------------------------
October 2002 $ 549,286 $2,773,810 $26,318,471
------------------------------------------------------------------------------
November 2002 $ 508,388 $2,168,269 $26,826,859
------------------------------------------------------------------------------
December 2002 $ 467,372 $1,525,046 $27,294,231
------------------------------------------------------------------------------
January 2003 $ 426,244 $1,402,004 $27,720,475
------------------------------------------------------------------------------
February 2003 $ 385,010 $1,278,626 $28,105,485
------------------------------------------------------------------------------
March 2003 $ 343,677 $1,154,931 $28,449,162
------------------------------------------------------------------------------
April 2003 $ 302,249 $1,030,936 $28,751,411
------------------------------------------------------------------------------
May 2003 $ 260,733 $ 906,659 $29,012,144
------------------------------------------------------------------------------
June 2003 $ 220,480 $ 783,462 $29,232,624
------------------------------------------------------------------------------
July 2003 $ 182,908 $ 664,121 $29,415,532
------------------------------------------------------------------------------
August 2003 $ 146,771 $ 550,159 $29,562,303
------------------------------------------------------------------------------
September 2003 $ 113,848 $ 443,527 $29,676,151
------------------------------------------------------------------------------
October 2003 $ 83,006 $ 343,625 $29,759,157
------------------------------------------------------------------------------
November 2003 $ 57,239 $ 254,093 $29,816,396
------------------------------------------------------------------------------
December 2003 $ 35,187 $ 175,432 $29,851,583
------------------------------------------------------------------------------
January 2004 $ 18,561 $ 110,987 $29,870,144
------------------------------------------------------------------------------
February 2004 $ 7,176 $ 60,924 $29,877,320
------------------------------------------------------------------------------
March 2004 $ 198 $ 25,935 $29,877,518
------------------------------------------------------------------------------
April 2004 $ 0 $ 7,374 $29,877,518
------------------------------------------------------------------------------
May 2004 $ 0 $ 198 $29,877,518
------------------------------------------------------------------------------
</TABLE>
-6-
<PAGE> 28
EXHIBIT 9.01(H) (CONTINUED)
CUMULATIVE NET COLLECTIONS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
COLLECTION PERIOD AMOUNT 3-MONTH CUMULATIVE TOTAL COLLECTIONS
COLLECTIONS
------------------------------------------------------------------------------
<S> <C> <C> <C>
June 2004 $0 $0 $29,877,518
------------------------------------------------------------------------------
July 2004 $0 $0 $29,877,518
------------------------------------------------------------------------------
August 2004 $0 $0 $29,877,518
------------------------------------------------------------------------------
</TABLE>
-7-
