Second Amendment to Indenture and Servicing Agreement (Floating Rate Midland Receivables-Backed Variable Funding Notes, Series 1999-A) among Midland Funding 98-A Corporation, Norwest Bank Minnesota, Midland Credit Management, Asset Guaranty Insurance Company, Banco Santander Central Hispano, and Warehouse Line, L.L.C.

Contract Categories: Business Finance › Indenture Agreements
Summary

This amendment updates the terms of an existing Indenture and Servicing Agreement for the Floating Rate Midland Receivables-Backed Variable Funding Notes, Series 1999-A. The parties involved include Midland Funding 98-A Corporation (issuer), Norwest Bank Minnesota (trustee and backup servicer), Midland Credit Management (servicer), Asset Guaranty Insurance Company (note insurer), and certain noteholders. The amendment revises definitions, funding percentages, reserve requirements, compliance obligations, and reporting duties. It also sets new limits on receivable purchases based on liquidity and enhances the rights of the note insurer to inspect records. These changes are effective as of January 31, 2000.

Read More Arrow
EX-10.1 2 p64073ex10-1.txt EX-10.1 1 Exhibit 10.1 EXECUTION COPY SECOND AMENDMENT TO INDENTURE AND SERVICING AGREEMENT (FLOATING RATE MIDLAND RECEIVABLES-BACKED VARIABLE FUNDING NOTES, SERIES 1999-A) This SECOND AMENDMENT TO INDENTURE AND SERVICING AGREEMENT, dated as of January 31, 2000 (this "Amendment"), is executed by and among Midland Funding 98-A Corporation, as issuer (the "Issuer"), 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"), Banco Santander Central Hispano, S.A., New York Branch and Warehouse Line, L.L.C. (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 March 31, 1999 (as amended, supplemented or otherwise modified, the "Indenture and Servicing Agreement") relating to the Floating Rate Midland Receivables-Backed Variable Funding Notes, Series 1999-A; and B. Pursuant to that certain Funding Agreement dated as of January 14, 2000 among the Issuer, the Servicer, the Trustee, the Backup Servicer, the Note Insurer and the Noteholders, each party agreed to certain amendments to the Indenture and Servicing Agreement and also agreed to execute an amendment to the Indenture and Servicing Agreement containing the provisions set forth herein; 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 replacing the percentages set forth in the tables found in the definition of "Acquisition Price" with the following: 1 2
NUMBER OF PRIOR MAJOR CARD OTHER CARD AGENCY PLACEMENTS PERCENTAGE PERCENTAGE Zero 10.00 8.00% One 8.20% 6.60% Two 3.60% 2.90% Three or more 2.00% 1.60%
AVERAGE AGE MAJOR CARD OTHER CARD SINCE CHARGE-OFF PERCENTAGE PERCENTAGE 0 Months 10.00% 8.00% 1-3 Months 9.10% 7.30% 4-6 Months 8.20% 6.60% 7-9 Months 6.70% 5.40% 10-12 Months 5.30% 4.20% 13-15 Months 4.60% 3.70% 16-18 Months 4.10% 3.30% 19-21 Months 4.00% 3.20% 22-24 Months 3.80% 3.10% 25-30 Months 3.50% 2.80% 31-36 Months 2.80% 2.30% 37-42 Months 2.30% 1.80% 43-48 Months 1.50% 1.20% 49 or more Months 0.00% 0.00%
(b) Section 1.01 is amended by adding the following language to the definition of Funding Amount in Clause A of such definition, immediately preceding the word ", minus (B)": or for Pools purchased under a forward flow contract, prior to any Pool purchased under such forward flow contract demonstrating Satisfactory Performance, eighty-five and a half percent (85.5%) for Major Cards and eighty-one percent (81%) for Other Cards (and upon any Pool purchased under such forward flow contract demonstrating Satisfactory Performance, an amount equal to one ninth (1/9) of all Fundings with respect to all Pools purchased under such forward flow contract prior to such Satisfactory Performance. (c) Section 1.01 is amended by adding 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 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, 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 provider, terms and conditions reasonably acceptable to the Controlling Party, and the remaining term of each of which is at least 6 2 3 months; provided that, prior to the earlier of April 15, 2000 or the day upon which the Servicer receives written notice that such Promissory Note will not be renewed with respect to the Third Amended and Restated Promissory Note payable to Bank of America, N.A., availability under such Promissory Note shall be included notwithstanding the stated maturity of April 15, 2000. (d) Section 1.01 is amended by replacing the period (".") at the end of the definition of Required Reserve Amount and adding the following language thereto to read as follows: ; provided that, if the Servicer or Issuer fail to comply with Section 3.10(b), Section 8.07(p), Section 9.01(n) and the delivery of the monthly compliance report pursuant to Section 3.06(a), then so long as such failure continues and if the Issuer submits a Request for Funding during the continuation of such failure, then upon the related Funding, the Required Reserve Amount shall be increased by the amount of such Funding. (e) Section 1.01 is amended by adding the following definition: "Satisfactory Performance" shall mean, for a Pool purchased, cumulative collections shall exceed 20% of the respective Purchase Price by the end of the sixth full month since purchase. (f) Section 3.10 is amended by adding "(a)" to the existing paragraph and by adding a new subsection (b) thereafter to read as follows: (b) In addition to, and not by way of limitation of, any other rights of the Note Insurer hereunder, each of the Issuer and the Servicer shall permit the Note Insurer, upon reasonable notice and during normal business hours, to visit and inspect the properties of the Issuer or Servicer, to examine its books of account, records, reports, and other papers, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees, and independent public accountants, all at such reasonable times and as often as may be reasonably requested. (g) Section 3.06(a) is amended by adding the following sentence thereto: The Servicer shall include as part of each Monthly Servicing Report a monthly compliance report calculated as of the end of each Collection Period substantially in the form attached hereto as Exhibit 3.06(a). 3 4 (h) Section 6.11 is amended by adding a new subsection (j) thereto to read as follows: (j) If the Servicer or Issuer fail to comply with Section 3.10(b), Section 8.07(p), Section 9.01(n) and the delivery of the monthly compliance report pursuant to Section 3.06(a), then so long as such failure continues, the Noteholders shall not be required to make such a Funding during such time unless (i) such Funding is required pursuant to this Agreement and (ii) the Issuer concurrent with such Funding, deposits an amount in the Reserve Account so that after such Funding the balance in the Reserve Account shall equal the then adjusted Required Reserve Amount. (i) Section 7.07 is amended by adding a new subsection (s) thereto to read as follows: (s) The Issuer shall provide the Trustee within ten (10) Business Days subsequent to each Funding Date a CD-ROM or computer tape listing of all Receivables which became subject to this Agreement on such Funding Date. (j) Section 8.07 is amended by adding a new subsection (p) thereto to read as follows: (p) The Servicer shall not purchase more than $3,000,000 of additional receivables under or in connection with a Consumer Account during each period that the Servicer has less than $10,000,000 in Liquidity. (k) Section 9.01 is amended by replacing the period (".") at the end of subsection (m) with ";or" and adding a new subsection (n) and (o) thereto to read as follows: (n) the Servicer shall have at any time during the periods set forth below, Liquidity in at least the amounts set forth below:
Period (all dates inclusive) Required Liquidity ---------------------------- ------------------ Closing Date - March 31, 2000 $5,000,000 April 1- April 30, 2000 $4,250,000 May 1- May 31, 2000 $3,500,000 June 1- June 30, 2000 $3,000,000 July 1- July 31, 2000 $2,500,000 August 1- August 31, 2000 $1,750,000 September 1- September 30, 2000 $1,250,000 October 1 - November 29, 2000 $1,000,000 November 30 - December 30, 2000 $2,000,000 December 31, 2000 - January 30,2001 $3,250,000 January 31 - February 27, 2001 $4,250,000 February 28, 2001 and thereafter $5,000,000
; or (o) the existence and continuation of a "Servicer Default" or an "Event of Default" (which has not been waived) as defined in and pursuant to any securitization transaction to which the Servicer and Note Insurer are parties. 4 5 (l) Section 9.02(a) is amended by deleting the first sentence in its entirety and replacing it with the following: 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 calendar quarter, unless the Servicer is appointed by the Controlling Party for successive quarterly periods. 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, or if the Controlling Party does not appoint the Servicer to a successive quarterly term at least ten (10) Business Days prior to the end of a calendar quarter, the Trustee shall, upon the direction of the Controlling Party, by notice then given in writing to the Servicer and the Note Insurer terminate 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. (m) Section 9.08 is amended by replacing the period (".") at the end of subsection (k) with ";or" and adding a adding a new subsection (l) thereto to read as follows: (l) the Issuer does not deposit in the Reserve Account the required amount indicated in the proviso of the definition of Required Reserve Amount within two Business Days of the date of the related Funding. SECTION 2. 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 3. 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 4. 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 5. 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 5 6 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. SECTION 6. 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 7. 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 8. DEFINED TERMS. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Indenture and Servicing Agreement. (BALANCE OF PAGE INTENTIONALLY LEFT BLANK) 6 7 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 FUNDING 98-A CORPORATION, as Issuer By: --------------------------------------- R. Brooks Sherman, Treasurer MIDLAND CREDIT MANAGEMENT, INC., as Servicer By: --------------------------------------- R. Brooks Sherman, Executive Vice President NORWEST BANK MINNESOTA, National ASSOCIATION, not in its individual capacity, but solely as Trustee and as Backup Servicer By: --------------------------------------- Casey Kelly, Corporate Trust Officer ASSET GUARANTY INSURANCE COMPANY By: --------------------------------------- Scott Mangan, Vice President BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH By: --------------------------------------- Name: --------------------------------------- Title: ------------------------------------- By: --------------------------------------- Name: --------------------------------------- Title: --------------------------------------- WAREHOUSE LINE, L.L.C. By: --------------------------------------- Name: --------------------------------------- Title: ------------------------------------- 7 8 EXHIBIT 3.06(a) MONTHLY COMPLIANCE REPORT MIDLAND CREDIT MANAGEMENT, INC. FOR FLOATING RATE MIDLAND RECEIVABLES-BACKED NOTES, SERIES 1999-A Pursuant to the Indenture and Servicing Agreement, dated as of March 31, 1999 (the "Indenture and Servicing Agreement"), Midland Credit Management, Inc., as "Servicer" submits the following information for the Collection Period set out herein as it relates to the Floating Rate Midland Receivables-Backed Notes, Series 1999-A. 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. LIQUIDITY Cash $_____________ Availability under the Third Amended and $_____________ Restated Promissory Note payable to Bank of America N.A. (the "B of A Note") Total amount available under the B of A Note $________________ Maturity Date _________________ Other Liquidity Source: 1) __________________________________ $_____________ Total amount available under such source $________________ Commitment Expiration Date _________________ A-1 9 2) __________________________________ $_____________ Total amount available under such source $________________ Commitment Expiration Date _________________ 3) __________________________________ $_____________ Total amount available under such source $________________ Commitment Expiration Date _________________ 4) __________________________________ $_____________ Total amount available under such source $________________ Commitment Expiration Date _________________ Total Liquidity $_____________ B. POOL INFORMATION 1. Acquisition Date - Section 2.04(l)(i)
Pool # Date of Acquisition (2.04(l)(i))
A-2 10 2. Originator Concentration - Section 2.04(l)(iv)
Name of Originator Charged-Off Balance of Receivables acquired from such Originator divided by the Charged-Off Balance of all Receivables (expressed as a percentage) --------------------------------------------------
3. Average Age Since Charge-Off - Section 2.04(l)(v) The Average Age since Charge-Off for all Receivables is _________ months. 4. State Concentration - Section 2.04(l)(vi)
Obligor Location by Charged-Off Balance Charged-Off Balance of mailing address Location divided by aggregate Charged-Off Balance of all Receivables - -----------------------------------------------------------------------
5. Average Charged-Off Balance - Section 2.04(l)(vii) The Average Charged-Off Balance of all Receivables (per account) is $ . 6. Charged-Off Balance Concentration Limit - Section 2.04(l)(viii) The percentage of accounts with a Charged-Off Balance in excess of $7,500.00 is %. A-3 11 7. Originating Institution Concentration Limits - Section 2.04(l)(ix)
Rating Agency Rating of the Charged-Off Balance of Charged-Off Balance of Originating Institution(s) accounts related to accounts related to Major Cards divided by Other Cards divided by the aggregate the aggregate Charged-Off Balance of Charged-Off Balance of the Receivables the Receivables (expressed as a (expressed as a percentage) percentage) - --------------------------------------------------------------------------------- A- or Better BBB+ BBB BBB- BB+ BB and lower (including unrated)
8. Previous Agency Placement Concentration Limits - Section 2.04(l)(x)
Previous Agency Placement Charged-Off Balance Percentage of Charged-Off Balance to the aggregate Charged-Off Balance of the Receivables - ------------------------------------------------------------------------------ Zero One Two Three
9. Private Label Retail Receivables Concentration Limit - Section 2.04(l)(xi) The aggregate Charged-Off Balances of all private label retail Receivables is % of the aggregate Charged-Off Balance of all Receivables. C. MONTHLY COLLECTIONS
Pool # Collections for the Servicing Fee Percentage Collection Period - --------------------------------------------------------------------
A-4