EXHIBIT 4.1
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PEOPLE'S BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1998-1 Investor Certificateholders
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SERIES 1998-1 SUPPLEMENT
Dated as of April 1, 1998
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of March 18, 1997
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$400,000,000
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$343,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1998-1
$27,000,000 Floating Rate Class B
Asset Backed Certificates, Series 1998-1
$30,000,000 Collateral Interest, Series 1998-1
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TABLE OF CONTENTS
Page
RECITALS .....................................................................1
SECTION 1. Designation...................................................1
SECTION 2. Definitions...................................................2
SECTION 2.1 Other Definitional Provisions................................26
SECTION 3. Conveyance of Interest in Series Accounts....................27
SECTION 4. Minimum Seller Interest, Minimum Aggregate
Principal Receivables and Removal of Accounts................27
SECTION 5. Reassignment and Transfer Terms..............................28
SECTION 6. Delivery and Payment for the Series 1998-1
Certificates.................................................28
SECTION 7. Depositary; Form of Delivery of Series 1998-1
Certificates.................................................28
SECTION 8. Enhancement..................................................29
SECTION 9. Article IV of Agreement......................................29
SECTION 9.A Series 1998-1 Pay Out Events.................................74
SECTION 10. Series 1998-1 Termination....................................76
SECTION 11. Ratification and Reaffirmation of Pooling and
Servicing Agreement..........................................77
SECTION 12. Ratification and Reaffirmation of Representations
and Warranties...............................................77
SECTION 13. [RESERVED]...................................................77
SECTION 14. No Subordination.............................................77
SECTION 15. Repurchase of the Series 1998-1 Certificates.................77
SECTION 16. Counterparts.................................................79
SECTION 17. Additional Covenants of Transferor...........................79
SECTION 18. Series 1998-1 Investor Exchange..............................79
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Page
SECTION 19. Governing Law................................................80
SECTION 20. Notification to Luxembourg Stock Exchange....................80
EXHIBIT 1-A Form of Class A Investor Certificate
EXHIBIT 1-B Form of Class B Investor Certificate
EXHIBIT 2 Form of Monthly Certificateholders' Statement
EXHIBIT 3 DTC Letter of Representations
EXHIBIT 4 Form of Monthly Payment Instructions to Trustee
EXHIBIT 5 Form of Notice to Trustee Regarding Completion of
Required Deposits and Withdrawals
EXHIBIT 6 Form of Notification to Trustee Regarding Failure
to Make Payment
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SERIES 1998-1 SUPPLEMENT, dated as of April 1, 1998 (as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the Pooling and Servicing Agreement referenced below, this "Series Supplement")
by and between PEOPLE'S BANK, a Connecticut capital stock savings bank, as
Transferor and Servicer, and BANKERS TRUST COMPANY, a banking corporation
organized and existing under the laws of the State of New York, not in its
individual capacity but solely as Trustee under the Amended and Restated Pooling
and Servicing Agreement dated as of March 18, 1997 between People's Bank and the
Trustee, as amended (as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with its terms, the "Pooling
and Servicing Agreement").
RECITALS:
1. Section 6.9(b) of the Pooling and Servicing Agreement provides,
among other things, that the Transferor and the Trustee may at any time and from
time to time enter into a Supplement to the Pooling and Servicing Agreement for
the purpose of authorizing the delivery by the Trustee to the Transferor for the
execution and redelivery to the Trustee for authentication of one or more Series
of Investor Certificates.
2. Pursuant to this Series Supplement, the Transferor and the Trustee
on behalf of the Trust shall create a new Series of Investor Certificates and
shall specify the Principal Terms thereof.
SECTION 1. Designation. (a) The Series 1998-1 Investor Certificates
shall be issued in two Classes, which shall be designated generally as the
Floating Rate Class A Asset Backed Certificates, Series 1998-1 and the Floating
Rate Class B Asset Backed Certificates, Series 1998-1. In addition, there is
hereby authorized a third Class which constitutes an uncertificated interest in
the Trust, which shall be deemed to be an "Investor Certificate" for all
purposes under the Pooling and Servicing Agreement and this Series Supplement,
except as expressly provided herein, and shall be known as the Collateral
Interest, Series 1998-1 and have the rights assigned to the Collateral Interest
in this Series Supplement.
(b) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Pooling and Servicing Agreement, shall be entitled to the
benefits of the Pooling and Servicing Agreement and this Series Supplement upon
payment by the
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Collateral Interest Holder of amounts owing on the Closing Date pursuant to the
Loan Agreement. Notwithstanding the foregoing, except as expressly provided
herein, (i) the provisions of Article VI and Article XII of the Pooling and
Servicing Agreement relating to the registration, authentication, delivery,
presentation, cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest and (ii) the Opinion of Counsel specified
in clause (d) of the sixth sentence of subsection 6.9(b) of the Agreement shall
not be required with respect to the Collateral Interest.
SECTION 2. Definitions. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Pooling and Servicing Agreement, the terms and provisions of
this Series Supplement shall govern. All capitalized terms not otherwise defined
herein are defined in the Pooling and Servicing Agreement. All Article, Section
or subsection references herein shall mean Article, Section or subsections of
the Pooling and Servicing Agreement except as otherwise provided herein. Each
capitalized term used or defined herein shall relate only to the Series 1998-1
Investor Certificates and to no other Series of Certificates issued by the
Trust.
"Accumulation Shortfall" shall mean (a) with respect to the Transfer
Date occurring immediately prior to the Initial Class A Accumulation Date, zero,
and (b) with respect to each Transfer Date thereafter during the Controlled
Accumulation Period occurring prior to the Class A Scheduled Payment Date, the
excess, if any, of the applicable Controlled Deposit Amount for the immediately
preceding Transfer Date over the amount deposited into the Principal Funding
Account pursuant to subsection 4.8(a)(ii)(A) on such preceding Transfer Date.
"Adjusted Investor Interest" shall mean, on any date of determination,
an amount equal to the sum of (a) the Class A Adjusted Investor Interest, (b)
the Class B Investor Interest and (c) the Collateral Interest, in each case as
of such date of determination.
"Agent" shall have the meaning specified in the Loan
Agreement.
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"Agreement" shall mean the Pooling and Servicing Agreement, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms, including by this Series Supplement thereto.
"Available Investor Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to (a) Principal Collections processed on
any Date of Processing during such Monthly Period, which were allocated to the
Investor Interest and were deposited in the Principal Account pursuant to
subsection 4.4(c)(ii), 4.4(d)(ii) or 4.4(e)(ii) (or which will be deposited in
the Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection 4.2(a) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 4.4(c)(ii),
4.4(d)(ii) or 4.4(e)(ii) as if they had been deposited in the Collection Account
during such Monthly Period), plus (b) the sum of the amounts allocated on such
related Transfer Date to Investor Default Amounts and Investor Charge-Offs
pursuant to subsections 4.6(a)(iii), 4.6(a)(iv), 4.6(b)(iii), 4.6(b)(iv),
4.6(d)(i), 4.6(d)(ii), 4.6(d)(ix), 4.6(d)(x) and 4.12, as applicable, minus (c)
the amount of Reallocated Principal Collections with respect to such Monthly
Period which pursuant to Section 4.12 are required to fund the Class A Required
Amount and the Class B Required Amount (other than any portions thereof that are
applied pursuant to (x) subsection 4.6(a)(iii), 4.6(a)(iv), 4.6(b)(iii) or
4.6(b)(iv) and (y) subsection 4.6(d)(i) or 4.6(d)(ii) (to the extent such
portions pursuant to subsection 4.6(d)(i) or 4.6(d)(ii) are available to pay
Investor Default Amounts or Investor Charge-Offs), which shall, without
duplication, be included as Available Investor Principal Collections pursuant to
clause (b) above), plus (d) Available Shared Principal Collections with respect
to such Monthly Period, provided, that with respect to the Monthly Period
preceding the first Transfer Date, the amount calculated under clause (a) of
this definition shall equal zero.
"Available Reserve Account Amount" shall mean, as to any Transfer Date,
the lesser of (a) the amount on deposit in the Reserve Account on such date
(after taking into account any interest and earnings retained in the Reserve
Account pursuant to subsection 4.9(b) on such date, but before giving effect to
any deposit made or to be made pursuant to subsection 4.6(d)(xi) to the Reserve
Account on such date) and (b) the Required Reserve Account Amount.
"Available Shared Principal Collections" shall mean, with respect to
any Monthly Period, Shared Principal Collections available to be allocated to
the Series 1998-1 Investor Certificates from each other Series.
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"Base Rate" shall mean, with respect to any Monthly Period, the
Certificate Rate plus 2.00% per annum.
"Calculation Period" shall have the meaning specified in the applicable
Interest Rate Cap.
"Certificate Rate" shall mean, with respect to the Series 1998-1
Investor Certificates and any Monthly Period, the weighted average of (i) the
lesser of the Class A Certificate Rate and the Class A Cap Rate, (ii) the lesser
of the Class B Certificate Rate and the Class B Cap Rate and (iii) the
Collateral Rate (weighted based on the Class A Investor Interest, the Class B
Investor Interest and the Collateral Interest, respectively, as of the last day
of the preceding Monthly Period).
"Class A Adjusted Investor Interest" shall mean, on any date of
determination, an amount equal to the Class A Investor Interest minus the
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class A Floating Allocation of
Finance Charge Collections (other than the proceeds of the sale of any Interest
Rate Cap pursuant to Section 4.11(g)) processed on any Date of Processing during
such Monthly Period, which are allocated to the Investor Interest and deposited
in the Finance Charge Account pursuant to Article IV (or which will be deposited
in the Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection 4.2(a) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 4.4(c)(i),
4.4(d)(i) or 4.4(e)(i) as if they had been deposited in the Collection Account
during such Monthly Period), (b) the Principal Funding Investment Proceeds, if
any, arising pursuant to subsection 4.3(c) with respect to the related Transfer
Date which are to be applied as Class A Available Funds pursuant to such
subsection (or which will be required to be deposited in the Finance Charge
Account pursuant to such subsections on the related Transfer Date), (c) amounts,
if any, to be withdrawn from the Reserve Account which will be deposited into
the Finance Charge Account on the related Transfer Date pursuant to subsections
4.9(b) and 4.9(d), (d) the proceeds from the sale of all or any portion of the
Class A Interest Rate Cap deposited into the Collection Account during such
Monthly Period pursuant to subsection 4.11(g), and (e) with respect to the
Monthly Period preceding the first Transfer Date, the amount specified as Class
A Available Funds in the proviso to subsection 4.4(c)(i).
"Class A Cap Rate" shall mean 9.14% per annum.
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"Class A Certificate Rate" shall mean, with respect to the period from
and including the Closing Date through and including April 14, 1998, 5.8275% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to 0.14% in excess of LIBOR as determined on the related LIBOR
Determination Date.
"Class A Certificateholder" shall mean the Person in whose name a Class
A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any of the Floating Rate Class A
Asset Backed Certificates, Series 1998-1, executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit 1-A hereto.
"Class A Covered Amount" shall mean an amount determined as of each
Transfer Date with respect to any Interest Accrual Period as the product of (a)
a fraction, the numerator of which is the actual number of days in such Interest
Accrual Period and the denominator of which is 360, (b) the Class A Certificate
Rate in effect with respect to such Interest Accrual Period, and (c) the
Principal Funding Account Balance as of the Distribution Date preceding such
Transfer Date after giving effect to all payments, deposits and withdrawals on
such Distribution Date.
"Class A Excess Interest" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the amount by which the Class A
Certificate Rate exceeds the Class A Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class A Excess Principal, if any, as
of the preceding Distribution Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date), and (c) the actual number
of days in such Interest Accrual Period divided by 360.
"Class A Excess Principal" shall mean on any date of determination, the
amount by which the Class A Adjusted Investor Interest exceeds the Expected
Class A Principal after giving effect to all payments, deposits and withdrawals
on such date.
"Class A Floating Allocation" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class A Adjusted Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class A Floating Allocation means the percentage equivalent of a
fraction, the
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numerator of which is the Class A Initial Investor Interest and the denominator
of which is the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean, on any date of
determination, the aggregate initial principal amount of the Class A
Certificates on the Closing Date, which is $343,000,000, less the portion of
such amount represented by Class A Certificates tendered and canceled pursuant
to any Series 1998-1 Investor Exchange occurring prior to such date of
determination.
"Class A Interest Rate Cap" shall mean the master agreement dated as of
April 1, 1998 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated April
1, 1998 between the Trustee and the Interest Rate Cap Provider, relating to the
Class A Certificates and for the exclusive benefit of the Class A
Certificateholders, or (unless context requires otherwise) any Replacement
Interest Rate Cap or Qualified Substitute Arrangement with respect thereto, as
the same may in each case be amended, supplemented or otherwise modified from
time to time in accordance with its terms upon ratings confirmation by the
Rating Agency.
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.5(a).
"Class A Investor Default Amount" shall mean, with respect to any
Monthly Period, an amount equal to the product of (a) the Investor Default
Amount for such Monthly Period and (b) the Class A Floating Allocation for such
Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class A Initial Investor Interest, minus (b) the
aggregate amount of payments of principal paid to the Class A Certificateholders
pursuant to Section 4.8 prior to such date of determination, minus (c) the
excess, if any, of the aggregate amount of Class A Investor Charge-Offs over
Class A Investor Charge-Offs reimbursed pursuant to subsections 4.6(a)(iv),
4.6(d)(i) and 4.6(e) prior to such date of determination; provided, however,
that upon the tender and cancellation of any Class A Certificates pursuant to a
Series 1998-1 Investor Exchange, the amounts stated in clauses (b) and (c) shall
be computed with respect to the Class A Certificates not tendered or canceled
pursuant to such Series 1998-1 Investor Exchange; provided further, however,
that such Class A Investor Interest may not be reduced below zero.
"Class A Monthly Cap Rate Interest" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the lesser of the Class
A Certificate Rate and the Class A Cap Rate with respect to the immediately
preceding Interest Accrual
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Period, (b) the Class A Adjusted Investor Interest as determined as of the
preceding Distribution Date (after giving effect to all payments, deposits and
withdrawals on such Distribution Date) or, for the first Distribution Date, the
Class A Initial Investor Interest, and (c) the actual number of days in such
Interest Accrual Period divided by 360.
"Class A Monthly Interest" shall mean, with respect to any Distribution
Date, an amount equal to the sum of (a) the product of (i) the Class A
Certificate Rate with respect to the immediately preceding Interest Accrual
Period and (ii) the lesser of the Class A Adjusted Investor Interest as of the
preceding Distribution Date (after giving effect to all payments, deposits and
withdrawals on such Distribution Date) and the Expected Class A Principal as of
the preceding Distribution Date, or, for the first Distribution Date, the Class
A Initial Investor Interest, and (iii) the actual number of days in such
Interest Accrual Period divided by 360, (b) the Class A Covered Amount for such
Interest Accrual Period, and (c) the product of (i) the Class A Excess Principal
as of such preceding Distribution Date, (ii) the lesser of the Class A
Certificate Rate and Class A Cap Rate with respect to such Interest Accrual
Period and (iii) the actual number of days in such Interest Accrual Period
divided by 360.
"Class A Monthly Principal" shall mean, with respect to each Transfer
Date relating to the Controlled Accumulation Period or the Rapid Amortization
Period, prior to the payment in full of the Class A Investor Interest, an amount
equal to the least of (i) Available Investor Principal Collections on deposit in
the Principal Account with respect to the related Monthly Period, (ii) for each
Transfer Date with respect to the Controlled Accumulation Period, prior to the
Class A Scheduled Payment Date, the applicable Controlled Deposit Amount for
such Transfer Date, and (iii) the Class A Adjusted Investor Interest prior to
any deposits on such Transfer Date.
"Class A Monthly Servicing Fee" shall mean (a) with respect to the
Monthly Period preceding the first Transfer Date, zero, and (b) with respect to
any subsequent Monthly Period, one-twelfth of the product of 2.00% and the Class
A Adjusted Investor Interest on the last day of the preceding Monthly Period.
"Class A Notional Amount" shall mean, on any date of determination, the
notional amount of the Class A Interest Rate Cap on such date, which shall be an
amount equal to or greater than the Expected Class A Principal with respect to
such date of determination, calculated based upon a Controlled Accumulation
Period commencing November 1, 2002 (with a Controlled Accumulation Period Length
of four months), less the aggregate notional amount of any portions of the Class
A Interest Rate Cap sold on or prior to such date pursuant to Section 4.11(g).
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"Class A Required Amount" shall have the meaning specified in
subsection 4.6(e).
"Class A Scheduled Payment Date" shall mean the March 2003 Distribution
Date.
"Class B Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class B Floating Allocation of
Finance Charge Collections (other than the proceeds of the sale of any Interest
Rate Cap pursuant to Section 4.11(g)) processed on any Date of Processing during
such Monthly Period, which are allocated to the Investor Interest and deposited
in the Finance Charge Account pursuant to Article IV (or which will be deposited
in the Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection 4.2(a) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 4.4(c)(i),
4.4(d)(i) or 4.4(e)(i) as if they had been deposited in the Collection Account
during such Monthly Period), (b) the proceeds from the sale of all or any
portion of the Class B Interest Rate Cap deposited into the Collection Account
during such Monthly Period pursuant to subsection 4.11(g), and (c) with respect
to the Monthly Period preceding the first Transfer Date, the amount specified as
Class B Available Funds in the proviso to subsection 4.4(c)(i).
"Class B Cap Rate" shall mean 9.34% per annum.
"Class B Certificate Rate" shall mean, with respect to the period from
and including the Closing Date through and including April 14, 1998, 6.0275% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to 0.34% in excess of LIBOR, as determined on the related LIBOR
Determination Date.
"Class B Certificateholder" shall mean the Person in whose name a Class
B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any of the Floating Rate Class B
Asset Backed Certificates, Series 1998-1, executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit 1-B hereto.
"Class B Excess Interest" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the amount by which the Class B
Certificate Rate exceeds the Class B Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class B Excess Principal, if any, as
of the preceding Distribution Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date),
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and (c) the actual number of days in such Interest Accrual Period divided by
360.
"Class B Excess Principal" shall mean on any date of determination the
amount by which the Class B Investor Interest exceeds the Expected Class B
Principal after giving effect to all payments, deposits and withdrawals on such
date.
"Class B Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the Investor Interest
as of the close of business on such day.
"Class B Floating Allocation" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class B Investor Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class B Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Class B Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean, on any date of
determination, the aggregate initial principal amount of the Class B
Certificates on the Closing Date, which is $27,000,000 less the portion of such
amount represented by Class B Certificates tendered and canceled pursuant to any
Series 1998-1 Investor Exchange occurring prior to such date of determination.
"Class B Interest Rate Cap" shall mean the master agreement dated as of
April 1, 1998 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated April
1, 1998 between the Trustee and the Interest Rate Cap Provider, relating to the
Class B Certificates and for the exclusive benefit of the Class B
Certificateholders, or (unless context requires otherwise) any Replacement
Interest Rate Cap or Qualified Substitute Arrangement with respect thereto, as
the same may in each case be amended, supplemented or otherwise modified from
time to time in accordance with its terms upon ratings confirmation by the
Rating Agency.
"Class B Investor Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables
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during the Revolving Period, the Class B Floating Allocation, and (b) with
respect to the Principal Receivables during the Controlled Accumulation Period
or Rapid Amortization Period, the
Class B Fixed Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.5(b).
"Class B Investor Default Amount" shall mean, with respect to any
Monthly Period, an amount equal to the product of (a) the Investor Default
Amount for such Monthly Period and (b) the Class B Floating Allocation for such
Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class B Initial Investor Interest, minus (b) the
aggregate amount of payments of principal paid to the Class B Certificateholders
pursuant to Section 4.8 prior to such date of determination, minus (c) the
aggregate amount of Reallocated Class B Principal Collections allocated on all
prior Transfer Dates pursuant to Section 4.12 with respect to which the
Collateral Interest was not reduced pursuant to such Section 4.12, minus (d) the
aggregate amount of Class B Investor Charge-Offs with respect to all prior
Transfer Dates, minus (e) the amount by which the Class B Investor Interest has
been reduced on all prior Transfer Dates pursuant to the third sentence of
subsection 4.5(a) plus (f) the aggregate amount allocated and available on all
prior Transfer Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c), (d) and (e); provided, however, that upon the tender
and cancellation of any Class B Certificates pursuant to a Series 1998-1
Investor Exchange, the amounts stated in clauses (b), (c), (d), (e) and (f)
shall be computed with respect to the Class B Certificates not tendered or
canceled pursuant to such Series 1998-1 Investor Exchange; provided further,
however, that such Class B Investor Interest may not be reduced below zero.
"Class B Monthly Cap Rate Interest" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the lesser of the Class
B Certificate Rate and the Class B Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class B Investor Interest as
determined as of the preceding Distribution Date (after giving effect to all
payments, deposits and withdrawals on such Distribution Date) or, for the first
Distribution Date, the Class B Initial Investor Interest, and (c) the actual
number of days in such preceding Interest Accrual Period divided by 360.
"Class B Monthly Interest" shall mean, with respect to any Distribution
Date, an amount equal to the sum of (a) the product of (i) the Class B
Certificate Rate with respect to the
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immediately preceding Interest Accrual Period, (ii) the lesser of the Class B
Investor Interest as of the preceding Distribution Date (after giving effect to
all payments, deposits and withdrawals on such Distribution Date) and the
Expected Class B Principal as of the preceding Distribution Date, or, for the
first Distribution Date, the Class B Initial Investor Interest, and (iii) the
actual number of days in such Interest Accrual Period divided by 360 and (b) the
product of (i) the Class B Excess Principal as of such preceding Distribution
Date,(ii) the lesser of the Class B Certificate Rate and the Class B Cap Rate
with respect to such Interest Accrual Period and (iii) the actual number of days
in such Interest Accrual Period divided by 360.
"Class B Monthly Principal" shall mean, with respect to each Transfer
Date relating to the Controlled Accumulation Period immediately following the
Class A Scheduled Payment Date, or with respect to any Transfer Date relating to
the Rapid Amortization Period, beginning with the Transfer Date on which the
Class A Investor Interest has been paid in full (after taking into account
payments to be made on the related Distribution Date), an amount equal to the
lesser of (i) Available Investor Principal Collections on deposit in the
Principal Account with respect to the related Monthly Period (minus the portion
of such Available Investor Principal Collections applied to Class A Monthly
Principal on such Transfer Date) and (ii) the Class B Investor Interest for such
Transfer Date.
"Class B Monthly Servicing Fee" shall mean (a) with respect to the
Monthly Period preceding the first Transfer Date, zero, and (b) with respect to
any subsequent Monthly Period, one-twelfth of the product of 2.00% and the Class
B Investor Interest on the last day of the preceding Monthly Period.
"Class B Notional Amount" shall mean, on any date of determination, the
notional amount of the Class B Interest Rate Cap on such date, which shall be an
amount equal to the Expected Class B Principal with respect to such date of
determination, less the aggregate notional amount of any portions of the Class B
Interest Rate Cap sold on or prior to such date pursuant to Section 4.11(g).
"Class B Payment Commencement Date" shall mean either the Distribution
Date on which the Class A Investor Interest is reduced to zero or, if the Class
A Investor Interest is paid in full on the Class A Scheduled Payment Date and
the Rapid Amortization Period has not commenced, the Distribution Date following
the Class A Scheduled Payment Distribution Date.
"Class B Required Amount" shall have the meaning specified in
subsection 4.6(f).
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"Class B Scheduled Payment Date" shall mean the April 2003 Distribution
Date.
"Closing Date" shall mean April 1, 1998.
"Collateral Allocation" shall mean, with respect to any Monthly Period,
(a) with respect to Default Amounts and Finance Charge Receivables at any time
and Principal Receivables during the Revolving Period, the Collateral Floating
Allocation, and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or Rapid Amortization Period, the Collateral Fixed
Allocation.
"Collateral Available Funds" shall mean, with respect to any Monthly
Period, the Collateral Floating Allocation of Finance Charge Collections
processed on any Date of Processing during such Monthly Period, which are
allocated to the Investor Interest and deposited in the Finance Charge Account
pursuant to Article IV (or which will be deposited in the Collection Account on
the Transfer Date following such Monthly Period pursuant to the fourth paragraph
of subsection 4.2(a) of the Agreement and will be allocated to the Investor
Interest pursuant to subsection 4.4(c)(i), 4.4(d)(i) or 4.4(e)(i) as if they had
been deposited in the Collection Account during such Monthly Period).
"Collateral Default Amount" shall mean, with respect to any Monthly
Period, an amount equal to the product of (a) the Investor Default Amount for
such Monthly Period and (b) the Collateral Floating Allocation for such Monthly
Period.
"Collateral Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on such day.
"Collateral Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Collateral Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Collateral Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Initial Collateral Interest and the
denominator of which is the Initial Investor Interest.
- 12 -
"Collateral Interest" shall mean, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the right to
receive, to the extent necessary to make the required payments to the Collateral
Interest Holder under this Series Supplement, the portion of Collections
allocable thereto under the Agreement and this Series Supplement, and funds on
deposit in the Collection Account allocable thereto pursuant to the Agreement
and this Series Supplement. On any date of determination, for purposes of all
calculations in the Agreement and this Series Supplement, the amount of the
Collateral Interest shall be an amount equal to (a) the Initial Collateral
Interest, minus (b) the aggregate amount of payments of principal paid to the
Collateral Interest Holder pursuant to Section 4.8 prior to such date of
determination, minus (c) the aggregate amount of Reallocated Principal
Collections allocated on all prior Transfer Dates pursuant to Section 4.12,
minus (d) the aggregate amount of Collateral Interest Charge-Offs with respect
to all prior Transfer Dates, minus (e) the amount by which the Collateral
Interest has been reduced on all prior Transfer Dates pursuant to the second
sentence of subsection 4.5(a) plus (f) the aggregate amount allocated and
available on all prior Transfer Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
that such Collateral Interest may not be reduced below zero.
"Collateral Interest Charge-Offs" shall have the meaning specified in
subsection 4.5(c).
"Collateral Interest Holder" shall mean the entity so designated in the
Loan Agreement.
"Collateral Interest Monthly Servicing Fee" shall mean (a) with respect
to the Monthly Period preceding the first Transfer Date, zero, and (b) with
respect to any subsequent Monthly Period, one-twelfth of the product of 2.00%
and the Collateral Interest on the last day of the preceding Monthly Period.
"Collateral Interest Surplus" shall mean, with respect to any date of
determination, the amount, if any, by which the Collateral Interest as of such
date (after giving effect to reductions in the Collateral Interest for any
Collateral Interest Charge-Offs and Reallocated Principal Collections and any
further adjustments to the Collateral Interest for the benefit of the Class A
Certificateholders and the Class B Certificateholders as of such date) exceeds
the Required Collateral Interest as of such date.
"Collateral Monthly Interest" shall mean, with respect to any Transfer
Date, an amount equal to the product of (i) the Collateral Rate with respect to
the related Interest Accrual
- 13 -
Period, (ii) the Collateral Interest as of the preceding Distribution Date
(after giving effect to all payments, deposits and withdrawals on such
Distribution Date) or, for the first Transfer Date, the Initial Collateral
Interest, and (iii) the actual number of days in the related Interest Accrual
Period divided by 360.
"Collateral Monthly Principal" shall mean (a) with respect to any
Transfer Date relating to the Revolving Period, following any reduction of the
Required Collateral Interest effected by a reduction of the Required Collateral
Percentage as described in the definition of "Required Collateral Percentage",
an amount equal to the lesser of (x) the Collateral Interest Surplus as of such
Transfer Date and (y) the Available Investor Principal Collections on deposit in
the Principal Account with respect to the related Monthly Period, or (b) with
respect to any Transfer Date relating to the Controlled Accumulation Period or
the Rapid Amortization Period, as the case may be, an amount equal to the lesser
of (x) the Collateral Interest Surplus as of such Transfer Date and (y) the
excess, if any of (i) the Available Investor Principal Collections on deposit in
the Principal Account with respect to the related Monthly Period over (ii) the
sum of the Class A Monthly Principal and the Class B Monthly Principal on such
Transfer Date.
"Collateral Rate" shall mean for any Interest Accrual Period, the rate
specified in the Loan Agreement.
"Controlled Accumulation Amount" shall mean (a) for any Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest, $24,500,000; provided that if the Controlled
Accumulation Period Length is modified pursuant to subsection 4.8(d), (i) the
Controlled Accumulation Amount for each such Transfer Date with respect to the
Controlled Accumulation Period shall mean the amount determined in accordance
with subsection 4.8(d) on the date on which the Controlled Accumulation Period
has most recently been modified and (ii) the sum of the Controlled Accumulation
Amounts for all Transfer Dates with respect to the modified Controlled
Accumulation Period shall not be less than the Class A Investor Interest, and
(b) for any Transfer Date with respect to the Controlled Accumulation Period
after the payment in full of the Class A Investor Interest, an amount equal to
the Class B Investor Interest on such Transfer Date.
"Controlled Accumulation Date" shall mean January 1, 2002.
"Controlled Accumulation Period" shall mean, unless a Pay Out Event has
occurred prior to such date, a period commencing on the Controlled Accumulation
Date or such later day as is determined in accordance with subsection 4.8(d) and
continuing
- 14 -
to, but not including, a Pay Out Commencement Date or to, and including, (i) the
date of termination of the Trust pursuant to Section 12.1 of the Agreement or
(ii) the Series 1998-1 Termination Date.
"Controlled Accumulation Period Length" shall have the meaning
specified in subsection 4.8(d).
"Controlled Deposit Amount" shall mean, with respect to any Transfer
Date, the sum of (a) the Controlled Accumulation Amount for such Transfer Date
and (b) the Accumulation Shortfall, if any, as of such date.
"Definitive Certificates" shall have the meaning specified
in Section 6.11 of the Agreement.
"Discount Option" shall have the meaning specified in Section 4.14.
"Discounted Percentage" shall have the meaning specified in Section
4.14.
"Distribution Account" shall have the meaning specified in subsection
4.3(b).
"Distribution Date" shall mean April 15, 1998 and the fifteenth day of
each calendar month thereafter, or, if such fifteenth day is not a Business Day,
the next succeeding Business Day; provided, however, that no Distribution Date
shall occur after the earliest to occur of (x) the Distribution Date on which
the Investor Interest has been paid in full, (y) the date of termination of the
Trust pursuant to Section 12.1 of the Agreement, and (z) the Series 1998-1
Termination Date.
"Enhancement" shall mean, with respect to the Series 1998-1
Certificates, the subordination of the Collateral Interest to the extent
provided herein, the Interest Rate Caps and, with respect to the Class A
Certificates, the funds and securities on deposit in the Reserve Account, up to
the Available Reserve Account Amount, and the subordination of the Class B
Certificates to the extent provided herein.
"Enhancement Provider" shall mean, with respect to the Series 1998-1
Certificates, the Collateral Interest Holder, and with respect to any other
Series, the applicable provider of
credit enhancement, if any.
"Excess Principal Funding Investment Proceeds" shall mean, with respect
to each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal
- 15 -
Funding Investment Proceeds for such Transfer Date exceed the Class A Covered
Amount determined on such Transfer Date.
"Excess Spread" shall mean the sum of the amounts specified pursuant to
subsections 4.6(a)(v), 4.6(b)(v) and 4.6(c)(ii).
"Expected Class A Principal" shall mean, with respect to any date of
determination, (a) on each date to but excluding the Initial Class A
Accumulation Date, the Class A Initial Investor Interest, (b) on each date
thereafter to but not including the Class A Scheduled Payment Date, the Class A
Initial Investor Interest less the product of (i) the Controlled Accumulation
Amount and (ii) the number of Distribution Dates that have occurred from and
including the Initial Class A Accumulation Date, and (c) on each date
thereafter, zero.
"Expected Class B Principal" shall mean, with respect to any date of
determination, (a) on each date to but excluding the Class B Scheduled Payment
Date, the Class B Initial Investor Interest, and (b) on each date thereafter,
zero.
"Finance Charge Account" shall have the meaning specified in Section
4.3(a).
"Finance Charge Collections" shall mean Collections in respect of
Finance Charge Receivables.
"Fitch" shall mean Fitch IBCA, Inc.
"Fixed Investor Percentage" shall mean, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of which
is the Investor Interest as of the close of business on the last day of the
Revolving Period (or, if there has been an Investor Exchange with respect to the
Certificates after the end of the Revolving Period, the Investor Interest as of
the end of the Revolving Period will be reduced ratably to reflect the amount of
Certificates tendered and canceled pursuant to any Investor Exchange) and the
denominator of which is the greater of (a) the Aggregate Principal Receivables
as of such date of determination and (b) the sum of the numerators used to
calculate the Investor Percentages for all outstanding Series with respect to
Principal Receivables on such date of determination.
"Floating Investor Percentage" shall mean, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of which
is the Adjusted Investor Interest determined as of the close of business on the
last day of the Monthly Period immediately preceding such date of determination
(or with respect to the first Monthly Period, the Initial Investor Interest) and
the denominator of which is the
- 16 -
greater of (a) the Aggregate Principal Receivables as of such date of
determination (or with respect to the first Monthly Period, the aggregate amount
of Principal Receivables in the Trust as of the beginning of the day on the
Closing Date), and (b) the sum of the numerators used to calculate the Investor
Percentages for all outstanding Series on such date of determination with
respect to Finance Charge Receivables, Default Amounts or Principal Receivables,
as applicable, on such date of determination.
"Initial Class A Accumulation Date" shall mean the first Distribution
Date occurring after the Monthly Period in which the Controlled Accumulation
Period commences.
"Initial Collateral Interest" shall mean the aggregate initial
principal amount of the Collateral Interest on the Closing Date, which is
$30,000,000.
"Initial Investor Interest" shall mean the sum of the Class A Initial
Investor Interest, the Class B Initial Investor
Interest and the Initial Collateral Interest.
"Interest Accrual Period" shall mean, with respect to any Distribution
Date, the period beginning on and including the Distribution Date occurring in
the preceding calendar month (or, in the case of the first Distribution Date,
from and including the Closing Date) through and including the day preceding the
current Distribution Date.
"Interest Rate Cap Payment" shall mean, with respect to any
Distribution Date, any payment required to be made by the Interest Rate Cap
Provider to the Trust pursuant to an Interest Rate Cap with respect to such
Distribution Date.
"Interest Rate Cap Provider" shall mean Xxxxxx Brothers Financial
Products Inc. in its capacity as obligor under the Interest Rate Caps, or if any
Replacement Interest Rate Cap or Qualified Substitute Arrangement is obtained
pursuant to Section 4.11, any obligor with respect to such Replacement Interest
Rate Cap or Qualified Substitute Arrangement.
"Interest Rate Caps" shall mean, collectively, the Class A Interest
Rate Cap and the Class B Interest Rate Cap.
"Investor Accounts" shall mean the Series 1998-1 Collection Subaccount
established under Section 4.2B, the Principal Account, the Principal Funding
Account and the Finance Charge Account established under subsection 4.3(a), the
Distribution Account established under subsection 4.3(b) and the Reserve Account
established under subsection 4.9(a).
- 17 -
"Investor Charge-Offs" shall mean, with respect to any Transfer Date,
the sum of the Class A Investor Charge-Offs, the Class B Investor Charge-Offs
and the Collateral Interest Charge-Offs, in each case with respect to such
Transfer Date.
"Investor Default Amount" shall mean, (i) with respect to the Monthly
Period preceding the first Transfer Date, an amount equal to zero, and (ii) with
respect to each Monthly Period thereafter, an amount equal to the product of (a)
the sum of the Default Amounts for all Defaulted Accounts during such Monthly
Period and (b) the Floating Investor Percentage for such Monthly Period.
"Investor Interest" shall mean for any date of determination, the sum
of the Class A Investor Interest, the Class B Investor Interest and the
Collateral Interest, each as of such date.
"Investor Percentage" shall mean, for any date of determination, (a)
with respect to Finance Charge Receivables and Default Amounts at any time and
Principal Receivables during the Revolving Period, the Floating Investor
Percentage and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or the Rapid Amortization Period, the Fixed Investor
Percentage.
"LIBOR" shall mean, for any Interest Accrual Period, the London
interbank offered quotations rate for one-month Dollar deposits determined for
each Interest Accrual Period in accordance with the provisions of Section 4.13.
"LIBOR Determination Date" shall mean (a) for the initial Interest
Period, March 24, 1998 (for the period from and including the Closing Date
through and including April 14, 1998) and (b) for each subsequent Interest
Accrual Period, the second London Banking Day preceding the first day of such
Interest Accrual Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee, the Agent and the other financial institutions party
thereto, dated as of April 1, 1998, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"London Banking Day" shall mean any day on which commercial banks are
open for business (including dealings in foreign exchange and deposits in U.S.
dollars) in London.
"Minimum Aggregate Principal Receivables" shall have the meaning
specified in Section 4 hereof.
- 18 -
"Minimum Seller Interest" shall have the meaning specified in Section 4
hereof.
"Monthly Investor Servicing Fee" shall mean (a) with respect to the
Monthly Period preceding the first Transfer Date, zero, and (b) with respect to
each subsequent Monthly Period, an amount equal to one twelfth of the product of
2.00% and the Adjusted Investor Interest as of the last day of the preceding
Monthly Period.
"Monthly Total Principal Allocation" shall mean (a) with respect to any
day in a Monthly Period, the Principal Allocation for such day plus the sum of
all Principal Allocations on each prior day of such Monthly Period or (b) with
respect to any Monthly Period, the Principal Allocation, if any, for the last
day of such Monthly Period plus the sum of all Principal Allocations on each
prior day of such Monthly Period.
"Pay Out Commencement Date" shall mean, with respect to the Series
1998-1 Investor Certificates, the date on which a Trust Pay Out Event is deemed
to occur or occurs pursuant to Section 9.1 of the Agreement or a Series 1998-1
Pay Out Event is deemed to occur or occurs pursuant to Section 9A hereof.
"Permitted Investments" shall mean with respect to the Investor
Accounts, (a) negotiable instruments or securities either represented by
instruments in bearer or registered form or book-entry form at a federal reserve
bank or held by a clearing corporation which are registered in the name of the
Trustee upon books maintained for that purpose by or on behalf of the issuer
thereof and identified on books maintained for that purpose by the Trustee and
held for the benefit of the Trust or the Certificateholders and which evidence
(i) direct obligations of the United States of America or any agency or
instrumentality thereof the full and timely payment of which is guaranteed by
the full faith and credit of the United States of America; (ii) demand deposits,
time deposits or certificates of deposit of, or bankers' acceptances issued by,
any depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking or depositary institution authorities;
provided, however, that at the time of the Trust's investment or contractual
commitment to invest therein, the certificates of deposit or short-term
deposits, if any, of such depositary institution or trust company shall have a
credit rating from Standard & Poor's of A-1+ and from Fitch (if rated by Fitch)
of F-1+, and either such certificates of deposit or short-term deposits shall
have a credit rating from Xxxxx'x of P-1 or the long-term unsecured debt
obligations of such depositary institution or trust company (other than such
obligations whose rating is based on collateral or on the credit of a Person
other
- 19 -
than such institution or trust company) shall have a rating from Xxxxx'x of at
least Aa3, and the amount of such time deposits, demand deposits or certificates
of deposit are fully insured within the limits of insurance set by the FDIC and
the combined capital, surplus and undivided profits of such depositary
institution or trust company is not less than $3 million; (iii) certificates of
deposit having, at the time of the Trust's investment or contractual commitment
to invest therein, a rating from Xxxxx'x, Standard & Poor's and Fitch (if rated
by Fitch) of P-1 and A-1+ and F-1+, respectively; (iv) commercial paper having,
at the time of the Trust's investment or contractual commitment to invest
therein, a rating from Xxxxx'x, Standard & Poor's and Fitch (if rated by Fitch)
of P-1, A-1+ and F-1+, respectively; or (v) investments in money market funds
registered under the Investment Company Act rated in each case in the highest
investment category by Standard & Poor's, Xxxxx'x and Fitch (if rated by Fitch),
or otherwise approved in writing by the Rating Agency and acceptable to the
Enhancement Provider; and (b) demand deposits in the name of the Trust or the
Trustee, on behalf of the Trust, in any depositary institution or trust company
referred to in clause (a)(ii) above; provided, however, that with respect to any
of the Permitted Investments referred to herein, if requested by the Enhancement
Provider, the Servicer shall furnish to the Enhancement Provider an Opinion of
Counsel, in form and substance satisfactory to the Enhancement Provider and from
counsel reasonably acceptable to it, to the effect that, upon conveyance of
possession or registered ownership to the Trustee or its agent, nominee or
custodian, on behalf of the Trust, of such Permitted Investment, the Trustee, on
behalf of the Trust, will have a perfected first priority security interest in
and to such Permitted Investment for the benefit of the Series 1998-1 Investor
Certificateholders. Such opinion will be required only with respect to Permitted
Investments of a type that have not previously been the subject of such an
opinion or that have been the subject of a change in law. Notwithstanding the
foregoing, if the Rating Agency rating the Series 1998-1 Investor Certificates
is not Standard & Poor's, Xxxxx'x or Fitch, any investments specified in this
definition of "Permitted Investments" as requiring a specific credit rating from
Standard & Poor's, Xxxxx'x or Fitch (if rated by Fitch) must also have a
comparable credit rating from, or otherwise be acceptable to, the Rating Agency
rating the Series 1998-1 Investor Certificates, as confirmed to the Trustee in
writing by such Rating Agency, and any investments specified in this definition
of "Permitted Investments" as requiring written approval from Standard & Poor's,
Xxxxx'x or Fitch must also receive written approval from such other Rating
Agency.
"Pool Amount" shall mean, with respect to any Monthly Period, the
aggregate amount of Principal Receivables as of the close of business on the
last day of such Monthly Period.
- 20 -
"Pool Factor" shall mean, with respect to any Record Date, a number
carried out to seven decimal places representing the ratio of the Investor
Interest as of the end of the last day of the preceding Monthly Period
(determined after taking into account any increases or decreases in the Investor
Interest which will occur on the following Distribution Date) to the Initial
Investor Interest.
"Pooling and Servicing Agreement" shall have the meaning specified in
the preamble to this document.
"Portfolio Adjusted Yield" shall mean, with respect to any Transfer
Date or Determination Date, the average of the percentages obtained for each of
the three preceding Monthly Periods by subtracting the Base Rate from the
Portfolio Yield for such Monthly Period.
"Portfolio Yield" shall mean, with respect to the Series 1998-1
Investor Certificates and any Monthly Period, the annualized percentage
equivalent of a fraction the numerator of which is equal to the sum of (i) the
lesser of (x) the Finance Charge Receivables allocable to the Investor Interest
for such Monthly Period, calculated on a billed basis, after subtracting
therefrom an amount equal to the Investor Default Amount with respect to such
Monthly Period, and (y) the aggregate amount of Collections with respect to such
Monthly Period, (ii) the Principal Funding Investment Proceeds deposited into
the Finance Charge Account on the Transfer Date related to such Monthly Period,
(iii) the amount of the Reserve Draw Amount (up to the Available Reserve Account
Amount), if any, with respect to such Monthly Period, and (iv) any amounts of
interest and earnings described in Section 4.9, each deposited or required to be
deposited into the Finance Charge Account on the Transfer Date relating to such
Monthly Period (without duplication of amounts referenced in clauses (i), (ii)
and (iii) above), and the denominator of which is the Investor Interest as of
the last day of the preceding Monthly Period.
"Principal Account" shall have the meaning specified in subsection
4.3(a).
"Principal Allocation" shall have the meaning specified in subsection
4.4(d)(ii).
"Principal Collections" shall mean Collections in respect of Principal
Receivables.
"Principal Funding Account" shall have the meaning specified in
subsection 4.3(a).
- 21 -
"Principal Funding Account Balance" shall mean, with respect to any
date of determination, the amount of funds, if any, on deposit in the Principal
Funding Account on such date of determination (other than Principal Funding
Investment Proceeds).
"Principal Funding Investment Proceeds" shall mean, with respect to
each Transfer Date, the investment earnings on funds in the Principal Funding
Account (net of investment expenses and losses) for the period from and
including the immediately preceding Transfer Date to but excluding such Transfer
Date.
"Principal Funding Investment Shortfall" shall mean, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such Transfer
Date are less than the Class A Covered Amount determined as of such Transfer
Date.
"Principal Shortfall" shall mean (i) on any Date of Processing for the
Series 1998-1 Investor Certificates, the excess of (x) an amount equal to the
sum (without duplication) of (A) during the Controlled Accumulation Period, the
Controlled Deposit Amount, and during the Rapid Amortization Period, the
Investor Interest, in each case with respect to the related Monthly Period, and
(B) at any time, the Collateral Interest Surplus with respect to the related
Monthly Period over (y) the Monthly Total Principal Allocation for such Date of
Processing, or (ii) for any other Series the amounts specified as such in the
Supplement for such other Series.
"Qualified Substitute Arrangement" shall have the meaning specified in
subsection 4.11(b).
"Qualified Trust Institution" shall mean a depository institution or
trust company having corporate trust powers under applicable federal and state
laws organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia; provided, however, that the
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depository institution or trust company shall have a
credit rating from Xxxxx'x, Standard & Poor's and Fitch (if rated by Fitch) of
at least Baa3, BBB- and BBB-, respectively, and the deposits in whose accounts
are insured to the limits provided by law and as required by the FDIC.
"Rapid Amortization Period" shall mean an Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (i) the date of termination of the Trust pursuant to Section 12.1 or (ii) the
Series 1998-1 Termination Date.
- 22 -
"Rating Agency" shall mean, with respect to the Series 1998-1
Certificates, each of Xxxxx'x, Standard & Poor's and Fitch, and with respect to
the Collateral Interest means Fitch.
"Reallocated Class B Principal Collections" shall mean, with respect to
any Transfer Date, Principal Collections (including amounts specified pursuant
to subsections 4.6(b)(iii) and (iv), 4.6(d)(ii) and 4.6(f) to be treated as
Available Investor Principal Collections) applied in accordance with subsection
4.12(a) in an amount not to exceed the product of (a) the Class B Investor
Allocation for the Monthly Period relating to such Transfer Date, (b) the
Investor Percentage for the Monthly Period relating to such Transfer Date and
(c) the amount of Principal Collections for the Monthly Period relating to such
Transfer Date; provided, that such amount shall not exceed the Class B Investor
Interest after giving effect to any Class B Investor Charge-Offs for such
Transfer Date.
"Reallocated Collateral Principal Collections" shall mean, with respect
to any Transfer Date, Principal Collections (including amounts specified
pursuant to subsections 4.6(d)(ix) and (x) to be treated as Available Investor
Principal Collections) applied in accordance with subsections 4.12(a) and (b) in
an amount not to exceed the product of (a) the Collateral Allocation for the
Monthly Period relating to such Transfer Date, (b) the Investor Percentage for
the Monthly Period relating to such Transfer Date and (c) the amount of
Principal Collections for the Monthly Period relating to such Transfer Date;
provided, that such amount shall not exceed the Collateral Interest after giving
effect to any Collateral Interest Charge-Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean, with respect to any
Transfer Date, the sum of (a) the Reallocated Class B Principal Collections and
(b) the Reallocated Collateral Principal Collections with respect to such
Transfer Date.
"Reference Banks" shall mean four major banks in the London interbank
market selected by the Trustee.
"Replacement Interest Rate Cap" shall mean, with respect to the Class A
Interest Rate Cap or the Class B Interest Rate Cap, any substitute interest rate
cap having substantially the same terms and conditions as such Interest Rate Cap
and with respect to which the Interest Rate Cap Provider party thereto (a) is
reasonably acceptable to the Trustee, (b) has either (i) a counterparty rating
of at least Aa3 by Xxxxx'x, XX- by Xxxxx and AAA by Standard & Poor's, or (ii)
if not a counterparty rating, a long term unsecured debt or long term
certificate of deposit rating of at least Aa3 by Xxxxx'x and AA- by Fitch, and a
short term unsecured debt or short term certificate of deposit rating
- 23 -
of A-1+ by Standard & Poor's, and (c) is acceptable to Xxxxx'x, Fitch and
Standard & Poor's.
"Required Collateral Interest" shall mean, (a) with respect to the
Closing Date, the Initial Collateral Interest and (b) with respect to any
Transfer Date thereafter, an amount equal to the product of (1) the Required
Collateral Percentage and (2) the Adjusted Investor Interest on such Transfer
Date after taking into account all deposits in the Principal Funding Account on
such date and payments to be made on the related Distribution Date, but not less
than $12,000,000; provided that (x) if either (i) there is a reduction in the
Collateral Interest pursuant to clause (c), (d) or (e) of the definition of such
term or (ii) a Pay Out Event with respect to the Series 1998-1 Investor
Certificates has occurred, the Required Collateral Interest for any Transfer
Date shall (subject to clause (y) below) equal the Required Collateral Interest
for the Transfer Date immediately preceding such reduction or Pay Out Event and
(y) in no event shall the Required Collateral Interest exceed the sum of the
outstanding principal amounts of (i) the Class A Certificates and (ii) the Class
B Certificates, each as of the last day of the Monthly Period preceding such
Transfer Date, less cash held in the Principal Funding Account as of such
Transfer Date, in each case after taking into account deposits, withdrawals and
payments to be made on the related Distribution Date.
"Required Collateral Percentage" shall mean, with respect to any
Transfer Date, 7.50% or, at the Transferor's option, a lesser percentage if on
or prior to such Transfer Date the Transferor, the Servicer, the Agent and the
Trustee shall each have received a copy of a written notice from the Rating
Agency to the effect that such action will not result in such Rating Agency
reducing or withdrawing its then existing rating of the Class A Certificates or
the Class B Certificates.
"Required Reserve Account Amount" shall mean, with respect to any
Transfer Date on or after the Reserve Account Funding Date, an amount equal to
(a) 0.50% of the Class A Investor Interest or (b) any other amount designated by
the Transferor; provided that if such designation is less than the amount
determined pursuant to clause (a), Transferor shall (i) provide the Servicer,
the Collateral Interest Holder and the Trustee with notification in writing by
the Rating Agency addressed to the Transferor, the Servicer and the Trustee that
such action will not result in such Rating Agency reducing or withdrawing its
then existing rating of the Class A Certificates or the Class B Certificates and
(ii) deliver to the Trustee a certificate of an authorized officer to the effect
that, based on the facts known to such officer at such time, in the reasonable
belief of the Transferor, such designation will not cause a Pay Out Event or an
event that, after the giving of notice or the lapse of time,
- 24 -
would cause a Pay Out Event to occur with respect to the Series 1998-1 Investor
Certificates.
"Reserve Account" shall have the meaning specified in subsection
4.9(a).
"Reserve Account Funding Date" shall mean the Transfer Date which
occurs not later than the earliest of (a) the Transfer Date with respect to the
Monthly Period which commences no later than three months prior to the
commencement of the Controlled Accumulation Period, or such earlier date as the
Servicer may determine, (b) the first Transfer Date for which the Portfolio
Adjusted Yield is less than 2.00%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the Transfer Date with respect
to the Monthly Period which commences twelve months prior to the commencement of
the Controlled Accumulation Period, (c) the first Transfer Date for which the
Portfolio Adjusted Yield is less than 3.00%, but in such event the Reserve
Account Funding Date shall not be required to occur earlier than the Transfer
Date with respect to the Monthly Period which commences six months prior to the
commencement of the Controlled Accumulation Period and (d) the first Transfer
Date for which the Portfolio Adjusted Yield is less than 4.00%, but in such
event the Reserve Account Funding Date shall not be required to occur earlier
than the Transfer Date with respect to the Monthly Period which commences four
months prior to the commencement of the Controlled Accumulation Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date following
the Reserve Account Funding Date, the amount, if any, by which the amount on
deposit in the Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
4.9(c).
"Revolving Period" shall mean the period from and including the Closing
Date to, but not including, the earlier of (a) the day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Scheduled Series 1998-1 Termination Date" shall mean the November 2005
Distribution Date.
"Series 1998-1" shall mean the Series represented by the Series 1998-1
Investor Certificates.
"Series 1998-1 Certificates" shall mean the Class A Certificates and
the Class B Certificates.
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"Series 1998-1 Collection Subaccount" shall have the meaning specified
in Section 4.2B.
"Series 1998-1 Investor Certificateholders" shall mean the Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder.
"Series 1998-1 Investor Certificates" shall mean the Class A
Certificates, the Class B Certificates and the Collateral Interest.
"Series 1998-1 Investor Exchange" shall mean an Investor Exchange
pursuant to Section 6.9(b) of the Agreement and Section 18 hereof.
"Series 1998-1 Pay Out Event" shall have the meaning specified in
Section 9A hereof.
"Series 1998-1 Termination Date" shall mean the earlier to occur of (i)
the day after the Distribution Date on which the Series 1998-1 Investor
Certificates are paid in full or (ii) the Scheduled Series 1998-1 Termination
Date.
"Series Servicing Fee Percentage" shall mean 2.00%.
"Series Supplement" shall have the meaning specified in the preamble to
this document.
"Shared Finance Charge Collections" shall mean, with respect to any
Transfer Date, as the context requires, either (a) the amount described in
subsection 4.6(d)(xv) allocated to the Series 1998-1 Investor Certificates but
available to cover shortfalls, if any, in amounts paid from Finance Charge
Collections for other Series, or (b) the aggregate amount allocated to Investor
Certificates of all other Series which the related Supplements specify are to be
treated as "Shared Finance Charge Collections" and which are available for
application pursuant to subsections 4.6(e), 4.6(f) and 4.6(g) on such Transfer
Date.
"Shared Principal Collections" shall mean, as the context requires,
either (a) the amounts allocated to the Series 1998-1 Investor Certificates
which, in accordance with subsections 4.4(c)(ii), 4.4(d)(ii) and 4.4(e)(ii), may
be applied to Principal Shortfalls with respect to other outstanding Series or
(b) the amounts allocated to the investor certificates (which are not retained
by the Transferor) of other Series which the applicable Supplements for such
Series specify are to be treated as "Shared Principal Collections" and which may
be applied to cover Principal Shortfalls with respect to the Series 1998-1
Investor Certificates.
- 26 -
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Xxxxx Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
"Transferor" shall mean People's Bank, a Connecticut capital stock
savings bank, the Seller under the Agreement.
SECTION 2.1 Other Definitional Provisions. Whenever a determination is
to be made under the Agreement as to whether a given action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Trust or the Series 1998-1 Investor Certificateholders (or any similar or
analogous determination), such determination shall be made without giving effect
to the Enhancement.
SECTION 3. Conveyance of Interest in Series Accounts. (a) The
Transferor and the Trustee intend that the Series Accounts and all property
credited thereto be the property of the Trust for the benefit of the Series
1998-1 Investor Certificateholders. If and to the extent the Series Accounts and
the property credited thereto are characterized as property of the Transferor,
the Transferor hereby assigns, sets-over, conveys, pledges and grants a security
interest and lien (free and clear of all other Liens) to the Trustee for the
benefit of the Certificateholders, in all of the Transferor's right, title and
interest (if any) in and to the Series Accounts and the amounts on deposit in
the Series Accounts and all property now or hereafter credited thereto,
including but not limited to Permitted Investments, together with all proceeds
thereof, as collateral security for the amounts payable from time to time to the
Trustee, for the benefit of the Series 1998-1 Investor Certificateholders.
(b) The Series Accounts shall be established at a depository
institution which agrees in writing as follows: (i) all money, securities,
instruments and other property credited to any such account shall be treated as
"financial assets" within the meaning of Section 8-102(a)(9) of the 1994
Official Text of the Uniform Commercial Code and (ii) such depository
institution will comply with "entitlement orders" (within the meaning of
- 27 -
Section 8-102(a)(8) of the 1994 Official Text of the Uniform Commercial Code)
issued by the Trustee and relating to such account without further consent by
the Transferor or any other person.
SECTION 4. Minimum Seller Interest, Minimum Aggregate Principal
Receivables and Removal of Accounts. (a) The Minimum Seller Interest applicable
to the Series 1998-1 Investor Certificates on any date of determination shall be
7% of the Aggregate Principal Receivables for such date of determination. The
Minimum Aggregate Principal Receivables shall be the sum of the numerators used
to calculate the Investor Percentage with respect to Principal Receivables for
all Series then outstanding. Upon final payment of the Series 1998-1 Investor
Certificates, the Minimum Aggregate Principal Receivables shall be computed in a
manner consistent with the Agreement or any future Supplement, as appropriate.
(b) In addition to the requirements contained in subsections 2.7(a) and
(b) of the Agreement with respect to the removal of Accounts, pursuant to
subsection 2.7(b)(iii)(c) of the Agreement, the removal of any Receivables of
any Removed Accounts on any Removal Date shall not, in the reasonable belief of
the Transferor, result in the failure to make a deposit of a Controlled Deposit
Amount or a payment of Collateral Monthly Principal.
SECTION 5. Reassignment and Transfer Terms. The Series 1998-1 Investor
Certificates shall be subject to transfer to the Transferor at its option, in
accordance with the terms specified in subsection 12.2(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial
Investor Interest. The Series 1998-1 Investor Certificates shall be subject to
mandatory transfer to the Transferor, in accordance with the terms specified in
subsection 12.2(a) of the Agreement, on the Distribution Date immediately
preceding the Scheduled Series 1998-1 Termination Date if the Investor Interest
is reduced to an amount less than or equal to 5% of the Initial Investor
Interest and the conditions specified in the proviso to Section 12.2(a) of the
Agreement
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shall have been satisfied. The deposit required in connection with any such
purchase shall be equal to (a) the Investor Interest, plus (b) accrued and
unpaid interest (other than Class A Excess Interest or Class B Excess Interest,
as the case may be) on the Series 1998-1 Investor Certificates through and
including the day preceding the day on which such purchase occurs, plus (c) all
additional amounts then due and payable to the Collateral Interest Holder under
the Loan Agreement, less (d) the amount on deposit in the Finance Charge Account
which will be transferred to the Distribution Account pursuant to Section 4.6 on
the related Transfer Date, less (e) the amount on deposit in the Principal
Account which will be transferred to the Distribution Account pursuant to the
second paragraph of Subsection 4.8(a) on the related Transfer Date. The
mandatory purchase requirement is in addition to any other provisions and
remedies provided by the Agreement and shall not serve to relieve any party of
obligations it may otherwise have or waive any remedy that is otherwise provided
in the Agreement.
SECTION 6. Delivery and Payment for the Series 1998-1 Certificates. The
Transferor shall execute and deliver the Series 1998-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1998-1 Certificates when authenticated in
accordance with Section 6.2 of the Agreement.
SECTION 7. Depositary; Form of Delivery of Series 1998-1 Certificates.
(a) The Series 1998-1 Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1, 6.2, 6.9 and 6.11 of the Agreement.
(b) The depositary for the Series 1998-1 Certificates shall be The
Depository Trust Company, and the Class A Certificates and the Class B
Certificates shall be initially registered in the name of CEDE & Co., its
nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1998-1 Investor Certificates, Class A Certificates
- 29 -
or Class B Certificates having Undivided Interests aggregating a specified
percentage, such direction or consent, with respect to the Class A Certificates
and the Class B Certificates, may be given by Certificate Owners having
interests in the requisite percentage of Series 1998-1 Certificates, Class A
Certificates or Class B Certificates, as the case may be, acting through the
Clearing Agency and the Clearing Agency Participants; provided, however, that so
long as the Class A Certificates and Class B Certificates are in book-entry
form, the Trustee shall only be obligated to follow such directions or consents
from the depositary or Clearing Agency.
SECTION 8. Enhancement. Enhancement for the Series 1998-1 Certificates
shall be the subordination of the Collateral Interest to the extent provided
herein, the Interest Rate Caps and, with respect to the Class A Certificates,
the funds and securities on deposit in the Reserve Account, up to the Available
Reserve Account Amount, and the subordination of the Class B Certificates to the
extent provided herein.
SECTION 9. Article IV of Agreement. Any provision of Article IV of the
Agreement which distributes Collections to the Holder of the Exchangeable Seller
Certificate on the basis of the Seller Percentage shall continue to apply
irrespective of the issuance of the Series 1998-1 Investor Certificates.
Sections 4.1 and 4.2 of the Agreement shall be read in their entirety as
provided in the Agreement. Article IV of the Agreement (except for Sections 4.1
and 4.2 thereof) shall read in its entirety as follows and shall be applicable
only to the Series 1998- 1 Investor Certificates:
ARTICLE IV
RIGHTS OF SERIES 1998-1 INVESTOR CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Series 1998-1 Investor Certificateholders. The
Series 1998-1 Investor Certificates shall represent fractional Undivided
Interests in the Trust, consisting of the right to receive, to the extent
necessary to make the required payments with respect to such Series 1998-1
Investor
- 30 -
Certificates at the times and in the amount specified in this Agreement, (a) the
related Investor Percentage of Collections received with respect to the
Receivables, (b) funds on deposit in the Collection Account and the Excess
Funding Account allocable to the Series 1998-1 Investor Certificates, (c) funds
and securities on deposit in the Finance Charge Account, the Principal Account,
the Distribution Account and the Series 1998-1 Collection Subaccount, (d) with
respect to the Class A Certificates only, funds and securities on deposit in the
Reserve Account, up to the Available Reserve Account Amount, and the Principal
Funding Account and (e) with respect to the Class A Certificates and the Class B
Certificates only, the right to receive payments pursuant to the Interest Rate
Caps in accordance with Section 4.11. The Collateral Interest shall be
subordinate to the Class A Certificates and the Class B Certificates to the
extent described herein. The Class B Certificates shall be subordinate to the
Class A Certificates to the extent described herein. The Exchangeable Seller
Certificate shall represent the ownership interest in the Trust Assets not
allocated to the Series 1998-1 Investor Certificates or any other Series
outstanding; provided, however, the ownership interest represented by the
Exchangeable Seller Certificate and any other Series outstanding shall not
represent any interest in the Series 1998-1 Collection Subaccount, the Principal
Funding Account, the Reserve Account or the Interest Rate Caps, except as
specifically provided in this Article IV.
SECTION 4.2B The Series 1998-1 Collection Subaccount. Pursuant to
Section 4.1 of the Agreement, the Servicer, on behalf of the Trustee, shall
establish and maintain a subaccount of the Collection Account to be maintained
with a Qualified Trust Institution, which shall initially be Bankers Trust
Company, for the benefit of the Series 1998-1 Investor Certificateholders,
bearing a designation clearly indicating that the funds therein are held in
trust for the benefit of the Series 1998-1 Investor Certificateholders (the
"Series 1998-1 Collection Subaccount"). Funds allocable to the Series 1998-1
Investor Certificates which are deposited into the Collection Account will be
transferred to the Series 1998-1 Collection Subaccount prior to further
application. References in this Series Supplement to deposits of such funds into
the Collection Account should be read to include such transfers. The Servicer,
on behalf of the Trustee, at all times shall
- 31 -
maintain accurate records reflecting each transaction in the Series 1998-1
Collection Subaccount and that funds held therein shall at all times be held in
trust for the benefit of the Series 1998-1 Investor Certificateholders. Pursuant
to the authority granted to it pursuant to subsection 3.1(b), the Servicer shall
have the power, revocable by the Trustee, to withdraw funds, and to instruct the
Trustee to withdraw funds, from the Series 1998-1 Collection Subaccount for the
purpose of carrying out its duties hereunder. All such instructions from the
Servicer to the Trustee shall be in writing; provided, however, that the
Servicer is entitled to give instructions to the Trustee by facsimile. Funds on
deposit in the Series 1998-1 Collection Subaccount (not required to be deposited
in the Finance Charge Account or the Principal Account pursuant to Section 4.4
hereof) shall at all times be invested by the Trustee, at the direction of the
Servicer, in Permitted Investments. Any such investment shall mature and such
funds shall be available for withdrawal, on or prior to the Transfer Date
following the Monthly Period in which such funds were processed for collection;
provided, however, that any Permitted Investment in short term U.S. treasury
securities may mature one day after such Transfer Date and may be sold on such
Transfer Date. All interest and earnings (net of losses and investment expenses)
on funds on deposit in the Series 1998-1 Collection Subaccount shall be
deposited by the Trustee in a separate deposit account with a Qualified Trust
Institution in the name of the Transferor, which shall not constitute a part of
the Trust, or shall otherwise be turned over to the Transferor not less
frequently than monthly; provided, however, that following the failure of the
Servicer to make a payment or deposit, which failure results in the occurrence
of a Servicer Default with respect to the Series 1998-1 Investor Certificates,
such interest and earnings shall not be paid to the Transferor or deposited in
such separate deposit account during the period such Servicer Default is
continuing, but shall be retained in, or deposited into, the Finance Charge
Account and shall be treated as Finance Charge Collections allocable to the
Series 1998-1 Investor Certificateholders. The Qualified Trust Institution shall
maintain, either on its own or through its nominee or custodian for the benefit
of the Series 1998-1 Investor Certificateholders, possession of any certificated
negotiable instrument or security (other than certificated securities held by a
clearing corporation) evidencing the Permitted Investments described in clause
(a) of the definition thereof
- 32 -
relating to the Collection Account from the time of purchase thereof until the
time of maturity. Subject to the restrictions set forth above, the Servicer, or
a Person designated in writing by the Servicer, shall instruct the Trustee in
writing with respect to the investment of funds on deposit in the Series 1998-1
Collection Subaccount. For purposes of determining the availability of funds or
the balances in the Series 1998-1 Collection Subaccount for any reason under
this Agreement, all investment earnings on such funds (net of losses and
expenses) shall be deemed not to be available or on deposit so long as a
Servicer Default shall not be continuing pursuant to this Section 4.2B.
Permitted Investments shall not be disposed of prior to their maturity other
than as provided above with respect to short term U.S. treasury securities.
SECTION 4.3 Establishment of Series 1998-1 Investor Accounts. (a) The
Finance Charge Account, the Principal Account and the Principal Funding Account.
The Servicer, for the benefit of the Series 1998-1 Investor Certificateholders,
shall establish and maintain with a Qualified Trust Institution, initially
Bankers Trust Company, in the name of the Trustee, on behalf of the Trust, three
segregated trust accounts maintained in the corporate trust department of such
Qualified Trust Institution, and held in trust by such Qualified Trust
Institution (the "Finance Charge Account", the "Principal Account" and the
"Principal Funding Account", respectively), bearing a designation clearly
indicating that the funds therein are held in trust for the benefit of the
Series 1998-1 Investor Certificateholders. The Servicer, on behalf of the
Trustee (or the Trustee so long as the Finance Charge Account, the Principal
Account or the Principal Funding Account, are established with the Trustee), at
all times shall maintain accurate records reflecting each transaction in the
Principal Account, the Finance Charge Account and the Principal Funding Account,
and that funds held therein shall at all times be held in trust for the benefit
of the Series 1998-1 Investor Certificateholders. Pursuant to the authority
granted to it pursuant to subsection 3.1(b), the Servicer shall have the power,
revocable by the Trustee, to withdraw funds, and to instruct the Trustee to
withdraw funds, from the Finance Charge Account, Principal Account and the
Principal Funding Account for the purpose of carrying out its duties hereunder.
All such instructions from the Servicer to the Trustee shall be in writing;
provided, however, that the Servicer is
- 33 -
entitled to give instructions to the Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the
Series 1998-1 Investor Certificateholders, shall cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, with an office or
branch of a Qualified Trust Institution (other than the Transferor), initially
Bankers Trust Company, a non-interest bearing segregated demand deposit account
maintained in the corporate trust department of such Qualified Trust
Institution, and held in trust by such Qualified Trust Institution (the
"Distribution Account") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Series 1998-1
Investor Certificateholders. The Paying Agent shall have the revocable authority
to make withdrawals from the Distribution Account. Funds on deposit in the
Distribution Account shall not be invested.
(c) Administration of the Finance Charge Account, Principal Account and
Principal Funding Account.
(i) Funds on deposit in the Finance Charge Account, the
Principal Account and the Principal Funding Account shall at all times
be invested by the Trustee at the direction of the Servicer in
Permitted Investments. Any such investment shall mature and such funds
shall be available for withdrawal on or prior to the Transfer Date
following the Monthly Period in which such funds were processed for
collection. The Qualified Trust Institution which holds the Finance
Charge Account, the Principal Account and the Principal Funding Account
shall maintain either on its own or through its nominee or custodian
for the benefit of the Series 1998-1 Investor Certificateholders,
possession of any certificated negotiable instrument or security (other
than certificated securities held by a clearing corporation) evidencing
the Permitted Investments relating to the Principal Account, the
Finance Charge Account or the Principal Funding Account, as the case
may be, described in clause (a) of the definition of Permitted
Investments from the time of purchase thereof until the time of
maturity; provided, however, that any Permitted Investment in short
term U.S. treasury securities may mature one day after such Transfer
Date and may be sold on such Transfer Date. Subject to the
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restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, shall instruct the Qualified Trust Institution
which holds the Finance Charge Account, the Principal Account and the
Principal Funding Account in writing with respect to the investment of
funds on deposit in the Finance Charge Account and the Principal
Account. Permitted Investments shall not be disposed of prior to their
maturity other than as provided above with respect to short term U.S.
treasury securities.
(ii) At the end of each month, all interest and earnings (net
of losses and investment expenses) on funds on deposit in the Finance
Charge Account and the Principal Account shall be deposited by the
Trustee in a separate deposit account with a Qualified Trust
Institution in the name of the Transferor, or a Person designated in
writing by the Transferor, which shall not constitute a part of the
Trust, or shall otherwise be turned over by the Trustee to the
Transferor not less frequently than monthly. For purposes of
determining the availability of funds or the balances in the Finance
Charge Account or the Principal Account for any reason under this
Agreement, all investment earnings on such funds (net of losses and
expenses) shall be deemed not to be available or on deposit.
(iii) On the Transfer Date occurring in the month following
the commencement of the Controlled Accumulation Period and on each
Transfer Date thereafter with respect to the Controlled Accumulation
Period, prior to the Class A Scheduled Payment Date, the Trustee,
acting at the Servicer's direction given on or before such Transfer
Date, shall transfer from the Principal Funding Account to the Finance
Charge Account the Principal Funding Investment Proceeds on deposit in
the Principal Funding Account, but not in excess of the Class A Covered
Amount, for application as Class A Available Funds applied pursuant to
subsection 4.6(a). Any Excess Principal Funding Investment Proceeds
shall be paid to the Holder of the Exchangeable Seller Certificate on
each Transfer Date. An amount equal to any Principal Funding Investment
Shortfall will be deposited in the Finance Charge Account on each
Transfer Date from the Reserve Account to the extent funds are
available pursuant
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to subsection 4.9. Except as otherwise provided in this subsection
4.3(c)(iii), Principal Funding Investment Proceeds (including
reinvested interest) shall not be considered part of the amounts on
deposit in the Principal Funding Account for purposes of this
Agreement.
(d) Termination of Qualified Trust Institution. If the entity with
which any of the accounts established pursuant to this Section 4.3 ceases to be
a "Qualified Trust Institution," then such entity shall (i) provide the Trustee
and the Servicer with prompt written notice that it is no longer a "Qualified
Trust Institution" and (ii) transfer the funds deposited in each of the accounts
in the manner directed by the Servicer within 10 Business Days of the day on
which such entity ceased to be a "Qualified Trust Institution."
SECTION 4.4 Allocations.
(a)[Reserved]
(b) [Reserved]
(c)Allocations During the Revolving Period. During the Revolving
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, direct the Trustee to
transfer from the Collection Account (or, if applicable, the Principal Account
or the Principal Funding Account) the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to
the sum of (x) the product of (A) the Floating Investor Percentage on
the Date of Processing of such Collections and (B) the aggregate amount
of Finance Charge Collections processed on such Date of Processing and
(y) the proceeds of the sale of any Interest Rate Cap pursuant to
subsection 4.11(g) on such Date of Processing; provided, however, that
with respect to the initial Interest Accrual Period an additional
amount of $840,612.50 shall be deposited in the Finance Charge Account
from proceeds of the sale of the Series 1998-1 Investor Certificates,
and such deposit shall be deemed to constitute
- 36 -
$777,323.75 of Class A Available Funds and $63,288.75 of Class B
Available Funds with respect to the Monthly Period preceding the first
Transfer Date for all purposes under this Agreement.
(ii) Deposit in the Principal Account an amount equal
to the product of (A) the Floating Investor Percentage on the
Date of Processing of such Collections and (B) the aggregate
amount of such Principal Collections processed on such Date of
Processing; provided, however, that if the amount deposited
into the Principal Account pursuant to this subsection
4.4(c)(ii) exceeds the Collateral Interest Surplus, if any, as
of such Date of Processing, then such excess shall not be
treated as a Principal Allocation and shall be treated as
Shared Principal Collections allocable to other Series and
applied in accordance with Section 4.2(e) of the Agreement;
provided further that, if on any Date of Processing the
aggregate amount of Collections deposited in the Principal
Account on such Date of Processing pursuant to this subsection
4.4(c)(ii) is less than an amount equal to the Collateral
Interest Surplus, then Shared Principal Collections from other
Series, if any, allocable to the Series 1998-1 Investor
Certificates will be deposited to the Principal Account in
accordance with subsection 4.2(e) to the extent of such
shortfall.
(d) Allocations During the Controlled Accumulation Period.
During the Controlled Accumulation Period, the Servicer shall, prior to
the close of business on the day any Collections are deposited in the
Collection Account, direct the Trustee to transfer from the Collection
Account (or, if applicable, the Principal Account or the Principal
Funding Account) the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount
equal to the sum of (x) the product of (A) the Floating
Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of Collections
processed in respect of Finance
- 37 -
Charge Receivables on such Date of Processing and (y) the
proceeds of the sale of any Interest Rate Cap pursuant to
subsection 4.11(g) on such Date of Processing.
(ii) Deposit in the Principal Account an amount, if
any, equal to the product of (A) the Fixed Investor Percentage
on the Date of Processing of such Collections and (B) the
aggregate amount of such Principal Collections processed on
such Date of Processing (for any such Date of Processing, a
"Principal Allocation"); provided, however, that if the
Monthly Total Principal Allocation on such Date of Processing
exceeds an amount equal to the sum of (x) the Controlled
Deposit Amount, if such Date of Processing is during the
Controlled Accumulation Period prior to the beginning of the
Monthly Period in which the Class A Scheduled Payment Date
occurs, or the Class B Investor Interest if such Date of
Processing is in the Controlled Accumulation Period
thereafter, and (y) the Collateral Interest Surplus as of such
Date of Processing, then such excess shall not be treated as a
Principal Allocation and shall be treated as Shared Principal
Collections and applied in accordance with Section 4.2(e) of
the Agreement; provided, further, that if on any Date of
Processing the aggregate Principal Allocation for such Date of
Processing and for each prior Date of Processing in such
Monthly Period is less than an amount equal to the sum of the
Controlled Deposit Amount and the Collateral Interest Surplus,
then Shared Principal Collections from other Series, if any,
allocable to the Series 1998- 1 Investor Certificates will be
deposited to the Principal Account in accordance with Section
4.2(e) of the Agreement to the extent of such shortfall.
(e)Allocations During the Rapid Amortization Period. During
the Rapid Amortization Period, the Servicer shall, prior to the close
of business on the day any Collections are deposited in the Collection
Account, direct the Trustee to transfer from the Collection Account the
following amounts as set forth below:
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(i) Deposit in the Finance Charge Account an amount
equal to the sum of (x) the product of (A) the Floating
Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of such Collections
processed in respect of Finance Charge Receivables on such
Date of Processing and (y) the proceeds of the sale of any
Interest Rate Cap pursuant to subsection 4.11(g).
(ii) Deposit in the Principal Account an amount equal
to the Principal Allocation; provided, however, that if the
Principal Allocation on any date exceeds the Investor
Interest, the amount of such excess shall be treated as Shared
Principal Collections allocable to other Series and applied in
accordance with Section 4.2(e) of the Agreement; provided,
further, that if on any Date of Processing the Monthly Total
Principal Allocation for such Date of Processing in such
Monthly Period is less than the Investor Interest, then Shared
Principal Collections from other Series, if any, allocable to
the Series 1998-1 Investor Certificates pursuant to Section
4.2(e) of the Agreement will be deposited in the Principal
Account to the extent of such shortfall.
SECTION 4.5 Defaulted Accounts and Charge-Offs.
(a) On each Determination Date, the Servicer shall calculate the Class
A Investor Default Amount for the preceding Monthly Period. If on the related
Transfer Date, the Class A Investor Default Amount for such Determination Date
exceeds the sum of the amounts allocated with respect thereto pursuant to
subsections 4.6(a)(iii), 4.6(d)(i), 4.6(e) and 4.12(a) with respect to such
preceding Monthly Period, then the Collateral Interest (after giving effect to
reductions for any Collateral Interest Charge-Offs and any Reallocated Principal
Collections on such Transfer Date) will be reduced by the amount of such excess,
but not by more than the Class A Investor Default Amount for such Transfer Date.
If such reduction would cause the Collateral Interest to be a negative number,
the Collateral Interest will be reduced to zero, and the Class B Investor
- 39 -
Interest (after giving effect to reductions for any Class B Investor Charge-Offs
and any Reallocated Class B Principal Collections on such Transfer Date) will be
reduced by the amount by which the Collateral Interest would have been reduced
below zero. If such reduction would cause the Class B Investor Interest to be a
negative number, the Class B Investor Interest will be reduced to zero, and the
Class A Investor Interest will be reduced by the amount by which the Class B
Investor Interest would have been reduced below zero (a "Class A Investor
Charge-Off"). If the Class A Investor Interest has been reduced by the amount of
any Class A Investor Charge-Offs, it will be reimbursed on any Distribution Date
(but not by an amount in excess of the aggregate Class A Investor Charge-Offs)
by the amounts allocated and available for such purpose pursuant to subsections
4.6(a)(iv), 4.6(d)(i), 4.6(e) and 4.12(a).
(b) On each Determination Date, the Servicer shall calculate the Class
B Investor Default Amount for the preceding Monthly Period. If on any
Determination Date, the Class B Investor Default Amount for such Determination
Date exceeds the amount allocated and available to fund such amount pursuant to
subsections 4.6(b)(iii), 4.6(d)(ii), 4.6(f) and 4.12(b), the Collateral Interest
(after giving effect to reductions for any Collateral Interest Charge-Offs and
any Reallocated Principal Collections on such Transfer Date and any adjustments
with respect thereto as described in subsection 4.5(a)) will be reduced by the
amount of such excess but not by more than the Class B Investor Default Amount
for such Transfer Date. If such reduction would cause the Collateral Interest to
be a negative number, the Collateral Interest shall be reduced to zero and the
Class B Investor Interest shall be reduced by the amount by which the Collateral
Interest would have been reduced below zero (a "Class B Investor Charge-Off").
The Class B Investor Interest will also be reduced by the amount of Reallocated
Principal Collections in excess of the Collateral Interest pursuant to
subsection 4.12(a) and the amount of any portion of the Class B Investor
Interest allocated to the Class A Certificates to avoid a reduction in the Class
A Investor Interest pursuant to subsection 4.5(a). The Class B Investor Interest
will thereafter be reimbursed
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(but not in the excess of the unpaid principal balance of the Class B
Certificates) on any Transfer Date by amounts allocated and available for that
purpose as described under subsections 4.6(b)(iv), 4.6(d)(ii) and (v), 4.6(f)
and 4.12(b).
(c) On each Determination Date, the Servicer shall calculate the
Collateral Default Amount for the preceding Monthly Period. If on any
Determination Date, the Collateral Default Amount for such Determination Date
exceeds the amount allocated and available to fund such amount pursuant to
subsections 4.6(d)(ix), (x) and (xii) and 4.6(g), the Collateral Interest will
be reduced by the amount of such excess but not by more than the lesser of the
Collateral Default Amount and the Collateral Interest for such Transfer Date (a
"Collateral Interest Charge-Off"). The Collateral Interest will also be reduced
by the amount of Reallocated Principal Collections pursuant to subsections
4.12(a) and (b) and the amount of any portion of the Collateral Interest
allocated to the Class A Certificates or the Class B Certificates to avoid a
reduction in the Class A Investor Interest, pursuant to subsection 4.5(a), or
the Class B Investor Interest, pursuant to subsection 4.5(b), respectively. The
Collateral Interest will thereafter be reimbursed (but not in the excess of the
unpaid principal balance of the Collateral Interest) on any Transfer Date by
amounts allocated and available for that purpose as described under subsections
4.6(d)(ix) and (x) and 4.6(g).
SECTION 4.6 Monthly Payments. On each Determination Date, the Servicer
shall notify the Trustee that the Servicer will withdraw, or shall instruct the
Trustee to withdraw, and the Trustee acting in accordance with such instructions
shall withdraw, on the succeeding Transfer Date, the amounts required to be
withdrawn from the Finance Charge Account (or from the finance charge accounts
for other Series, as applicable) pursuant to subsections 4.6(a), (b), (c), (d),
(e), (f) and (g). On each Determination Date, the Servicer shall also notify the
Trustee of the amounts to be withdrawn by the Trustee, acting on instructions
from the Servicer, from the Principal Funding Account and the Reserve Account,
pursuant to subsections 4.3(c), 4.9(b) and 4.9(d).
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(a) On each Transfer Date, an amount equal to the Class A Available
Funds for the related Monthly Period will be distributed in the following
priority:
(i) Class A Monthly Cap Rate Interest and the Class A Covered
Amount. On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the
Finance Charge Account and deposit to the Distribution Account, to the
extent funds are available from such Class A Available Funds (i) first,
an amount equal to the sum of the Class A Monthly Cap Rate Interest and
the Class A Covered Amount for the related Distribution Date; and (ii)
then, an amount equal to the amount of any overdue Class A Monthly Cap
Rate Interest and overdue Class A Covered Amount, for which a payment
has not been made under this subsection 4.6(a)(i) or otherwise pursuant
to this Agreement; provided, however, that with respect to the first
Distribution Date relating to the Series 1998-1 Investor Certificates,
the amount of Class A Monthly Cap Rate Interest referred to in (i)
above shall be $777,323.75 (reflecting an initial period of 14 days).
(ii) Class A Monthly Servicing Fee. On each Transfer Date, the
Servicer or the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw from the Finance Charge Account, to the
extent funds are available from such Class A Available Funds after
giving effect to the withdrawals pursuant to subsection 4.6(a)(i), an
amount equal to the Class A Monthly Servicing Fee accrued in respect of
the preceding Monthly Period, plus all accrued and unpaid Class A
Monthly Servicing Fees in respect of previous Monthly Periods, and the
Servicer or the Trustee, as the case may be, shall pay such amount to
the Servicer.
(iii) Class A Investor Default Amount. On each Transfer Date,
the Servicer or the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the Finance Charge Account, to
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the extent funds are available from such Class A Available Funds after
giving effect to the withdrawal pursuant to subsections 4.6(a)(i) and
(ii), an amount equal to the Class A Investor Default Amount, if any,
for the preceding Monthly Period, and the Servicer or the Trustee, as
the case may be, shall apply such amount, subject to Section 4.12, in
accordance with Section 4.8 as Available Investor Principal
Collections.
(iv) Reimbursement of Class A Investor Charge-Offs. On each
Transfer Date, the Servicer or the Trustee, acting in accordance with
instructions of the Servicer, shall withdraw from the Finance Charge
Account, to the extent funds are available from such Class A Available
Funds after giving effect to the withdrawals and transfers pursuant to
subsections 4.6(a)(i) through (iii), an amount equal to the aggregate
amount of Class A Investor Charge-Offs, if any, which have not
theretofore been reimbursed pursuant to this subsection 4.6(a)(iv) or
otherwise pursuant to the Agreement and shall apply such amount,
subject to Section 4.12, in accordance with Section 4.8 as Available
Investor Principal Collections. On the date of any such reimbursement,
the Class A Investor Interest shall be increased by the amount of such
reimbursement of Class A Investor Charge-Offs.
(v) Excess Spread. The remaining Class A Available Funds, if
any, for the Related Monthly Period shall constitute Excess Spread and
shall be allocated and distributed as set forth in subsection 4.6(d).
(b) On each Transfer Date, an amount equal to Class B Available Funds
for the Related Monthly Period will be distributed in the following priority:
(i) Class B Monthly Cap Rate Interest. On each Transfer Date,
the Servicer or the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the Finance Charge Account and
deposit to the Distribution Account, to the extent funds are available
from such Class B
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Available Funds, (i) first, an amount equal to the Class B Monthly Cap
Rate Interest for the related Distribution Date; and (ii) then, an
amount equal to the amount of any overdue Class B Monthly Cap Rate
Interest, for which a payment has not been made under this subsection
4.6(b)(i) or otherwise pursuant to the Agreement; provided, however,
that with respect to the first Distribution Date relating to the Series
1998-1 Investor Certificates, the amount referred to in (i) above shall
be $63,288.75 (reflecting an initial period of 14 days).
(ii) Class B Monthly Servicing Fee. On each Transfer Date, the
Servicer or the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw from the Finance Charge Account, to the
extent funds are available from such Class B Available Funds after
giving effect to the withdrawals pursuant to subsection 4.6(b)(i), an
amount equal to the Class B Monthly Servicing Fee accrued in respect of
the preceding Monthly Period, plus all accrued and unpaid Class B
Monthly Servicing Fees in respect of previous Monthly Periods, and the
Servicer or the Trustee, as the case may be, shall pay such amount to
the Servicer.
(iii) Class B Investor Default Amount. On each Transfer Date,
the Servicer or the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the Finance Charge Account, to
the extent funds are available from such Class B Available Funds after
giving effect to the withdrawal pursuant to subsections 4.6(b)(i) and
(ii), an amount equal to the Class B Investor Default Amount, if any,
for the preceding Monthly Period, and the Servicer or the Trustee, as
the case may be, shall apply such amount, subject to Section 4.12, in
accordance with Section 4.8 as Available Investor Principal
Collections.
(iv) Reimbursement of Class B Investor Charge-Offs. On each
Transfer Date, the Servicer or the Trustee, acting in accordance with
instructions of the Servicer, shall
- 44 -
withdraw from the Finance Charge Account, to the extent funds are
available from such Class B Available Funds after giving effect to the
withdrawals and transfers pursuant to subsections 4.6(b)(i) through
(iii), an amount equal to the aggregate amount of Class B Investor
Charge-Offs, if any, which have not theretofore been reimbursed
pursuant to this subsection 4.6(b)(iv) or otherwise pursuant to this
Agreement and shall apply such amount, subject to Section 4.12, in
accordance with Section 4.8 as Available Investor Principal
Collections. On the date of any such reimbursement, the Class B
Investor Interest shall be increased by the amount of such
reimbursement of Class B Investor Charge-Offs.
(v) Excess Spread. The remaining Class B Available Funds, if
any, for the related Monthly Period shall constitute Excess Spread and
shall be allocated and distributed as set forth in subsection 4.6(d).
(c) On each Transfer Date, an amount equal to the Collateral Available
Funds for the related Monthly Period will be distributed in the following
priority:
(i) Collateral Interest Monthly Servicing Fee. On each
Transfer Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance Charge
Account, to the extent funds are available from such Collateral
Available Funds, an amount equal to the Collateral Interest Monthly
Servicing Fee accrued in respect of the preceding Monthly Period plus
all accrued and unpaid Collateral Interest Monthly Servicing Fees in
respect of previous Monthly Periods, and the Servicer or the Trustee,
as the case may be, shall pay such amount to the Servicer.
(ii) Excess Spread. The remaining Collateral Available Funds,
if any, for the related Monthly Period shall constitute Excess Spread
and shall be allocated and distributed as set forth in subsection
4.6(d).
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(d) On each Transfer Date, Excess Spread will be distributed in the
following priority:
(i) On each Transfer Date, the Servicer or the Trustee, acting
in accordance with instructions from the Servicer, shall withdraw from
the Finance Charge Account, to the extent funds are available from
Excess Spread, an amount equal to the Class A Required Amount, if any,
with respect to the related Distribution Date, to be applied, with
respect to each of the components thereof, in accordance with Section
4.6(a).
(ii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread, after giving effect to the withdrawal
pursuant to subsection 4.6(d)(i), an amount equal to the Class B
Required Amount, if any, with respect to the related Distribution Date,
to be applied, with respect to each of the components thereof, in
accordance with Section 4.6(b).
(iii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) and (ii), and shall deposit in the
Distribution Account for distribution to the Class A Certificateholders
on the next succeeding Distribution Date pursuant to Section 4.7, an
amount equal to the amount of any accrued and unpaid interest on any
overdue Class A Monthly Interest, calculated on the basis of (x) a
default rate of interest equal to the Class A Certificate Rate plus
0.5% and (y) the actual number of days such Class A Monthly Interest is
or was at any time overdue, divided by 360.
(iv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to
- 46 -
the extent funds are available from Excess Spread after giving effect
to the withdrawals pursuant to subsections 4.6(d)(i) through (iii), and
shall deposit in the Distribution Account for distribution to the Class
B Certificateholders on the next succeeding Distribution Date pursuant
to Section 4.7, an amount equal to the amount of any accrued and unpaid
interest on any overdue Class B Monthly Interest, calculated on the
basis of (x) a default rate of interest equal to the Class B
Certificate Rate plus 0.5% and (y) the actual number of days such Class
B Monthly Interest is or was at any time overdue, divided by 360.
(v) On each Transfer Date, the Servicer or the Trustee, acting
in accordance with instructions from the Servicer, shall withdraw from
the Finance Charge Account, to the extent funds are available from
Excess Spread after giving effect to the withdrawals pursuant to
subsections 4.6(d)(i) through (iv), an amount equal to any unreimbursed
reductions in the Class B Investor Interest in connection with the
payment of the Class A Required Amount, to reinstate the Class B
Investor Interest to the extent of any such reduction, which amount
shall be applied, subject to Section 4.12, in accordance with Section
4.8 as Available Investor Principal Collections.
(vi) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, and pay to the Collateral
Interest Holder in accordance with the Loan Agreement, to the extent
funds are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (v), an amount
equal to the sum of (x) the Collateral Monthly Interest for the related
Monthly Period and (y) the amount of any accrued and unpaid Collateral
Monthly Interest for any prior Monthly Periods.
(vii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
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withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (vi), and shall deposit in
the Distribution Account for distribution to the Class A
Certificateholders on the next succeeding Distribution Date pursuant to
Section 4.7, an amount equal to the amount by which the Class A Monthly
Interest for the related Interest Accrual Period exceeds the Class A
Monthly Cap Rate Interest (other than Class A Excess Interest), to the
extent such amount is not paid by the Interest Rate Cap Provider
pursuant to the Class A Interest Rate Cap in accordance with Section
4.11(a), plus any such amounts accrued and unpaid for prior Interest
Accrual Periods.
(viii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (vii), and shall deposit in
the Distribution Account for distribution to the Class B
Certificateholders on the next succeeding Distribution Date pursuant to
Section 4.7, an amount equal to the amount by which the Class B Monthly
Interest for the related Interest Accrual Period exceeds the Class B
Monthly Cap Rate Interest (other than Class B Excess Interest), to the
extent such amount is not paid by the Interest Rate Cap Provider
pursuant to the Class B Interest Rate Cap in accordance with Section
4.11(a), plus any such amounts accrued and unpaid for prior Interest
Accrual Periods.
(ix) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (viii), an amount equal to
the Collateral Default Amount for the preceding Monthly Period, which
amount shall be applied,
- 48 -
subject to Section 4.12, in accordance with Section 4.8 as Available
Investor Principal Collections.
(x) On each Transfer Date, the Servicer or the Trustee, acting
in accordance with instructions from the Servicer, shall withdraw from
the Finance Charge Account, to the extent funds are available from
Excess Spread after giving effect to the withdrawals pursuant to
subsections 4.6(d)(i) through (ix), an amount equal to the aggregate
amount by which the Collateral Interest has been reduced below the
Required Collateral Interest for reasons other than the payment of
principal to the Collateral Interest Holder (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed), which amount shall be applied, subject to Section 4.12, in
accordance with Section 4.8 as Available Investor Principal
Collections.
(xi) On each Transfer Date from and after the Reserve Account
Funding Date to but excluding the date on which the Reserve Account
shall terminate pursuant to subsection 4.9(f), the Servicer or the
Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (x), and shall deposit in the
Reserve Account, an amount equal to the excess, if any, of the Required
Reserve Account Amount over the Available Reserve Account Amount
(without giving effect to any deposit made on such date hereunder).
(xii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (xi), an amount equal to the
aggregate amount of any additional amounts due and payable under the
Loan Agreement, which amount shall
- 49 -
be applied and distributed in accordance with and to the extent
specified in the Loan Agreement.
(xiii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (xii), and shall deposit in
the Distribution Account for distribution to the Class A
Certificateholders on the next succeeding Distribution Date pursuant to
Section 4.7, an amount equal to the amount of any Class A Excess
Interest which accrued during the related Interest Accrual Period.
(xiv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (xiii), and shall deposit in
the Distribution Account for distribution to the Class B
Certificateholders on the next succeeding Distribution Date pursuant to
Section 4.7, an amount equal to the amount of any Class B Excess
Interest which accrued during the related Interest Accrual Period.
(xv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (xiv), and shall make such
amounts available to be applied as Shared Finance Charge Collections to
pay to Certificateholders of other Series to the extent of shortfalls,
if any, in amounts payable to such Certificateholders from Finance
Charge Collections allocated to such other Series in accordance with
the related Supplements.
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(xvi) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (xv), the amounts of any
accrued and unpaid expenses of the Trust specified in writing by the
Trustee to the Servicer, and shall make such amounts available to the
Trustee to pay such accrued and unpaid expenses of the Trust, if any,
not otherwise paid pursuant to this Section 4.6.
(xvii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account the remaining Excess Spread
after giving effect to the withdrawals pursuant to subsections
4.6(d)(i) through (xvi), and shall pay such amount to the holder of the
Exchangeable Seller Certificate.
(e)With respect to each Distribution Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class A Required Amount"),
if any, by which the sum of (i) Class A Monthly Cap Rate Interest for such
Distribution Date, (ii) any Class A Monthly Cap Rate Interest previously due but
not paid to the Class A Certificateholders on a prior Distribution Date, (iii)
the Class A Covered Amount for such Distribution Date and Class A Covered
Amounts previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, (iv) the Class A Monthly Servicing Fee for the related
Distribution Date and any accrued and unpaid Class A Monthly Servicing Fees from
prior Monthly Periods, (v) the Class A Investor Default Amount, if any, for the
related Monthly Period and (vi) the unreimbursed Class A Investor Charge-Offs,
exceeds the Class A Available Funds deposited in the Finance Charge Account for
the related Monthly Period. In the event that the Class A Required Amount for
such Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive Class A Required Amount on the related
Determination Date and all or a portion of the
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Excess Spread with respect to the related Monthly Period in an amount up to the
Class A Required Amount for such Distribution Date shall be distributed from the
Finance Charge Account on the related Transfer Date pursuant to subsection
4.6(d)(i). In the event that the Class A Required Amount for such Distribution
Date exceeds the amount of Excess Spread with respect to the related Monthly
Period, then the Trustee shall, in accordance with the related Supplements,
withdraw on such Transfer Date from the finance charge accounts for other Series
the amounts of Shared Finance Charge Collections with respect to the related
Monthly Period, if any, allocable to the Series 1998-1 Investor Certificates
from other Series, in an amount up to the remaining Class A Required Amount, and
such amount shall be deposited into the Distribution Account on such Transfer
Date for distribution on the related Distribution Date in accordance with the
priorities set forth in subsections 4.6(a)(i) through (iv). In the event that
the Class A Required Amount for such Distribution Date exceeds the amount of
Excess Spread and Shared Finance Charge Collections allocable to the Class A
Certificates, all or a portion of the Reallocated Principal Collections with
respect to such Monthly Period in an amount up to such excess shall be
distributed on such Transfer Date pursuant to subsection 4.12(a).
(f) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class B
Required Amount"), if any, by which the sum of (i) Class B Monthly Cap Rate
Interest for such Distribution Date, (ii) any Class B Monthly Cap Rate Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, (iii) the Class B Monthly Servicing Fee for the related
Distribution Date and any accrued and unpaid Class B Monthly Servicing Fees from
prior Monthly Periods, (iv) the Class B Investor Default Amount, if any, for the
related Monthly Period, and (v) the unreimbursed Class B Investor Charge-Offs,
exceeds the Class B Available Funds deposited in the Finance Charge Account for
the related Monthly Period. In the event that the Class B Required Amount for
the related Transfer Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive
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Class B Required Amount on the related Determination Date and all or a portion
of Excess Spread (other than Excess Spread applied to fund the Class A Required
Amount with respect to such Distribution Date) with respect to the related
Monthly Period shall be distributed from the Finance Charge Account on such
Distribution Date pursuant to subsection 4.6(d)(ii). In the event that the Class
B Required Amount for such Distribution Date exceeds the amount of Excess Spread
with respect to such Monthly Period remaining after application thereof to fund
the Class A Required Amount, then the Trustee shall, in accordance with the
related Supplements, withdraw on such Transfer Date from the finance charge
accounts for other Series the amounts of Shared Finance Charge Collections with
respect to the related Monthly Period, if any, allocable to the Series 1998-1
Investor Certificates from other Series, after the application thereof pursuant
to subsection 4.6(e), in an amount up to the remaining Class B Required Amount,
and such amount shall be deposited to the Distribution Account on such Transfer
Date on the related Distribution Date in accordance with the priorities set
forth in subsections 4.6(b)(i) through (iv). In the event that the Class B
Required Amount for such Distribution Date exceeds the amount of Excess Spread
and Shared Finance Charge Collections allocable to the Class B Certificates on
such Transfer Date, all or a portion of the Reallocated Collateral Principal
Collections with respect to such Monthly Period, if any, remaining after the
application thereof pursuant to Section 4.6(e), in an amount up to such excess,
shall be distributed on such Transfer Date pursuant to Section 4.12(b).
(g) On each Transfer Date, in the event that the amounts due on such
Transfer Date pursuant to subsections 4.6(c)(i) and 4.6(d)(v) through (xii)
exceed in whole or in part the Excess Spread allocable thereto on to such
Transfer Date, then the Trustee shall, in accordance with the related
Supplements, withdraw on such Transfer Date from the finance charge accounts for
other Series the amounts of Shared Finance Charge Collections with respect to
the related Monthly Period, if any, allocable to the Series 1998-1 Investor
Certificates from other Series, after the application thereof pursuant to
subsections 4.6(e) and (f), in an amount up to such excess or such
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lesser amount as may be available after the application thereof pursuant to
subsections 4.6(e) and (f), and such amount shall be distributed to the Servicer
on such Transfer Date in accordance with Section 4.6(c)(i) and then applied in
accordance with the priorities set forth in subsections 4.6(d)(v) through (xii).
SECTION 4.7 Payment of Investor Certificate Interest. On each
Distribution Date, the Paying Agent shall pay in accordance with Section 5.1,
(a) to the Class A Certificateholders from the Distribution Account the amount
deposited into the Distribution Account and allocated to the Class A
Certificates pursuant to subsections 4.6(a)(i), 4.6(d)(i), (iii), (vii) and
(xiii), 4.6(e), 4.11(a) and 4.12(a) on the related Transfer Date and (b) to the
Class B Certificateholders from the Distribution Account the amount deposited
into the Distribution Account and allocated to the Class B Certificates pursuant
to subsections 4.6(b)(i), 4.6(d)(ii), (iv), (viii) and (xiv), 4.6(f), 4.11(a)
and 4.12(b) on the related Transfer Date.
SECTION 4.8 Payment of Investor Certificate Principal.
(a) On each Determination Date, the Servicer shall instruct the Trustee
to withdraw, and the Trustee, acting in accordance with such instructions, shall
withdraw on such Transfer Date or the related Distribution Date, as applicable,
to the extent of available funds, the amounts required to be withdrawn from the
Finance Charge Account, the Principal Account, the Principal Funding Account and
the Distribution Account as follows:
(i) on each Transfer Date with respect to the Revolving
Period, an amount equal to the Available Investor Principal Collections
for the related Monthly Period shall be distributed on each Transfer
Date, to the extent available, in the following priority:
(A) an amount equal to the Collateral Monthly
Principal with respect to such Transfer Date shall be
distributed to the Collateral Interest Holder in accordance
with the Loan Agreement; and
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(B) the remaining Available Investor Principal
Collections, if any, shall constitute Shared Principal
Collections to be deposited and applied in the manner
specified in subsection 4.2(e) of the Agreement.
(ii) on each Transfer Date with respect to the Controlled
Accumulation Period (beginning on the first Transfer Date following the
Monthly Period in which the Controlled Accumulation Period commences),
to the extent available, in the following priority:
(A) on each Transfer Date occurring prior to the
Class A Scheduled Payment Date, an amount equal to the Class A
Monthly Principal with respect to such Transfer Date shall be
deposited into the Principal Funding Account;
(B) on the Transfer Date immediately following the
payment in full of the Class A Investor Interest on the Class
A Scheduled Payment Date, an amount equal to the Class B
Monthly Principal with respect to such Transfer Date will be
deposited in the Distribution Account;
(C) on each Transfer Date after giving effect to the
distribution referred to in clauses (A) and (B), if a
reduction in the Required Collateral Interest has occurred on
or prior to such Transfer Date, an amount equal to the
Collateral Monthly Principal with respect to such Transfer
Date will be paid to the Collateral Interest Holder in
accordance with the Loan Agreement; and
(D) the remaining Available Investor Principal
Collections, if any, for the related Monthly Period shall
constitute Shared Principal Collections to be deposited and
applied in the manner specified in subsection 4.2(e) of the
Agreement.
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(iii) on each Transfer Date with respect to the Rapid
Amortization Period (beginning on the first Transfer Date following the
Monthly Period in which the Rapid Amortization Period commences), to
the extent available, in the following priority:
(A) an amount equal to the Class A Monthly Principal
with respect to such Transfer Date will be deposited in the
Distribution Account;
(B) upon payment of the Class A Investor Interest in
full, an amount equal to the Class B Monthly Principal with
respect to such Transfer Date will be deposited in the
Distribution Account;
(C) upon payment of the Class B Investor Interest in
full, an amount equal to the Collateral Monthly Principal with
respect to such Transfer Date will be paid to the Collateral
Interest Holder in accordance with the Loan Agreement; and
(D) the remaining Available Investor Principal
Collections, if any, for the related Monthly Period shall
constitute Shared Principal Collections to be deposited and
applied in the manner specified in subsection 4.2(e) of the
Agreement;
provided, further, that on each Transfer Date in the Controlled
Accumulation Period, the Servicer shall withdraw, or instruct the
Trustee to withdraw, and on such Transfer Date the Trustee shall
withdraw, from the Excess Funding Account and deposit to the Principal
Funding Account or (following the Class A Scheduled Payment Date) the
Distribution Account, as applicable, an amount equal to the lesser of
(x) the amount on deposit in the Excess Funding Account (exclusive of
investment earnings) and (y) the amount by which the Controlled Deposit
Amount on such Transfer Date exceeds the Available Investor Principal
Collections for the related Monthly Period; provided, further, that on
the first Transfer Date with respect to the Rapid Amortization Period,
the
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Servicer shall withdraw, or instruct the Trustee to withdraw, and on
such Transfer Date the Trustee shall withdraw, from the Excess Funding
Account and deposit to the Distribution Account, any amount on deposit
therein (exclusive of investment earnings).
(b)(i) On the earlier to occur of (i) the first Transfer Date
with respect to the Rapid Amortization Period and (ii) the Transfer
Date immediately preceding the Class A Scheduled Payment Date, the
Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Principal Funding Account and deposit in the
Distribution Account the amount on deposit in the Principal Funding
Account.
(ii) On the Determination Date preceding the Transfer
Date immediately prior to the Series 1998-1 Termination Date,
the Servicer shall determine the amounts to be deposited
pursuant to this sentence and on the final Transfer Date: (x)
the Servicer shall, or shall instruct the Trustee to, and the
Trustee shall, withdraw from the Principal Account and deposit
into the Distribution Account, an amount which is no greater
than the Investor Interest as of the immediately preceding
Distribution Date, after giving effect to all payments,
deposits and withdrawals made on such date; and (y) the
Servicer shall, or shall instruct the Trustee to, and the
Trustee shall, withdraw from the Principal Account and deposit
into the Collection Account, for allocation to other Series as
Principal Collections pursuant to Article IV, the amount, if
any, remaining in the Principal Account after giving effect to
the withdrawals made pursuant to clause (x).
(c) On each Distribution Date occurring after a deposit is
made to the Distribution Account pursuant to subsection 4.8(a) or (b)
of the Agreement or Section 5 or 15 of the Series Supplement, the
Paying Agent shall pay, in accordance with Section 5.1 to the Series
1998-1 Investor Certificateholders from the Distribution Account, the
amount so deposited into the Distribution Account.
(d) The Controlled Accumulation Period is scheduled to
commence on the Controlled
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Accumulation Date; provided that if the Controlled Accumulation Period
Length (determined as described below) on any Determination Date on or
after the Determination Date preceding the Reserve Account Funding Date
is less than fourteen months, the Servicer, at its option, may elect to
modify the date on which the Controlled Accumulation Period actually
commences to the first day of the month that is a number of months
prior to the month in which the Class A Scheduled Payment Date occurs
at least equal to the Controlled Accumulation Period Length (so that,
as a result of such election, the number of Monthly Periods in the
Controlled Accumulation Period will at least equal the Controlled
Accumulation Period Length) and shall provide prompt written notice of
such action to the Trustee; provided that (i) the length of the
Controlled Accumulation Period will not be less than four months; (ii)
such determination of the Controlled Accumulation Period Length shall
be made on each Determination Date prior to the commencement of the
Controlled Accumulation Period, and any election to shorten the
Controlled Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the Controlled
Accumulation Period Length determined on any subsequent Determination
Date, but the Controlled Accumulation Period shall in no event commence
prior to the Controlled Accumulation Date, and (iii) notwithstanding
any other provision of this Series Supplement to the contrary, no
election to postpone the commencement of the Controlled Accumulation
Period shall be made after a Pay Out Event shall have occurred and be
continuing with respect to any other Series. The "Controlled
Accumulation Period Length" will mean a number of months such that the
amount available for distribution of principal on the Class A
Certificates on the Class A Scheduled Payment Date is expected to equal
or exceed the Class A Investor Interest, assuming for this purpose that
(1) the payment rate with respect to Principal Collections remains
constant at the lowest level of such payment rate during the twelve
preceding Monthly Periods (or such lower payment rate as Servicer may
select), (2) the total amount of Principal Receivables in the Trust
(and the principal amount on deposit in the Excess Funding Account, if
any) remains constant at the level on such date of determination, (3)
no Pay Out Event
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with respect to any Series will subsequently occur during the
Controlled Accumulation Period and (4) no additional Series (other than
any Series being issued on such date of determination) will
subsequently be issued during the Controlled Accumulation Period. On
each Determination Date on which the Controlled Accumulation Period
Length is modified pursuant to this Section 4.8(d), the Servicer shall
also determine the related Controlled Accumulation Amount, which shall
be an amount not less than (x) the Class A Investor Interest on such
date, divided by (y) the Controlled Accumulation Period Length
determined on such date.
SECTION 4.9 Establishment of the Reserve Account.
(a) Reserve Account. The Servicer, for the benefit of the
Class A Certificateholders, shall establish and maintain or cause to be
established and maintained with a Qualified Trust Institution (other
than the Servicer) in the name of the Trustee, on behalf of the Class A
Certificateholders, the "Reserve Account", which shall be a segregated
trust account with the corporate trust department of such Qualified
Trust Institution, and held in trust by such Qualified Trust
Institution bearing a designation clearly indicating that the funds
deposited therein are held by the Trustee, on behalf of the Class A
Certificateholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve
Account and in all proceeds thereof. If, at any time, the institution
holding the Reserve Account ceases to be a Qualified Trust Institution,
the Servicer shall within 20 Business Days establish a new Reserve
Account meeting the conditions specified above with a Qualified Trust
Institution and shall transfer any cash and/or any investments that are
on deposit in the existing Reserve Account to such new Reserve Account.
From the date such new Reserve Account is established, it shall be the
"Reserve Account." The Trustee, acting in accordance with instructions
from the Servicer, shall (i) make withdrawals from the Reserve Account
from time to time in an amount up to the Available Reserve Account
Amount at such time, for the purposes set forth in this Series
Supplement, and (ii) on each Transfer Date (from and after the Reserve
Account Funding Date) prior to the
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termination of the Reserve Account pursuant to Section 4.9(f) make a
deposit into the Reserve Account in the amount specified in, and
otherwise in accordance with, subsection 4.6(d)(xi).
(b) Administration of the Reserve Account. Funds on deposit in
the Reserve Account on any Transfer Date, after giving effect to any
deposits to or withdrawals from the Reserve Account on such Transfer
Date, shall be invested by the Trustee at the direction of the Servicer
in Permitted Investments that will mature so that such funds will be
available for withdrawal on or prior to the following Transfer Date;
and provided, further, that each Permitted Investment shall mature such
that such Permitted Investment shall be available for withdrawal on or
prior to the following Transfer Date. The Trustee shall maintain,
either on its own behalf or through its nominee or custodian, on behalf
of the Class A Certificateholders, possession of any certificated
negotiable instrument or security (other than certificated securities
held by a clearing corporation) evidencing the Permitted Investments
made pursuant to this subsection 4.9(b) described in clause (a) of the
definition of "Permitted Investments" from the time of purchase thereof
until the time of sale or maturity. No Permitted Investment shall be
disposed of prior to its maturity. On each Transfer Date, all interest
and earnings (net of losses and investment expenses) accrued since the
preceding Transfer Date on funds on deposit in the Reserve Account
shall be retained in the Reserve Account to the extent that the
Available Reserve Account Amount is less than the Required Reserve
Account Amount; and the balance, if any, shall be deposited into the
Finance Charge Account and included in Class A Available Funds for such
Transfer Date. For purposes of determining the availability of funds or
the balances in the Reserve Account for any reason under this
Agreement, except as otherwise provided in this paragraph, all
investment earnings on such funds shall be deemed not to be available
or on deposit.
(c) Calculation of Reserve Draw Amount. On or before each
Transfer Date with respect to the Controlled Accumulation Period prior
to the payment in full of the Class A Investor Interest and on or
before the first Transfer Date with
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respect to the Rapid Amortization Period, the Servicer shall calculate
the "Reserve Draw Amount" which shall be equal to the Principal Funding
Investment Shortfall with respect to such Transfer Date less, in each
case, the amount of funds deposited into the Finance Charge Account on
such Transfer Date pursuant to subsection 4.9(b).
(d) Withdrawal of Reserve Draw Amount. If the Reserve Draw
Amount for any Transfer Date is greater than zero, the Trustee, acting
in accordance with the instructions of the Servicer, shall withdraw
from the Reserve Account an amount equal to the lesser of (x) such
Reserve Draw Amount and (y) the Available Reserve Account Amount as of
such Transfer Date, and shall deposit such amount into the Finance
Charge Account, and such amount shall be included in Class A Available
Funds for such Transfer Date.
(e) Withdrawal of Reserve Account Surplus. If the Reserve
Account Surplus for any Transfer Date, after giving effect to all
deposits to and withdrawals from the Reserve Account with respect to
such Transfer Date, is greater than zero, the Trustee, acting in
accordance with the instructions of the Servicer, shall withdraw from
the Reserve Account not later than 1:00 p.m. (New York City time) on
such Transfer Date an amount equal to the Reserve Account Surplus and
pay such amount in accordance with the Loan Agreement.
(f) Termination of the Reserve Account. Upon the earliest to
occur of (i) the termination of the Trust pursuant to Article XII of
the Agreement, (ii) if the Controlled Accumulation Period has not
commenced, the first Transfer Date relating to the Rapid Amortization
Period, and if the Controlled Accumulation Period has commenced, the
earlier to occur of (I) the first Transfer Date with respect to the
Rapid Amortization Period and (II) the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee, acting in
accordance with the instructions of the Servicer, after the prior
payment of all amounts owing to the Class A Certificateholders that are
payable from the Reserve Account as provided in this Series Supplement,
shall withdraw from the Reserve Account and pay in accordance with the
Loan Agreement, all amounts, if any, on deposit in the Reserve Account
and the Reserve Account shall
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be deemed to have terminated for purposes of this Series Supplement.
SECTION 4.10 Transferor's or Servicer's Failure to Make a Deposit or
Payment.
(a) If the Servicer fails to make, or to give instructions to
make, any payment or deposit (other than as required by subsection
2.4(d) (except as provided in the immediately following paragraph),
2.4(e), 2.4(f), 3.3, 9.2, 10.2, or 12.2(a) of the Agreement, or
Sections 4 or 15 of this Series Supplement (collectively, "Excluded
Payments")) relating to the Series 1998-1 Investor Certificates
required to be made or given by the Servicer on the related Transfer
Date at the time specified in the Agreement (including applicable grace
periods), the Trustee shall make such payment or deposit from the
applicable Investor Account without instruction from the Servicer. The
Trustee shall be required to make any such payment, deposit or
withdrawal hereunder only to the extent that it has sufficient
information to allow the Trustee to determine the amount thereof;
provided, however, that the Trustee shall in all cases be deemed to
have sufficient information to determine the amount of interest (i)
required to be paid or provided for under subsections 4.6(a)(i), (b)(i)
and (d)(vi) on each Transfer Date, and (ii) payable to the Series
1998-1 Investor Certificateholders on each Distribution Date. The
Servicer shall, upon request of the Trustee, promptly provide the
Trustee with all information necessary to allow the Trustee to make
such a payment or withdrawal. Such funds or the proceeds of such
withdrawal shall be applied by the Trustee in the manner in which such
payment or deposit should have been made by the Transferor or the
Servicer, as the case may be.
SECTION 4.11 Interest Rate Caps.
(a) The Trustee hereby acknowledges that the Class A Interest
Rate Cap has been obtained for the benefit of the Class A
Certificateholders and the Class B Interest Rate Cap for the benefit of
the Class B Certificateholders. Each of the Interest Rate Caps provides
that (i) the Trust shall not be required to make any payments
thereunder and (ii) the Trust shall be entitled to receive a payment
(determined in accordance with
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the respective Interest Rate Cap) from the Interest Rate Cap Provider
on or prior to each Transfer Date if LIBOR plus 0.14% for the related
Interest Accrual Period exceeds the Class A Cap Rate or LIBOR plus
0.34% for the related Interest Accrual Period exceeds the Class B Cap
Rate. The Interest Rate Cap Provider will make a payment on or prior to
each Transfer Date to the Trustee, on behalf of the Trust, in an amount
equal to the product of (i) the amount by which, in the case of the
Class A Interest Rate Cap, LIBOR plus 0.14% exceeds the Class A Cap
Rate or, in the case of the Class B Interest Rate Cap, LIBOR plus 0.34%
exceeds the Class B Cap Rate, as applicable, (ii) the Class A Notional
Amount or the Class B Notional Amount, as applicable, for the related
Calculation Period, and (iii) the actual number of days in such
Calculation Period divided by 360. Payments pursuant to the Class A
Interest Rate Cap will be deposited in the Distribution Account for
payment to the Class A Certificateholders on the following Distribution
Date. Payments pursuant to the Class B Interest Rate Cap will be
deposited in the Distribution Account for payment to the Class B
Certificateholders on the following Distribution Date.
(b) In the event that the counterparty rating of the Interest
Rate Cap Provider is withdrawn or reduced below Aa3 by Xxxxx'x, XX- by
Fitch or AAA by Standard & Poor's or, with respect only to an Interest
Rate Cap Provider for a Replacement Interest Rate Cap, (i) the long
term unsecured debt or long term certificate of deposit rating of such
Interest Rate Cap Provider is withdrawn or reduced below Aa3 by Moody's
or AA-by Fitch or (ii) the short term unsecured debt or short term
certificate of deposit rating of the Interest Rate Cap Provider is
withdrawn or reduced below A-1+ by Standard & Poor's, then within 30
days after such withdrawal or reduction (notice of which the Interest
Rate Cap Provider is required, under each Interest Rate Cap, to provide
to the Trustee, Moody's, Fitch, and Standard & Poor's promptly upon
obtaining knowledge thereof and notice of which the Trustee shall
provide to the Servicer within two Business Days after receipt
thereof), the Interest Rate Cap Provider, at its own expense, is
required, under each Interest Rate Cap, either to (x) obtain a
Replacement Interest Rate Cap for each such Interest Rate Cap to which
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it is then currently a party or (y) enter into or establish, with
respect to each such Interest Rate Cap, any other arrangement
satisfactory to Moody's, Fitch, and Standard & Poor's, including
collateral, guarantees or letters of credit, which arrangement will
result in Xxxxx'x, Fitch and Standard & Poor's not reducing or
withdrawing the ratings of the Class A Certificates or the Class B
Certificates in effect immediate prior to the ratings downgrade of the
Interest Rate Cap Provider (a "Qualified Substitute Arrangement"). Upon
receipt of notice of any such reduction or withdrawal, the Trustee, at
the direction of the Servicer, shall, unless such a Replacement
Interest Rate Cap Provider or Qualified Substitute Arrangement has
theretofore been established or obtained, use its best efforts to
establish or obtain or cause the Interest Rate Cap Provider to
establish or obtain, with respect to each such Interest Rate Cap, a
Replacement Interest Rate Cap or Qualified Substitute Arrangement;
provided, however, that in the event at any time any Qualified
Substitute Arrangement established pursuant to this Section 4.11 or
pursuant to the applicable Interest Rate Cap shall cease to be
satisfactory to the Rating Agency or shall terminate prior to the Class
A Scheduled Payment Date (in the case of a Qualified Substitute
Arrangement with respect to the Class A Interest Rate Cap) or the Class
B Scheduled Payment Date (in the case of a Qualified Substitute
Arrangement with respect to the Class B Interest Rate Cap), then the
provisions of this Section 4.11(b) shall again be applied and in
connection therewith the 30-day period referred to above shall commence
on the date the Servicer receives notice of such cessation or
termination, as the case may be. Subject to Section 4.11(c) below, the
Trustee shall, with respect to any Interest Rate Cap for which a
Replacement Interest Rate Cap or Qualified Substitute Arrangement has
been or (with respect to clauses (A), (C) and (D) below) will be
obtained, (A) timely provide any written notice required thereby to the
Interest Rate Cap Provider of its intention to terminate the Interest
Rate Cap within such 30-day period, (B) terminate such Interest Rate
Cap within such 30-day period, (C) request the payment to it of all
amounts due to the Trust under such Interest Rate Cap through the
termination date and (D) deposit any such amounts so received, on the
day of receipt, to the
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Collection Account for application as Finance Charge Receivables for
the benefit of the applicable Class of Certificateholders.
(c) The Trustee shall not at any time terminate any Interest
Rate Cap (including any Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect thereto) unless, prior to or
simultaneously with the termination thereof, the Interest Rate Cap
Provider, the Trustee or the Servicer has obtained or shall
concurrently obtain (i) a Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect thereto, (ii) to the extent
applicable, an Opinion of Counsel as to the due authorization,
execution, delivery, validity and enforceability of such Replacement
Interest Rate Cap or Qualified Substitute Arrangement, as the case may
be, and (iii) a letter from each of Moody's, Fitch, and Standard &
Poor's confirming that the termination of such Interest Rate Cap and
its replacement with such Replacement Interest Rate Cap or Qualified
Substitute Arrangement will not result in a reduction or withdrawal of
its rating of the Class A Certificates or the Class B Certificates.
Notwithstanding anything to the contrary in Section 4.11(b) above, the
Trustee shall not at any time terminate any such Interest Rate Cap (or
such Replacement Interest Rate Cap or Qualified Substitute Arrangement
with respect thereto) that comprises all or a portion of any Qualified
Substitute Arrangement established pursuant to subsection 4.11(b)
unless the latter Qualified Substitute Arrangement has been or is
required to be terminated pursuant to this Section 4.11.
(d) The Servicer shall notify the Trustee, the Rating Agency
and the Collateral Interest Holder within five Business Days after
obtaining knowledge that the long term unsecured debt or the long term
certificate of deposit rating of the Interest Rate Cap Provider has
been withdrawn or reduced by Moody's, Fitch or Standard & Poor's.
(e) Notwithstanding the foregoing, the Servicer may at any
time obtain a Replacement Interest Rate Cap, provided that the Servicer
delivers to the Trustee (i) an Opinion of Counsel as to the due
authorization, execution and delivery and validity and enforceability
of such
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Replacement Interest Rate Cap and (ii) a letter from each of Xxxxx'x,
Fitch and Standard & Poor's confirming that the termination of the then
current Interest Rate Cap and its replacement with such Replacement
Interest Rate Cap will not adversely affect its rating of the Class A
Certificates or the Class B Certificates.
(f) The Trustee hereby appoints the Interest Rate Cap Provider
to perform the duties of the calculation agent under the Interest Rate
Cap, subject to the terms of the Interest Rate Cap and to any
subsequent replacement of the Interest Rate Cap pursuant to this
Section 4.11, and the Interest Rate Cap Provider accepts such
appointment. The Trustee shall, at the direction of the Servicer,
request a copy of the audited annual consolidated financial statements
of the Interest Cap Provider, prepared in accordance with accounting
principles that are generally accepted in its place of domicile.
(g) The Trustee, on behalf of the Certificateholders, shall
have the right to, and upon notification from the Servicer shall, sell
all or a portion of the Interest Rate Caps subject to the following
conditions having been met:
(i) The Notional Amount of the unsold portion of each
Interest Rate Cap remaining as an asset of the Trust shall at
least equal the Class A Adjusted Investor Interest, in the
case of the Class A Interest Rate Cap, and the Class B
Investor Interest, in the case of the Class B Interest Rate
Cap, outstanding as of the date of such sale; and
(ii) The Trustee shall have received written
confirmation from the Rating Agency that such sale will not
result in a reduction or withdrawal of the then current rating
on the relevant class of Certificates by the Rating Agency.
(h) The Servicer shall have the duty of (i) obtaining a fair
market value price for the sale of the Trust's rights under any portion
of an Interest Rate Cap sold pursuant to the subsection 4.11(g), (ii)
notifying the Trustee of prospective purchasers and bids, (iii)
selecting the purchaser of such portion of the Interest Rate Cap, and
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(iv) instructing the selected purchaser (and/or the
Trustee) to deposit the purchase price therefor into the
Collection Account. The Trustee, upon receipt of the purchase
price into the Collection Account, shall execute all
documentation, prepared by the Servicer, necessary to effect
the transfer of the Trust's rights under such portion of the
Interest Rate Cap and to release the lien of the Trustee
thereon and proceeds thereof.
Funds deposited in the Collection Account in respect of the
sale of all or a portion of a Class A Interest Rate Cap or a Class B
Interest Rate Cap shall be applied on the next Transfer Date as,
respectively, Class A Available Funds or Class B Available Funds in
accordance with subsections 4.6(a) and (b).
SECTION 4.12 Reallocated Principal Collections. On each Transfer Date,
the Servicer shall apply, or shall cause the Trustee to apply, the Reallocated
Principal Collections (applying all Reallocated Collateral Principal Collections
in accordance with subsections 4.12(a) and (b) prior to applying any Reallocated
Class B Principal Collections in accordance with subsection 4.12(a) for any
amounts still owing after the application of Reallocated Collateral Principal
Collections) with respect to such Transfer Date, to make the following
distributions on each Transfer Date in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii)
the amount of Excess Spread and Shared Finance Charge Collections from
other Series with respect to the related Monthly Period, shall be
applied pursuant to subsections 4.6(a)(i) through (iv); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii)
the amount of Excess Spread and Shared Finance Charge Collections from
other Series allocated and available to the Class B Certificates
pursuant to subsection 4.6(d)(ii) and 4.6(f) on such Transfer Date
shall be applied pursuant to subsections 4.6(b)(i) through (iv).
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On each Transfer Date, the Collateral Interest shall be reduced by the
amount of Reallocated Collateral Principal Collections and by the amount of
Reallocated Class B Principal Collections applied pursuant to subsections
4.12(a) and/or (b) on such Transfer Date. If such reduction would cause the
Collateral Interest (after giving effect to any Collateral Interest Charge-Offs
for such Transfer Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Interest Charge-Offs for such Transfer Date)
shall be reduced to zero and the Class B Investor Interest shall be reduced by
the amount by which the Collateral Interest would have been reduced below zero.
If the reallocation of Reallocated Principal Collections would cause the Class B
Investor Interest (after giving effect to any Class B Investor Charge-Offs for
such Transfer Date) to be a negative number on any Transfer Date, Reallocated
Principal Collections shall be reallocated on such Transfer Date in an aggregate
amount not to exceed the amount which would cause the Class B Investor Interest
(after giving effect to any Class B Investor Charge-Offs for such Transfer Date)
to be reduced to zero.
SECTION 4.13 Determination of LIBOR. "LIBOR" shall mean, for a specific
Interest Accrual Period (other than the initial Interest Accrual Period), the
rate for deposits in United States dollars for one month (commencing on the
first day of the relevant Interest Accrual Period) which appears on Telerate
Page 3750 as of 11:00 a.m., London time, on the LIBOR Determination Date for
such Interest Accrual Period. If such rate does not appear on Telerate Page
3750, the rate for such Interest Accrual Period will be determined on the basis
of the rates at which deposits in the United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on such LIBOR
Determination Date to prime banks in the London interbank market for a period
equal to one month (commencing on the first day of Interest Accrual Period). The
Trustee will request the principal London office of each such bank to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for such Interest Accrual Period will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for such
Interest Accrual Period will be the arithmetic mean of the rates quoted by four
major banks in New York City, selected by the Trustee, at approximately 11:00
a.m., New York City time, on the first day of such Interest Accrual Period for
loans in
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United States dollars to leading European banks for a period equal to one month
(commencing on the first day of such Interest Accrual Period).
SECTION 4.14 Discount Option.
(a) The Transferor may at its option (the "Discount Option"),
at any time, upon not less than 20 Business Days prior written notice
to the Servicer, the Trustee, the Interest Rate Cap Provider, the
Collateral Interest Holder, and each Rating Agency, designate a
percentage, which may be a fixed percentage or a variable percentage
based on a formula (the "Discounted Percentage"), of the amount of
Principal Receivables in Accounts designated in such notice to be
treated on and after such designation, or for the period specified in
such notice, as Finance Charge Receivables (it being understood and
agreed that an increase in the Discount Percentage shall constitute a
new exercise of the Discount Option); provided, however, that no such
designation shall become effective on the date specified in such
written notice unless the following conditions have been satisfied:
(i) on or before the date specified in the written
notice, the Transferor shall have received written
confirmation from each Rating Agency which is then rating an
outstanding Series of Certificates that such designation will
not result in a withdrawal or reduction of its rating of such
Series of Certificates;
(ii) such exercise of the Discount Option shall not,
in the reasonable belief of the Transferor, cause a Pay Out
Event to occur or cause an event which with notice or the
lapse of time or both would constitute a Pay Out Event;
(iii) the Transferor shall have delivered to the
Trustee an Officer's Certificate confirming the items set
forth in clauses (i) and (ii) above. The Trustee may
conclusively rely on such Officer's Certificate, shall have no
duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying.
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On and after the date of satisfaction of each of the above conditions,
in processing Collections of the Principal Receivables of the Accounts
designated pursuant to such notice, the Servicer shall deem the product of the
Discount Percentage and Collections of such Principal Receivables as Finance
Charge Collections.
(b) The Transferor may at its option, at any time, upon not
less than 20 Business Days prior written notice to the Servicer, the
Trustee, the Collateral Interest Holder, and each Rating Agency,
suspend or terminate the Discount Option or reduce the Discount
Percentage to a percentage specified in such notice; provided, however,
that such notice shall specify the period of time for which the
Discount Option shall be suspended, the effective date of the
termination of the Discount Option or the percentage to which the
Discount Option shall be reduced, as the case may be.
(c) Each Certificateholder by its acceptance of a beneficial
interest in a Certificate and the Collateral Interest Holder by its
acceptance of the Collateral Interest shall be deemed to have consented
to the exercise by the Transferor of the Discount Option at such time
as the Transferor determines to exercise such options.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
[THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1998-1]
SECTION 5.1 Distributions.
(a) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the certificate delivered by the
Servicer to the Trustee pursuant to subsection 3.4(b)) to each Class A
Certificateholder of record on the immediately preceding Record Date
(other than as provided in subsection 2.4(e) or Section 12.3 respecting
a final distribution) such Class A Certificateholder's pro rata share
(based on the aggregate Undivided Interests represented by Class A
Certificates held by such Class A
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Certificateholder) of amounts on deposit in the Distribution Account as
are payable to the Class A Certificateholders pursuant to Sections 4.7
and 4.8 hereof by check mailed to each Class A Certificateholder except
that, with respect to Class A Certificates registered in the name of
the nominee of a Clearing Agency, such distribution shall be made in
immediately available funds.
(b) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the certificate delivered by the
Servicer to the Trustee pursuant to subsection 3.4(b)) to each Class B
Certificateholder of record on the immediately preceding Record Date
(other than as provided in subsection 2.4(e) or Section 12.3 respecting
a final distribution) such Class B Certificateholder's pro rata share
(based on the aggregate Undivided Interests represented by Class B
Certificates held by such Class B Certificateholder) of amounts on
deposit in the Distribution Account as are payable to the Class B
Certificateholders pursuant to Sections 4.7 and 4.8 hereof by check
mailed to each Class B Certificateholder except that, with respect to
Class B Certificates registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately
available funds.
SECTION 5.2 Monthly Certificateholders' Statement.
(a) On or before each Distribution Date, the Paying Agent
shall forward to each Series 1998-1 Investor Certificateholder of
record on the immediately preceding Record Date and the Rating Agencies
a statement substantially in the form of Exhibit 2 to the Series
Supplement relating to Series 1998-1 and the Collateral Interest
prepared by the Servicer setting forth among other things the following
information (which, in the case of subclauses (i), (ii) and (iii)
below, shall be stated on the basis of an original principal amount of
$1,000 per Certificate and, in the case of subclauses (viii) and (ix)
shall be stated on an aggregate basis and on the basis of an original
principal amount of $1,000 per Certificate):
(i) the total amount distributed to the Class A
Certificateholders and the Class B Certificateholders,
respectively, on such
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Distribution Date, and to the Collateral Interest Holder on
the preceding Transfer Date;
(ii) the amount of such distribution, if any,
allocable to principal with respect to the Class A
Certificates, the Class B Certificates and the Collateral
Interest, respectively;
(iii) the amount of such distribution allocable to
Class A Monthly Interest, Class B Monthly Interest, and
Collateral Monthly Interest, respectively;
(iv) the amount of Principal Collections processed
during the preceding Monthly Period, as appropriate, and
allocated in respect of the Class A Certificates, the Class B
Certificates and the Collateral Interest, respectively;
(v) the aggregate amount of Principal Receivables,
the Investor Interest, the Adjusted Investor Interest, the
Class A Investor Interest, the Class A Adjusted Investor
Interest, the Class B Investor Interest, the Collateral
Interest, the Class B Fixed Allocation, the Collateral Fixed
Allocation, the Floating Investor Percentage, the Class A
Floating Allocation, the Class B Floating Allocation, the
Collateral Floating Allocation and the Fixed Investor
Percentage, in each case as of the close of business on the
last day of the preceding Monthly Period;
(vi) the aggregate outstanding balance of Accounts
which are up to 30, 31-60 and 61 or more days delinquent in
accordance with the Servicer's then existing Account
Guidelines by class of delinquency as of the close of business
on the last day of the preceding Monthly Period;
(vii) the Class A Investor Default Amount, the Class
B Investor Default Amount and the Collateral Default Amount
for the preceding Monthly Period;
(viii) the aggregate amount of Class A Investor
Charge-Offs, Class B Investor
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Charge-Offs and Collateral Interest Charge- Offs for the
preceding Monthly Period;
(ix) the aggregate amount of Investor Charge-Offs
reimbursed to the Class A Certificateholders, the Class B
Certificateholders and the Collateral Interest Holder on the
Transfer Date immediately preceding such Distribution Date;
(x) the amount of the Class A Monthly Servicing Fee,
the Class B Monthly Servicing Fee and the Collateral Interest
Monthly Servicing Fee for the preceding Monthly Period;
(xi) the Principal Funding Account Balance as of the
related Transfer Date;
(xii) the Accumulation Shortfall with respect to the
related Transfer Date;
(xiii) the amount of the Principal Funding Investment
Proceeds transferred to the Finance Charge Account on the
related Transfer Date;
(xiv) the Class A Principal Funding Investment
Shortfall on the related Transfer Date;
(xv) the amount of Class A Available Funds, Class B
Available Funds and Collateral Available Funds on deposit in
the Finance Charge Account on the related Transfer Date;
(xvi) the Pool Factor as of the end of the last day
of the preceding Monthly Period;
(xvii) the aggregate amount of Finance Charge
Collections during the preceding Monthly Period (including
amounts arising from the sale of either Interest Rate Cap to
be treated as Finance Charge Collections), as appropriate, and
allocated in respect of the Series 1998-1 Investor
Certificates;
(xviii) the Class A Required Amount, the Class B
Required Amount, the amount of Reallocated Collateral
Principal Collections and Reallocated Class B Principal
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Collections, if any, to be applied with respect to the
Required Amounts, and the amount of any reductions in the
Collateral Interest and the Class B Investor Interest, if any,
to satisfy the Required Amounts, in each case with respect to
the preceding Monthly Period;
(xix) the Reserve Account Draw and the Available
Reserve Account Amount with respect to the related Transfer
Date; and
(xx) the ratio of the Collateral Interest to the
Investor Interest as of the last day of the preceding Monthly
Period.
The Monthly Certificateholders' Statement shall be
substantially in the form of Exhibit 2, with such changes as the
Servicer may determine to be necessary or desirable; provided, however,
that no such change shall serve to exclude information required by this
subsection 5.2(a). The Servicer shall, upon making such determination,
deliver to the Trustee and the Rating Agency an Officer's Certificate
to which shall be annexed the form of Exhibit 2, as so changed. Upon
the delivery of such Officer's Certificate to the Trustee, Exhibit 2,
as so changed, shall for all purposes of this Agreement constitute
Exhibit 2. The Trustee may conclusively rely upon such Officer's
Certificate as to such change conforming to the requirements of this
Agreement.
(b) On or before January 31 of each calendar year, beginning
with calendar year 1999, the Servicer shall furnish to the Paying
Agent, who shall distribute to each Person who at any time during the
preceding calendar year was a Series 1998-1 Certificateholder, a
statement prepared by the Servicer containing the information required
to be contained in the regular monthly report to Series 1998-1 Investor
Certificateholders, as set forth in subclauses (i), (ii) and (iii)
above, aggregated for such calendar year or the applicable portion
thereof during which such Person was a Series 1998-1 Investor
Certificateholder, together with such other customary information
(consistent with the treatment of the Certificate as debt) as the
Trustee or the Servicer deems necessary or desirable to enable the
Series 1998-1 Investor
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Certificateholders to prepare their tax returns. Such obligations of
the Paying Agent shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the
Paying Agent pursuant to any requirements of the Internal Revenue Code.
SECTION 9.A Series 1998-1 Pay Out Events. If any one of the following
events shall occur during the Revolving Period or the Controlled Accumulation
Period with respect to the Series 1998-1 Investor Certificates:
(a) failure on the part of the Transferor or the Holder of the
Exchangeable Seller Certificate (i) to make any payment or deposit
required by the terms of (A) the Agreement relating to the Series
1998-1 Investor Certificates, or (B) this Series Supplement, in each
case on or before the date occurring five Business Days after the date
such payment or deposit is required to be made herein or (ii) duly to
observe or perform in any material respect any covenants or agreements
of the Transferor set forth in the Agreement, which failure has a
material adverse effect on the Series 1998-1 Investor
Certificateholders (which determination shall be made without regard to
whether any funds are available pursuant to the Interest Rate Caps) and
which continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee, or to
the Transferor and the Trustee by the Holders of Series 1998-1 Investor
Certificates evidencing Undivided Interests aggregating not less than
50% of each of the Class A Investor Interest, the Class B Investor
Interest and the Collateral Interest, and continues to affect
materially and adversely the interests of the Series 1998-1 Investor
Certificateholders for such period;
(b) any representation or warranty made by the Transferor in
the Agreement, including this Series Supplement, or any information
contained in a computer file or microfiche list required to be
delivered by the Transferor pursuant to Section 2.1, 2.6 or 3.4(c) of
the Agreement, (i) shall prove to have been incorrect in any material
respect when made or when delivered, which continues to be incorrect in
any material respect for a period of 60 days, after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by the Holders of the Series 1998-1 Investor
Certificates evidencing Undivided Interests aggregating not less than
50% of each of the Class A Investor Interest, the Class B Investor
Interest and the
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Collateral Interest, and (ii) as a result of which the interests of the
Series 1998-1 Investor Certificateholders are materially and adversely
affected (which determination shall be made without regard to whether
any funds are available pursuant to the Interest Rate Caps) and
continue to be materially and adversely affected for such period;
provided, however, that a Series 1998-1 Pay Out Event pursuant to this
subsection 9A(b) shall not be deemed to have occurred hereunder if the
Transferor has accepted reassignment of the related Receivable, or all
of such Receivables, if applicable, during such period in accordance
with the provisions hereof;
(c) with respect to any Determination Date, the Portfolio
Adjusted Yield is less than zero;
(d) the Transferor shall fail to convey Receivables arising
under Additional Accounts to the Trust, as required by subsection
2.6(e) of the Agreement;
(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1998-1 Investor
Certificateholders (which determination shall be made without regard to
the subordination of the Collateral Interest or whether funds are
available pursuant to the Enhancement or the Interest Rate Caps);
(f) failure to pay the Class A Certificates in full on the
Class A Scheduled Payment Date;
(g) failure to pay the Class B Certificates in full on the
Class B Scheduled Payment Date; or
(h) failure of the Interest Rate Cap Provider to make any
payment under the Class A Interest Rate Cap or the Class B Interest
Rate Cap within five days of the date on which such payment was due;
then, in the case of any event described in subparagraphs (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1998-1 Investor Certificates evidencing Undivided
Interests aggregating more than 50% of each of the Class A Investor Interest,
the Class B Investor Interest and the Collateral Interest by notice then given
in writing to the Transferor and the Servicer (and to the Trustee if given by
the Certificateholders and the Collateral Interest Holder) may declare that a
pay out event (a "Series 1998-1 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in subparagraphs (c), (d),
(f), (g) or (h) a Series 1998-1 Pay Out Event shall occur without any notice or
other action on the part of the
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Trustee or the Series 1998-1 Investor Certificateholders immediately upon the
occurrence of such event.
Notwithstanding the foregoing, any failure of performance under Section
9A(a)(i) for a period of up to 60 calendar days with respect to an event
described in clause (i) below or up to 15 calendar days with respect to an event
described in clause (ii) below (in addition to the five Business Days provided
above) shall not constitute a Pay Out Event for purposes of this sentence until
the expiration of such period, if such failure could not be prevented by the
exercise of reasonable diligence by the Transferor and such failure was caused
by (i) an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes or (ii) computer malfunction,
communication malfunction or other electronic system malfunction; the preceding
clause shall not relieve the Transferor from using its best efforts to perform
its respective obligations in a timely manner in accordance with the terms of
this Agreement and any Supplement and the Transferor shall provide the Trustee,
each Rating Agency, the Collateral Interest Holder, and each of the
Certificateholders with an Officer's Certificate giving prompt notice of such
failure, together with a description of its efforts to so perform its
obligations. Notice of any such Pay Out Event shall be given by the Servicer to
the Rating Agency.
SECTION 10. Series 1998-1 Termination. All principal or interest with
respect to the Series 1998-1 Investor Certificates shall be due and payable no
later than the Scheduled Series 1998-1 Termination Date. In the event that the
Investor Interest is greater than zero on the Scheduled Series 1998-1
Termination Date, after giving effect to all transfers, withdrawals, deposits
and drawings to occur on such date and the payment of principal to be made on
the Certificates on such date, the Trustee will sell or cause to be sold, and
pay the proceeds to the Series 1998-1 Investor Certificateholders pro rata in
final payment of all principal of and accrued interest on the Series 1998-1
Investor Certificates, an amount of Principal Receivables and the related
Finance Charge Receivables (or interests therein) up to 110% of the Investor
Interest at the close of business on such date (but not more than an amount of
Receivables equal to the sum of (1) the product of (A) the Seller Percentage,
(B) the aggregate outstanding Principal Receivables and (C) a fraction the
numerator of which is the related Investor Percentage of Finance Charge
Collections and the denominator of which is the sum of all Investor Percentages
with respect to Finance Charge Collections of all Series outstanding and (2) the
Investor Interest of such Series). The Transferor or any of its Affiliates shall
be permitted to bid for such Receivables. In addition, the Transferor or any of
its Affiliates shall have the right to match any bid by a third person and be
granted the right to purchase the
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Receivables at such matched bid price. Any proceeds of such sale in excess of
such principal and interest paid shall be paid to the Collateral Interest Holder
to satisfy any amounts owing under the Loan Agreement and thereafter paid to the
Holder of the Exchangeable Seller Certificate. Upon such Scheduled Series 1998-
1 Termination Date, final payment of all amounts allocable to the Certificates
shall be made in the manner provided in Section 12.3 of the Agreement.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
Agreement. As supplemented by this Series Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
Warranties. Except as otherwise provided in the Agreement, each of the
Transferor, the Servicer and the Trustee hereby ratify and reaffirm its
representations and warranties contained in the Agreement as follows: (a) with
respect to the Transferor, the representations and warranties contained in (i)
Section 2.3 of the Agreement, (ii) Section 2.4(a) of the Agreement (with respect
to the Agreement as supplemented by this Series Supplement) and (iii) Section
2.4(b) of the Agreement, (b) with respect to the Servicer, the representations
and warranties contained in Section 3.3 of the Agreement and (c) with respect to
the Trustee, the representations and warranties contained in Section 11.15 of
the Agreement, as though such representations and warranties were made by such
party as of the Closing Date.
SECTION 13. [RESERVED]
SECTION 14. No Subordination. Notwithstanding the provisions contained
in Section 13.1 of the Agreement to the contrary, the Agreement may also be
amended from time to time by the Servicer, the Transferor and the Trustee with
the consent of the Series 1998- 1 Investor Certificateholders evidencing
Undivided Interests aggregating not less than 100% of the Investor Interest for
the purpose of (i) adding any provisions to or changing in any manner or
eliminating any of the provisions of this Series Supplement or (ii) modifying in
any manner the rights of the Series 1998-1 Investor Certificateholders which
would, in either case, result in the subordination of the rights of the Series
1998-1 Investor Certificateholders to the rights of the Holders of any other
Series.
SECTION 15. Repurchase of the Series 1998-1 Certificates. In the event
of a breach of any of the representations and warranties set forth in Section
12(a)(ii) hereof, either the Trustee or the Holders of Series 1998-1
Certificates evidencing Undivided Interests aggregating more than 50% of each of
the Class A Investor
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Interest and the Class B Investor Interest, by notice then given in writing to
the Transferor (and to the Trustee and the Servicer, if given by the Series
1998-1 Certificateholders), may direct the Transferor to purchase the Series
1998-1 Investor Certificates (as specified below) within 60 days of such notice,
or within such longer period as may be specified in such notice, which period
shall not exceed 120 days, and the Transferor shall be obligated to purchase on
a Distribution Date specified by the Transferor (such Distribution Date, the
"Repurchase Date") occurring within such applicable period on the terms and
conditions set forth below; provided, however, that no such purchase shall be
required to be made if, at any time during such applicable period, the
representations and warranties contained in Section 12(a)(ii) hereof, shall then
be true and correct in all material respects. The Transferor shall deposit on
the Transfer Date (in New York Clearing House, next day funds) immediately
preceding such Repurchase Date, an amount equal to the reassignment deposit
amount for such Series 1998-1 Investor Certificates in the Distribution Account,
for distribution to the Series 1998-1 Investor Certificateholders pursuant to
Article XII of the Agreement and Section 10 hereof. The reassignment deposit
amount for such reassignment shall be equal to the sum of (i) the Investor
Interest at the end of the day on the last day of the Monthly Period preceding
the Repurchase Date, less the amount on deposit in the Principal Account which
will be transferred to the Distribution Account pursuant to 4.8(b)(ii) on the
related Transfer Date, (ii) an amount equal to all interest accrued but unpaid
on the Series 1998-1 Investor Certificates through and including the last day of
the Interest Accrual Period in which such Transfer Date occurs, less the amount
on deposit in the Finance Charge Account and, with respect to the Class A
Certificates, Principal Funding Investment Proceeds and amounts available to be
withdrawn from the Reserve Account on the related Transfer Date, which will be
transferred to the Distribution Account to pay interest pursuant to subsections
4.6(a) through (d), as applicable, on such Transfer Date and (iii) any
additional amounts owing to the Collateral Interest Holder pursuant to the Loan
Agreement. The deposit into the Distribution Account of the reassignment deposit
amount shall be considered a prepayment in full of the Series 1998-1 Investor
Certificates. The Series 1998-1 Termination Date shall be deemed to have
occurred on the Repurchase Date as long as such amount was deposited in full
into the Distribution Account on such Transfer Date. If the Trustee or the
Series 1998-1 Investor Certificateholders give notice directing the Transferor
to purchase the Series 1998-1 Investor Certificates as provided above, the
obligation of the Transferor to purchase the Series 1998-1 Investor Certificates
and to pay the reassignment deposit amount pursuant to this Section 15 shall
constitute the sole remedy respecting a breach of the representations and
warranties referenced in Section 12(a)(ii) hereof available to the Series 1998-1
Investor Certificateholders
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or the Trustee on behalf of the Series 1998-1 Investor Certificateholders.
SECTION 16. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 17. Additional Covenants of Transferor. People's Bank, in its
capacity as Transferor, hereby covenants that following the occurrence of a
Series Pay Out Event described in Section 9A(c) hereof, except as otherwise
required by any Requirements of Law, it will not reduce the Periodic Finance
Charges assessed on any Receivable, or other fees on any Account, if the
Transferor reasonably believes that, as a result of such reduction, (i) the
weighted average of the Periodic Finance Charges on the last day of the Monthly
Period during which such reduction will be effective (weighted based on the
Transferor's reasonable belief as to the Principal Receivables which will be
outstanding on such last day) will be less than (ii) the sum of (1) 2.00% and
(2) the weighted average of the Certificates Rates of each Series that will be
outstanding on such last day (weighted based on the Transferor's reasonable
belief as to (x) the amount of the Investor Interest of each Series that will be
outstanding on such last day, (y) in the case of Series for which the
Certificate Rate is a floating rate, the Certificate Rate with respect to such
Monthly Period).
SECTION 18. Series 1998-1 Investor Exchange. Pursuant to subsection
6.9(b) of the Agreement, the Series 1998-1 Investor Certificateholders may
tender their Series 1998-1 Investor Certificates, and the Holders of the
Exchangeable Seller Certificate may tender the Exchangeable Seller Certificate,
in exchange for (i) one or more newly issued Series of Series 1998-1 Investor
Certificates and (ii) a reissued Exchangeable Seller Certificate in accordance
with the terms and conditions contained in a notice of exchange delivered to the
Series 1998-1 Investor Certificateholders. Such notice of exchange will specify,
among other things: (a) the amount of Series 1998-1 Investor Certificates that
may be tendered, (b) the Certificate Rate with respect to the new Series, (c)
the term of the Series, (d) the method of computing the investor percentage, (e)
the manner of Enhancement, if any, with respect to the Series and (f) the time
and the manner in which the tender and cancellation of the Series 1998-1
Investor Certificates and the issuance of the new Series of Certificates will be
effectuated. Upon satisfaction of the conditions contained in subsections 6.9(b)
and 6.9(c) of the Agreement, and the receipt by the Trustee of the Exchange
Notice and the related Supplement, the Trustee shall cancel the existing
Exchangeable Seller Certificate and the applicable Series 1998-1 Investor
Certificates, and shall issue such Series of Series 1998-1 Investor Certificates
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and a new Exchangeable Seller Certificate, each dated the Exchange Date.
SECTION 19. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 20. Notification to Luxembourg Stock Exchange. On or prior to
each Distribution Date the Servicer shall, or shall cause the Trustee to, send
written notice to the Luxembourg Stock Exchange specifying (i) the Class A
Certificate Rate for the immediately following Distribution Date, (ii) the
amount of interest to be distributed in respect of the Class A Certificates for
the immediately following Distribution Date and (iii) the Class A Investor
Interest on the Distribution Date on or prior to which such report is being
furnished (after giving effect to all payments of principal to be made on such
Distribution Date). Promptly following each Distribution Date the Servicer shall
cause a notice to be published in a daily newspaper, which initially shall be
the Luxemburger Wort, specifying the information described in clauses (i) and
(ii) of the preceding sentence.
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IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
PEOPLE'S BANK,
Transferor and Servicer
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
BANKERS TRUST COMPANY, not in
its individual capacity but
solely as Trustee
By: /s/ Xxxxx Xxxx
---------------------------
Name: Xxxxx Xxxx
Title: Vice President
- 82 -
EXHIBIT 1-A
FORM OF CLASS A INVESTOR CERTIFICATE
$------------
No. 1 CUSIP No. ___________
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS A ASSET BACKED CERTIFICATE, SERIES 1998-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA(1) and MasterCard1 credit card
receivables generated or to be generated by People's Bank.
(Not an interest in or obligation of
People's Bank or any
Affiliate thereof.)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE SENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S
BANK OR ITS AGENT FOR REGISTRATION OF TRANS FER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESEN TATIVE
OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns
of CEDE & CO. with respect to this certificate, the "Class A Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter created
under selected VISA and MasterCard credit card accounts (the "Accounts") of
People's Bank, a Connecticut stock savings bank, all Receivables in Automatic
Additional Accounts and Additional Accounts added to the Trust from time to
time, all monies due or to become due in payment of the Receivables (including
all Finance Charge Receivables), and the other assets and interests constituting
the Trust pursuant to an Amended and Restated Pooling and Servicing Agreement,
dated as of March 18, 1997, as supplemented by the Series 1998-1 Supplement
--------
1 VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
dated as of April 1, 1998 (collectively, the "Agreement"), by and between
People's Bank, as Transferor and Servicer, and Bankers Trust Company, as Trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth herein below.
The Transferor has structured the Agreement and the Investor
Certificates with the intention that the Investor Certificates will qualify
under applicable tax law as indebtedness, and the Transferor, the Holder of the
Exchangeable Seller Certificate, the Servicer and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Certificate (or,
in the case of a Certificate Owner, by virtue of such Certificate Owner's
acquisition of a beneficial interest therein), agrees to treat the Investor
Certif icates (or a beneficial interest therein) consistently with, and to take
no action inconsistent with, the treatment of the Investor Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law.
This Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended from
time to time, the Certificateholder by virtue of the acceptance hereof assents
and by which the Certificateholder is bound. Although a summary of certain
provisions of the Agreement is set forth below, this Class A Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Agreement.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge Receivables
which arise generally from Periodic Finance Charges and other fees and charges
as fully specified in the Agreement. The assets of the Trust in which this
Certificate represents an interest, consist of (i)(a) the Receivables now
existing and hereafter created and arising in connection with the Accounts, and
all Receivables in the Automatic Additional Accounts and Additional Accounts
added to the Trust from time to time (b)
- 2 -
all monies due or to become due with respect thereto (including all Finance
Charge Receivables), (c) all proceeds (as defined in Section 9-306 of the UCC as
in effect in the State of New York) of such Receivables, (d) proceeds of
insurance policies relating to the Receivables, and (e) Interchange and
Recoveries pursuant to subsections 2.5(k) and (l) of the Agreement, (ii) such
funds as from time to time are deposited in the Collection Account, the Excess
Funding Account, and the Investor Accounts, and (iii) the benefit of the Class A
Interest Rate Cap between the Trustee and the Interest Rate Cap Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$343,000,000 Floating Rate Class A Asset Backed Certificates, Series 1998-1 (the
"Class A Certificates"), each of which represents an undivided interest in
certain assets of the Trust, including the right to receive Collections
allocable to the Class A Certificates and other amounts at the times and in the
amounts specified in the Agreement to be deposited in the Investor Accounts or
paid to the Investor Certificateholders. The aggregate interest represented by
the Class A Certificates at any time in the Principal Receivables in the Trust
will not exceed an amount equal to the Class A Investor Interest at such time.
The Class A Initial Investor Interest is $343,000,000 minus the retirement of
any Class A Certificates pursuant to an Investor Exchange. The Class A Investor
Interest on any date of determination will be an amount equal to (a) the Class A
Initial Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class A Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
A Investor Charge-Offs over Class A Investor Charge-Offs reimbursed prior to
such date of determination; provided, however, that the Class A Investor
Interest may not be reduced below zero. In addi tion to the Class A
Certificates, a class of certificates entitled "People's Bank Credit Card Master
Trust $27,000,000 Floating Rate Class B Asset Backed Certificates, Series
1998-1" (the "Class B Certificates") and an Undivided Interest in the Trust in
the initial amount of $30,000,000 (the "Collateral Interest," and together with
the Class A Certificates and the Class B Certifi xxxxx, the "Certificates") will
be issued, and the Exchangeable Seller Certificate will be reissued to the
Holder of the Exchange able Seller Certificate pursuant to the Agreement, and
other Series of certificates have been, and may from time to time be, issued by
the Trust, which represent or will represent an undivided interest in the Trust.
The Exchangeable Seller Certificate will represent the interest in the Principal
Receivables not represented by the Certificates or any other Series of
certificates.
Interest on the Class A Certificates will be distributed on April 15,
1998 and on the fifteenth day of each calendar month thereafter, or if such
fifteenth day is not a Business Day, on the next succeeding Business Day (a
"Distribution Date"), to the Class
- 3 -
A Certificateholders of record on the Record Date preceding the related
Distribution Date.
No principal will be payable to the Class A Certificateholders during
the Revolving Period, which begins on the date of issuance of this Class A
Certificate or during the Controlled Accumulation Period. During the Controlled
Accumulation Period, which is sched uled to begin January 1, 2002 but which may
be postponed as provided in the Agreement, an amount equal to the Controlled
Depos it Amount will be deposited into the Principal Funding Account on each
Transfer Date commencing with the Transfer Date following the Monthly Period in
which the Controlled Accumulation Period com mences. The amount on deposit in
the Principal Funding Account will be distributed as principal to the Class A
Certificateholders on the March 2003 Distribution Date (the "Class A Scheduled
Payment Date"), unless paid earlier as the result of the occurrence of a Pay Out
Event and the commencement of the Rapid Amortization Period, or later in
accordance with the Agreement. During the Rapid Amortization Period, if any, in
addition to monthly payments of interest on the Class A Certificates, principal
will be distributed to the Class A Certificateholders on the Distribution Date
of each calendar month commencing in the month following the month in which the
Rapid Amortization Period commences.
The Servicer will deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in no
event later than the second Business Day following such Date of Processing.
Notwithstanding anything in the Agreement to the contrary, for so long
as, and only so long as, the Transferor shall remain the Servicer hereunder and
(a)(i) the Servicer provides to the Trustee a letter of credit or other
arrangement covering risk of collection of the Servicer acceptable to the Rating
Agency (as evidenced by letters from the Rating Agency) and (ii) the Transferor
shall not have received a notice from the Rating Agency that such letter of
credit or other arrangement would result in the lowering or withdrawal of such
Rating Agency's then-existing rating of any Series of Investor Certificates or
(b) under certain other circum stances permitted under the Agreement, the
Servicer need not deposit Collections into the Collection Account, the Principal
Account or the Finance Charge Account in accordance with the immediately
preceding sentence, or make payments to the Holder of the Exchangeable Seller
Certificate prior to the close of business on the day any Collections are
deposited in the Collection Account, but may make such payments on the Transfer
Date in the Monthly Period following the Monthly Period in which such
Collections are received in an amount equal to the net amount of such deposits,
payments and withdrawals which would have been made but for the provisions of
this paragraph.
- 4 -
On each Distribution Date, to the extent funds are available on the
terms specified in the Agreement from available Finance Charge Collections, from
payments made pursuant to the Class A Interest Rate Cap and from Excess Spread,
interest will be distributed to the Class A Certificateholders in an amount
equal to the sum of: (i) the product of (a) the Class A Certificate Rate, (b)
the lesser of the Class A Adjusted Investor Interest determined as of the
preceding Distribution Date, after giving effect to all payments, deposits and
withdrawals on such Distribution Date or Closing Date, as applicable, and the
Expected Class A Principal as of the preceding Distribution Date or Closing Date
(or, for the initial Interest Accrual Period, the Class A Initial Investor
Interest), and (c) the actual number of days in the related Interest Accrual
Period divided by 360, plus (ii) the Class A Covered Amounts for such Interest
Accrual Period, plus (iii) the product of (a) the Class A Excess Principal, (b)
the lesser of the Class A Certificate Rate and 9.14% per annum, and (c) the
actual number of days in the related Interest Accrual Period divided by 360,
plus (iv) to the extent permitted by applicable law, any interest accrued on the
Class A Certificates (including interest on any overdue Class A Monthly
Interest) during any prior Interest Accrual Period which has not been
distributed to the Class A Certificateholders, plus, (v) to the extent that
there is available Excess Spread, an amount equal to the product of (a) the
amount by which the Class A Certificate Rate exceeds 9.14%, (b) the Class A
Excess Principal and (c) the actual number of days in the related Interest
Accrual Period divided by 360.
On each Determination Date during the Revolving Period, the Controlled
Accumulation Period and the Rapid Amortization Period, if any, the Servicer will
determine the Class A Required Amount and the Class B Required Amount. If either
or both of the Required Amounts are greater than zero after application of
available Finance Charge Collections, Excess Spread and Shared Finance Charge
Collections, then Principal Collections allocable to the Collateral Interest
will be reallocated and applied first to fund the remaining Class A Required
Amount, if any, and second to fund the remaining Class B Required Amount, if
any, and to the extent that Reallocated Collateral Principal Collections are
less than such remaining Class A Required Amount, Principal Collections
allocable to the Class B Certificates will then be reallocated and applied to
fund the remaining Class A Required Amount. The Collateral Interest and (if the
Collateral Interest is reduced to zero) the Class B Investor Interest will be
reduced by the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections applied to fund the Required Amounts.
If, on any Distribution Date, Reallocated Collateral Principal
Collections are insufficient to fund the remaining Class A Required Amount for
the related Monthly Period, then the Collateral Interest (after giving effect to
reduction for any Collateral Interest
- 5 -
Charge-Offs and Reallocated Principal Collections) will be reduced by the amount
of such deficiency (but not by more than the Class A Investor Default Amount for
such Monthly Period). In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest will be
reduced to zero, and the Class B Investor Interest (after giving effect to reduc
tions for any Class B Investor Charge-Offs and any Reallocated Class B Principal
Collections in excess of the Collateral Interest as of such Distribution Date)
will be reduced by the amount by which the Collateral Interest would have been
reduced below zero. In the event that such reduction would cause the Class B
Investor Interest to be a negative number, the Class B Investor Interest will be
reduced to zero and the Class A Investor Interest will be reduced by the amount
by which the Class B Investor Interest would have been reduced below zero.
The Trustee has entered into the Class A Interest Rate Cap with the
Interest Rate Cap Provider for the exclusive benefit of the Class A
Certificateholders. On each Transfer Date that the Class A Certificate Rate for
the related Interest Accrual Period exceeds the Class A Cap Rate, the Interest
Rate Cap Provider will make a payment to the Trustee, on behalf of the Trust,
based on the amount of such excess and the notional amount of the Class A
Interest Rate Cap. The Class A Notional Amount will at all times be equal to or
greater than the amount of the Expected Class A Principal. The Class A Interest
Rate Cap or its Replacement Inter est Rate Cap or Qualified Substitute
Arrangement will terminate on the day immediately following the Class A
Scheduled Payment Date.
People's Bank, as Servicer, is entitled to receive as ser vicing
compensation a monthly servicing fee in an amount equal to one-twelfth of the
product of 2.00% per annum and the Aggregate Principal Receivables in the Trust
on the last day of the preceding Monthly Period, payable on each succeeding
Distribution Date. With respect to any Distribution Date, the Class A Monthly
Servicing Fee will equal one-twelfth of the product of 2.00% per annum and the
Class A Adjusted Investor Interest as of the last day of the preceding Monthly
Period; provided that the Class A Monthly Servicing Fee for the first
Distribution Date will be an amount equal to zero.
On each Transfer Date, beginning with the Transfer Date following the
Monthly Period in which the Controlled Accumulation Period commences, an amount
equal to the Controlled Deposit Amount will be deposited in the Principal
Funding Account. The amounts on deposit in the Principal Funding Account will be
deposited in the Distribution Account for distribution to the Class A Certif
icateholders on the Class A Scheduled Payment Date.
As provided in the Agreement, Principal Collections remaining after
funding of the Required Amounts during the Revolving Period
- 6 -
and the Controlled Accumulation Period and Principal Collections remaining after
funding of the Controlled Deposit Amount during the Controlled Accumulation
Period will be applied as Shared Principal Collections and distributed first to
the certificateholders of other Series to the extent of Principal Shortfalls, if
any, and then to the Holder of the Exchangeable Seller Certificate. In addition,
during the Controlled Accumulation Period and the Rapid Amortization Period,
Shared Principal Collections from other Series available to the Certificates
will be applied to pay the Certifi cateholders to the extent of Principal
Shortfalls, if any, with respect to Series 1998-1.
On each Distribution Date beginning with the month following the
Monthly Period in which the Rapid Amortization Period commences, the Monthly
Total Principal Allocations from the prior Monthly Period along with Shared
Principal Collections from other Series, if any, and certain other amounts
treated as Available Investor Principal Collections will be distributed to the
Class A Certificateholders until the earlier of the date on which the Class A
Investor Interest is paid in full and the Series 1998-1 Termination Date.
Distributions with respect to this Class A Certificate will be made by
the Paying Agent by check mailed to the address of the holders of record
appearing in the Certificate Register (except for the final distribution in
respect of this Class A Certificate) without the presentation or surrender of
this Certificate or the making of any notation thereon, except that with respect
to Certif icates registered in the name of the nominee of a Clearing Agency,
distributions will be made in the form of immediately available funds.
This Class A Certificate does not represent an obligation of, or an
interest in, the Transferor or the Servicer, and neither the Class A
Certificates nor the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Class A Certificate is limited in right of payment to certain collections
respecting the Receivables, as more specifically set forth hereinabove and in
the Agreement.
As provided in the Agreement, withdrawals from the Series 1998-1
Investor Accounts may be made upon the instructions of the Servicer from time to
time for purposes other than distributions to Class A Certificateholders.
The Transferor may designate (subject to the terms and conditions of
the Agreement) Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust.
- 7 -
The Agreement and any Supplement may be amended by the Transferor, the
Servicer and the Trustee, without the consent of the Certificateholders of any
Series, to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, and to add any other
provisions with respect to matters or questions arising under the Agreement and
any Supplement which are not inconsistent with the provisions of the Agreement
and any Supplement. The Agreement may be amended from time to time by the
Transferor, the Servicer and the Trustee, and without the consent of any
Certificateholders, to (a) provide for the transfer by the Transferor of its
interest in and to all or part of the Accounts in accordance with the provi
sions of the Agreement and (b) provide for the purchase of Princi pal
Receivables by the Trust at a price which is less than 100% of the outstanding
balance thereof, and to provide for the treatment of Collections of Principal
Receivables, in an amount up to the aggregate amount by which the purchase price
of Principal Receiv xxxxx as sold thereafter is less than 100%, as Collections
of Finance Charge Receivables; provided, however, that any such action may not
adversely affect in any material respect the interests of Certificateholders;
provided further that the Servicer and the Trustee shall have received notice
from the Rating Agency that any such amendment will not result in the reduction
or withdrawal of its then-existing rating of the certificates of any Series.
The Agreement and any Supplement may be amended by the Xxxx sferor, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregating not less than 66-2/3% of the
principal amount of each Series adversely affected, for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series. No such amendment, however, may (a) reduce in
any manner the amount of, or delay the timing of, distributions required to be
made on such Series, (b) change the definition of or the manner of calculating
the interest of any certificateholder of such Series or (c) reduce the aforesaid
percentage of undivided interests, the holders of which are required to consent
to any such amendment, in each case without the consent of all
certificateholders of all Series adversely affected.
The transfer of this Class A Certificate shall (subject to the
limitations set forth in the Agreement) be registered in the Certificate
Register upon surrender of this Class A Certificate for registration of transfer
at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the Class A
Certificateholder or such Class A Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class A Certificates of
authorized denomination and for the same aggregate
- 8 -
Undivided Interests will be issued to the designated transferee or transferees.
Pursuant to the Series 1998-1 Supplement, the Transferor has the option
(the "Discount Option"), at any time to designate as Finance Charge Receivables
a fixed or variable percentage of Receivables in designated Accounts which
otherwise would be treated as Principal Receivables. The exercise by the
Transferor of the Discount Option will be subject to, among other things, the
receipt by the Trustee of written confirmation from each Rating Agency that the
exercise of such option will not result in a withdrawal or reduction of its
rating of the Certificates. Each Certificatehold er by its acceptance of a
beneficial interest in a Certificate will be deemed to have consented to the
exercise by the Transferor of the Discount Option at such time as the Transferor
determines to exercise such option.
As provided in the Agreement and subject to certain limita tions
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates evidencing like aggregate Undivided Inter ests, as requested by the
Class A Certificateholder surrendering such Class A Certificates. No service
charge may be imposed for any such exchange but the Servicer or Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1998-1, the Agreement
provides that the right of the Class A Certificateholders to receive payments
from the Trust will terminate on the Scheduled Series 1998-1 Termination Date.
Upon the termination of Trust pursuant to Section 12.1 of the Agreement (and
subject to the exceptions set forth in the Agreement), the Trustee will assign
and convey to the Holder of the Exchangeable Seller Certificate (with out
recourse, representation or warranty) all right, title and interest of the Trust
in the Receivables, whether then existing or thereafter created, and Recoveries
allocable to the Trust relating thereto and Interchange pursuant to subsections
2.5(k) and (l) of the Agreement. The Trustee will execute and deliver such
instru ments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the Holder of the Exchangeable Seller Certificate to
vest in such Holder all right, title and interest which the Trustee had in the
Receivables.
- 9 -
Unless the certificate of authentication hereon has been ex ecuted by
or on behalf of the Trustee, by manual signature, this Class A Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
- 10 -
IN WITNESS WHEREOF, People's Bank has caused this Class A Cer tificate
to be executed by its duly authorized officer.
PEOPLE'S BANK
By:
------------------------------
Dated: April 1, 1998
- 11 -
Form of Trustee's Certificate of Authentication
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY, not in
its individual capacity,
but solely as Trustee
By:
---------------------------
(Authorized Officer)
- 12 -
EXHIBIT 1-B
FORM OF CLASS B INVESTOR CERTIFICATE
$-----------
No. R-1 CUSIP No. ___________
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS B ASSET BACKED CERTIFICATE, SERIES 1998-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA(1) and MasterCard1 credit card
receivables generated or to be generated by People's Bank.
(Not an interest in or obligation of
People's Bank or any
Affiliate thereof.)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE SENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S
BANK OR ITS AGENT FOR REGISTRATION OF TRANS FER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESEN TATIVE
OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns
of CEDE & CO. with respect to this certificate, the "Class B Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter created
under selected VISA and MasterCard credit card accounts (the "Accounts") of
People's Bank, a Connecticut stock savings bank, all Receivables in Automatic
Additional Accounts and Additional Accounts added to the Trust from time to
time, all monies due or to become due in payment of the Receivables (including
all Finance Charge Receivables), and the other assets and interests constituting
the Trust pursuant to an Amended and Restated Pooling and Servicing Agreement,
dated as
--------
1 VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
of March 18, 1997, and as supplemented by the Series 1998-1 Supple ment, dated
as of April 1, 1998, (collectively, the "Agreement"), by and between People's
Bank, as Transferor and Servicer, and Bank ers Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth herein below.
The Transferor has structured the Agreement and the Investor
Certificates with the intention that the Investor Certificates will qualify
under applicable tax law as indebtedness, and the Transferor, the Holder of the
Exchangeable Seller Certificate, the Servicer and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Certificate (or,
in the case of a Certificate Owner, by virtue of such Certificate Owner's
acquisition of a beneficial interest therein), agrees to treat the Investor
Certif icates (or a beneficial interest therein) consistently with, and to take
no action inconsistent with, the treatment of the Investor Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law.
This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended from
time to time, the Certificateholder by virtue of the acceptance hereof assents
and by which the Certificateholder is bound. Although a summary of certain
provisions of the Agreement is set forth below, this Class B Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Agreement.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge Receivables
which arise generally from Periodic Finance Charges and other fees and charges
as fully specified in the Agreement. The assets of the Trust in which this
Certificate represents an interest, consist of (i)(a) the Receivables now
existing and hereafter created and arising in connection with the Accounts and
all Receivables in Automatic Additional Accounts and
- 2 -
Additional Accounts added to the Trust from time to time, (b) all monies due or
to become due with respect thereto (including all Finance Charge Receivables),
(c) all proceeds (as defined in Section 9-306 of the UCC as in effect in the
State of New York) of such Receivables, (d) proceeds of insurance policies
relating to the Receivables, (e) Interchange and Recoveries pursuant to subsec
tions 2.5(k) and (l) of the Agreement, (ii) such funds as from time to time are
deposited in the Collection Account, the Excess Funding Account, and the
Investor Accounts and (iii) the benefit of the Class B Interest Rate Cap between
the Trustee and the Interest Rate Cap Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$27,000,000 Floating Rate Class B Asset Backed Certificates, Series 1998-1 (the
"Class B Certificates"), each of which represents an undivided interest in
certain assets of the Trust, including the right to receive Collections
allocable to the Class B Certificates and other amounts at the times and in the
amounts specified in the Agreement to be deposited in the Investor Accounts or
paid to the Investor Certificateholders. The aggregate interest represented by
the Class B Certificates at any time in the Principal Receivables in the Trust
will not exceed an amount equal to the Class B Investor Interest at such time.
The Class B Initial Investor Interest is $27,000,000 minus the retirement of any
Class B Certificates pursuant to an Investor Exchange. The Class B Investor
Interest on any date of determination will be an amount equal to (a) the Class B
Initial Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class B Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
B Investor Charge-Offs, Reallocated Principal Collections and other reductions
of the Class B Investor Interest in respect of the Class A Required Amount over
Class B Investor Charge-Offs, Reallocated Principal Collections and such other
reductions reimbursed prior to such date of determination; provided, however,
that the Class B Investor Interest may not be reduced below zero. In addition to
the Class B Certificates, a class of certificates entitled "People's Bank Credit
Card Master Trust $343,000,000 Floating Rate Class A Asset Backed Certificates,
Series 1998-1" (the "Class A Certificates") and an Undivided Interest in the
Trust in the initial amount of $30,000,000 (the "Collateral Interest," and
together with the Class A Certificates and the Class B Certifi xxxxx, the
"Certificates") will be issued, and the Exchangeable Seller Certificate will be
issued to the Holder of the Exchangeable Seller Certificate pursuant to the
Agreement, and other Series of certificates have been, and may from time to time
be, issued by the Trust, which represent or will represent an undivided interest
in the Trust. The Exchangeable Seller Certificate will represent the interest in
the Principal Receivables not represented by the Certificates or any other
Series of certificates.
- 3 -
Interest on the Class B Certificates will be distributed on April 15,
1998 and on the fifteenth day of each calendar month thereafter, or if such
fifteenth day is not a Business Day, on the next succeeding Business Day (a
"Distribution Date"), to the Class B Certificateholders of record on the Record
Date preceding the related Distribution Date. Principal with respect to the
Class B certificates is scheduled to be distributed on the April 2003
Distribution Date, (the "Class B Scheduled Payment Date"), but may be paid
earlier or later as provided in the Agreement. During the Rapid Amortization
Period, if any, interest and principal will be distributed to the Class B
Certificateholders on the Distribution Date of each calendar month until the
Class B Certificateholders have been paid in full.
The Servicer will deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in no
event later than the second Business Day following such Date of Processing.
Notwithstanding anything in the Agreement to the contrary, for so long
as, and only so long as, the Transferor shall remain the Servicer hereunder and
(a)(i) the Servicer provides to the Trustee a letter of credit or other
arrangement covering risk of collection of the Servicer acceptable to the Rating
Agency (as evidenced by letters from the Rating Agency) and (ii) the Transferor
shall not have received a notice from the Rating Agency that such letter of
credit or other arrangement would result in the lowering or withdrawal of such
Rating Agency's then-existing rating of any Series of Investor Certificates or
(b) under certain circumstances permitted under the Agreement, the Servicer need
not deposit Col lections into the Collection Account, the Principal Account or
the Finance Charge Account in accordance with the immediately preceding sentence
or make payments to the Holder of the Exchangeable Seller Certificate prior to
the close of business on the day any Collections are deposited in the Collection
Account, but may make such payments on the Transfer Date in the Monthly Period
following the Monthly Period in which such Collections are received in an amount
equal to the net amount of such deposits, payments and with drawals which would
have been made but for the provisions of this paragraph.
On each Distribution Date, to the extent funds are available on the
terms specified in the Agreement from available Finance Charge Collections, from
payments made pursuant to the Class B Interest Rate Cap and from Excess Spread,
interest will be distributed to the Class B Certificateholders in an amount
equal to the sum of: (i) the product of (a) the Class B Certificate Rate, (b)
the lesser of the Class B Investor Interest determined as of the preceding
Distribution Date, after giving effect to all payments, deposits and withdrawals
on such Distribution Date and the Expected Class B Principal as of the preceding
Distribution
- 4 -
Date or Closing Date (or, for the initial Interest Accrual Period, the Class B
Initial Investor Interest), as applicable, and (c) the actual number of days in
the related Interest Accrual Period divided by 360, plus (ii) the product of (a)
the Class B Excess Principal, (b) the lesser of the Class B Certificate Rate and
9.34%, and (c) the actual number of days in the related Interest Accrual Period
divided by 360, plus (iii) to the extent permitted by applicable law, any
interest accrued on the Class B Certificates (including interest on any overdue
Class B Monthly Interest) during any prior Interest Accrual Period which has not
been distributed to the Class B Certificateholders, plus, (iv) to the extent
that there is available Excess Spread, an amount equal to the product of (a) the
amount by which the Class B Certificate Rate exceeds 9.34%, (b) the Class B
Excess Principal and (c) the actual number of days in the related Interest
Accrual Period divided by 360.
On each Determination Date during the Revolving Period, the Controlled
Accumulation Period and the Rapid Amortization Period, if any, the Servicer will
determine the Class A Required Amount and the Class B Required Amount. If either
or both of the Required Amounts are greater than zero after application of
available Finance Charge Collections, Excess Spread and Shared Finance Charge
Collections, then Principal Collections allocable to the Collateral Interest
will be reallocated and applied first to fund the remaining Class A Required
Amount, if any, and second to fund the remaining Class B Required Amount, if
any, and to the extent that Reallocated Collateral Principal Collections are
less than such remaining Class A Required Amount, Principal Collections
allocable to the Class B Certificates will then be reallocated and applied to
fund the remaining Class A Required Amount. The Collateral Interest will be
reduced by the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections applied to fund the Required Amounts.
The Class B Investor Interest will be reduced by the amount of Reallocated Class
B Principal Collections in excess of the Collateral Interest (after giving
effect to reductions for an Collateral Interest Charge-Offs and any reallocated
Collateral Principal Collections as of the related Distribution Date) applied to
fund the Class A Required Amount.
If, on any Distribution Date, Reallocated Collateral Principal
Collections are insufficient to fund the remaining Class A Required Amount for
the related Monthly Period, then the Collateral Interest (after giving effect to
reduction for any Collateral Interest Charge-Offs and Reallocated Principal
Collections) will be reduced by the amount of such deficiency (but not by more
than the Class A Investor Default Amount for such Monthly Period). In the event
that such reduction would cause the Collateral Interest to be a negative number,
the Collateral Interest will be reduced to zero, and the Class B Investor
Interest (after giving effect to reduc tions for any Class B Investor
Charge-Offs and any Reallocated
- 5 -
Class B Principal Collections in excess of the Collateral Interest as of such
Distribution Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. In the event that such reduction
would cause the Class B Investor Interest to be a negative number, the Class B
Investor Interest will be reduced to zero and the Class A Investor Interest will
be reduced by the amount by which the Class B Investor Interest would have been
reduced below zero.
If, on any Distribution Date, Reallocated Collateral Principal
Collections not required to fund the Class A Required Amount are insufficient to
fund the remaining Class B Required Amount for such Monthly Period, then the
Collateral Interest (after giving effect to reduction for any Collateral
Interest Charge-Offs, Reallocated Principal Collections and any adjustments made
thereto for the benefit of the Class A Certificateholders) will be reduced by
the amount of such deficiency (but not by more than the Class B Investor Default
Amount for such Monthly Period). In the event that such reduction would cause
the Collateral Interest to be a negative number, the Collateral Interest will be
reduced to zero, and the Class B Investor Interest will be reduced by the amount
by which the Collateral Interest would have been reduced below zero.
The Trustee has entered into the Class B Interest Rate Cap with the
Interest Rate Cap Provider for the exclusive benefit of the Class B
Certificateholders. On each Transfer Date that the Class B Certificate Rate for
the related Interest Accrual Period exceeds the Class B Cap Rate, the Interest
Rate Cap Provider will make a payment to the Trustee, on behalf of the Trust,
based on the amount of such excess and the notional amount of the Class B
Interest Rate Cap. The Class B Notional Amount will at all times equal the
amount of the Expected Class B Principal. The Class B Interest Rate Cap, or its
Replacement Interest Rate Cap or Quali fied Substitute Arrangement, will
terminate on the day immediately following the Class B Scheduled Payment Date.
People's Bank, as Servicer, is entitled to receive as ser vicing
compensation a monthly servicing fee in an amount equal to one-twelfth of the
product of 2.00% per annum and the Aggregate Principal Receivables in the Trust
on the last day of the preceding Monthly Period, payable on each succeeding
Distribution Date. With respect to any Distribution Date, the Class B Monthly
Servicing Fee will equal one-twelfth of the product of 2.00% per annum and the
Class B Investor Interest as of the last day of the preceding Monthly Period;
provided that the Class B Monthly Servicing Fee for the first Distribution Date
will be an amount equal to zero.
On the Transfer Date immediately preceding the Class B Sched uled
Payment Date, and on each Transfer Date thereafter until the Class B Investor
Interest has been reduced to zero, the Servicer or the Trustee acting in
accordance with instructions from the
- 6 -
Servicer will withdraw all amounts on deposit in the Principal Account, in
respect of Collections processed during the preceding Monthly Period and deposit
such amounts in the Distribution Account for distribution to the Class B
Certificateholders on the next suc ceeding Distribution Date, to the extent
specified in the Agree ment.
As provided in the Agreement, Principal Collections remaining after
funding of the Required Amounts during the Revolving Period and the Controlled
Accumulation Period and Principal Collections remaining after funding of the
Controlled Deposit Amount during the Controlled Accumulation Period will be
applied as Shared Principal Collections and distributed first to the
certificateholders of other Series to the extent of Principal Shortfalls, if
any, and then to the Holder of the Exchangeable Seller Certificate. In addition,
during the Controlled Accumulation Period and the Rapid Amortization Period,
Shared Principal Collections from other Series available to the Certificates
will be applied to pay the Certifi cateholders to the extent of Principal
Shortfalls, if any, with respect to Series 1998-1.
On each Distribution Date beginning with the month following the
Monthly Period in which the Rapid Amortization Period commences, the Monthly
Total Principal Allocations from the prior Monthly Period along with Shared
Principal Collections from other Series, if any, and certain other amounts
treated as Available Investor Principal Collections will be distributed to the
Class A Certificateholders until the earlier of the date on which the Class A
Investor Interest is paid in full and the Series 1998-1 Termination Date and,
following the final principal payment to the Class A Certificateholders, to the
Class B Certificateholders until the earlier of the date on which the Class B
Investor Interest is paid in full and the Series 1998-1 Termination Date.
Distributions with respect to this Class B Certificate will be made by
the Paying Agent by check mailed to the address of the holder of record
appearing in the Certificate Register (except for the final distribution in
respect of this Class B Certificate) without the presentation or surrender of
this Certificate or the making of any notation thereon, except that with respect
to Certif icates registered in the name of the nominee of a Clearing Agency,
distributions will be made in the form of immediately available funds.
This Class B Certificate does not represent an obligation of, or an
interest in, the Transferor or the Servicer, and neither the Class B
Certificates nor the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Class B Certificate is limited in right of payment to certain collections
respecting the Receivables, as more specifically set forth hereinabove and in
the Agreement.
- 7 -
As provided in the Agreement, withdrawals from the Series 1998-1
Investor Accounts may be made upon the instructions of the Servicer from time to
time for purposes other than distributions to Class B Certificateholders.
The Transferor may designate (subject to the terms and conditions of
the Agreement) Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust.
The Agreement and any Supplement may be amended by the Transferor, the
Servicer and the Trustee, without the consent of the Certificateholders of any
Series, to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, to add any other
provisions with respect to matters or questions arising under the Agreement and
any Supplement which are not inconsistent with the provisions of the Agreement
and any Supplement. The Agreement may be amended from time to time by the
Transferor, the Servicer and the Trustee, and without the consent of any
Certificateholders, to (a) provide for the transfer by the Transferor of its
interest in and to all or part of the Accounts in accordance with the provi
sions of the Agreement and (b) provide for the purchase of Princi pal
Receivables by the Trust at a price which is less than 100% of the outstanding
balance thereof, and to provide for the treatment of Collections of Principal
Receivables, in an amount up to the aggregate amount by which the purchase price
of Principal Receiv xxxxx as sold thereafter is less than 100%, as Collections
of Finance Charge Receivables; provided, however, that any such action may not
adversely affect in any material respect the interests of Certificateholders;
provided further that the Servicer and the Trustee shall have received notice
from the Rating Agency that any such amendment will not result in the reduction
or withdrawal of its then-existing rating of the certificates of any Series.
The Agreement and any Supplement may be amended by the Xxxx sferor, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregating not less than 66-2/3% of the
principal amount of each Series adversely affected, for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series. No such amendment, however, may (a) reduce in
any manner the amount of, or delay the timing of, distributions required to be
made on such Series, (b) change the definition of or the manner of calculating
the interest of any certificateholder of such Series or (c) reduce the aforesaid
percentage of undivided interests, the holders of which are required to consent
to any such amendment, in each case without the consent of all
certificateholders of all Series adversely affected.
- 8 -
The transfer of this Class B Certificate shall be registered in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the Class B
Certificateholder or such Class B Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class B Certificates of
authorized denomination and for the same aggregate Undivided Interests will be
issued to the designated transferee or transferees.
Pursuant to the Series 1998-1 Supplement, the Transferor has the option
(the "Discount Option"), at any time to designate as Finance Charge Receivables
a fixed or variable percentage of Receivables in designated Accounts which
otherwise would be treated as Principal Receivables. The exercise by the
Transferor of the Discount Option will be subject to, among other things, the
receipt by the Trustee of written confirmation from each Rating Agency that the
exercise of such option will not result in a withdrawal or reduction of its
rating of the Certificates. Each Certificatehold er by its acceptance of a
beneficial interest in a Certificate will be deemed to have consented to the
exercise by the Transferor of the Discount Option at such time as the Transferor
determines to exercise such option.
As provided in the Agreement and subject to certain limita tions
therein set forth, Class B Certificates are exchangeable for new Class B
Certificates evidencing like aggregate Undivided Inter ests, as requested by the
Class B Certificateholder surrendering such Class B Certificates. No service
charge may be imposed for any such exchange but the Servicer or Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1998-1, the Agreement
provides that the right of the Class B Certificateholders to receive payments
from the Trust will terminate on the Scheduled Series 1998-1 Termination Date.
Upon the termination of Trust pursuant to Section 12.1 of the Agreement, the
Trustee will assign and convey to the Holder of the Exchangeable Seller
Certificate (without recourse, representation or warranty) all right, title and
- 9 -
interest of the Trust in the Receivables, whether then existing or thereafter
created, and Recoveries allocable to the Trust relating thereto and Interchange
pursuant to subsections 2.5(k) and (l) of the Agreement. The Trustee will
execute and deliver such instru ments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Holder of the
Exchangeable Seller Certificate to vest in such Holder all right, title and
interest which the Trustee had in the Receivables.
Unless the certificate of authentication hereon has been ex ecuted by
or on behalf of the Trustee, by manual signature, this Class B Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
- 10 -
IN WITNESS WHEREOF, People's Bank has caused this Class B Cer tificate
to be executed by its duly authorized officer.
PEOPLE'S BANK
By:
----------------------------
Dated: April 1, 1998
- 11 -
Form of Trustee's Certificate of Authentication
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY, not in
its individual capacity,
but solely as Trustee
By:
---------------------------
(Authorized Officer)
- 12 -
EXHIBIT 2
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
MONTHLY CERTIFICATEHOLDERS' STATEMENT FOR MONTHLY PERIOD #
Monthly Period - Beginning Date _________
Monthly Period - Ending Date _________
Determination Date _________
Distribution Date _________
(Note: Monthly Period numbers found herein refer solely to Series 1998-1 and
may not correspond to Monthly Period numbers used for other Series of
the Trust.)
21. Information Regarding Distributions to Certificateholders
1.1 Total amount distributed to
Certificateholders (per $1,000
Initial Investor Interest) _____________
1.2 Total principal amount
distributed to Certificateholders
(per $1,000 Initial Investor Interest) _____________
1.3 Total interest amount
distributed to Certificateholders
(Per $1,000 Initial Investor Interest) _____________
2. Receivables Balances
2.1 Aggregate Principal Receivables in
Trust, end of period ___ _____________
(a) Aggregate Principal Receivables
in Trust on Closing Date _____________
22.2 Investor Interest, end of period __
(a) Investor Interest as of Closing Date _____________
22.3 Investor Interest as a percentage
of Trust Principal Receivables _____________
(a) Investor Interest as a percentage of
Trust Principal Receivables as of the
Closing Date _____________
22.4 Adjusted Investor Interest _____________
22.5 Floating Investor Percentage _____________
22.6 Fixed Investor Percentage _____________
23. Collections _____________
23.1 Aggregate amount of Collections Processed
during the Monthly Period allocated to
Certificateholders _____________
B. Monthly Pay Rate for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) Period - 4 _________%
(v) Period - 5 _________%
(vi) Period - 6 _________%
(vii) 6 mo. Avg. _________%
23.2 Principal Collections during the Monthly
Period allocated to Certificateholders _____________
23.3 Amount by which Controlled Accumulation
exceeds principal allocated to Investors _____________
23.4 Finance Charge Collections during the Monthly
Period allocated to Certificateholders _____________
23.5 Annualized Gross Portfolio Yield for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
- 2 -
24. Delinquent Balances*
Aggregate Percentage
Account Aggregate
Balances Receivables
24.1 Less than 31 days delinquent ___________ ___________%
24.2 31 - 60 days delinquent ___________ ___________%
24.3 61-90 days delinquent ___________ ___________%
24.4 More than 90 days delinquent ___________ ___________%
24.5 Total ___________ ___________%
25. Default Summary
25.1 Aggregate Investor Default Amount _____________
Aggregate Percent of
Account Aggregate
Balances Receivables
-------- -----------
25.2 Investor default percentage for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
25.3 Investor Charge-Offs
(i) Aggregate dollar amount
(ii) Per $1,000 of Initial Investor Interest
25.4 Reimbursed Investor Charge-Offs
(i) Aggregate dollar amount
(ii) Per $1,000 of Initial Investor Interest
25.5 Reallocated Principal Collections
(i) Aggregate dollar amount
(ii) Per $1,000 of Initial Investor Interest
25.6 Base Rate
- 3 -
25.7 Portfolio Yield minus Base Rate for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
26. Monthly Investor Servicing Fee
27. Accumulation Shortfall
28.1 Principal Funding Investment Proceeds
28.2 Principal Funding Investment Shortfall
29. Withdrawal from Reserve Account under Section 4.6
30. Required Reserve Account Amount
31. Available Reserve Account Amount
32. Pool Factor
33. Collateral Interest as a Percentage of
Investor Interest
PEOPLE'S BANK, Servicer
By:_______________________
Calculations
Monthly Pay Rate = Aggregate Collections (excluding Interchange) during
the Monthly Period/Aggregate Amount of Receivables at the end of the
prior Monthly Period
Amount by which Controlled Accumulation Amount exceeds Principal
allocated to Investors during the Monthly Period = $________ -
Principal allocated to Investors
Gross Portfolio Yield = Finance Charges allocated to Investors during
the Monthly Period (including Interchange allocated to Investors and
deposited in the Finance Charge Account)/Investor Interest for the
prior Monthly Period
#_______
- 4 -
Portfolio Yield minus Base Rate - Finance charges allocated to Investors during
the Monthly Period (including Interchange allocated to Investors and deposited
in the Finance Charge Amount) - Investor Default Amount for the Monthly
Period/Investor Interest for the prior Monthly Period - Base Rate.
- 5 -
EXHIBIT 3
FORM OF DTC LETTER OF REPRESENTATION
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/ AND PASS-THROUGH CERTIFICATES
Letter of Representations
[To be Completed by Issuer and Trustee]
People's Bank Credit Card Master Trust
[Name of Issuer]
Banker Trust Company
[Name of Trustee]
---------------------
[Date]
Attention: General Counsel's Office
The Depository Trust Company
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Re: $____________ Floating Rate Class A Asset Backed
Certificates, Series ______ $__________ Floating Rate
Class B Asset Backed Certificates, Series ______
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee will
act as trustee with respect to the Securities pursuant to an Amended and
Restated Pooling and Servicing Agreement, dated as of March 18, 1997 as amended
by an Amendment, dated as of September 24, 1997, (the "Document").
______________ is distributing the Securities through The Depository Trust
Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at
DTC,and to act in accordance with its Rules with respect
to the Securities, Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _________________, there shall
be deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each stated maturity of the Securities in the face
amounts set forth on Schedule A hereto, the total of which represents 100% of
the principal amount of such Securities. If, however, the aggregate principal
amount of any maturity exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC and any
payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC). ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC not less
than 15 calender days in advance of such record date. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Reorganization Department
at(212) 709-6896 or (000) 000-0000, and receipt of such notices shall be
confirmed by telephoning (000) 000-0000. Notices to DTC pursuant to this
Paragraph by mail or by any other means shall be sent to DTC's Reorganization
Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to DTC
by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designated to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business
- 2 -
days before the Publication Date. Issuer or Trustee shall forward such notice
either in a separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP number submitted in that transmission. (The party
sending such notice shall have a method to verify subsequently the use of such
means and the timeliness of such notice.) The Publication Date shall be not less
than 30 days nor more than 60 days prior to the redemption date or, in the case
of an advance refunding, the date that the proceeds are deposited in escrow.
Notices to DTC pursuant to the Paragraph by telecopy shall be sent to DTC's Call
Notification Department at (000) 000-0000 or (000) 000-0000. If the party
sending the notice does not receive a telecopy receipt from DTC confirming that
the notice has been received, such party shall telephone (000) 000-0000. Notices
to DTC pursuant to this Paragraph by mail or by any other means shall be sent
to:
Manager: Call Notification Department
The Depository Trust Company
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trustee
to Security holders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notice to DTC pursuant to this Paragraph and notices of
other corporate actions by telecopy shall be sent to DTC's Reorganization
Department at(212) 709-1093 or 000 000-0000 and receipt of such notices shall be
confirmed by telephoning 000 000-0000. Notices to DTC pursuant to the above by
mail or by any other means shall be sent to:
Manager: Reorganization Department
Reorganization Window
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized denomination
if less than $1,000 face value; payable on each payment date allocated as to the
interest and principal portions thereof preferably 5 but not less than 2
business days prior to such payment date. Such notices, which shall also contain
the current pool factor, any special adjustments to principal/interest
rates(e.g. adjustments due to deferred interest
- 3 -
or shortfall), and Trustee contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (000) 000-0000, or if by mail or by any
other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
7. [Note: Issuer must represent one of the following, and cross out the
other:] [The interest accrual period is payment date to payment date.]
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent, as
well as the dollar amount of the payment for each issue. Notification of payment
details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between Issuer
or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 000000000
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Trustee and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (000) 000-0000 or 000 000-0000 and
receipt of such notices shall be confirmed by telephoning 000 000-0000. Notices
to DTC pursuant to the above by mail or by any other means shall be sent to:
Manager: Announcements
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
- 4 -
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between Trustee and DTC, such
payments shall be wired as follows:
The Chase Manhattan Bank
ABA 000000000
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Trustee.
The Security certificate(s) shall remain in Agent's custody as a
"Balance Certificate" subject to the provisions of the Balance Certificate
Agreement between Agent and DTC currently in effect.
11. DTC shall receive all reorganization payment and CUSIP-level detail
resulting from corporate actions (such as tender officer, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 000000000
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address
as the number or address to which notices or payments of interest or principal
may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Trustee's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Trustee to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Trustee prior to payment, if
required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue,
- 5 -
transfer, and exchange certificates in appropriate amounts, as
required by DTC and others.
15. DTC may discontinue providing its services as securities depositary
with respect to the Securities at any time by giving reasonable notice to Issuer
or Trustee (at which time DTC will confirm with Issuer or Trustee the aggregate
principal amount of Securities outstanding). Under such circumstances, at DTC's
request Issuer and Trustee shall cooperate fully with DTC by taking appropriate
action to make valuable one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
17. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES --
to be included in DTC Letter of Representations
Issuer and Agent recognize that DTC does not in any way undertake to,
and shall not have any responsibility to, monitor or ascertain whether a
transfer of Securities could give rise to a transaction prohibited or not
otherwise permissible under the Employee Retirement Income Security Act of 1974
or under Section 4975 of the Internal Revenue Code of 1986. Issuer and Agent
acknowledge that: a) so long as Cede & Co. is the sole record owner of the
Securities, it shall be entitled to all voting rights in respect thereof and to
receive the full amount of all principal, premium, if any, and interest payable
with respect thereto; and b) DTC shall treat any DTC Participant having
Securities credited to its DTC accounts as entitled to the full benefits of
ownership of such Securities even if the crediting of such Securities to the DTC
accounts of such Participant results from transfers or failures to transfer in
violation of such laws. (The treatment by DTC of the effects of the crediting by
it of Securities to the accounts of DTC Participants shall not affect the rights
of Issuer or purchasers, sellers, or holders of Securities against any DTC
Participant.)
Notes:
- 6 -
A. If there is a Trustee (as defined in this Letter of Representations).
Trustee as well as Issuer must sign this Letter. If there is no Trustee
in signing this Letter Issuer itself undertakes to perform all of the
obligations set forth herein.
B. Schedule B contains statements that DTC believes accurately describe
DTC, the method of effecting book-entry transfers of securities
distributed through DTC, and certain related matters.
Very truly yours,
People's Bank Credit Card Master Trust
--------------------------------------
(Issuer)
By:___________________________________
(Authorized Officer's Signature)
Bankers Trust Company
--------------------------------------
(Trustee)
By:___________________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:_________________________
cc: Underwriter
Underwriter's Counsel
- 7 -
SCHEDULE A
$____________ Floating Rate Class A Asset Backed Certificates,
Series ______
-------------------------------------------------------------------------------
$__________ Floating Rate Class B Asset Backed Certificates,
Series ______
-------------------------------------------------------------------------------
CUSIP Number Principal Amount Maturity Date Interest Rate
------------ ---------------- ------------- -------------
- 8 -
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to certain
issues)
1. The Depository Trust Company "DTC", New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Security certificate will be
issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
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written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in
effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date identified in a listing attached to
the Omnibus Proxy.
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC. Trustee, or Issuer, subject
to any
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statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of Issuer or
Trustee, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee [or
Tender/Remarketing Agent], and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee [or Tender/Remarketing Agent]. The
requirement for physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's records
and followed by a book-entry credit of tendered Securities to Trustee [or
Tender/Remarketing Agent's] DTC account.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
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EXHIBIT 4
FORM OF MONTHLY PAYMENT INSTRUCTIONS TO TRUSTEE
BANKERS TRUST COMPANY
ABA #000000000
A/C 00-000-000
CORPORATE TRUST AND AGENCY GROUP
ATTENTION: XXXXX XXXX/XXXXX XXXXXX
RE: PEOPLE'S BANK 1998-1 FINANCE CHARGE ACCOUNT
ON ___________________________ PLEASE PERFORM THE FOLLOWING
TRANSACTIONS PURSUANT TO THE SERIES 1998-1 SUPPLEMENT AND THE
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT DATED AS OF
MARCH 18, 1997:
Per Section Please withdraw $0.00 from Finance
4.6 (a) (i) & Charge Account - 22756 and deposit into the
4.6 (d) (vii) Distribution Account - 22753 to pay Monthly
Certificate Interest to Class A Investors.
Per Section Please withdraw $0.00 from Finance
4.6 (b) (i) & Charge Account - 22756 and deposit into the
4.6 (d) Distribution Account - 22753 to pay Monthly
(viii) Certificate Interest to Class B Investors.
Per Section Please withdraw $0.00 from
4.6 (d) (vi) Finance Charge Account - 22756 and deposit
into the Distribution Account - 22753 to pay
Collateral Monthly Interest to the Collateral
Interest Holder.
Per Section Please withdraw $0.00 from
4.6 (a) (ii), Finance Charge Account - 22756 to pay Monthly
4.6 (b) (ii), Investor Servicing Fee to People's Bank.
4.6 (c) (i) &
4.6 (d) (vii)
Per Section Please withdraw $0.00 from
4.6 (a) Finance Charge Account - 22756 to pay
(iii), Investor Default Amount to People's
4.6 (c) (iii) Structured Finance Corp.
& 4.6 (d) (ix)
4.6 (d) (ix)
Per Section Please withdraw $0.00 from
4.6 (d) Finance Charge Account - 22756 and wire to
(xvii) People's Structured Finance Corp.
AUTHORIZED BY:_______________________________
XXXX XXXXXX, VICE PRESIDENT
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EXHIBIT 5
Form of Notification to Trustee Regarding
Completion of Required Deposits and Withdrawals
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
This is to inform you that on the Transfer Date occurring on _________
we have made all deposits and withdrawals for the Monthly Period beginning on
________ and ending on _________.
_____________________________
Name:
Title:
EXHIBIT 6
Form of Notification to Trustee Regarding
Failure to Make Payment
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
This is to inform you that we have been unable to make a [payment or
deposit] in the amount of __________ for the Monthly Period beginning on
________ and ending on _________. Such payments were to be made from [Account]
on _________ and such payment or deposit was to be made to [Person or Account].
_____________________________
Name:
Title:
