<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 24, 1996
DISCOVER CARD MASTER TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-23108 NOT APPLICABLE
(STATE OF (COMMISSION (IRS EMPLOYER
ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
C/O GREENWOOD TRUST COMPANY
12 READ'S WAY
NEW CASTLE, DELAWARE 19720
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 323-7184
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: NOT APPLICABLE
<PAGE> 2
ITEM 5. OTHER EVENTS
SERIES 1996-5. ON JULY 24, 1996, $819,188,676 AGGREGATE PRINCIPAL
AMOUNT OF SERIES 1996-5 FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH
CERTIFICATES AND $43,116,000 AGGREGATE PRINCIPAL AMOUNT OF SERIES 1996-5
FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES OF DISCOVER CARD
MASTER TRUST I WERE ISSUED PURSUANT TO THE POOLING AND SERVICING AGREEMENT,
DATED AS OF OCTOBER 1, 1993, BETWEEN GREENWOOD TRUST COMPANY AS MASTER SERVICER,
SERVICER AND SELLER AND FIRST BANK NATIONAL ASSOCIATION (SUCCESSOR TRUSTEE TO
BANK OF AMERICA ILLINOIS, FORMERLY CONTINENTAL BANK, NATIONAL ASSOCIATION) AS
TRUSTEE, AS AMENDED, AND THE SERIES SUPPLEMENT, DATED AS OF JULY 24, 1996, FOR
SERIES 1996-5 BETWEEN GREENWOOD TRUST COMPANY AS MASTER SERVICER, SERVICER AND
SELLER AND FIRST BANK NATIONAL ASSOCIATION AS TRUSTEE.
DISCOVER CARD PORTFOLIO INFORMATION. ON OR ABOUT JULY 22, 1996,
THE REGISTRANT MADE AVAILABLE THE DISCOVER CARD PORTFOLIO INFORMATION FOR THE
SIX MONTHS ENDED JUNE 30, 1996, WHICH IS ATTACHED AS EXHIBIT 99.1 HERETO.
ITEM 7. EXHIBITS
EXHIBIT NO. DESCRIPTION
EXHIBIT 4.1 SERIES SUPPLEMENT WITH RESPECT TO SERIES 1996-5 BETWEEN GREENWOOD
TRUST COMPANY AS MASTER SERVICER, SERVICER AND SELLER AND FIRST
BANK NATIONAL ASSOCIATION AS TRUSTEE, INCLUDING FORM OF CLASS A
CERTIFICATE AND FORM OF CLASS B CERTIFICATE, DATED AS OF JULY 24,
1996.
EXHIBIT 99.1 DISCOVER CARD PORTFOLIO INFORMATION FOR THE SIX MONTHS ENDED JUNE
30, 1996.
PAGE 2 OF 79 PAGES
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DISCOVER CARD MASTER TRUST I
(REGISTRANT)
BY: GREENWOOD TRUST COMPANY
(ORIGINATOR OF THE TRUST)
DATE: JULY 24, 1996 BY: /s/ John J. Coane
-----------------------------
JOHN J. COANE
VICE PRESIDENT, DIRECTOR OF ACCOUNTING
AND TREASURER
PAGE 3 OF 79 PAGES
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
EXHIBIT 4.1 SERIES SUPPLEMENT WITH RESPECT TO SERIES 1996-5 BETWEEN GREENWOOD ___
TRUST COMPANY AS MASTER SERVICER, SERVICER AND SELLER AND FIRST
BANK NATIONAL ASSOCIATION AS TRUSTEE, INCLUDING FORM OF CLASS A
CERTIFICATE AND FORM OF CLASS B CERTIFICATE, DATED AS OF JULY 24,
1996.
EXHIBIT DISCOVER CARD PORTFOLIO INFORMATION FOR THE SIX MONTHS ENDED JUNE
99.1 30, 1996.
</TABLE>
PAGE 4 OF 79 PAGES
<PAGE> 1
EXHIBIT 4.1
GREENWOOD TRUST COMPANY
Master Servicer, Servicer and Seller
and
FIRST BANK NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders
-------------
SERIES SUPPLEMENT
Dated as of July 24, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1993
-------------
DM 1,250,000,000 Class A Certificates
$43,116,000 Class B Certificates
DISCOVER CARD MASTER TRUST I
SERIES 1996-5 CERTIFICATES
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SERIES TERM SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ANNEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3. Representations and Warranties of the Sellers. . . . . . . . . . . . . . 24
SECTION 4. Representations and Warranties of Greenwood as Master Servicer and
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5. Representations and Warranties of Other Servicers. . . . . . . . . . . . 24
SECTION 6. Representations and Warranties of the Trustee. . . . . . . . . . . . . . 24
SECTION 7. The Investor Certificates. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8. Establishment and Administration of Investor Accounts and the Credit
Enhancement Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9. Allocations of Collections . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10. Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 11. Credit Enhancement. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 12. Alternative Credit Support Election . . . . . . . . . . . . . . . . . . 49
SECTION 13. Calculation of Investor Losses. . . . . . . . . . . . . . . . . . . . . 50
SECTION 14. Servicing Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 15. Class Interest Rate Caps. . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 16. Class Currency Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 17. Investor Certificateholders' Monthly Statement. . . . . . . . . . . . . 54
SECTION 18. Master Servicer's Monthly Certificate.. . . . . . . . . . . . . . . . . 54
SECTION 19. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 20. Additional Amortization Events. . . . . . . . . . . . . . . . . . . . . 54
SECTION 21. Purchase of Investor Certificates and Series Termination. . . . . . . . 56
SECTION 22. Variable Accumulation Period. . . . . . . . . . . . . . . . . . . . . . 57
SECTION 23. Series Yield Factor . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 24. Ratification of Pooling and Servicing Agreement.. . . . . . . . . . . . 58
SECTION 25. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 26. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
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DISCOVER CARD MASTER TRUST I
SERIES 1996-5 CERTIFICATES
This Series of Master Trust Certificates is established pursuant to
Section 6.06 of that certain Pooling and Servicing Agreement, dated as of
October 1, 1993, as amended, by and between GREENWOOD TRUST COMPANY, a Delaware
banking corporation ("Greenwood"), as Master Servicer, Servicer and Seller and
FIRST BANK NATIONAL ASSOCIATION (successor trustee to Bank of America Illinois,
formerly Continental Bank, National Association) (the "Trustee"), as Trustee
(the "Pooling and Servicing Agreement"). This SERIES TERM SHEET and the ANNEX
attached hereto, by and among the Master Servicer, the Servicers, the Sellers
and the Trustee, constitute the SERIES SUPPLEMENT (the "Series Supplement"). The
Pooling and Servicing Agreement and this Series Supplement together establish
the Series of Master Trust Certificates to be known as the DISCOVER CARD MASTER
TRUST I, SERIES 1996-5 CERTIFICATES.
SERIES TERM SHEET
<TABLE>
<S> <C>
Date of Series Term Sheet July 24, 1996.
Group One.
Series Initial Investor Interest $862,304,676.
Class Initial Investor Interest of each Class of Class A - $819,188,676.
Investor Certificates Class B - $43,116,000.
Class Initial Foreign Currency Investor Interest Class A - DM 1,250,000,000.
of each Class of Investor Certificates Class B - Not applicable.
Class A Expected Final Payment Date The Class A Interest Payment Date in July 1999.
Class B Expected Final Payment Date The Class B Interest Payment Date in August
1999.
Type of Structure Bullet Maturity.
</TABLE>
1
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<TABLE>
<S> <C>
Certificate Rates Class A - LIBOR plus 0.0825%, per annum,
calculated on the basis of the actual number of
days elapsed and a 360-day year.
Class B - LIBOR plus 0.2500%, per annum,
calculated on the basis of the actual number of
days elapsed and a 360-day year.
Foreign Currency Certificate Rates Class A - Foreign Currency LIBOR plus
0.0700%, per annum, calculated on the basis of
the actual number of days elapsed and a 360-day
year.
Class B - Not applicable.
Class Cap Rate Not applicable.
Class Maximum Rate Not applicable.
Class Currency Swap Class A - Initially, the Class Currency Swap
executed by the Trustee and the Currency Swap
Counterparty, substantially in the form of
Exhibit L.
Class B - Not applicable.
Currency Swap Counterparty Initially, Deutsche Bank AG, New York Branch.
Currency Swap Downgrade Trigger The withdrawal or reduction of the Currency
Swap Counterparty's long-term, unsecured and
unguaranteed debt rating below "AA-" by
Standard & Poor's or "Aa3" by Moody's.
</TABLE>
2
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<TABLE>
<S> <C>
Minimum Investor Certificate Ratings Class A - Standard & Poor's - AA-.
Moody's - Aa3.
Class B - Not applicable.
Currency Swap Dollar Escrow Account The account established with Commerzbank AG,
New York Branch.
Class Foreign Currency Distribution Account The account established with Commerzbank AG
in Frankfurt.
Depository DKV.
Foreign Currency Deutsche Marks. As used herein "Deutsche
Marks" or "DM" shall mean the lawful currency
of the Federal Republic of Germany on the date
hereof; provided, however, that if on any
Payment Date (i) a successor currency (the
"Euro") has replaced DM as the lawful currency
of the Federal Republic of Germany or (ii) both
DM and the Euro (or any successor currency)
are lawful currencies of the Federal Republic of
Germany and the necessary amount of DM is
not available to the Currency Swap Counterparty
on commercially reasonable terms in the
currency exchange markets or, as applicable,
available to the Trustee in New York at
commercially reasonable terms, then each
reference to DM contained in this Series
Supplement shall be deleted and replaced with a
reference to the Euro (or any successor
currency), with each such reference reflecting
the fixed conversion rate between DM and the
Euro adopted in connection with economic and
monetary union in the European Community.
Escrow Agent Commerzbank AG, New York Branch.
</TABLE>
3
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<TABLE>
<S> <C>
Escrow Agreement The Escrow Agreement executed by the Trustee,
the Master Servicer, the Currency Swap
Counterparty and the Escrow Agent,
substantially in the form of Exhibit M.
Initial Exchange Date The date determined by Merrill Lynch Bank
AG, which date is at least 40 days after the later
of the commencement of the offering and the
Series Closing Date, on which date Greenwood
will undertake to cause the Trust to exchange the
interests in the Temporary Global Certificate for
interests in the Permanent Global Certificate
upon customary certification as required by
United States laws as to non-U.S. beneficial
ownership.
Second Exchange Date The date on which beneficial interests in the
Permanent Global Certificate are exchanged for
definitive Class A Certificates and/or definitive
Technical Global Certificates, which date is
within 60 calendar days (or if such date is not a
Frankfurt Business Day, the next succeeding
Frankfurt Business Day) following the receipt of
notice from DKV, Euroclear or Cedel to a
Paying Agent or to the Trustee requesting that
beneficial interests in the Permanent Global
Certificate be exchanged for definitive Class A
Certificates.
LIBOR Determination Date The second LIBOR Business Day immediately
preceding the commencement of an Interest
Accrual Period.
Series Yield Factor Initially zero, but may be increased pursuant to
Section 23.
Series Cut-Off Date July 1, 1996.
Series Closing Date July 24, 1996.
</TABLE>
4
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<TABLE>
<S> <C>
Date from which Interest for First Series Closing Date.
Interest Payment Date Shall Accrue
Distribution Dates The 15th day of each month (or, if such day is
not a Business Day, the next succeeding
Business Day), commencing in August 1996.
Interest Payment Dates Class A - The second Frankfurt Business Day
following the Distribution Date in each July,
October, January and April, commencing in
October 1996, or the second Frankfurt Business
Day following each Special Payment Date, as
applicable.
Class B - The second Frankfurt Business Day
following the Distribution Date in each July,
October, January and April, commencing in
October 1996, and the second Frankfurt
Business Day following the Distribution Date in
August 1999 or the second Frankfurt Business
Day following each Special Payment Date, as
applicable.
Principal Payment Date Not applicable.
Interest Calculation Dates The second Frankfurt Business Day following
each Distribution Date, commencing in August
1996.
Principal Commencement Date The first day of the Due Period related to the
August 1998 Distribution Date (or such later
Distribution Date as the Master Servicer shall
elect in accordance with Section 22).
Revolving Period From the Series Cut-Off Date to, but not
including, the earlier to occur of (i) the Principal
Commencement Date and (ii) the Amortization
Commencement Date.
</TABLE>
5
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<TABLE>
<S> <C>
Accumulation Period Unless an Amortization Event shall have
occurred prior thereto, the period commencing
on the Principal Commencement Date and
ending upon the earliest to occur of (x) the
payment in full of the Series Invested Amount,
(y) the Amortization Commencement Date and
(z) the Series Termination Date.
Accumulation Amount (a) Through the Class A Expected Final
Payment Date, the greater of (i) $68,265,723
and (ii) if the Master Servicer elects to delay the
commencement of the Accumulation Period in
accordance with Section 22, the Class A Initial
Investor Interest divided by the number of
Distribution Dates from the commencement of
the Accumulation Period through and including
the Class A Expected Final Payment Date, and
(b) thereafter, $43,116,000.
Type of Credit Enhancement Cash collateral account.
Stated Shared Credit Enhancement Amount There shall be no Shared Credit Enhancement.
Stated Class B Credit Enhancement Amount $47,426,758.
Credit Enhancement Provider Collectively, the one or more lenders making a
loan in order to provide the initial funds on
deposit in the Credit Enhancement Account, or
any successor provider of the Credit
Enhancement.
Maximum Shared Credit Enhancement Amount There shall be no Shared Credit Enhancement.
Maximum Class B Credit Enhancement Amount On any Distribution Date (a) prior to the making
of an Effective Alternative Credit Support
</TABLE>
6
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<TABLE>
<S> <C>
Election, the greater of (i) $8,623,047 and (ii)(x)
if a Supplemental Credit Enhancement Event has
not occurred, an amount equal to 5.5% of the
Series Investor Interest as of the last day of the
related Due Period or (y) if a Supplemental
Credit Enhancement Event has occurred, an
amount equal to 6.0% of the Series Investor
Interest as of the last day of the related Due
Period or (b) subsequent to the making of an
Effective Alternative Credit Support Election,
the greater of (i) $8,623,047 and (ii) an amount
equal to 8.5% of the Series Investor Interest as
of the last day of the related Due Period;
provided, however, that if an Amortization Event
with respect to the Series established hereby
occurs, the Maximum Class B Credit
Enhancement Amount for each Distribution Date
thereafter shall equal the Maximum Class B
Credit Enhancement Amount for the Distribution
Date immediately preceding the occurrence of
the Amortization Event; and provided, further,
that if a Credit Enhancement Drawing has been
made, until such time as the Available Class B
Credit Enhancement Amount has been reinstated
in an amount at least equal to the amount of
such Credit Enhancement Drawing, the
Maximum Class B Credit Enhancement Amount
shall be the Maximum Class B Credit
Enhancement Amount as of the date of such
Credit Enhancement Drawing.
Total Maximum Credit Enhancement Amount On any Distribution Date, the Maximum Class
B Credit Enhancement Amount for such
Distribution Date.
Additional Credit Support Amount The lesser of (x)(i) $25,869,140 prior to the
occurrence of a Supplemental Credit
Enhancement Event or (ii) $21,557,617
following the occurrence of a Supplemental
Credit Enhancement Event and (y) the difference
between the Maximum Class B Credit
Enhancement Amount (after giving effect to an
Alternative Credit Support Election) and the
Available Class B Credit Enhancement Amount
(immediately before giving effect to the
Alternative Credit Support Election).
</TABLE>
7
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<TABLE>
<S> <C>
Supplemental Credit Enhancement Amount The lesser of (x)(i) $4,311,523 prior to the
occurrence of an Alternative Credit Support
Election or (ii) zero following the occurrence of
an Alternative Credit Support Election and (y)
the difference between the Maximum Class B
Credit Enhancement Amount (after giving effect
to the occurrence of a Supplemental Credit
Enhancement Event) and the Available Class B
Credit Enhancement Amount (immediately
before giving effect to the occurrence of a
Supplemental Credit Enhancement Event).
Initial Subordinated Amount $86,230,468.
Additional Subordinated Amount $25,869,140 prior to the occurrence of a
Supplemental Credit Enhancement Event and
$17,246,093 following the occurrence of a
Supplemental Credit Enhancement Event.
Supplemental Subordinated Amount $8,623,047 prior to the effectiveness of an
Alternative Credit Support Election and zero
following the effectiveness of an Alternative
Credit Support Election.
Series Buffer Amount Zero.
Group Buffer Amount Zero.
Investor Servicing Fee Percentage 2.0% per annum calculated on the basis of a
360-day year of twelve 30-day months.
Supplemental Servicing Fee Percentage Zero.
Amount of Additional Funds Initially, zero.
</TABLE>
8
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<TABLE>
<S> <C>
Eligible for Reallocations to and from Other Yes.
Series in Group
Series Termination Date The third Frankfurt Business Day following the
Distribution Date in January 2002.
Estimated Investment Shortfall On any date of determination, the positive
difference, if any, between (i) the Certificate
Rate for the Class for whose benefit the amounts
on deposit in the Series Principal Funding
Account are held as of such date of
determination and (ii) the weighted average yield
(expressed as a Money Market Yield) on the
investments in the Series Principal Funding
Account as of such date of determination.
Estimated Yield On any date of determination, the Portfolio
Yield for the immediately preceding Due Period
less 2.00%.
Classes, if any, subject to Regulation S Class A.
restrictions
Classes, if any, subject to ERISA restrictions Class A and Class B.
Bearer Certificates The Temporary Global Certificate, the
Permanent Global Certificate, the definitive
Technical Global Certificates, the definitive
Class A Certificates and the Special Certificates.
Registered Certificates Class B Certificates.
Class A Certificate Each certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit C.
</TABLE>
9
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<TABLE>
<S> <C>
Class B Certificate Each certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit I.
Temporary Global Certificate The certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
Permanent Global Certificate The certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit B.
Technical Global Certificate Each certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit D.
Class A Coupon Each coupon executed by the Sellers,
substantially in the form of Exhibit E.
Technical Global Coupon Each coupon executed by the Sellers,
substantially in the form of Exhibit F.
Special Certificate Each certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit G.
Monthly Payment Coupon Each coupon executed by the Sellers,
substantially in the form of Exhibit H.
Notices Any notices to holders or beneficial owners of
Class A Certificates, pursuant to the terms
hereof or as required by applicable law,
regulatory authority or otherwise, will be given
by publication at least once in a newspaper of
nationwide circulation designated by the
</TABLE>
10
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<TABLE>
<S> <C>
Frankfurt Stock Exchange so long as the Class
A Certificates are listed on the Frankfurt Stock
Exchange. Such notices shall be deemed to have
been given on the date of such delivery or
publication or, if delivered or published on
different dates, on the first date on which
delivery or publication shall have been made.
Representative of the Managers Merrill Lynch Bank AG.
Listing Agent Merrill Lynch Bank AG.
Principal Paying Agent Class A - Initially, Commerzbank AG in
Frankfurt.
Class B - Not applicable.
Paying Agents Class A - Initially, the Principal Paying Agent,
Commerzbank International S.A. in Luxembourg
and Commerzbank (Schweiz) AG in Zurich.
Class B - the Corporate Trust Office of the
Trustee.
</TABLE>
11
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IN WITNESS WHEREOF, the Sellers, the Master Servicer, the Servicers and
the Trustee have caused this Series Supplement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.
GREENWOOD TRUST COMPANY,
as Seller, Master Servicer and Servicer
/s/ John J. Coane
-----------------------------------------
John J. Coane
Vice President, Director of Accounting
and Treasurer
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
/s/ G. M. Carrol
-----------------------------------------
G. M. Carroll
Vice President
<PAGE> 15
ANNEX
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and for the benefit of
the Certificateholders:
SECTION 1. Definitions.
(a) Capitalized terms not otherwise defined in this Series Supplement
(including the Series Term Sheet) shall have the meanings ascribed to them in
the Pooling and Servicing Agreement. Capitalized terms that refer to a Series or
a Class refer to the Series established hereby or a Class of the Series
established hereby, as applicable, unless the context otherwise clearly
requires.
(b) The following terms have the definitions set forth below with
respect to the Series established hereby, unless the context otherwise clearly
requires:
"Accumulation Amount," if applicable, shall have the meaning set forth
in the Series Term Sheet; provided, however, that such amount may be adjusted
pursuant to Section 22.
"Accumulation Period," if applicable, shall have the meaning set forth
in the Series Term Sheet.
"Additional Credit Support Amount" shall have the meaning set forth in
the Series Term Sheet.
"Additional Subordinated Amount" shall have the meaning set forth in
the Series Term Sheet.
"Alternative Credit Support Election" shall mean an election made by
the Sellers pursuant to Section 12.
"Amortization Commencement Date" shall mean the earlier of the date on
which an Amortization Event is deemed to occur pursuant to Section 9.01 of the
Pooling and Servicing Agreement or Section 20 hereof.
"Amortization Event" shall mean any event specified in Section 9.01 of
the Pooling and Servicing Agreement or Section 20 hereof.
"Amortization Period" shall mean the period from, and including, the
Amortization Commencement Date to, and including, the earlier of (i) the date of
the final distribution to Investor Certificateholders of the Series established
hereby and (ii) the Series Termination Date. The first Distribution Date of the
Amortization Period shall be the Distribution Date in the calendar month
following the Amortization Commencement Date.
"Available Class B Credit Enhancement Amount" shall mean, with respect
to the first Distribution Date, the Stated Class B Credit Enhancement Amount,
and, thereafter, shall mean the amount available to be drawn under the Credit
Enhancement with respect to the Available Class B Credit Enhancement Amount from
time to time, which on any date of determination shall be equal to the Available
Class B Credit Enhancement Amount for the immediately preceding Distribution
Date minus the amount of all Credit Enhancement Drawings with respect to the
Available Class B Credit Enhancement Amount on or since such immediately
preceding Distribution Date, plus the amount of
1
<PAGE> 16
all payments made to the Trustee as administrator of the Credit Enhancement with
respect to the Available Class B Credit Enhancement Amount pursuant to Section 9
plus, following an Effective Alternative Credit Support Election, the Additional
Credit Support Amount and, plus, following a Supplemental Credit Enhancement
Event, the Supplemental Credit Enhancement Amount.
"Available Shared Credit Enhancement Amount," if applicable, shall
mean, with respect to the first Distribution Date, the Stated Shared Credit
Enhancement Amount, and, thereafter, shall mean the amount available to be drawn
under the Credit Enhancement with respect to the Available Shared Credit
Enhancement Amount from time to time, which on any date of determination shall
be equal to the Available Shared Credit Enhancement Amount for the immediately
preceding Distribution Date minus the amount of all Credit Enhancement Drawings
with respect to the Available Shared Credit Enhancement Amount on or since such
immediately preceding Distribution Date, and plus the amounts of all payments
made to the Trustee as administrator of the Credit Enhancement with respect to
the Available Shared Credit Enhancement Amount pursuant to Section 9.
"Available Subordinated Amount," if there is a Subordinate Class with
respect to Class A, shall mean, on a Distribution Date, the sum of
(a) (i) with respect to the first Distribution Date, the
Initial Subordinated Amount or (ii) with respect to any other
Distribution Date, the Available Subordinated Amount after
giving effect to all adjustments on the prior Distribution
Date; and
(b) the amount of Series Excess Servicing,
as such amount may be reduced pursuant to the provisions of Section 9 to take
into account (i) the amount of Class A and Class B Excess Servicing used to
reimburse the Class A Cumulative Investor Charged-Off Amount, (ii) the amount of
Class B Excess Servicing used to reduce the Class A Required Amount Shortfall,
(iii) the amount of the Class B Subordinated Payment and (iv) the amount of any
reduction in the Class B Investor Interest resulting from the reimbursement of
the Class A Cumulative Investor Charged-Off Amount, in each case for such
Distribution Date.
Upon the occurrence of a Supplemental Credit Enhancement Event, the Available
Subordinated Amount will be increased by the Supplemental Subordinated Amount.
In addition, on the first Distribution Date following an Effective Alternative
Credit Support Election, the Available Subordinated Amount shall be increased by
the Additional Subordinated Amount. In no event, however, shall the Available
Subordinated Amount exceed (i) through the last Distribution Date preceding an
Effective Alternative Credit Support Election, the Initial Subordinated Amount
plus the Supplemental Subordinated Amount and (ii) thereafter, the sum of the
Initial Subordinated Amount, the Supplemental Subordinated Amount and the
Additional Subordinated Amount.
"Calculation Period," if applicable, shall have the meaning specified
in the applicable interest rate cap agreement.
"Cedel" shall mean Cedel Bank, societe anonyme.
"Certificate Interest" shall mean, for any Class for any Interest
Payment Date, the product of (a) the Class Invested Amount for such Class for
such Interest Payment Date and (b) a fraction the numerator of which is (1) with
respect to each Class that has no Subclasses, the Certificate Rate for such
Class or (2) with respect to each Class that has two or more Subclasses, the
Class Weighted Average Certificate Rate, and the denominator of which is (x) if
the relevant Certificate Rate is to be
2
<PAGE> 17
calculated on the basis of the actual number of days elapsed and a 360 day year,
360 divided by the actual number of days from and including the immediately
preceding Interest Payment Date (or, in the case of the first Interest Payment
Date, from and including the Series Closing Date) to but excluding the current
Interest Payment Date or (y) if the relevant Certificate Rate is to be
calculated on the basis of a 360 day year of twelve 30-day months, twelve (or,
in the case of the first Interest Payment Date, 360 divided by the number of
days from and including the Series Closing Date to but excluding the current
Interest Payment Date, assuming 30-day months).
"Certificate Principal" shall mean, with respect to each Class, the
principal payable in respect of such Class of Investor Certificates.
"Certificate Rate," with respect to any Class or Subclass, shall mean
the certificate rate set forth in the Series Term Sheet with respect to such
Class or Subclass, as such rate may be adjusted as of the beginning of each
Interest Accrual Period, if applicable; provided, however, that the Certificate
Rate for any Class or Subclass that does not have a fixed Certificate Rate shall
not exceed the Class Cap Rate or Class Maximum Rate, as applicable, for such
Class or Subclass; and provided, further, that any interest on the Investor
Certificates (including any interest accrued with respect to any Class
Deficiency Amount) shall be payable or distributed (i) with respect to a Class
that is subject to a Class Currency Swap, to the Currency Swap Counterparty (or,
in the event of a Currency Swap Termination, converted into Foreign Currency by
the Trustee as described in Section 10) or (ii) with respect to a Class that is
not subject to a Class Currency Swap, to the Investor Certificateholders, in
each case, only to the extent permitted by applicable law.
"Class Additional Funds," if applicable, shall mean, with respect to
any Class for any Distribution Date, an amount equal to the product of (i) a
fraction the numerator of which is the Class Investor Interest and the
denominator of which is the sum of the Class Investor Interests for each Class
of the Series established hereby and (ii) the amount of Series Additional
Investor Funds, in each case for such Distribution Date.
"Class Alternative Deficiency Amount" shall mean, with respect to each
Class, on any Payment Date, the Class Deficiency Amount that would have been
calculated for such Class on such Payment Date if the aggregate unreimbursed
Investor Losses on such Payment Date equalled zero.
"Class B Available Collections" shall mean, if there is a Subordinated
Class with respect to Class A, with respect to any Distribution Date, an amount
equal to the sum of (i) Class B Available Finance Charge Collections for such
Distribution Date and (ii) Class B Principal Collections for such Distribution
Date.
"Class B Available Finance Charge Collections" shall mean, if there is
a Subordinate Class with respect to Class A, with respect to any Distribution
Date, an amount equal to the sum of Class B Finance Charge Collections, Class B
Yield Collections, if any, Class B Investment Income, if any, for the related
Due Period and Class B Additional Funds for such Distribution Date (less Class B
Excess Servicing).
"Class Cap Rate," if applicable, shall mean, with respect to a Class or
Subclass that does not have a fixed or maximum Certificate Rate, the rate that
is specified as such in the Series Term Sheet and in the Class Interest Rate Cap
with respect to such Class or Subclass.
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<PAGE> 18
"Class Charge-Off Reimbursement Amount" shall mean, with respect to any
Class with respect to any Distribution Date, the total amount by which the Class
Cumulative Investor Charged-Off Amount for such Class is reduced on such
Distribution Date pursuant to Section 9.
"Class Cumulative Investor Charged-Off Amount" with respect to each
Class for any Distribution Date, shall mean the sum of the Class Investor
Charged-Off Amounts for such Class for all preceding Due Periods that have not
been reimbursed pursuant to Section 9 prior to such Distribution Date, plus the
Class Investor Charged-Off Amount for such Class for the Due Period related to
such Distribution Date, as adjusted pursuant to Section 9 on such Distribution
Date. The Class Cumulative Investor Charged-Off Amount with respect to each
Class initially shall be zero.
"Class Currency Swap," if any, shall mean, with respect to a Class or
Subclass, the currency swap agreement or other currency protection agreement for
the benefit of the Investor Certificateholders of such Class or Subclass, dated
on or before the Series Closing Date, between the Trustee, acting on behalf of
the Trust, and the Currency Swap Counterparty, or any Replacement Class Currency
Swap or Qualified Substitute Class Currency Swap.
"Class Currency Swap Termination Account," if any, shall have the
meaning set forth in Section 8.
"Class Deficiency Amount" shall mean, with respect to each Class, on
any Payment Date, the amount, if any, by which (a) the sum of (i) Certificate
Interest for such Class accrued since the immediately preceding Payment Date,
(ii) if, since the immediately preceding Payment Date and prior to the current
Payment Date, a Reimbursed Loss Event has occurred, the sum of (A) the
Reimbursed Loss Interest for each previous Distribution Date since the last
Distribution Date on which Investor Losses for such Class equalled zero and (B)
the Reimbursed Loss Interest Gross-up Amount for each previous Distribution Date
since the last Distribution Date on which the aggregate amount of unreimbursed
Investor Losses for such Class equalled zero, (iii) the Class Deficiency Amount
on the immediately preceding Payment Date, and (iv) the Class Deficiency Amount
on the immediately preceding Payment Date multiplied by the product of (A) a
fraction the numerator of which is the weighted average of the Certificate Rates
or of the Class Weighted Average Certificate Rates, as applicable, for such
Class for the relevant Due Periods and the denominator of which is (x) if the
relevant Certificate Rate is to be calculated on the basis of the actual number
of days elapsed and a 360-day year, 360 divided by the actual number of days
from and including the immediately preceding Distribution Date to but excluding
the current Distribution Date or (y) if the relevant Certificate Rate is to be
calculated on the basis of a 360-day year of twelve 30-day months, twelve and
(B) the number of Distribution Dates from and including the preceding Payment
Date to but excluding the current Payment Date exceeds (b) the amount deposited
since the immediately preceding Payment Date into the Series Interest Funding
Account pursuant to Section 10(a)(2)(A).
"Class Excess Servicing" shall mean, with respect to each Class, on any
Distribution Date, the positive difference, if any, between (i) the sum of Class
Finance Charge Collections for the related Due Period, Class Yield Collections
for the related Due Period, if any, Class Investment Income for the related Due
Period, if any, and Class Additional Funds for such Distribution Date, if any,
and (ii) the Class Required Amount.
"Class Expected Final Payment Date" with respect to each Class, if
applicable, shall mean the date designated as such in the Series Term Sheet.
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<PAGE> 19
"Class Final Maturity Date" with respect to each Class, if applicable,
shall mean the date designated as such in the Series Term Sheet.
"Class Finance Charge Collections" shall mean, with respect to any
Class, with respect to any day or any Distribution Date or Trust Distribution
Date, as applicable, an amount equal to the product of (x) the Class Percentage
with respect to Finance Charge Collections for the related Distribution Date and
(y) the amount of Finance Charge Collections for such day or for the related Due
Period, as applicable; provided, however, that Class Finance Charge Collections
for each Class shall be increased by the lesser of (i) the amount of Class
Investment Shortfall for such Class and (ii) an amount equal to the product of
the total amount of Finance Charge Collections otherwise allocable to Greenwood
on behalf of the Holder of the Seller Certificate for the related Due Period and
a fraction the numerator of which is the Class Invested Amount for such Class
and the denominator of which is the Aggregate Invested Amount; and provided,
further, that notwithstanding the foregoing, Class Finance Charge Collections
for each Class shall not, with respect to any such day, Distribution Date or
Trust Distribution Date during the Accumulation Period, as applicable, exceed
the amount that would be available if the Class Percentage with respect thereto
were the percentage equivalent of a fraction the numerator of which is the
amount of the Class Investor Interest on the last day of the Due Period prior to
the commencement of the Accumulation Period, and the denominator of which is the
greater of (i) the amount of Principal Receivables in the Trust on the first day
of the related Due Period and (ii) the sum of the numerators used in calculating
the components of the Series Percentage with respect to Finance Charge
Collections for each Series then outstanding (including the Series established
hereby) as of such day, Distribution Date or Trust Distribution Date, as
applicable.
"Class Foreign Currency Certificate Interest," if applicable, shall
mean, with respect to a Class that is subject to a Class Currency Swap, for any
Interest Payment Date, the product of (x) the Class Foreign Currency Invested
Amount with respect to the Distribution Date immediately preceding such Interest
Payment Date and (y) a fraction the numerator of which is the Class Foreign
Currency Certificate Rate and the denominator of which is (i) if the relevant
Certificate Rate is to be calculated on the basis of the actual number of days
elapsed and a 360-day year, 360 divided by the actual number of days from and
including the immediately preceding Interest Payment Date with respect to such
Class (or, in the case of the first Interest Payment Date, from and including
the Series Closing Date) to but excluding the current Interest Payment Date with
respect to such Class or (ii) if the relevant Certificate Rate is to be
calculated on the basis of a 360-day year of twelve 30-day months, twelve (or,
in the case of the first Interest Payment Date, 360 divided by the number of
days from and including the Series Closing Date to but excluding the current
Interest Payment Date, assuming 30-day months).
"Class Foreign Currency Certificate Rate," if applicable, shall have
the meaning set forth in the Series Term Sheet.
"Class Foreign Currency Distribution Account," if any, shall have the
meaning set forth in Section 8 and shall be established at the bank specified in
the Series Term Sheet.
"Class Foreign Currency Interest Shortfall," if applicable, shall have
the meaning set forth in Section 10.
"Class Foreign Currency Invested Amount" shall mean, with respect to a
Class for any Distribution Date, an amount equal to the Class Foreign Currency
Initial Investor Interest minus the sum of (a) the aggregate amount of principal
payments in Foreign Currency paid to the Certificateholders of such Class prior
to such Distribution Date, (b) the aggregate amount of Investor
5
<PAGE> 20
Losses of such Class not reimbursed prior to such Distribution Date, converted
into Foreign Currency at the Currency Swap Exchange Rate (or, following a
Currency Swap Termination, multiplied by a fraction, the numerator of which is
the Class Foreign Currency Invested Amount on the immediately preceding
Distribution Date minus the aggregate amount of principal payments in Foreign
Currency paid to the Certificateholders of such Class subsequent to such
Distribution Date and the denominator of which is the Class Invested Amount) and
(c) the aggregate amount of losses of principal on investments of funds on
deposit for the benefit of such Class in the Series Principal Funding Account,
if applicable, converted into Foreign Currency at the Currency Swap Exchange
Rate (or, following a Currency Swap Termination, multiplied by a fraction, the
numerator of which is the Class Foreign Currency Invested Amount on the
immediately preceding Distribution Date minus the aggregate amount of principal
payments in Foreign Currency paid to the Certificateholders of such Class
subsequent to such Distribution Date and the denominator of which is the Class
Invested Amount).
"Class Foreign Currency Modified Required Amount," if applicable, shall
mean (i) on any Distribution Date prior to a Currency Swap Termination, the
product of (a) the Class Modified Required Amount with respect to such
Distribution Date, (b) the Currency Swap Exchange Rate and (c) a fraction the
numerator of which is the Class Foreign Currency Certificate Rate and the
denominator of which is the Class Certificate Rate and (ii) on any Distribution
Date following a Currency Swap Termination, the product of (a) the Class
Modified Required Amount with respect to such Distribution Date, (b) a fraction,
the numerator of which is the Class Foreign Currency Invested Amount for such
Class for such Distribution Date and the denominator of which is the Class
Invested Amount for such Class for such Distribution Date and (c) a fraction,
the numerator of which is the Class Foreign Currency Certificate Rate and the
denominator of which is the Class Certificate Rate.
"Class Initial Investor Interest" shall mean, with respect to each
Class, the aggregate face amount of Investor Certificates of such Class as
specified in the Series Term Sheet.
"Class Interest Rate Cap," if applicable, shall mean, with respect to a
Class or Subclass that does not have a fixed or maximum Certificate Rate, the
interest rate cap agreement or other interest rate protection for the benefit of
the Investor Certificateholders of such Class or Subclass, dated on or before
the Series Closing Date, between the Trustee, acting on behalf of the Trust, and
the Interest Rate Cap Provider, or any Replacement Interest Rate Cap or
Qualified Substitute Cap Arrangement.
"Class Interest Rate Cap Payment" shall mean, with respect to a Class
or Subclass that does not have a fixed or maximum Certificate Rate, with respect
to any Interest Payment Date, any payment required to be made on such Interest
Payment Date by the Interest Rate Cap Provider with respect to the Class
Interest Rate Cap for such Class or Subclass.
"Class Invested Amount" shall mean, with respect to any Class for any
Distribution Date, an amount equal to the Class Initial Investor Interest minus
the sum of (a)(i) with respect to a Class that is subject to a Class Currency
Swap, the aggregate amount of payments of Certificate Principal (in Dollars)
deposited into the Currency Swap Dollar Escrow Account for payment to the
Currency Swap Counterparty for the benefit of such Class, or, in the event of a
Currency Swap Termination, converted into Deutsche Marks by the Trustee at the
then prevailing spot exchange rate in New York for payment to the Investor
Certificateholders of such Class or (ii) with respect to a Class that is not
subject to a Class Currency Swap, the aggregate amount of payments of
Certificate Principal paid to such Class of Investor Certificateholders, in each
case prior to such Distribution Date, (b) the aggregate amount of Investor
Losses of such Class not reimbursed prior to such Distribution Date and (c) the
aggregate amount of losses of principal on investments of funds on deposit for
the benefit of such Class in the Series Principal Funding Account, if
applicable.
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<PAGE> 21
"Class Investment Income" shall mean, with respect to any Class, income
from the investment of funds on deposit in the Series Principal Funding Account
for the benefit of such Class less Excess Income.
"Class Investment Shortfall" with respect to each Class with respect to
any Distribution Date during the Accumulation Period, if applicable, shall mean
an amount equal to the positive difference, if any, between (i) one-twelfth of
the product of (a) (x) with respect to each Class that has no Subclasses, the
Certificate Rate, or (y) with respect to each Class that has two or more
Subclasses, the Class Weighted Average Certificate Rate, in each case for the
related Due Period, and (b) the amount on deposit in the Series Principal
Funding Account for the benefit of such Class as of the end of the previous
Distribution Date and (ii) Class Investment Income for the related Due Period.
"Class Investor Charged-Off Amount" shall mean, with respect to each
Class for any Distribution Date, an amount equal to the sum of (i) the product
of (a) the Charged-Off Amount for such Distribution Date and (b) the Class
Percentage with respect to the Charged-Off Amount and (ii) if there is a
Subordinate Class with respect to Class A, with respect to Class B only, the sum
of (a) the positive difference, if any, between (x) the Class B Subordinated
Payment and (y) the amount of Class B Available Finance Charge Collections for
the related Due Period and (b) the amount by which the Class A Cumulative
Investor Charged-Off Amount is reduced by way of a reallocation of Class B
Investor Interest pursuant to Section 9.
"Class Investor Interest" shall mean, with respect to any Class for any
Distribution Date, an amount equal to the Class Invested Amount for such Class
for such Distribution Date minus, if applicable, the aggregate amount on deposit
in the Series Principal Funding Account for the benefit of such Class in respect
of Principal Collections.
"Class Maximum Rate," if applicable, shall have the meaning set forth
in the Series Term Sheet with respect to any Class or Subclass.
"Class Modified Required Amount" with respect to any Class on any
Distribution Date, shall mean the Class Required Amount for such Distribution
Date minus the sum of all accrued but unpaid Class Monthly Servicing Fees.
"Class Monthly Deficiency Amount" with respect to any Class on any
Distribution Date, shall have the meaning set forth in Section 10. The Class
Monthly Deficiency Amount for each Class initially shall be zero.
"Class Monthly Servicing Fee" with respect to any Class for any
Distribution Date, shall mean an amount equal to the product of (x) a fraction
the numerator of which shall be the Class Investor Interest and the denominator
of which shall be the Series Investor Interest, in each case on the first day of
the related Due Period and (y) the amount of the Investor Servicing Fee for the
related Due Period.
"Class Percentage" shall mean, with respect to any Class with respect
to any Distribution Date or any Trust Distribution Date, as applicable:
(a) when used with respect to the Charged-Off Amount, the
percentage equivalent of a fraction the numerator of which shall be the
amount of the Class Investor Interest and the denominator of which
shall be the greater of (i) the amount of Principal Receivables in the
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<PAGE> 22
Trust and (ii) the Aggregate Investor Interest, in each case on the
first day of the related Due Period; or
(b) when used with respect to Principal Collections prior to
the occurrence of a Fixed Principal Allocation Event, the percentage
equivalent of a fraction the numerator of which shall be the amount of
the Class Investor Interest on the first day of the related Due Period
and the denominator of which shall be the greater of (i) the amount of
Principal Receivables in the Trust on the first day of the related Due
Period and (ii) the sum of the numerators used in calculating the
components of the Series Percentage with respect to Principal
Collections for each Series then outstanding (including the Series
established hereby) as of such Distribution Date or Trust Distribution
Date, as applicable; or
(c) when used with respect to Principal Collections on and
after the occurrence of a Fixed Principal Allocation Event, the
percentage equivalent of a fraction, the numerator of which shall be
the amount of the Class Investor Interest on the last day of the Due
Period prior to the occurrence of a Fixed Principal Allocation Event
and the denominator of which shall be the greater of (i) the amount of
Principal Receivables in the Trust on the first day of the related Due
Period and (ii) the sum of the numerators used in calculating the
components of the Series Percentage with respect to Principal
Collections for each Series then outstanding (including the Series
established hereby) as of such Distribution Date or Trust Distribution
Date, as applicable; or
(d) when used with respect to Finance Charge Collections during
the Revolving Period and the Accumulation Period or Controlled
Liquidation Period, as applicable, and provided that an Effective
Alternative Credit Support Election has been made, during the
Amortization Period, the percentage equivalent of a fraction the
numerator of which shall be the amount of the Class Investor Interest
on the first day of the related Due Period and the denominator of which
shall be the greater of (i) the amount of Principal Receivables in the
Trust on the first day of the related Due Period and (ii) the sum of
the numerators used in calculating the components of the Series
Percentage with respect to Finance Charge Collections for each Series
then outstanding (including the Series established hereby) as of such
Distribution Date or Trust Distribution Date, as applicable; or
(e) when used with respect to Finance Charge Collections during
the Amortization Period, provided that an Effective Alternative Credit
Support Election has not been made, the percentage equivalent of a
fraction the numerator of which shall be the amount of the Class
Investor Interest on the last day of the Due Period prior to the
occurrence of an Amortization Event, and the denominator of which shall
be the greater of (i) the amount of Principal Receivables in the Trust
on the first day of the related Due Period and (ii) the sum of the
numerators used in calculating the components of the Series Percentage
with respect to Finance Charge Collections for each Series then
outstanding (including the Series established hereby) as of such
Distribution Date or Trust Distribution Date, as applicable.
"Class Principal Collections" shall mean, with respect to any Class
with respect to any day or any Distribution Date or Trust Distribution Date, as
applicable, an amount equal to the product of (x) the Class Percentage with
respect to Principal Collections for the related Distribution Date and (y) the
amount of Principal Collections for such day or for the related Due Period, as
applicable.
"Class Required Amount" with respect to any Class on any Distribution
Date, shall mean the sum of (i) the product of (a) the Class Invested Amount
with respect to such Class for such
8
<PAGE> 23
Distribution Date and (b) a fraction, the numerator of which is the Certificate
Rate for such Class, and the denominator of which is (x) if the relevant
Certificate Rate is to be calculated on the basis of the actual number of days
elapsed and a 360-day year, 360 divided by the actual number of days from and
including the immediately preceding Interest Calculation Date (or in the case of
the first Distribution Date, from and including the Series Closing Date) to but
excluding the Interest Calculation Date following the current Distribution Date
or (y) if the relevant Certificate Rate is to be calculated on the basis of a
360-day year of twelve 30-day months, twelve, (or in the case of the first
Distribution Date, 360 divided by the number of days from and including the
Series Closing Date to but excluding the Interest Calculation Date following the
current Distribution Date, assuming each month has 30 days), (ii) the Class
Monthly Deficiency Amount on the immediately preceding Distribution Date, (iii)
the Class Deficiency Amount on the immediately preceding Payment Date multiplied
by a fraction the numerator of which is the weighted average of the Certificate
Rates or of the Class Weighted Average Certificate Rates, as applicable, for
such Class for each Due Period subsequent to the immediately preceding Payment
Date plus 2.00% per annum and the denominator of which is (x) if the relevant
Certificate Rate is to be calculated on the basis of the actual number of days
elapsed and a 360-day year, 360 divided by the actual number of days from and
including the immediately preceding Distribution Date to but excluding the
current Distribution Date or (y) if the relevant Certificate Rate is to be
calculated on the basis of a 360-day year of twelve 30-day months, twelve, (iv)
if on the immediately preceding Distribution Date a Reimbursed Loss Event
occurred, the sum of (A) the Reimbursed Loss Interest for each previous
Distribution Date since the last Distribution Date on which the aggregate amount
of unreimbursed Investor Losses for such Class equalled zero, (B) the Reimbursed
Loss Interest Gross-up Amount for each previous Distribution Date since the last
Distribution Date on which the aggregate amount of unreimbursed Investor Losses
for such Class equalled zero and (C) for any Distribution Date following the
Distribution Date immediately following the Reimbursed Loss Event to and
including the next Payment Date, the Reimbursed Loss Interest Gross-up Amount
for such Distribution Date and (v) the sum of all accrued but unpaid Class
Monthly Servicing Fees.
"Class Required Amount Shortfall" with respect to any Class on any
Distribution Date, shall have the meaning set forth in Section 9.
"Class Subordinated Payment" shall mean, if there is a Subordinate
Class with respect to Class A, with respect to any Distribution Date, the
amount, if any, withheld from Class B Available Collections and paid to or for
the benefit of the Class A Certificateholders pursuant to Section 9 on such
Distribution Date.
"Class Weighted Average Certificate Rate," if applicable, shall mean,
for any Class composed of two or more Subclasses, for any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the sum of, for
each Subclass of such Class, the product of the Class Invested Amount for such
Subclass and the Certificate Rate for such Subclass for such Distribution Date,
and the denominator of which is the Class Invested Amount for such Class.
"Class Yield Collections" shall mean, with respect to any Class, with
respect to any day or any Distribution Date, as applicable, an amount equal to
the product of the Class Yield Percentage for such Class and the amount of
Series Yield Collections for such day or the related Due Period, as applicable.
"Class Yield Percentage" shall mean, with respect to any Class on any
Distribution Date (i) during the Revolving Period and the Accumulation Period or
Controlled Liquidation Period, as
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<PAGE> 24
applicable, and, provided that an Effective Alternative Credit Support Election
has been made, during the Amortization Period, the percentage equivalent of a
fraction the numerator of which shall be the Class Investor Interest for such
Class and the denominator of which shall be the Series Investor Interest, in
each case as of the first day of the related Due Period; or (ii) during the
Amortization Period, provided that an Effective Alternative Credit Support
Election has not been made, the percentage equivalent of a fraction the
numerator of which shall be the amount of the Class Investor Interest on the
last day of the Due Period prior to the occurrence of an Amortization Event and
the denominator of which shall be the sum of the Class Yield Percentages for
each Class of the Series established hereby as of such Distribution Date.
"Commercial Paper Determination Date," if applicable, shall have the
meaning set forth in the Series Term Sheet.
"Commercial Paper Rate," if applicable, shall mean, with respect to any
Commercial Paper Determination Date, the rate equal to the Money Market Yield on
such Commercial Paper Determination Date of the rate for commercial paper having
a maturity of 30 days as published by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15 (519), Selected Interest Rates," or
any successor publication, under the heading "Commercial Paper." In the event
that such rate is not published on such date, then the Commercial Paper Rate
will be the Money Market Yield on such date of the rate for Commercial Paper
having a maturity of 30 days as published by the Federal Reserve Bank of New
York in the daily statistical release "Composite 3:30 p.m. Quotations for U.S.
Government Securities" ("Composite Quotations") under the heading "Commercial
Paper." If on such date the rate for commercial paper is not yet published in
either H.15 (519) or Composite Quotations, the Commercial Paper Rate for such
date shall be calculated by the Trustee and shall be the Money Market Yield of
the arithmetic mean (rounded to the nearest one-hundredth of a percent, with
five hundred one-thousandths of a percent rounded upward) of the offered rates,
as of 11:00 a.m., New York City time, of three leading dealers of commercial
paper in New York City selected by the Trustee on such date, for commercial
paper having a maturity of 30 days placed for an industrial issuer whose bond
rating is "AA" or the equivalent, from either Rating Agency. In the event that
such rates are not available on such date, then the Commercial Paper Rate shall
be the Money Market Yield of the rate for commercial paper so provided in a
comparable source. The Commercial Paper Rate shall be determined by the Trustee.
"Controlled Accumulation Amount" with respect to any Distribution Date
related to the Accumulation Period shall mean, if applicable, an amount equal to
the sum of the Accumulation Amount and any existing Deficit Accumulation Amount;
provided, however, that the Controlled Accumulation Amount shall not be less
than zero and shall not exceed an amount equal to, through the Class Expected
Final Payment Date or Class Final Maturity Date, as applicable, with respect to
each Class in turn, beginning with Class A, the Class Investor Interest for such
Class.
"Controlled Liquidation Amount" with respect to any Distribution Date
related to the Controlled Liquidation Period shall mean, if applicable, an
amount equal to the sum of the Liquidation Amount and any existing Deficit
Liquidation Amount; provided, however, that the Controlled Liquidation Amount
shall not be less than zero and shall not exceed an amount equal to, with
respect to each Class in turn, beginning with Class A, until the applicable
Distribution Date set forth in the definition of "Liquidation Amount" with
respect to such Class, the Class Invested Amount for such Class.
"Controlled Liquidation Period," if applicable, shall have the meaning
set forth in the Series Term Sheet.
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<PAGE> 25
"Counterparty Currency Swap Default," if applicable, shall mean, in the
absence of a Trust Swap Default, the failure of the Currency Swap Counterparty
to deposit into the Class Foreign Currency Distribution Account on behalf of the
Certificateholders of a Class that is subject to a Class Currency Swap on the
Frankfurt Business Day immediately preceding any Payment Date with respect to
such Class (or within any applicable grace period specified in the Class
Currency Swap) the sum of (a) the sum of the Class Foreign Currency Modified
Required Amounts for each Distribution Date of the Interest Accrual Period and
(b) if applicable, the product of (x) the amount of principal deposited into the
Currency Swap Dollar Escrow Account and (y) the Currency Swap Exchange Rate (if
such failure constitutes a default under the terms of the Class Currency Swap).
"Credit Enhancement" shall mean any credit enhancement obtained by the
Master Servicer in accordance with Section 11.
"Credit Enhancement Account," if applicable, shall have the meaning set
forth in Section 8.
"Credit Enhancement Agreement" shall mean the Agreement among the
Sellers, the Master Servicer, the Trustee and the Credit Enhancement Provider
with respect to the Credit Enhancement.
"Credit Enhancement Drawing" shall mean any drawing made under the
Credit Enhancement.
"Credit Enhancement Fee" shall mean, on any Distribution Date, the sum
of all fees and interest payable to the Credit Enhancement Provider or the
Trustee as administrator of the Credit Enhancement for the related Due Period
pursuant to the Credit Enhancement Agreement.
"Credit Enhancement Provider" shall have the meaning set forth in the
Series Term Sheet.
"Currency Swap Counterparty," if any, shall have the meaning set forth
in the Series Term Sheet.
"Currency Swap Dollar Escrow Account," if any, shall have the meaning
set forth in Section 8 and shall be maintained at the Escrow Agent specified in
the Series Term Sheet.
"Currency Swap Downgrade Trigger," if any, shall have the meaning set
forth in the Series Term Sheet.
"Currency Swap Exchange Rate," if applicable, shall mean the fixed
Foreign Currency-to-Dollar exchange rate specified in the Class Currency Swap.
"Currency Swap Termination," if applicable, shall mean the termination
of the Class Currency Swap (without the replacement thereof by a Replacement
Class Currency Swap or a Qualified Substitute Class Currency Swap Arrangement)
prior to the payment in full of the Class Foreign Currency Invested Amount.
"Deficit Accumulation Amount" shall mean, with respect to the first
Distribution Date of the Accumulation Period, zero, and with respect to any
other Distribution Date of the Accumulation Period, the amount, if any, by which
the amount deposited into the Series Principal Funding Account on the preceding
Distribution Date is less than the Controlled Accumulation Amount for such
preceding Distribution Date.
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<PAGE> 26
"Deficit Liquidation Amount" shall mean, with respect to the first
Distribution Date of the Controlled Liquidation Period, zero, and with respect
to any other Distribution Date of the Controlled Liquidation Period, the amount,
if any, by which the amount of Certificate Principal paid to the Investor
Certificateholders on the preceding Distribution Date is less than the
Controlled Liquidation Amount for such preceding Distribution Date.
"DKV" shall mean Deutscher Kassenverein Aktiengesellschaft in its
capacity as depository for the respective accounts of Cedel or Euroclear, or for
its own accounts, as the case may be.
"Dollars" or "U.S.$" or "$" shall mean the lawful currency of the
United States of America.
"Drawing Date" shall mean the first Business Day preceding each
Distribution Date.
"Effective Alternative Credit Support Election" shall have the meaning
specified in Section 12.
"Escrow Agent," if applicable, shall have the meaning set forth in the
Series Term Sheet.
"Escrow Agreement," if applicable, shall have the meaning set forth in
the Series Term Sheet.
"Estimated Investment Shortfall," if applicable, shall have the meaning
set forth in the Series Term Sheet.
"Estimated Yield," if applicable, shall have the meaning specified in
the Series Term Sheet.
"Excess Income" on any Distribution Date shall mean an amount equal to
the excess, if any, of (a) interest and other income (net of investment
expenses) on such Distribution Date with respect to the funds on deposit in the
Series Principal Funding Account during the related Interest Period over (b) the
amount on deposit in the Series Principal Funding Account in respect of
Certificate Principal during such Interest Period multiplied by a fraction, the
numerator of which is the Certificate Rate or the Class Weighted Average
Certificate Rate, as applicable, for the Class for whose benefit the amounts on
deposit in the Series Principal Funding Account are held during such Interest
Period and the denominator of which is (x) if the relevant Certificate Rate is
to be calculated on the basis of the actual number of days elapsed and a 360-day
year, 360 divided by the actual number of days from and including the
immediately preceding Distribution Date to but excluding the current
Distribution Date or (y) if the relevant Certificate Rate is to be calculated on
the basis of a 360-day year of twelve 30-day months, twelve.
"Fixed Principal Allocation Event" shall mean the earliest of (a) the
beginning of the Due Period immediately following the Due Period related to the
first Distribution Date during the Controlled Liquidation Period or the
Accumulation Period, as applicable, with respect to the Series established
hereby on which the Series Available Principal Amount is less than zero; (b) the
date on which an Amortization Event with respect to the Series established
hereby occurs; and (c) a date selected by the Master Servicer, if any. If the
Master Servicer establishes a date for a Fixed Principal Allocation Event
pursuant to clause (c) of the preceding sentence, the Master Servicer shall
provide notification of such date to Greenwood on behalf of the Holder of the
Seller Certificate, the Trustee, the Credit Enhancement Provider and the Rating
Agencies no later than two Business Days prior to such date.
"Foreign Currency," if applicable, shall have the meaning set forth in
the Series Term Sheet.
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<PAGE> 27
"Foreign Currency LIBOR," if applicable, shall mean, with respect to
any LIBOR Determination Date, the rate for deposits in Foreign Currency with a
duration comparable to the relevant Interest Accrual Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such day. If such rate does
not appear on Telerate Page 3750, the rate will be determined by the Trustee on
the basis of the rates at which deposits in Foreign Currency are offered by
major banks in the London interbank market, selected by the Trustee, at
approximately 11:00 a.m., London time, on such day to prime banks in the London
interbank market with a duration comparable to the relevant Interest Accrual
Period commencing on that day. The Trustee will request the principal London
office of at least four banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for
that day will be the arithmetic mean of the rates quoted by four major banks in
Frankfurt am Main, selected by the Trustee, at approximately 11:00 a.m.,
Frankfurt am Main time, on that day for loans in Foreign Currency to leading
European banks with a duration comparable to the relevant Interest Accrual
Period commencing on that day.
"Frankfurt Business Day," if applicable, shall mean any day other than
a Saturday or a Sunday on which banking institutions in Frankfurt am Main,
Germany and New York, New York are not required or authorized by law to be
closed.
"Funded Credit Enhancement" shall mean any Credit Enhancement that
consists of funds on deposit in one or more segregated trust accounts in the
corporate trust department of an office or branch of the Trustee or a Qualified
Institution for the benefit of the Investor Certificateholders of the Series
established hereby, including, without limitation, a reserve account or a cash
collateral account.
"Group Available Principal Amount" shall mean, with respect to each
Distribution Date, the amount remaining on deposit in the Group Principal
Collections Reallocation Account on such Distribution Date after all withdrawals
have been made from such account for the benefit of any Series in the same Group
as the Series established hereby (including the Series established hereby), but
before such amount is withdrawn from the Group Principal Collections
Reallocation Account and deposited into the Collections Account pursuant to
Section 9(b)(32)).
"Group Buffer Amount," if applicable, shall have the meaning set forth
in the Series Term Sheet.
"Group Excess Spread" shall mean, for any Distribution Date, the sum of
the Series Excess Spreads for each Series (including the Series established
hereby) that is a member of the same Group as the Series established hereby, in
each case for such Distribution Date.
"Group Finance Charge Collections Reallocation Account" shall have the
meaning specified in Section 8.
"Group Principal Allocation Event" shall mean the first Distribution
Date, if any, on which (i) the sum of the amount of Series Principal Collections
less the amount of Series Yield Collections for each Series that is a member of
the same Group as the Series established hereby (including the Series
established hereby) that is not in its Amortization Period is less than (ii) the
Group Required Principal Amount for such Distribution Date.
"Group Principal Collections Reallocation Account" shall have the
meaning specified in Section 8.
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<PAGE> 28
"Group Required Principal Amount" shall mean, with respect to the Group
of which the Series established hereby is a member, for any Distribution Date,
the sum of the Series Required Principal Amounts for such Distribution Date for
each Series that is a member of such Group and that is in its Controlled
Liquidation Period or Accumulation Period, as applicable.
"Initial Credit Enhancement" shall mean the Credit Enhancement first
obtained by the Master Servicer pursuant to Section 11.
"Initial Subordinated Amount," if applicable, shall have the meaning
set forth in the Series Term Sheet.
"Interest Accrual Period" shall mean, with respect to any Interest
Payment Date, the period from and including the Interest Payment Date
immediately preceding such Interest Payment Date (or, in the case of the first
Interest Payment Date, from and including the Series Closing Date) to but
excluding such Interest Payment Date.
"Interest Calculation Dates," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"Interest Payment Date" shall mean each date designated as such in the
Series Term Sheet.
"Interest Period" shall mean each period from and including a given
Distribution Date to but excluding the next following Distribution Date
commencing with the first Distribution Date of the Accumulation Period.
"Interest Rate Cap Provider," if any, shall mean the entity listed as
the Interest Rate Cap Provider in the Series Term Sheet, in its capacity as
obligor under the Class Interest Rate Caps, or if any Replacement Class Interest
Rate Caps or Qualified Substitute Cap Arrangements are obtained pursuant to
Section 15, the obligor with respect to such Replacement Class Interest Rate
Caps or Qualified Substitute Cap Arrangements.
"Investor Accounts" shall mean, in addition to Investor Accounts
established pursuant to the Pooling and Servicing Agreement, the Series
Collections Account, the Series Principal Collections Account, the Series
Principal Funding Account, the Series Interest Funding Account, the Series
Distribution Account, the Class Foreign Currency Distribution Account, the
Currency Swap Dollar Escrow Account, the Class Currency Swap Termination
Account, the Group Finance Charge Collections Reallocation Account and the Group
Principal Collections Reallocation Account.
"Investor Loss" with respect to each Class, shall mean the amount of
any reduction in the Class Invested Amount with respect to such Class pursuant
to Section 13(b) and, in the event the Receivables are sold pursuant to Section
12.01(b) of the Pooling and Servicing Agreement, the amount, if any, by which
the Class Investor Interest (determined immediately prior to such sale) exceeds
the product of (x) a fraction, the numerator of which is the Class Investor
Interest and the denominator of which is the Aggregate Investor Interest and (y)
the net proceeds of such sale.
"Investor Servicing Fee" shall mean, with respect to any Distribution
Date, an amount equal to the product of the Investor Servicing Fee Percentage
and the Series Investor Interest on the first day of the Due Period related to
such Distribution Date (or in the case of the first Distribution Date for the
Series established hereby, the Series Initial Investor Interest).
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<PAGE> 29
"Investor Servicing Fee Percentage" shall mean the percentage
identified as such in the Series Term Sheet.
"LIBOR," if applicable, shall mean, with respect to any LIBOR
Determination Date, the rate for deposits in United States dollars with a
duration comparable to the relevant Interest Accrual Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such day. If such rate does
not appear on Telerate Page 3750, the rate will be determined by the Trustee on
the basis of the rates at which deposits in United States dollars are offered by
major banks in the London interbank market, selected by the Trustee, at
approximately 11:00 a.m., London time, on such day to prime banks in the London
interbank market with a duration comparable to the relevant Interest Accrual
Period commencing on that day. The Trustee will request the principal London
office of at least four banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for
that day 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 that day for loans in United States dollars to leading European
banks with a duration comparable to the relevant Interest Accrual Period
commencing on that day.
"LIBOR Business Day," if applicable, shall mean a day other than a
Saturday or a Sunday on which banking institutions in the City of London,
England and in New York, New York are not required or authorized by law to be
closed.
"LIBOR Determination Date," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"Liquidation Amount," if applicable, shall have the meaning set forth
in the Series Term Sheet.
"Maximum Class B Credit Enhancement Amount" shall have the meaning set
forth in the Series Term Sheet.
"Maximum Shared Credit Enhancement Amount," if applicable, shall have
the meaning set forth in the Series Term Sheet.
"Money Market Yield" shall mean a yield (expressed as a percentage
rounded to the nearest one-hundredth of a percent, with five hundred
one-thousandths of a percent rounded upwards) calculated in accordance with the
following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the related Interest Accrual Period.
"Non-U.S. Holder," shall mean any person who, as to the United States,
is a foreign corporation, a non-resident alien individual, a non-resident alien
fiduciary of an estate or trust which is not an estate or trust which is subject
to United States federal income taxation regardless of the source of its income,
or a foreign partnership one or more of the members of which is, as to the
United States, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary
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<PAGE> 30
of an estate or trust which is not an estate or trust which is subject to United
States federal income taxation regardless of the source of its income.
"Payment Date" shall mean any Interest Payment Date and any Class
Expected Final Payment Date.
"Portfolio Yield" shall mean, with respect to any Due Period, the
annualized percentage equivalent of a fraction, the numerator of which shall be
the sum of (i) the amount of Finance Charge Collections received during such Due
Period, (ii) the amount of Series Yield Collections for each Series then
outstanding for such Due Period and (iii) the amount of Series Additional Funds
for each Series then outstanding for such Due Period, and the denominator of
which shall be the total amount of Principal Receivables in the Trust as of the
first day of such Due Period.
"Principal Commencement Date" shall mean the date designated as such in
the Series Term Sheet.
"Principal Distribution Amount" shall mean, with respect to any
Distribution Date occurring in (i) the Accumulation Period, the Controlled
Accumulation Amount, (ii) in the Controlled Liquidation Period, the Controlled
Liquidation Amount, or (iii) in the Amortization Period, the Series Investor
Interest.
"Principal Distribution Amount Shortfall" with respect to any
Distribution Date in the Accumulation Period, the Controlled Liquidation Period
or the Amortization Period, as applicable, shall have the meaning set forth in
Section 9.
"Principal Payment Date" shall mean, if applicable, each date
designated as such in the Series Term Sheet.
"Qualified Credit Enhancement Provider" shall mean, (i) if the Credit
Enhancement is not Funded Credit Enhancement, an institution that meets the
Qualified Credit Enhancement Provider Rating Requirements established by each
Rating Agency, which requirements are set forth in the Series Term Sheet if the
Initial Credit Enhancement is not Funded Credit Enhancement, or (ii) if the
Initial Credit Enhancement is Funded Credit Enhancement, an institution that
meets the Qualified Credit Enhancement Provider Rating Requirements established
by each Rating Agency, which requirements will be established by the Rating
Agencies at the time, if any, that the Master Servicer elects to replace the
Initial Credit Enhancement with Credit Enhancement that is not Funded Credit
Enhancement (or, in either case, such lesser requirements as the applicable
Rating Agency shall allow); provided, however, that in the event the Master
Servicer elects to obtain Credit Enhancement that is not Funded Credit
Enhancement and is unable after the exercise of its best efforts to obtain from
a Qualified Credit Enhancement Provider as so defined such Credit Enhancement
with respect to which the representations set forth in Section 11(a) shall be
true, the term "Qualified Credit Enhancement Provider" shall mean a Person who
satisfies such requirements except that its long-term unsecured debt rating by
any nationally recognized rating agency may be lower than that set forth in such
requirements, but shall not be lower than the highest credit rating of any
Person who otherwise satisfies said requirements and from whom the Master
Servicer is able to obtain such a Credit Enhancement.
"Qualified Substitute Cap Arrangement," if any, shall have the meaning
specified in Section 15.
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<PAGE> 31
"Qualified Substitute Currency Swap Counterparty," if any, shall mean
an institution substituted in place of the then-current Currency Swap
Counterparty under a Class Currency Swap, and that otherwise satisfies the
conditions set forth in Section 16.
"Qualified Substitute Class Currency Swap Arrangement," if any, shall
have the meaning specified in Section 16.
"Reimbursed Loss Event" shall mean, with respect to each Class for any
Distribution Date, the occurrence of the reimbursement of Investor Losses
pursuant to Section 13(c) with respect to such Class on such Distribution Date
such that the aggregate amount of unreimbursed Investor Losses for such Class is
reduced to zero.
"Reimbursed Loss Interest" shall mean, for any Class for any
Distribution Date, an amount equal to the product of (i) the aggregate amount of
Investor Losses that have not been reimbursed pursuant to Section 13(c) prior to
the commencement of the related Due Period and (ii) a fraction the numerator of
which is the Certificate Rate or the Class Weighted Average Certificate Rate, as
applicable, for such Class for the related Due Period and the denominator of
which is (x) if the relevant Certificate Rate is to be calculated on the basis
of the actual number of days elapsed and a 360-day year, 360 divided by the
actual number of days from and including the Interest Calculation Date in the
preceding calendar month to but excluding the Interest Calculation Date
following the current Distribution Date or (y) if the relevant Certificate Rate
is to be calculated on the basis of a 360-day year of twelve 30-day months,
twelve.
"Reimbursed Loss Interest Gross-up Amount" shall mean, for any Class
for any Distribution Date, an amount equal to the product of (i) the positive
difference, if any, between the Class Alternative Deficiency Amount for the
immediately preceding Payment Date and the actual Class Deficiency Amount for
the immediately preceding Payment Date and (ii) a fraction the numerator of
which is the Certificate Rate or the Class Weighted Average Certificate Rate, as
applicable, for such Class for the related Due Period and the denominator of
which is (x) if the relevant Certificate Rate is to be calculated on the basis
of the actual number of days elapsed and a 360-day year, 360 divided by the
actual number of days from and including the Interest Calculation Date in the
preceding calendar month to but excluding the Interest Calculation Date
following the current Distribution Date or (y) if the relevant Certificate Rate
is to be calculated on the basis of a 360-day year of twelve 30-day months,
twelve.
"Replacement Class Interest Rate Cap," if any, shall mean an interest
rate cap agreement or other interest rate protection having substantially the
same terms and conditions as the Class Interest Rate Cap that it replaces, and
otherwise satisfying the conditions set forth in Section 15.
"Replacement Class Currency Swap," if any, shall mean a currency swap
agreement or other currency swap protection having substantially the same terms
and conditions as the Class Currency Swap that it replaces, and otherwise
satisfying the conditions set forth in Section 16.
"Replacement Class Currency Swap Counterparty," if any, shall mean an
institution that succeeds to the interest of or otherwise replaces the
then-current Currency Swap Counterparty under a Class Currency Swap, and
otherwise satisfies the conditions set forth in Section 16.
"Representative of the Managers," if any, shall have the meaning set
forth in the Series Term Sheet.
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<PAGE> 32
"Required Daily Deposit" shall mean, if applicable, with respect to
each Servicer, an amount equal to:
(a) during the Revolving Period and the Accumulation
Period or the Controlled Liquidation Period, as
applicable, the sum of
(x)(1) during the Revolving Period, an amount equal to
the sum of (i) the sum of the Class Finance Charge
Collections and the Class Yield Collections for each
Class for such day and (ii) the amount of Class B
Principal Collections for such day; minus the sum of
the Class B Yield Collections for such day and all
accrued but unfunded Class A Monthly Servicing Fees;
or
(2) during the Accumulation Period or the Controlled
Liquidation Period, as applicable, an amount equal to
the sum of (i) the amount set forth in clause (1)
above and (ii)(A) until the aggregate amount deposited
during such Due Period pursuant to this clause (ii)
equals the Controlled Accumulation Amount or the
Controlled Liquidation Amount, as applicable, for the
related Distribution Date, the amount of Class A
Principal Collections for such day less the amount of
Class A Yield Collections for such day and (B)
thereafter, zero; plus
(y) the positive difference, if any, between
(1) the product of the Class A Percentage for
the related Distribution Date with respect to
Principal Collections and the amount of Principal
Collections received during the Due Period through and
including such day, less the product of the Class A
Yield Percentage and the amount of Series Yield
Collections received during the Due Period through and
including such day, and less any amounts deposited
into the Collections Account during the Due Period
through and including such day pursuant to clause
(x)(2)(ii)(A) above or previously deposited during
such Due Period pursuant to this clause (y) and
(2) the positive difference, if any, between
(i) an amount equal to (A) the aggregate amount of
Principal Receivables in the Trust as of such day
multiplied by a fraction the numerator of which shall
be the Series Initial Investor Interest and the
denominator of which shall be sum of the Series
Initial Investor Interest for each Series then
outstanding minus (B) the Series Investor Interest as
of the end of the immediately preceding Due Period
(after giving effect to payments of principal made or
to be made on the related Distribution Date) and (ii)
an amount equal to the positive difference between the
Series Minimum Principal Receivables Balance and the
Series Investor Interest; provided, however, that any
calculation under this paragraph (y) that results in a
number less than zero shall be treated as zero; or
(b) during the Amortization Period, an amount equal to the
sum of the Series Finance Charge Collections and the
Series Principal Collections for the Series
established hereby for such day minus all accrued but
unfunded Class A Monthly Servicing Fees; and
18
<PAGE> 33
multiplied, in each case, by a fraction the numerator of which shall be the
aggregate amount of Principal Receivables in the Trust that are serviced by such
Servicer and the denominator of which shall be the aggregate amount of Principal
Receivables in the Trust; provided, however, that if any Servicer is unable to
make the calculations set forth above on any day, the Required Daily Deposit for
such Servicer for such day shall be equal to all the Collections received by
such Servicer on such day.
Notwithstanding the foregoing, (i) upon the occurrence of any
circumstance described in Section 10.02(d), (e) or (f) of the Pooling and
Servicing Agreement with respect to any Servicer, the Required Daily Deposit for
any Series then outstanding shall equal the amount described in paragraph (b)
above for such Servicer and (ii) a Servicer may use Collections received by it
for its own account prior to the applicable Distribution Date as permitted by
Sections 3.03(b) and 4.03(b) of the Pooling and Servicing Agreement.
"Revolving Period" shall have the meaning set forth in the Series Term
Sheet.
"Series Additional Funds," if applicable, shall mean, for any
Distribution Date, the Additional Funds deposited into the Series Collections
Account for the Series established hereby on such Distribution Date.
"Series Additional Investor Funds," if applicable, shall mean, for any
Distribution Date, the Series Additional Funds, if any, that are not applied to
payment of the Supplemental Servicing Fee pursuant to Section 14.
"Series Available Principal Amount" shall mean, for any Distribution
Date, if a Group Principal Allocation Event has occurred, for each Series that
is a member of the same Group as the Series established hereby (including the
Series established hereby) that is in its Controlled Liquidation Period or
Accumulation Period, as applicable, an amount calculated as follows: For each
such Series, seriatim, beginning with the Series with the largest Series
Investor Interest for such Distribution Date (and if more than one Series has
the same Series Investor Interest on such Distribution Date, beginning with
whichever of such Series has the longest time remaining in its Controlled
Liquidation Period or Accumulation Period, as applicable (assuming that no
Amortization Event occurs with respect to such Series)), an amount equal to (x)
the Group Available Principal Amount less (y) the difference between the Series
Required Principal Amount and the amount of such Series' Controlled Liquidation
Amount or Controlled Accumulation Amount, as applicable, that was funded on such
Distribution Date (including any portion of such amount that was funded by
amounts withdrawn from the Group Principal Collections Reallocation Account
pursuant to Section 9(b)(31)). For purposes of calculating the Series Available
Principal Amount for each other such Series, the Group Available Principal
Amount shall be reduced by the Series Available Principal Amount for the prior
Series for which the Series Available Principal Amount was calculated.
"Series Buffer Amount," if applicable, shall have the meaning set forth
in the Series Term Sheet.
"Series Closing Date" shall mean the date designated as such in the
Series Term Sheet.
"Series Collections Account" shall have the meaning specified in
Section 8.
"Series Cut-Off Date" shall mean the date designated as such in the
Series Term Sheet.
"Series Distribution Account" shall have the meaning specified in
Section 8.
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<PAGE> 34
"Series Excess Servicing" shall mean, as of any Distribution Date, the
sum of the amounts of Class Excess Servicing for each Class of the Series
established hereby, as such amount is modified pursuant to Section 9.
"Series Excess Spread" shall mean, for any Distribution Date, an amount
equal to (a) the sum of Series Finance Charge Collections, Series Yield
Collections, Series Additional Investor Funds and any Class Investment Income
for any Class of the Series established hereby minus (b) the sum of (i) with
respect to each Class, the product of (A) the Class Invested Amount for such
Class for such Distribution Date and (B) a fraction, the numerator of which is
the Certificate Rate for that Class, and the denominator of which is (x) if the
relevant Certificate Rate is to be calculated on the basis of the acutal number
of days elapsed and a 360-day year, 360 divided by the actual number of days
from and including the second Frankfurt Business Day following the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
from and including the Series Closing Date) to but excluding the second
Frankfurt Business Day following the current Distribution Date or (y) if the
relevant Certificate Rate is to be calculated on the basis of a 360-day year of
twelve 30 day months, twelve (or in the case of the first Distribution Date, 360
divided by the number of days from and including the Series Closing Date to but
excluding the current Distribution Date, assuming 30-day months), (ii) the
Investor Servicing Fee, (iii) the product of the Series Percentage with respect
to the Charged-Off Amount and the Charged-Off Amount, and (iv) the Credit
Enhancement Fee, in each case for such Distribution Date.
"Series Finance Charge Collections" shall mean, with respect to any day
or any Distribution Date or Trust Distribution Date, as applicable, the sum of
the amount of Class Finance Charge Collections for each Class for such day or
for the related Due Period, as applicable.
"Series Initial Investor Interest" shall mean the aggregate face amount
of Investor Certificates initially authenticated and delivered pursuant to
Section 7, as specified in the Series Term Sheet.
"Series Interest Funding Account" shall have the meaning specified in
Section 8.
"Series Invested Amount" with respect to any Distribution Date, shall
mean the sum of the Class Invested Amounts for each Class of the Series
established hereby on such Distribution Date.
"Series Investor Interest" with respect to any Distribution Date, shall
mean the sum of the Class Investor Interests for each Class of the Series
established hereby on such Distribution Date.
"Series Minimum Principal Receivables Balance" shall mean, with respect
to the Series established hereby, on any date of determination the sum of (A)
(i) if a Fixed Principal Allocation Event has not occurred, the Series Investor
Interest on such date of determination, divided by 0.93 or (ii) if a Fixed
Principal Allocation Event has occurred, the Series Investor Interest as of the
date of the occurrence of the Fixed Principal Allocation Event, divided by 0.93,
and (B) (x) the product of (i) the sum of (1) the amount on deposit in the
Series Principal Funding Account on such date of determination and (2) for any
date of determination during the Accumulation Period, if any, the Controlled
Accumulation Amount for the next Distribution Date, and (ii) a fraction the
numerator of which is the Estimated Investment Shortfall and the denominator of
which is the Estimated Yield, in each case on such date of determination,
divided by (y) 0.93; provided, however, that Greenwood on behalf of the Holder
of the Seller Certificate may, upon 30 days prior notice to the Trustee, the
Rating Agencies and the Credit Enhancement Provider, reduce the Series Minimum
Principal Receivables Balance by increasing the divisors set forth above,
subject to the condition that Greenwood on behalf of the Holder of the Seller
Certificate shall have been notified by the Rating
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<PAGE> 35
Agencies that such reduction would not result in the lowering or withdrawal of
the rating of any Class of any Series then outstanding, and provided, further,
that the divisors set forth above may not be increased to more than 0.98.
"Series Percentage" shall mean, with respect to any specified category,
with respect to any Distribution Date or Trust Distribution Date, as applicable,
the sum of the Class Percentages with respect to such category for each Class of
the Series established hereby on such Distribution Date or Trust Distribution
Date, as applicable.
"Series Principal Collections" shall mean, with respect to any day or
any Distribution Date or Trust Distribution Date, as applicable, the sum of the
amount of Class Principal Collections for each Class for such day or for the
related Due Period, as applicable.
"Series Principal Collections Account" shall have the meaning specified
in Section 8.
"Series Principal Funding Account" shall mean the Series Principal
Funding Account established pursuant to Section 8. Amounts "on deposit in" the
Series Principal Funding Account shall be deemed to be on deposit for the
benefit of (i) the Class A Certificateholders for the period up to and including
the Class A Expected Final Payment Date or Class A Final Maturity Date, as
applicable, and (ii) if there is a Subordinate Class with respect to Class A,
the Class B Certificateholders for the period beginning immediately after the
Class A Expected Final Payment Date or Class A Final Maturity Date, as
applicable, and ending on the Class B Expected Final Payment Date or Class B
Final Maturity Date, as applicable. Amounts "on deposit in" the Series Principal
Funding Account shall be deemed to include amounts invested in Permitted
Investments pursuant to Section 8 unless the context clearly requires otherwise.
"Series Required Principal Amount" shall mean, with respect to each
Distribution Date, with respect to each Series that is a member of the same
Group as the Series established hereby (including the Series established hereby)
that is in its Controlled Liquidation Period or Accumulation Period, as
applicable, the product of (x) (i) if the related Due Period does not occur in
February, 1.25 or (ii) if the related Due Period occurs in February, 1.05, and
(y) the Controlled Liquidation Amount or the Controlled Accumulation Amount, as
applicable, for such Series for such Distribution Date.
"Series Term Sheet" shall mean the Series Term Sheet setting forth the
terms of the Series of Investor Certificates issued hereby, to which this Annex
is attached.
"Series Termination Date" shall mean the date designated as such in the
Series Term Sheet.
"Series Yield Collections" shall mean, with respect to any day or any
Distribution Date, as applicable, an amount equal to the product of the Series
Yield Factor and the amount of Series Principal Collections for such day or the
related Due Period, as applicable.
"Series Yield Factor" shall mean the number identified as such in the
Series Term Sheet, as such number may be changed from time to time pursuant to
Section 23.
"Shared Credit Enhancement" shall mean Credit Enhancement available for
the benefit of both the Class A Investor Certificates and the Class B Investor
Certificates.
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<PAGE> 36
"Special Payment Date" shall mean each Distribution Date with respect
to the Amortization Period and the Distribution Date related to each Class
Expected Final Payment Date or Class Final Maturity Date, as applicable.
"Stated Class B Credit Enhancement Amount" shall mean the "stated
amount" with respect to the Credit Enhancement that is available solely for the
benefit of the Class B Investor Certificates, as set forth in the Series Term
Sheet.
"Stated Shared Credit Enhancement Amount," if applicable, shall mean
the "stated amount" with respect to the shared portion of the Credit
Enhancement, as set forth in the Series Term Sheet.
"Subclass" with respect to any Class shall mean, if applicable, each
portion of such Class that has a different Certificate Rate or method of
calculating its Certificate Rate.
"Subordinate Class" shall mean, with respect to any Class, the Class,
if any, identified by the letter of the alphabet next succeeding the letter
designating such Class (e.g., the Subordinate Class with respect to Class A is
Class B).
"Subordinate Series" shall mean any Series which is subordinated in
right of payment, in whole or in part, pursuant to the Series Supplement with
respect to such Series, to the Series established hereby.
"Supplemental Credit Enhancement Amount," if applicable, shall have the
meaning set forth in the Series Term Sheet.
"Supplemental Credit Enhancement Event" shall occur the first time the
long-term debt or deposit rating of Greenwood or any Additional Seller is
withdrawn or reduced below BBB- by Standard & Poor's.
"Supplemental Servicing Fee" shall mean, if applicable, with respect to
any Distribution Date, an amount equal to the product of the Supplemental
Servicing Fee Percentage and the Series Investor Interest on the first day of
the Due Period related to such Distribution Date (or in the case of the first
Distribution Date for the Series established hereby, the Series Investor
Interest on the Series Cut-Off Date).
"Supplemental Servicing Fee Percentage," if applicable, shall mean the
percentage identified as such in the Series Term Sheet.
"Supplemental Subordinated Amount," if applicable, shall have the
meaning set forth in the Series Term Sheet.
"Telerate Page 3750," if applicable, shall mean the display page so
designated on the Dow Jones Telerate Service (or such other rate as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
"Total Available Credit Enhancement Amount" shall mean, with respect to
the first Distribution Date, the Stated Class B Credit Enhancement Amount plus,
if applicable, the Stated Shared Credit Enhancement Amount, and, on each
Distribution Date thereafter, shall mean the Available Class B Credit
Enhancement Amount plus, if applicable, the Available Shared Credit
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Enhancement Amount, in each case after all adjustments thereto on the
immediately preceding Distribution Date, and, in each case, as adjusted pursuant
to Section 9 on such Distribution Date.
"Total Maximum Credit Enhancement Amount" shall have the meaning set
forth in the Series Term Sheet.
"Trust Swap Default," if applicable, shall mean, with respect to a
Class that is subject to a Class Currency Swap, the failure of the Trustee, on
behalf of the Trust, to deposit into the Currency Swap Dollar Escrow Account on
the Distribution Date immediately preceding the Interest Payment Date (or within
any applicable grace period specified in the Class Currency Swap) for payment to
the Currency Swap Counterparty for such Class a Dollar amount equal to the sum
of the Class Modified Required Amounts for such Class for each Distribution Date
of the Interest Accrual Period (or any other amounts required to be deposited
pursuant to the Series Supplement).
"United States" or "U.S." shall mean the United States of America, its
territories and possessions, any State of the United States and the District of
Columbia.
SECTION 2. Subordination.
(a) Subordination of Certain Classes. If there is a Subordinate Class
with respect to Class A, the Holders of each Class B Investor Certificate, by
their acceptance of such Investor Certificate, hereby subordinate, for the
benefit of the Holders of Class A Investor Certificates, to the extent and in
the manner set forth in Section 9, all of such Investor Certificateholders'
right, title and interest in and to future distributions due on such Holders'
Investor Certificates, but only to the extent of the Available Subordinated
Amount.
(b) No Subordination of Series. The Investor Certificates of the Series
established hereby shall not be subordinated in right of payment to any other
Series, whether currently outstanding or to be issued in the future. One or more
other Series, however, may be subordinated in right of payment to the Series
established hereby, although the Sellers shall have no obligation to issue such
a Subordinate Series. If any Subordinate Series is issued, such Subordinate
Series shall be subordinate in right of payment to the Series established hereby
only to the extent set forth in the Series Supplement with respect to such
Subordinate Series.
SECTION 3. Representations and Warranties of the Sellers. The
representations and warranties of the Sellers contained in Section 2.04 of the
Pooling and Servicing Agreement and the corresponding sections of any Assignment
are true on and as of the date hereof and/or the date set forth in the Pooling
and Servicing Agreement, as applicable. Each Seller also represents and warrants
to the Trust as of the date hereof that the execution, delivery and performance
of this Series Supplement by such Seller have been duly authorized by all
necessary corporate action, do not require any approval or consent of any
governmental agency or authority, do not and will not conflict with any material
provision of the Certificate of Incorporation or By-Laws of such Seller, do not
and will not conflict with, or result in a breach which would constitute a
material default under, any agreement for borrowed money binding upon or
applicable to it or such of its property which is material to it, or, to the
best of such Seller's knowledge, any law or governmental regulation or court
decree applicable to it or such material property, and this Series Supplement is
the valid, binding and enforceable obligation of such Seller, except as the same
may be limited by receivership, insolvency, reorganization, moratorium or other
laws relating to the enforcement of creditors' rights generally or by general
equity principles.
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SECTION 4. Representations and Warranties of Greenwood as Master
Servicer and Servicer. The representations and warranties of Greenwood as the
Master Servicer and as a Servicer contained in Section 3.04 of the Pooling and
Servicing Agreement are true on and as of the date hereof. Greenwood as Master
Servicer and Servicer also represents and warrants to the Trust as of the date
hereof that the execution, delivery and performance of this Series Supplement by
Greenwood have been duly authorized by all necessary corporate action, do not
require any approval or consent of any governmental agency or authority, do not
and will not conflict with any material provision of the Certificate of
Incorporation or By-Laws of Greenwood, do not and will not conflict with, or
result in a breach which would constitute a material default under, any
agreement for borrowed money binding upon or applicable to it or such of its
property which is material to it, or, to the best of Greenwood's knowledge, any
law or governmental regulation or court decree applicable to it or such material
property, and this Series Supplement is the valid, binding and enforceable
obligation of Greenwood, except as the same may be limited by receivership,
insolvency, reorganization, moratorium or other laws relating to the enforcement
of creditors' rights generally or by general equity principles.
SECTION 5. Representations and Warranties of Other Servicers. The
representations and warranties of each Servicer (other than Greenwood), if any,
contained in Section 3.05 of the Pooling and Servicing Agreement are true and
correct on and as of the date hereof. Each such Servicer also represents and
warrants to the Trust as of the date hereof that the execution, delivery and
performance of this Series Supplement by such Servicer have been duly authorized
by all necessary corporate action, do not require any approval or consent of any
governmental agency or authority, do not and will not conflict with any material
provision of the Certificate of Incorporation or By-Laws of such Servicer, do
not and will not conflict with, or result in a breach which would constitute a
material default under, any agreement for borrowed money binding upon or
applicable to it or such of its property which is material to it, or, to the
best of such Servicer's knowledge, any law or governmental regulation or court
decree applicable to it or such material property, and this Series Supplement is
the valid, binding and enforceable obligation of such Servicer, except as the
same may be limited by receivership, insolvency, reorganization, moratorium or
other laws relating to the enforcement of creditors' rights generally or by
general equity principles.
SECTION 6. Representations and Warranties of the Trustee. The
representations and warranties of the Trustee contained in Section 11.16 of the
Pooling and Servicing Agreement are true on and as of the date hereof. The
Trustee also represents and warrants as of the date hereof that the Trustee has
full power, authority and right to execute, deliver and perform this Series
Supplement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Series Supplement, and this Series
Supplement has been duly executed and delivered by the Trustee.
SECTION 7. The Investor Certificates.
(a) The Certificates.
(i) The Series Term Sheet for the Series established hereby
will indicate whether the Investor Certificates of each Class will be issued in
registered or bearer form. The Investor Certificates of a Class that will be
issued in registered form shall be issued in accordance with Article VI of the
Pooling and Servicing Agreement. The Investor Certificates for a Class that will
be issued in bearer form will initially be represented by a single temporary
global certificate (the "Temporary Global Certificate"), without Coupons, in the
denomination of the Class Foreign Currency Initial Investor Interest, and
substantially in the form set forth in Exhibit A attached hereto. The Temporary
Global Certificate will be authenticated by or on behalf of the Trustee in the
manner set forth in Section 7(c) hereof and will be deposited outside the United
States with the Depository as the
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depository for Cedel and Euroclear. Interests in the Temporary Global
Certificate may be exchanged as described below for interests in a permanent
global certificate (the "Permanent Global Certificate") in bearer form without
Coupons, and substantially in the form set forth in Exhibit B attached hereto.
(ii) The Representative of the Managers shall advise the
Trustee, the Sellers, the Depository, Cedel and Euroclear of the Initial
Exchange Date. Not earlier than the Initial Exchange Date, Greenwood on behalf
of the Holder of the Seller Certificate will execute and deliver to the Trustee
or its designated agent, in either case, outside the United States, the
Permanent Global Certificate. Upon delivery, the Permanent Global Certificate
will be authenticated by or on behalf of the Trustee in the manner set forth in
Section 7(c) hereof and shall be exchanged for interests in the Temporary Global
Certificate upon delivery thereof by the Depository to the Trustee or its
designated agent, in either case, outside the United States. Upon any exchange
of all or a portion of the Temporary Global Certificate for an interest in the
Permanent Global Certificate, both the Temporary Global Certificate and the
Permanent Global Certificate shall be endorsed by or on behalf of the Trustee to
reflect the reduction and corresponding increase in their principal amounts, as
applicable. No interest will be paid in respect of any interest in the Temporary
Global Certificate and no exchange of an interest in the Temporary Global
Certificate for an interest in the Permanent Global Certificate shall occur
until the person entitled to receive such interest payment or any such interest
in the Permanent Global Certificate provides written certification as to
non-U.S. beneficial ownership substantially in the form of Exhibit J attached
hereto. Upon receipt of such certification, the Trustee shall cause the
Permanent Global Certificate to be endorsed. A beneficial owner of an interest
in the Permanent Global Certificate may elect upon not less than 60 days' prior
notice to the Trustee given through the Depository, Euroclear or Cedel to
exchange such interest for one or more definitive Class A Certificates in bearer
form, substantially in the form of Exhibit C attached hereto, with Coupons
attached thereto, substantially in the form of Exhibit E attached hereto, at the
time of issue for the interest due on each Interest Payment Date for such Class
after the Second Exchange Date. In addition, beneficial interests in the
Permanent Global Certificate will be exchanged for definitive Class A
Certificates as soon as practicable following the receipt by the Sellers of
notice that the Depository, Cedel or Euroclear has been closed for a continuous
period of fourteen days (other than by reason of holidays, statutory or
otherwise) or otherwise permanently has ceased business or has announced an
intention permanently to cease business. If an exchange of interests in the
Permanent Global Certificate is made necessary under the circumstances described
in the immediately preceding sentence, the Trustee shall notify Cedel, Euroclear
and the Depository of the occurrence of any such event and of the expected
availability of the definitive Class A Certificates. Until so exchanged, the
Permanent Global Certificate shall in all respects be entitled to the same
benefits under the Pooling and Servicing Agreement as definitive Class A
Certificates authenticated and delivered hereunder.
(iii) All interests in the Permanent Global Certificate shall
be exchanged for (i) definitive Class A Certificates and (ii) if so directed by
the Sellers, one or more definitive Technical Global Certificates (in lieu of
definitive Class A Certificates), substantially in the form of Exhibit D
attached hereto, with Coupons attached, substantially in the form of Exhibit F
attached hereto, to be deposited with the Depository within 60 calendar days (or
if the last day of such period is not a Frankfurt Business Day, on the next
succeeding Frankfurt Business Day) following receipt of notice from Cedel,
Euroclear or the Depository to the Paying Agent or to the Trustee, requesting
definitive Class A Certificates (the "Second Exchange Date"). Upon such
exchange, the Permanent Global Certificate shall be cancelled. No later than 45
days prior to the Second Exchange Date, the Trustee shall send written notice to
the Sellers, the Servicer, each Paying Agent, the Depository, Euroclear, Cedel
and the Representative of the Managers of receipt of such notice. For so long as
Investor Certificates issued in bearer form are listed on the Frankfurt Stock
Exchange, the Servicer shall publish or cause to be published a notice relating
to the Second Exchange Date in a newspaper of
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nationwide circulation designated by the Frankfurt Stock Exchange. On any
Frankfurt Business Day following the Second Exchange Date, the Sellers may
request that any definitive Technical Global Certificates be exchanged outside
the United States (within 60 calendar days) for definitive Class A Certificates.
Upon such exchange, such definitive Technical Global Certificate shall be
cancelled.
(iv) Any exchange as provided in this Section shall be made
free of charge to the beneficial owners of the Temporary Global Certificate, the
beneficial owners of the Permanent Global Certificate and the beneficial owners
of any Technical Global Certificate, except that a person receiving definitive
Class A Certificates must bear the cost of insurance, postage, transportation
and the like in the event that such person does not receive such definitive
Class A Certificates in person at the offices of the Depository.
(v) The following legend will appear in English on all Bearer
Certificates and Coupons: "Any United States Person who holds this obligation
will be subject to limitations under United States income tax laws, including
the limitations provided in Sections 165(j) and 1287(a) of the United States
Internal Revenue Code. Terms used in the preceding sentence will have the
meanings given to them by the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder."
(vi) The delivery to the Trustee by Cedel or Euroclear of any
written statement referred to above may be relied upon by the Sellers and the
Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to Cedel or Euroclear, as applicable,
pursuant to the terms of this Series Supplement. The Trustee, Cedel and
Euroclear, as the case may be, shall retain each certificate delivered pursuant
to this Section 7 for a period of four calendar years following the calendar
year in which such certificate is received.
(b) Special Certificates. Immediately upon the occurrence of an
Amortization Event, the Sellers shall execute and deliver to the Paying Agent on
behalf of the Trustee, Special Certificates substantially in the form of Exhibit
G, with Coupons attached substantially in the form of Exhibit H (the "Monthly
Payment Coupons"), in such amounts as to permit the exchange of all outstanding
definitive Class A Certificates for Special Certificates, and thereafter shall
execute, and deliver to the Paying Agent on behalf of the Trustee, Special
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under the Pooling and Servicing
Agreement and the Series Supplement. Upon surrender outside the United States of
any Class A Certificate and any unmatured Interest Coupons appertaining thereto
to any Paying Agent, the Trustee shall authenticate and deliver, or cause to be
authenticated and delivered, outside the United States to the Investor
Certificateholder surrendering such definitive Class A Certificate a Special
Certificate, with Monthly Payment Coupons attached, representing the same
Fractional Undivided Interest as the Class A Certificate surrendered and
entitling the Holder to receive monthly payment of principal and interest on the
second Frankfurt Business Day following each Special Payment Date. Such Holder
shall receive one Monthly Payment Coupon for each Class A Interest Payment Date
during the period from the date of such surrender to the Series Termination
Date. After commencement of the Amortization Period, Holders of Class A
Certificates must surrender such Class A Certificates and all unmatured Interest
Coupons appertaining thereto in exchange for Special Certificates and Monthly
Coupons in order to receive monthly payments of principal and interest on the
second Frankfurt Business Day following each Special Payment Date. In the event
that Class A Certificates are required to be exchanged pursuant to this
paragraph, the Sellers shall (i) notify the Trustee, the Paying Agent, any other
paying agency, the Depository, Cedel or Euroclear of such requirement prior to
the first Special Payment Date, (ii) instruct the Trustee to include in the next
statement prepared pursuant to Section 17 of this Series Supplement a notice
that Class A Certificates must be exchanged
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for Special Certificates and (iii) give notice of such requirement to Class A
Certificateholders in accordance with Section 19 hereof.
(c) Authentication of Certificates. On or about the Series Closing
Date, the Temporary Global Certificate representing the Class Foreign Currency
Initial Investor Interest for any Class issued in bearer form shall be
authenticated by or on behalf of the Trustee, upon the order of the Sellers, and
delivered to the Depository outside the United States. Upon the exchange of
beneficial interests in the Temporary Global Certificate for beneficial
interests in the Permanent Global Certificate, the Permanent Global Certificate
shall be authenticated by or on behalf of the Trustee and delivered to the
Depository outside the United States. Upon the exchange of beneficial interests
in the Permanent Global Certificate for definitive Class A Certificates and/or
definitive Technical Global Certificates, the definitive Class A Certificates
and/or definitive Technical Global Certificates shall be authenticated by or on
behalf of the Trustee and delivered to persons entitled thereto outside the
United States in authorized denominations specified by the Depository, Cedel or
Euroclear, as applicable (but not to exceed an aggregate amount equal to the
Class Foreign Currency Initial Investor Interest for such Class).
SECTION 8. Establishment and Administration of Investor Accounts and
the Credit Enhancement Account.
(a) The Series Distribution Account, Series Collections Account and
Series Principal Collections Account. The Trustee, for the benefit of the
Certificateholders, shall cause to be established and maintained in the name of
the Trust, with the corporate trust department of an office or branch of either
the Trustee or a Qualified Institution, three non-interest bearing segregated
demand deposit accounts (the "Series Distribution Account," the "Series
Collections Account" and the "Series Principal Collections Account") bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders. The Trust shall possess all right, title and
interest in all funds on deposit in the Series Distribution Account, the Series
Collections Account and the Series Principal Collections Account; provided,
however, that all interest and earnings (less investment expenses) on funds on
deposit in any such account shall be paid to the Holder of the Seller
Certificate in accordance with Section 4.02(c) of the Pooling and Servicing
Agreement. Pursuant to authority granted to it pursuant to Section 3.01(b) of
the Pooling and Servicing Agreement, the Master Servicer shall have the
revocable power to instruct the Trustee to withdraw funds from the Series
Distribution Account, the Series Collections Account and the Series Principal
Collections Account for the purpose of carrying out the duties of the Master
Servicer hereunder. The Master Servicer at all times shall maintain accurate
records reflecting each transaction in the Series Distribution Account, the
Series Collections Account and the Series Principal Collections Account. The
Paying Agent also shall have the revocable authority to make withdrawals from
the Series Distribution Account.
(b) Reallocation Accounts. The Trustee, for the benefit of the
Certificateholders, shall cause to be established and maintained in the name of
the Trust, with the corporate trust department of an office or branch of either
the Trustee or a Qualified Institution, two non-interest bearing segregated
trust accounts for the Group of which the Series established hereby is a member
(the "Group Finance Charge Collections Reallocation Account" and the "Group
Principal Collections Reallocation Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders. The Trust shall possess all right, title and interest in all
funds on deposit from time to time in the Group Finance Charge Collections
Reallocation Account and the Group Principal Collections Reallocation Account
and in all proceeds thereof. Pursuant to authority
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granted to it pursuant to Section 3.01(b) of the Pooling and Servicing
Agreement, the Master Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Group Finance Charge Collections Reallocation
Account and the Group Principal Collections Reallocation Account for the purpose
of carrying out the duties of the Master Servicer hereunder. The Master Servicer
at all times shall maintain accurate records reflecting each transaction in the
Group Finance Charge Collections Reallocation Account and in the Group Principal
Collections Reallocation Account.
(c) The Series Principal Funding Account. The Trustee, for the benefit
of the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trust, with the corporate trust
department of an office or branch of either the Trustee or a Qualified
Institution, a non-interest bearing segregated trust account (the "Series
Principal Funding Account") bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Certificateholders. The
Trust shall possess all right, title and interest in all funds on deposit from
time to time in the Series Principal Funding Account and in all proceeds
thereof. The Series Principal Funding Account shall be under the sole dominion
and control of the Trustee for the benefit of the Certificateholders. Pursuant
to authority granted to it pursuant to Section 3.01(b) of the Pooling and
Servicing Agreement, the Master Servicer shall have the revocable power to
withdraw funds from the Series Principal Funding Account for the purpose of
carrying out the duties of the Master Servicer hereunder. The Master Servicer at
all times shall maintain accurate records reflecting each transaction in the
Series Principal Funding Account. The Paying Agent also shall have the revocable
authority to make withdrawals from the Series Principal Funding Account.
Funds on deposit in the Series Principal Funding Account shall be
invested in Permitted Investments by the Trustee (or, at the direction of the
Trustee, by the Master Servicer on behalf of the Trustee) at the direction of
Greenwood on behalf of the Holder of the Seller Certificate, as set forth below.
Any Permitted Investment with a stated maturity shall mature on or prior to the
following Distribution Date. On or before the occurrence of the first
Distribution Date with respect to the Accumulation Period or Controlled
Liquidation Period, as applicable (and on or before any subsequent Distribution
Date in which the notice previously given is no longer correct or valid), the
Master Servicer shall notify the Trustee of the amount of Series Principal
Collections to be deposited into the Series Principal Funding Account on such
Distribution Date, and Greenwood on behalf of the Holder of the Seller
Certificate shall direct the Trustee in writing to invest the funds that will be
on deposit in the Series Principal Funding Account on such Distribution Date
(including any funds previously invested in Permitted Investments that will be
available for reinvestment on such Distribution Date) in Permitted Investments.
Greenwood's notice to the Trustee shall specifically identify each such
Permitted Investment (including its principal amount and maturity). In addition,
Greenwood on behalf of the Holder of the Seller Certificate shall from time to
time provide written notice to the Trustee directing the Trustee to reinvest
funds representing principal, interest or other investment income received by it
with respect to such Permitted Investments (whether upon maturity or otherwise)
in additional Permitted Investments. In the event that Greenwood on behalf of
the Holder of the Seller Certificate fails to direct the Trustee to invest or
reinvest any funds that are deposited in the Series Principal Funding Account or
that are received by it with respect to Permitted Investments by 2:00 p.m. on
the date such funds are available for investment, the Trustee shall use
reasonable efforts to invest such funds overnight in securities represented by
instruments in bearer or registered form which evidence obligations issued or
fully guaranteed, as to timely payment, by the United States of America or any
instrumentality or agency thereof when such obligations are backed by the full
faith and credit of the United States of America until such time as the Trustee
receives the required notice from Greenwood; provided, however, that the Trustee
shall have no liability for the failure to invest such funds if the Trustee has
employed reasonable efforts to make such investment.
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(d) The Series Interest Funding Account. The Trustee, for the benefit
of the Certificateholders, shall establish and maintain or cause to be
established and maintained in the name of the Trust, in the corporate trust
department of an office or branch of either the Trustee or a Qualified
Institution, a non-interest bearing segregated trust account (the "Series
Interest Funding Account") bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Certificateholders. The
Trust shall possess all right, title and interest in all funds on deposit from
time to time in the Series Interest Funding Account and in all proceeds thereof.
Pursuant to authority granted to it pursuant to Section 3.01(b) of the Pooling
and Servicing Agreement, the Master Servicer shall have the revocable power to
instruct the Trustee to withdraw funds from the Series Interest Funding Account
for the purpose of carrying out the duties of the Master Servicer hereunder. Any
funds on deposit in the Series Interest Funding Account for more than one
Business Day shall be invested in Permitted Investments pursuant to Section
4.02(c) of the Pooling and Servicing Agreement. The Master Servicer at all times
shall maintain accurate records reflecting each transaction in the Series
Interest Funding Account. The Paying Agent shall also have the revocable
authority to make withdrawals from the Series Interest Funding Account.
(e) The Credit Enhancement Account. If the Credit Enhancement is Funded
Credit Enhancement, the Master Servicer, for the benefit of the
Certificateholders and the Credit Enhancement Provider, shall establish and
maintain or cause to be established and maintained in the name of the Trust,
with the corporate trust department of an office or branch of either the Trustee
or a Qualified Institution, a non-interest bearing segregated trust account (the
"Credit Enhancement Account") bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Certificateholders and
the Credit Enhancement Provider. The Trust shall possess all right, title and
interest in all funds on deposit from time to time in the Credit Enhancement
Account and in all proceeds thereof. The Credit Enhancement Account shall be
under the sole dominion and control of the Trustee as the administrator of the
Credit Enhancement for the benefit of the Certificateholders and the Credit
Enhancement Provider; provided, however, the Master Servicer may make Credit
Enhancement Drawings pursuant to, and for the purposes set forth in, Section 9.
The interest of the Credit Enhancement Provider in the Credit Enhancement
Account shall be subordinated to the interests of the Certificateholders to the
extent provided herein and in the Credit Enhancement Agreement. The Trustee, at
the direction of the Master Servicer, shall (i) on the Series Closing Date,
deposit into the Credit Enhancement Account an amount equal to the sum of the
Stated Shared Credit Enhancement Amount and the Stated Class B Credit
Enhancement Amount (such amounts to be funded by the Credit Enhancement Provider
pursuant to the Credit Enhancement Agreement) and (ii) make withdrawals from,
and deposits to, the Credit Enhancement Account from time to time in the amounts
and for the purposes set forth in this Series Supplement. The Credit Enhancement
Provider shall not be entitled to reimbursement from the assets of the Trust for
any withdrawals from the Credit Enhancement Account except as specifically
provided in this Series Supplement. The Master Servicer at all times shall
maintain accurate records reflecting each transaction in the Credit Enhancement
Account.
Funds on deposit in the Credit Enhancement Account shall be invested in
Permitted Investments by the Trustee as administrator of the Credit Enhancement
at the direction of the Master Servicer, as set forth below. Any Permitted
Investment with a stated maturity shall mature on or prior to the following
Distribution Date or such longer period as will not result in the lowering or
withdrawal of the rating of any Class of any Series then outstanding by the
Rating Agencies and any funds received with respect to the maturity of a
Permitted Investment shall be available in sufficient time to allow for any
payments to be made to the Investor Certificateholders on such Distribution
Date. The Master Servicer's notice to the Trustee shall specifically identify
each such Permitted Investment (including its principal amount and maturity). In
addition, the Master Servicer shall from
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time to time provide written notice to the Trustee directing the Trustee to
reinvest funds representing principal, interest or other investment income
received by it with respect to such Permitted Investments (whether upon maturity
or otherwise) in additional Permitted Investments. In the event that the Master
Servicer fails to direct the Trustee to invest or reinvest any funds that are
deposited in the Credit Enhancement Account or that are received by it with
respect to Permitted Investments by 2:00 p.m. on the date such funds are
available for investment, the Trustee shall use reasonable efforts to invest
such funds overnight in securities represented by instruments in bearer or
registered form which evidence obligations issued or fully guaranteed, as to
timely payment, by the United States of America or any instrumentality or agency
thereof when such obligations are backed by the full faith and credit of the
United States of America until such time as the Trustee receives the required
notice from the Master Servicer; provided, however, that the Trustee shall have
no liability for the failure to invest such funds if the Trustee has employed
reasonable efforts to make such investment.
On each Distribution Date, all interest and earnings (net of losses and
investment expenses) accrued since the preceding Distribution Date on funds on
deposit in the Credit Enhancement Account shall be paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. For purposes of determining the
availability of funds or the balances in the Credit Enhancement Account, all
investment earnings on such funds shall be deemed not to be available or on
deposit. If, on any Distribution Date, after giving effect to all other deposits
to and withdrawals from the Credit Enhancement Account as of such Distribution
Date, the amount on deposit in the Credit Enhancement Account is greater than
the Total Maximum Credit Enhancement Amount, then the excess of the amount on
deposit over the Total Maximum Credit Enhancement Amount shall be withdrawn from
the Credit Enhancement Account and paid to the Trustee as administrator of the
Credit Enhancement for application in accordance with the provisions of the
Credit Enhancement Agreement.
Upon the earliest to occur of (i) the termination of the Trust, (ii)
the Series Termination Date and (iii) the day on which the Class Invested Amount
for each Class of the Series established hereby is paid in full, and after
payment of all amounts to be paid on such day from the Credit Enhancement
Account to or for the benefit of Investor Certificateholders of the Series
established hereby, all amounts remaining on deposit in the Credit Enhancement
Account shall be withdrawn from such account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement.
(f) The Class Foreign Currency Distribution Account. In the event that
any Class is subject to a Class Currency Swap, the Trustee, for the benefit of
the Certificateholders of such Class, shall cause to be established and
maintained in the name of the Paying Agent, an account outside the United States
(the "Class Foreign Currency Distribution Account") bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders of such Class. Pursuant to the authority granted to it
pursuant to Section 3.01(b) of the Pooling and Servicing Agreement, the Master
Servicer shall have the revocable power to instruct the Trustee to withdraw
funds from the Class Foreign Currency Distribution Account for the purpose of
carrying out the duties of the Master Servicer hereunder. The Trust shall
possess all right, title and interest in all funds on deposit from time to time
in the Class Foreign Currency Distribution Account and in all proceeds thereof
and each Paying Agent with respect to such Class (as specified in the Series
Term Sheet) shall have the revocable authority to make withdrawals from the
Class Foreign Currency Distribution Account. Notwithstanding Section 6.08(b) of
the Pooling and Servicing Agreement, the Class Foreign Currency Distribution
Account shall not be a segregated trust account and the Principal Paying Agent
shall make no certification with respect thereto.
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(g) The Currency Swap Dollar Escrow Account. In the event that any
Class is subject to a Class Currency Swap, the Trustee, for the benefit of the
Certificateholders of such Class and the Currency Swap Counterparty, shall cause
to be established and maintained in the name of the Trust, with the Escrow Agent
identified in the Series Term Sheet, a non-interest bearing escrow account (the
"Currency Swap Dollar Escrow Account") bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders of such Class. The Trust shall possess all right, title and
interest in all funds on deposit from time to time in the Currency Swap Dollar
Escrow Account and in all proceeds thereof. Any funds on deposit in the Currency
Swap Dollar Escrow Account for more than one Business Day shall be invested in
Permitted Investments specified in clause (a)(iii) of the definition of
Permitted Investments in accordance with the terms of the Escrow Agreement. The
Escrow Agent at all times shall maintain accurate records reflecting each
transaction in the Currency Swap Dollar Escrow Account. All funds deposited into
the Currency Swap Dollar Escrow Account shall be either released by the Escrow
Agent to the Currency Swap Counterparty or returned to the Trustee as provided
in the Escrow Agreement for conversion into Deutsche Marks by the Trustee at the
then prevailing exchange rate in New York.
(h) The Class Currency Swap Termination Account. In the event that any
Class is subject to a Class Currency Swap, the Trustee, for the benefit of the
Certificateholders of such Class, shall cause to be established and maintained
in the name of the Trust, with the corporate trust department of an office or
branch of either the Trustee or a Qualified Institution, a non-interest bearing
segregated trust account (the "Class Currency Swap Termination Account") bearing
a designation clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders of such Class. The Trustee, at the
direction of the Master Servicer, shall deposit into the Class Currency Swap
Termination Account any funds (in Dollars) received by the Trustee from the
Currency Swap Counterparty with respect to an Event of Default (as defined in
the Class Currency Swap) on the date such funds are received. Pursuant to the
authority granted to it pursuant to Section 3.01(b) of the Pooling and Servicing
Agreement, the Master Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Class Foreign Distribution Account for the
purpose of carrying out the duties of the Master Servicer hereunder. The Master
Servicer at all times shall maintain accurate records reflecting each
transaction in the Class Currency Swap Termination Account.
Funds on deposit in the Class Currency Swap Termination Account shall
be invested in Permitted Investments by the Trustee at the direction of the
Master Servicer, as set forth below. Any Permitted Investment with a stated
maturity shall mature on or prior to the following Distribution Date or such
longer period as will not result in the lowering or withdrawal of the rating of
any Class of any Series then outstanding by the Rating Agencies and any funds
received with respect to the maturity of a Permitted Investment shall be
available in sufficient time to allow for any payments to be made to the
Investor Certificateholders on the applicable Interest Payment Date with respect
to such Class. The Master Servicer's notice to the Trustee shall specifically
identify each such Permitted Investment (including its principal amount and
maturity). In addition, the Master Servicer shall from time to time provide
written notice to the Trustee directing the Trustee to reinvest funds
representing principal, interest or other investment income received by it with
respect to such Permitted Investments (whether upon maturity or otherwise) in
additional Permitted Investments. In the event that the Master Servicer fails to
direct the Trustee to invest or reinvest any funds that are deposited in the
Class Currency Swap Termination Account or that are received by it with respect
to Permitted Investments by 2:00 p.m. on the date such funds are available for
investment, the Trustee shall use reasonable efforts to invest such funds
overnight in securities represented by instruments in bearer or registered form
which evidence obligations issued or fully guaranteed, as to timely payment, by
the United States of America or any instrumentality or agency thereof when such
obligations are backed
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by the full faith and credit of the United States of America until such time as
the Trustee receives the required notice from the Master Servicer; provided,
however, that the Trustee shall have no liability for the failure to invest such
funds if the Trustee has employed reasonable efforts to make such investment.
(i) Transfer of Investor Accounts. If at any time any of the Investor
Accounts established in Sections 8(a) through 8(e) or 8(h) is not being held by
the Trustee and the institution holding such Investor Account ceases to be a
Qualified Institution, the Master Servicer shall within 10 Business Days
establish a new Investor Account (meeting any conditions specified in this
Series Supplement with respect to such Investor Account) with a Qualified
Institution and transfer any cash and/or any investments to such new Investor
Account.
SECTION 9. Allocations of Collections.
(a) Deposits to Series Collections Account. On or before each
Distribution Date, the Master Servicer shall direct the Trustee in writing to
withdraw from the Group Collections Account and deposit into the Series
Collections Account an amount equal to the sum of the Series Finance Charge
Collections and the Series Principal Collections for the related Due Period. On
or before each Distribution Date, the Class Additional Funds for each Class of
the Series established hereby shall also have been deposited into the Series
Collections Account pursuant to Section 4.03(e) of the Pooling and Servicing
Agreement.
(b) Deposits During the Revolving Period, Accumulation Period,
Controlled Liquidation Period or Amortization Period, as Applicable. The Master
Servicer shall, on or before each Distribution Date during the Revolving Period,
the Accumulation Period, the Controlled Liquidation Period or any Amortization
Period, as applicable, direct the Trustee in writing that funds be paid or
deposited in the following amounts, to the extent such funds are available and
in the order of priority specified, to the account or Person indicated, in each
case as set forth below; provided, however, that if the Credit Enhancement is
not Funded Credit Enhancement, then no amounts (other than any Credit
Enhancement Fees or any amounts paid to the Trustee as Administrator of the
Credit Enhancement in respect of the Total Available Credit Enhancement Amount)
that are measured or determined by reference to Class Excess Servicing for any
Class, Series Excess Servicing or the amount on deposit at any time in the Group
Finance Charge Collections Reallocation Account shall be paid or deposited if,
on the related Drawing Date, the Credit Enhancement Provider is unable to pay
its debts as they become due.
(1) During the Accumulation Period or on the first Distribution Date of
the Amortization Period, if applicable, an amount equal to the amount of Class
Investment Income for the related Due Period for any Class shall be withdrawn
from the Series Principal Funding Account and deposited into the Series
Collections Account.
(2) With respect to Class A, an amount equal to the lesser of
(x) the Class A Required Amount and
(y) the sum of (1) Class A Finance Charge Collections, (2)
Class A Yield Collections, (3) Class A Investment Income, if
applicable, and (4) Class A Additional Funds
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shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The amount by which the Class A Required Amount
exceeds the amount of such deposit shall be the "Class A Required Amount
Shortfall."
(3) With respect to Class A, an amount equal to the lesser of
(x) the Class A Required Amount Shortfall and
(y) funds, if any, available to pay such Class A Required
Amount Shortfall from funds initially allocated to any
Subordinate Series
shall be deposited into the Series Distribution Account. The Class A Required
Amount Shortfall shall be reduced by the amount of such deposit.
(4) With respect to Class A, an amount equal to the lesser of
(x) the Class A Cumulative Investor Charged-Off Amount and
(y) Class A Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class A Cumulative Investor
Charged-Off Amount, Series Excess Servicing and the Available Subordinated
Amount shall be reduced by the amount of such deposit.
(5) An amount equal to the lesser of
(x) the Class A Cumulative Investor Charged-Off Amount and
(y) funds, if any, available to pay such Class A Cumulative
Investor Charged-Off Amount from funds initially allocated to
any Subordinate Series
shall be deposited into the Series Principal Collections Account. The Class A
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
(6) If there is a Subordinate Class with respect to Class A, an amount
equal to the least of
(x) the Class A Required Amount Shortfall,
(y) the Available Subordinated Amount, and
(z) Class B Available Collections
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The Class B Subordinated Payment shall be increased
by, and the Class A Required Amount Shortfall, the Available Subordinated Amount
and Class B Available Collections shall be decreased by, the amount of such
deposit.
(7) If there is a Subordinate Class with respect to Class A, an amount
equal to the least of
(x) the Class A Cumulative Investor Charged-Off Amount,
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(y) the Available Subordinated Amount, and
(z) Class B Available Collections
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class B Subordinated Payment shall be
increased by, and the Class A Cumulative Investor Charged-Off Amount, the
Available Subordinated Amount and Class B Available Collections shall be reduced
by, the amount of such deposit.
(8) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Required Amount and
(y) the positive difference, if any, between
(1) the amount of Class B Available Finance Charge
Collections, and
(2) the Class B Subordinated Payment
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The amount by which the Class B Required Amount
exceeds the amount of such deposit shall be the "Class B Required Amount
Shortfall."
(9) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) funds, if any, available to pay such Class B Required
Amount Shortfall from funds initially allocated to any
Subordinate Series
shall be deposited into the Series Distribution Account. The Class B Required
Amount Shortfall shall be reduced by the amount of such deposit.
(10) If there is a Subordinate Class with respect to Class A, an
amount equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) funds, if any, available to pay such Class B Cumulative
Investor Charged-Off Amount from funds initially allocated to
any Subordinate Series
shall be deposited into the Series Principal Collections Account. The Class B
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
(11) If there is a Subordinate Class with respect to Class A, an
amount equal to the least of
(x) the Class A Required Amount Shortfall,
(y) the Available Subordinated Amount, and
(z) Series Excess Servicing
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shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The Class A Required Amount Shortfall, the
Available Subordinated Amount and the amount of Series Excess Servicing shall be
reduced by the amount of such deposit.
(12) If there is a Subordinate Class with respect to Class A, an
amount equal to the least of
(x) the Class A Cumulative Investor Charged-Off Amount,
(y) the Available Subordinated Amount, and
(z) Series Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class A Cumulative Investor
Charged-Off Amount, the Available Subordinated Amount and the amount of Series
Excess Servicing shall be reduced by the amount of such deposit. If the Class A
Cumulative Investor Charged-Off Amount is greater than zero after such
reduction, the Class A Cumulative Investor Charged-Off Amount shall be further
reduced by an amount equal to the least of
(x) the Class A Cumulative Investor Charged-Off Amount,
(y) the Available Subordinated Amount, and
(z) the Class B Investor Interest.
The Class A Cumulative Investor Charged-Off Amount, the Available Subordinated
Amount and the Class B Investor Interest shall each be reduced by such least
amount, and the Class B Cumulative Investor Charged-Off Amount shall be
increased by such amount.
(13) If there is a Subordinate Class with respect to Class A, an
amount equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The Class B Required Amount Shortfall and the
amount of Series Excess Servicing shall be reduced by the amount of such
deposit.
(14) If there is a Subordinate Class with respect to Class A, an
amount equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class B Cumulative Investor
Charged-Off Amount and the amount of Series Excess Servicing shall be reduced by
the amount of such deposit.
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(15) An amount equal to the lesser of
(x) the amount by which the Total Available Credit Enhancement
Amount is less than the Total Maximum Credit Enhancement Amount
and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and paid to the Trustee
as administrator of the Credit Enhancement for application in accordance with
the provisions of the Credit Enhancement Agreement. If there is Shared Credit
Enhancement, such deposit shall increase the Available Shared Credit Enhancement
Amount until the Available Shared Credit Enhancement Amount equals the Maximum
Shared Credit Enhancement Amount. If there is a Subordinate Class with respect
to Class A, any remaining portion of such deposit shall increase the Available
Class B Credit Enhancement Amount until the Available Class B Credit Enhancement
Amount equals the Maximum Class B Credit Enhancement Amount. The Total Available
Credit Enhancement Amount shall be increased by, and the amount of Series Excess
Servicing shall be decreased by, the amount of such deposit.
(16) If there is Shared Credit Enhancement, and if the Class A Required
Amount Shortfall is greater than zero, the Master Servicer, on the related
Drawing Date, shall make a Credit Enhancement Drawing in an amount equal to the
lesser of
(x) the Class A Required Amount Shortfall and
(y) the Available Shared Credit Enhancement Amount
and such amount shall be deposited into the Series Distribution Account. The
Class A Required Amount Shortfall and the Available Shared Credit Enhancement
Amount shall be reduced by the amount of such deposit.
(17) If there is Shared Credit Enhancement, and if the Class A
Cumulative Investor Charged-Off Amount is greater than zero, the Master
Servicer, on the related Drawing Date, shall make a Credit Enhancement Drawing
in an amount equal to the lesser of
(x) the Class A Cumulative Investor Charged-Off Amount and
(y) the Available Shared Credit Enhancement Amount
and such amount shall be deposited into the Series Principal Collections
Account. The Class A Cumulative Investor Charged-Off Amount and the Available
Shared Credit Enhancement Amount shall be reduced by the amount of such deposit.
(18) If there is Shared Credit Enhancement, and if there is a
Subordinate Class with respect to Class A, and if the Class B Required Amount
Shortfall is greater than zero, the Master Servicer, on the related Drawing
Date, shall make a Credit Enhancement Drawing in an amount equal to the lesser
of
(x) the Class B Required Amount Shortfall and
(y) the Available Shared Credit Enhancement Amount
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and such amount shall be deposited into the Series Distribution Account. The
Class B Required Amount Shortfall and the Available Shared Credit Enhancement
Amount shall be reduced by the amount of such deposit.
(19) If there is Shared Credit Enhancement, and if there is a
Subordinate Class with respect to Class A, and if the Class B Cumulative
Investor Charged-Off Amount is greater than zero, the Master Servicer, on the
related Drawing Date, shall make a Credit Enhancement Drawing in an amount equal
to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) the Available Shared Credit Enhancement Amount
and such amount shall be deposited into the Series Principal Collections
Account. The Class B Cumulative Investor Charged-Off Amount and the Available
Shared Credit Enhancement Amount shall be reduced by the amount of such deposit.
(20) If there is Subordinate Class with respect to Class A, and if the
Class B Required Amount Shortfall is greater than zero, the Master Servicer, on
the related Drawing Date, shall make a Credit Enhancement Drawing in an amount
equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) the Available Class B Credit Enhancement Amount
and such amount shall be deposited into the Series Distribution Account. The
Class B Required Amount Shortfall and the Available Class B Credit Enhancement
Amount shall be reduced by the amount of such deposit.
(21) If there is a Subordinate Class with respect to Class A, and if
the Class B Cumulative Investor Charged-Off Amount is greater than zero, the
Master Servicer, on the related Drawing Date, shall make a Credit Enhancement
Drawing in an amount equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) the Available Class B Credit Enhancement Amount
and such amount shall be deposited into the Series Principal Collections
Account. The Class B Cumulative Investor Charged-Off Amount and the Available
Class B Credit Enhancement Amount shall be reduced by the amount of such
deposit.
(22) An amount equal to the lesser of
(x) the Credit Enhancement Fee and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and paid to the Trustee
as the administrator of the Credit Enhancement for application in accordance
with the provisions of the Credit
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Enhancement Agreement. The amount of Series Excess Servicing shall be reduced by
the amount of such payment.
(23) An amount equal to the amount of Series Excess Servicing shall be
withdrawn from the Series Collections Account and deposited into the Group
Finance Charge Collections Reallocation Account.
(24) The allocations set forth in clauses (24)(A) and (24)(B) shall be
made, first, with respect to Class A, and then, if there is a Subordinate Class
with respect to Class A, the allocations set forth in clauses (24)(A) and
(24)(B) shall be made with respect to Class B, to the extent that funds are
available pursuant to this clause (24):
(A) An amount equal to the lesser of
(x) the Class Required Amount Shortfall and
(y) the product of
(1) a fraction the numerator of which is the
Class Required Amount Shortfall and the
denominator of which is the sum of the Class
Required Amount Shortfalls for all Classes
designated by the same letter of the alphabet of
all Series in the Group to which the Series
established hereby belongs (after giving effect
to provisions in the applicable Series
Supplements substantially similar to the clauses
preceding this clause (24)) and
(2) the amount on deposit in the Group Finance
Charge Collections Reallocation Account before
any withdrawals therefrom with respect to any
other Series pursuant to a comparable clause in
the applicable Series Supplements,
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited into the Series Distribution Account. The Class Required
Amount Shortfall shall be reduced by the amount of such deposit.
(B) An amount equal to the lesser of
(x) the Class Cumulative Investor Charged-Off Amount
and
(y) the product of
(1) a fraction the numerator of which is the
Class Cumulative Investor Charged-Off Amount and
the denominator of which is the sum of the Class
Cumulative Investor Charged-Off Amounts for all
Classes designated by the same letter of the
alphabet of all Series in the Group to which the
Series established hereby belongs (after giving
effect to provisions in the applicable Series
Supplements substantially similar to the clauses
preceding this clause (24)) and
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(2) the amount on deposit in the Group Finance
Charge Collections Reallocation Account before
any withdrawals therefrom with respect to any
other Series pursuant to a comparable clause in
the applicable Series Supplements,
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited into the Series Principal Collections Account. The Class
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
(25) The allocations set forth in clauses (25)(A) and (25)(B) shall be
made, to the extent that funds are available pursuant to this clause (25):
(A) If there is Shared Credit Enhancement, an amount equal to
the lesser of
(x) the amount by which the Available Shared Credit
Enhancement Amount is less than the Maximum Shared
Credit Enhancement Amount and
(y) the product of
(1) a fraction, the numerator of which is the
amount by which the Available Shared Credit
Enhancement Amount is less than the Maximum
Shared Credit Enhancement Amount and the
denominator of which is the sum of, for each
Series in the Group of which the Series
established hereby is a member, the amount by
which the Available Shared Credit Enhancement
Amount for such Series is less than the
Maximum Shared Credit Enhancement Amount for
such Series (after giving effect to
provisions in the applicable Series
Supplements substantially similar to the
clauses preceding this clause (25)) and
(2) the amount on deposit in the Group
Finance Charge Collections Reallocation
Account before any withdrawals therefrom with
respect to any other Series pursuant to a
comparable clause in the applicable Series
Supplements,
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and paid to the Trustee as administrator of the Credit Enhancement for
application in accordance with the provisions of the Credit Enhancement
Agreement. Such deposit shall increase the Available Shared Credit Enhancement
Amount.
(B) If there is a Subordinate Class with respect to Class A, an
amount equal to the lesser of
(x) the amount by which the Available Class B Credit
Enhancement Amount is less than the Maximum Class B
Credit Enhancement Amount and
(y) the product of
(1) a fraction, the numerator of which is the
amount by which the Available Class B Credit
Enhancement Amount is less than the
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Maximum Class B Credit Enhancement Amount and
the denominator of which is the sum of, for
each Series in the Group of which the Series
established hereby is a member, the amount by
which the Available Class B Credit
Enhancement Amount for such Series is less
than the Maximum Class B Credit Enhancement
Amount for such Series (after giving effect
to provisions in the applicable Series
Supplements substantially similar to the
clauses preceding this clause (25)) and
(2) the amount on deposit in the Group
Finance Charge Collections Reallocation
Account before any withdrawals therefrom with
respect to any other Series pursuant to a
comparable clause in the applicable Series
Supplements,
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and paid to the Trustee as administrator of the Credit Enhancement for
application in accordance with the provisions of the Credit Enhancement
Agreement. Such deposit shall increase the Available Class B Credit Enhancement
Amount.
(26) After all allocations from the Group Finance Charge Collections
Reallocation Account to be made pursuant to any other Series Supplement for any
Series that is a member of the same Group of which the Series established hereby
is a member have been made, an amount equal to the product of (x) a fraction the
numerator of which shall be the Series Investor Interest and the denominator of
which shall be the sum of the Series Investor Interests for each Series that is
a member of the same Group as the Series established hereby (including the
Series established hereby) and (y) the amount remaining on deposit in the Group
Finance Charge Collections Reallocation Account shall be withdrawn from the
Group Finance Charge Collections Reallocation Account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. Amounts remaining on deposit in
the Group Finance Charge Collections Reallocation Account shall be withdrawn
from such account and allocated pursuant to the provisions of the Series
Supplements for each other Series that is a member of the same Group as the
Series established hereby.
(27) Any amounts remaining on deposit in the Series Collections Account
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account.
(28) Unless the Distribution Date is a Distribution Date in the
Revolving Period, the lesser of
(x) the Principal Distribution Amount and
(y) the amount on deposit in the Series Principal Collections
Account
shall be withdrawn from the Series Principal Collections Account and deposited
into the Series Principal Funding Account. The amount by which the Principal
Distribution Amount exceeds the amount of such deposit shall be the "Principal
Distribution Amount Shortfall."
(29) Unless the Distribution Date is a Distribution Date in the
Revolving Period, the lesser of
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(x) the Principal Distribution Amount Shortfall and
(y) funds, if any, available to pay such Principal Distribution
Amount Shortfall from funds initially allocated to any
Subordinate Series
shall be deposited into the Series Principal Funding Account. The Principal
Distribution Amount Shortfall shall be reduced by the amount of such deposit.
(30) Any amounts remaining on deposit in the Series Principal
Collections Account shall be withdrawn from the Series Principal Collections
Account and be deposited into the Group Principal Collections Reallocation
Account.
(31) During the Accumulation Period or the Controlled Liquidation
Period, as applicable, the allocation set forth below shall be made with respect
to each Class, beginning with Class A and continuing, seriatim, for each Class,
to the extent that funds are available pursuant to this clause (31):
An amount equal to the lesser of
(x) the portion of the Principal Distribution Amount Shortfall
that is allocable to such Class and
(y) the product of
(1) a fraction the numerator of which is the portion
of the Principal Distribution Amount Shortfall that is
allocable to such Class and the denominator of which
is the sum of the portions of the Principal
Distribution Amount Shortfalls allocable to all
Classes designated by the same letter of the alphabet
of all Series in the Group to which the Series
established hereby belongs that are in their
Accumulation Periods or Controlled Liquidation
Periods, as applicable (after giving effect to
provisions in the applicable Series Supplements
substantially similar to the clauses preceding this
clause (31)) and
(2) the amount on deposit in the Group Principal
Collections Reallocation Account before any
withdrawals therefrom with respect to any other Series
shall be withdrawn from the Group Principal Collections Reallocation Account and
deposited into the Series Principal Funding Account. The Principal Distribution
Amount Shortfall shall be reduced by the amount of such deposit.
(32) After all allocations from the Group Principal Collections
Reallocation Account to be made pursuant to any other Series Supplement for any
Series that is a member of the same Group of which the Series established hereby
is a member have been made, the amount remaining on deposit in the Group
Principal Collections Reallocation Account shall be withdrawn from the Group
Principal Collections Reallocation Account and deposited into the Collections
Account.
(33) After all other allocations have been provided for with respect to
each Series then outstanding (whether or not such Series is a member of the same
Group as the Series established hereby), the lesser of
(x) the amount of the Seller Interest and
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(y) the amount on deposit in the Collections Account
shall be paid to the Holder of the Seller Certificate. If, after such payment,
any amounts remain on deposit in the Collections Account, such amounts shall
remain in the Collections Account for allocation as Principal Collections on the
next Trust Distribution Date.
SECTION 10. Payments.
(a) Payments.
(1) On each Distribution Date related to a Due Period in the
Accumulation Period, and on the first Distribution Date of the Amortization
Period, the Master Servicer shall direct the Trustee in writing to withdraw the
amount of Excess Income, if any, on deposit in the Series Principal Funding
Account from the Series Principal Funding Account and pay such amount to the
Holder of the Seller Certificate.
(2) On each Distribution Date, after giving effect to payments made
pursuant to Section 9 and the calculation of Investor Losses and adjustment of
the Class Investor Interest and Class Invested Amount with respect to each Class
pursuant to Section 13, the Master Servicer shall direct the Trustee in writing
to withdraw and cause the Paying Agent to pay funds from the applicable Investor
Account to or for the benefit of each Class of Investor Certificateholders,
seriatim, with respect to each Class, beginning with Class A, until such
payments have been made with respect to each Class, as set forth below:
(A) First, an amount equal to the lesser of
(x) the Class Modified Required Amount and
(y) the amount deposited into the Series Distribution
Account with respect to such Class on such
Distribution Date pursuant to Section 9
shall be withdrawn from the Series Distribution Account and deposited into the
Series Interest Funding Account. The amount by which the Class Modified Required
Amount exceeds the amount so deposited into the Series Interest Funding Account
shall be the Class Monthly Deficiency Amount with respect to such Distribution
Date.
(B) Second, an amount equal to the lesser of
(x) the sum of the Class Monthly Servicing Fee for
such Distribution Date and all accrued but unpaid
Class Monthly Servicing Fees from prior months and
(y) the amount deposited into the Series Distribution
Account with respect to such Class on such
Distribution Date pursuant to Section 9 less the
amount deposited into the Series Interest Funding
Account with respect to such Class pursuant to clause
(A) above
shall be withdrawn from the Series Distribution Account and paid to the Master
Servicer.
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(3) On the Distribution Date occurring in the same calendar month as
each Interest Payment Date, the Master Servicer shall direct the Trustee in
writing to deposit into the Series Interest Funding Account any Class Interest
Rate Cap Payment made by any Interest Rate Cap Provider for any Class or
Subclass pursuant to the Class Interest Rate Cap for such Class or Subclass.
(4) On the Distribution Date occurring in the same calendar month as
each Interest Payment Date, after giving effect to the payments described above
on such day, the Master Servicer shall direct the Trustee in writing to withdraw
the amount deposited into the Series Interest Funding Account with respect to
each Class or Subclass since the preceding Interest Payment Date. Such amount
shall be paid, or converted into Foreign Currency, as follows:
(a) With respect to any Class or Subclass that is not subject
to a Class Currency Swap, the Master Servicer shall cause the
Paying Agent to pay such amount on each Interest Payment Date
to the Investor Certificateholders of such Class or Subclass in
accordance with Section 5.01 of the Pooling and Servicing
Agreement;
(b) With respect to any Class or Subclass that is subject to a
Class Currency Swap, assuming no Currency Swap Termination has
occurred, the Master Servicer shall direct the Trustee in
writing to deposit such amount into the Currency Swap Dollar
Escrow Account; and
(c) With respect to any Class or Subclass that is subject to a
Class Currency Swap, and following a Currency Swap Termination,
the Master Servicer shall direct the Trustee in writing to
convert such amount into Foreign Currency at the then
prevailing spot exchange rate in New York; provided, however,
that the Trustee shall not convert any dollars into Foreign
Currency in excess of the amount of dollars that, when so
converted, would equal the sum of the Class Foreign Currency
Modified Required Amounts for each Distribution Date of the
Interest Accrual Period relating to such Interest Payment Date.
The positive difference, if any, between (i) the sum of the
Class Foreign Currency Modified Required Amounts for each
Distribution Date of the Interest Accrual Period and (ii) the
amount of Foreign Currency so obtained, shall be the "Class
Foreign Currency Interest Shortfall."
Any amounts withdrawn from the Series Interest Funding Account pursuant to this
clause (4) and not paid or converted into Foreign Currency shall be redeposited
into the Series Interest Funding Account and shall be deemed, on the next
Interest Payment Date, to be amounts deposited since the preceding Interest
Payment Date.
(5) The Master Servicer shall direct the Trustee in writing to withdraw
from the Class Currency Swap Termination Account and convert into Foreign
Currency at the then prevailing spot exchange rate in New York the lesser of
(x) the amount of dollars that, when converted into Foreign
Currency, will equal the Class Foreign Currency Interest
Shortfall and
(y) the amount on deposit in the Class Currency Swap
Termination Account.
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(6) On each Frankfurt Business Day immediately preceding each Interest
Payment Date with respect to any Class or Subclass that is subject to a Class
Currency Swap, the Master Servicer shall direct the Trustee in writing (i) to
deposit into the Class Foreign Currency Distribution Account all amounts
received from the Currency Swap Counterparty with respect to the sum of the
Class Foreign Currency Modified Required Amounts for each Distribution Date of
the Interest Accrual Period relating to such Interest Payment Date, (ii) to
deposit into the Class Foreign Currency Distribution Account all Foreign
Currency obtained by the Trustee by converting dollars pursuant to Sections
10(a)(4) and 10(a)(5) (x) on deposit in the Series Interest Funding Account and
(y) on deposit in the Class Currency Swap Termination Account (up to the amount
necessary to obtain the Class Foreign Currency Interest Shortfall) into Foreign
Currency at the then prevailing spot exchange rate in New York and (iii) to
cause the Paying Agent to pay such amount to the Investor Certificateholders of
such Class in accordance with subsection (c) of this Section 10.
(7) On each Distribution Date occurring in the same calendar month as
each Principal Payment Date or on each Special Payment Date, as applicable,
after giving effect to the payments described above on such day, an amount equal
to the lesser of
(x) the Principal Distribution Amount and
(y) the amount deposited into the Series Principal Funding
Account on such Distribution Date pursuant to Section 9
shall be withdrawn from the Series Principal Funding Account. Such amount shall
be paid or converted into Foreign Currency as follows:
(a) With respect to any Class or Subclass that is not subject
to a Class Currency Swap, the Master Servicer shall cause the
Paying Agent to pay such amount to the Investor
Certificateholders of such Class or Subclass in accordance with
Section 5.01 of the Pooling and Servicing Agreement;
(b) With respect to any Class or Subclass that is subject to a
Class Currency Swap, assuming no Currency Swap Termination has
occurred, the Master Servicer shall direct the Trustee in
writing to deposit such amount into the Currency Swap Dollar
Escrow Account; and
(c) With respect to any Class or Subclass that is subject to a
Class Currency Swap, and following a Currency Swap Termination,
the Master Servicer shall direct the Trustee in writing to
convert such amount into Foreign Currency at the then
prevailing spot exchange rate in New York; provided, however,
that the Trustee shall not convert any dollars into Foreign
Currency in excess of the amount of dollars that, when so
converted, would equal the Class Foreign Currency Invested
Amount on such Principal Payment Date or Special Payment Date,
as applicable.
Except as set forth in the following sentence, all such amounts shall be paid to
or with respect to the Class A Investor Certificateholders until the Class A
Invested Amount is reduced to zero; and, thereafter, if there is a Subordinate
Class with respect to Class A, such amounts shall be paid to the Class B
Investor Certificateholders until the Class B Invested Amount is reduced to
zero, unless the
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Series Termination Date occurs prior to such date. In no event shall any amounts
be paid with respect to any Class of Investor Certificates pursuant to this
clause (7) in excess of the Class Invested Amount for such Class, nor shall any
amounts be paid in excess of the Class Foreign Currency Invested Amount, if
applicable. Any amounts remaining on deposit in the Series Principal Funding
Account after the Class Invested Amount or the Class Foreign Currency Invested
Amount, as applicable, for each Class has been reduced to zero shall be paid to
the Holder of the Seller Certificate. Any amounts withdrawn from the Series
Principal Funding Account pursuant to this clause (7) and not paid or converted
into Foreign Currency shall be paid to the Holder of the Seller Certificate.
(8) On the first Distribution Date of the Amortization Period, if any,
after giving effect to the payments and withdrawals and conversions described
above on such day, an amount equal to the lesser of
(x) the Series Invested Amount and
(y) the amount on deposit in the Series Principal Funding
Account
shall be withdrawn from the Series Principal Funding Account. Such amount shall
be paid or converted into Foreign Currency as follows:
(a) With respect to any Class or Subclass that is not subject
to a Class Currency Swap, the Master Servicer shall cause the
Paying Agent to pay such amount to the Investor
Certificateholders of such Class or Subclass in accordance with
Section 5.01 of the Pooling and Servicing Agreement;
(b) With respect to any Class or Subclass that is subject to a
Class Currency Swap, assuming no Currency Swap Termination has
occurred, the Master Servicer shall direct the Trustee in
writing to deposit such amount into the Currency Swap Dollar
Escrow Account; and
(c) With respect to any Class or Subclass that is subject to a
Class Currency Swap, and following a Currency Swap Termination,
the Master Servicer shall direct the Trustee in writing to
convert such amount into Foreign Currency at the then
prevailing spot exchange rate in New York; provided, however,
that the Trustee shall not convert any dollars into Foreign
Currency in excess of the amount of dollars that, when so
converted, would equal the Class Foreign Currency Invested
Amount on such Special Payment Date.
Except as set forth in the following sentence, all such amounts shall be paid to
or with respect to the Class A Investor Certificateholders until the Class A
Invested Amount is reduced to zero; and, thereafter, if there is a Subordinate
Class with respect to Class A, such amounts shall be paid to the Class B
Investor Certificateholders until the Class B Invested Amount is reduced to
zero, unless the Series Termination Date occurs prior to such date. In no event
shall any amounts be paid with respect to any Class of Investor Certificates
pursuant to this clause (8) in excess of the Class Invested Amount for such
Class, nor shall any amounts be paid in excess of the Class Foreign Currency
Invested Amount, if applicable. Any amounts remaining on deposit in the Series
Principal Funding Account after the Class Invested Amount or the Class Foreign
Currency Invested Amount, as
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applicable, for each Class has been reduced to zero shall be paid to the Holder
of the Seller Certificate. Any amounts withdrawn from the Series Principal
Funding Account pursuant to this clause (8) and not paid or converted into
Foreign Currency shall be paid to the Holder of the Seller Certificate.
(9) On each Special Payment Date, after giving effect to the payments,
withdrawals and conversions described above on such day, the Master Servicer
shall direct the Trustee in writing to withdraw from the Class Currency Swap
Termination Account and convert into Foreign Currency at the then prevailing
spot exchange rate in New York, an amount equal to the lesser of
(x) the amount of dollars that, when converted into Foreign
Currency, will equal the positive difference, if any, between
(i) the product of (A) the amounts withdrawn from the Series
Principal Funding Account with respect to any Class that is
subject to a Class Currency Swap and (B) the Currency Swap
Exchange Rate and (ii) the amount of Foreign Currency obtained
by the Trustee by converting dollars on deposit in the Series
Principal Funding Account into Foreign Currency at the then
prevailing spot exchange rate in New York and
(y) the amount on deposit in the Class Currency Swap Termination
Account.
Any amount remaining on deposit in the Class Currency Swap Termination Account
following the earliest of (1) the payment in full of the Class Foreign Currency
Invested Amount, (2) the payment in full of the Series Invested Amount or (3)
the Series Termination Date, shall be withdrawn from the Class Currency Swap
Termination Account and paid to the Holder of the Seller Certificate.
(10) On each Principal Payment Date or on the Frankfurt Business Day
following each Special Payment Date, if applicable, with respect to any Class or
Subclass that is subject to a Class Currency Swap, the Master Servicer shall
direct the Trustee in writing (i) to deposit into the Class Foreign Currency
Distribution Account all amounts received from the Currency Swap Counterparty
with respect to the Class Foreign Currency Invested Amount, (ii) to deposit into
the Class Foreign Currency Distribution Account all Foreign Currency obtained by
the Trustee by converting dollars on deposit in the Series Principal Funding
Account and the Class Currency Swap Termination Account into Foreign Currency at
the then prevailing spot exchange rate in New York pursuant to Section 10(a)(9)
and (iii) to cause the Paying Agent to pay such amount to the Investor
Certificateholders of such Class in accordance with subsection (c) of this
Section 10.
(11) On the Distribution Date occurring in the same calendar month as
the Class Expected Final Payment Date or the Class Final Maturity Date, if
applicable, the Master Servicer shall direct the Trustee in writing to withdraw
the amount on deposit in the Series Principal Funding Account with respect to
each Class; provided that such amount shall be no greater than the Class
Invested Amount and funds, if any, remaining on deposit in the Series Principal
Funding Account after the payment in full of the Class Invested Amount with
respect to each Class shall be withdrawn and paid to the Holder of the Seller
Certificate. Such amount shall be paid or converted into Foreign Currency as
follows:
(a) With respect to any Class or Subclass that is not subject
to a Class Currency Swap, the Master Servicer shall cause the
Paying Agent to pay such amount to the Investor
Certificateholders of such Class or Subclass in accordance with
Section 5.01 of the Pooling and Servicing Agreement;
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(b) With respect to any Class or Subclass that is subject to a
Class Currency Swap, assuming no Currency Swap Termination has
occurred, the Master Servicer shall direct the Trustee in
writing to deposit such amount into the Currency Swap Dollar
Escrow Account; and
(c) With respect to any Class or Subclass that is subject to a
Class Currency Swap, and following a Currency Swap Termination,
the Master Servicer shall direct the Trustee in writing to
convert such amount into Foreign Currency at the then
prevailing spot exchange rate in New York; provided, however,
that the Trustee shall not convert any dollars into Foreign
Currency in excess of the amount of dollars that, when so
converted, would equal the Class Foreign Currency Invested
Amount on such Class Expected Final Payment Date or Class Final
Maturity Date, if applicable.
Any amounts withdrawn from the Series Principal Funding Account pursuant to this
clause (11) and not paid or converted into Foreign Currency shall be paid to the
Holder of the Seller Certificate.
(12) On the Frankfurt Business Day immediately preceding the Class
Expected Final Payment Date or the Class Final Maturity Date, if applicable,
with respect to any Class or Subclass that is subject to a Class Currency Swap,
the Master Servicer shall direct the Trustee in writing (i) to deposit into the
Class Foreign Currency Distribution Account all amounts received from the
Currency Swap Counterparty with respect to Class Foreign Currency Invested
Amount, (ii) to deposit into the Class Foreign Currency Distribution Account all
Foreign Currency obtained by the Trustee by converting dollars on deposit in the
Series Principal Funding Account into Foreign Currency at the then prevailing
spot exchange rate in New York pursuant to Section 10(a)(11) and (iii) to cause
the Paying Agent to pay such amount to the Investor Certificateholders of such
Class in accordance with subsection (c) of this Section 10.
(b) Payments to the Sellers and/or the Master Servicer.
Notwithstanding the other provisions in Section 9 and this Section 10, any
amounts payable to Greenwood on behalf of the Holder of the Seller Certificate
or to the Master Servicer on any Distribution Date pursuant to Section 9 and
this Section 10 may be paid prior to such Distribution Date pursuant to Section
4.03(d) of the Pooling and Servicing Agreement.
(c) Payments to Holders of Investor Certificates in Bearer
Form. On each Payment Date, with respect to any outstanding Class of Investor
Certificates issued in bearer form and denominated in a Foreign Currency, the
principal and interest on the Bearer Certificates will be payable in Foreign
Currency only against surrender of the Bearer Certificates or Coupons, as the
case may be, and subject to applicable laws and regulations at the offices of
any Paying Agent outside the United States. Payments of principal and interest
on the Bearer Certificates will be made by Foreign Currency check or Foreign
Currency bank draft drawn on a bank account which, at the Paying Agent's
discretion, shall be in Frankfurt or London, or by transfer in same day funds to
a Foreign Currency account maintained by the payee, subject in each case to all
applicable laws and regulations. To the extent necessary under the tax laws of
the United States, or any official application or interpretation of the tax laws
of the United States or its possessions, no such bank draft shall be mailed by
any of the Paying Agents to any address in the United States or its possessions
and no transfer of funds shall be made to an account maintained by the payee in
the United States or its possessions. Payments of principal and interest on the
Permanent Global Certificate will be made in immediately available funds by wire
transfer to such account as the Depository shall direct in writing;
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provided, however, that in no event shall any payments be made to an account
maintained by the payee in the United States or its possessions. The Trustee
will, so long as any of the Bearer Certificates remain outstanding, maintain a
paying agency in a city in Europe which is recognized as an international
financial center (one of which, so long as the Bearer Certificates are listed on
the Frankfurt Stock Exchange, will be Frankfurt am Main). Notice of any
termination of appointment and of any changes in the specified offices of any
Paying Agent will be given to the Holders of Bearer Certificates in accordance
with Section 19 hereof.
Upon the date fixed for the final payment of any Bearer Certificates,
if funds for the payment of the Bearer Certificates and Coupons (if any) shall
have been available at the offices of the Paying Agents, except as otherwise
provided in this paragraph, unmatured Coupons (if any) relating to such Bearer
Certificates (whether or not attached) shall become void and no payment made in
respect thereof and the only right of such Holders of Bearer Certificates shall
be to receive payment of the principal thereof together with accrued interest to
the payment date as provided herein.
SECTION 11. Credit Enhancement.
(a) Initial Credit Enhancement. The Master Servicer hereby represents
with respect to the Initial Credit Enhancement and shall be deemed to represent
with respect to any successor Credit Enhancement that (i) the Master Servicer
has provided for the Credit Enhancement for the account of the Trustee and for
the benefit of the Investor Certificateholders, (ii) the Master Servicer has
entered into a Credit Enhancement Agreement, (iii) the Credit Enhancement
permits the Trustee or the Master Servicer, acting as the Trustee's
attorney-in-fact or otherwise, to make Credit Enhancement Drawings from time to
time in an amount up to the Total Available Credit Enhancement Amount at such
time, for the purposes set forth in this Agreement and (iv) the Credit
Enhancement and the respective Credit Enhancement Agreement may be terminated by
the Trustee without penalty if (x) the Master Servicer elects to obtain a
successor Credit Enhancement and such successor Credit Enhancement does not
cause the ratings of the Investor Certificates of the Series established hereby
to be withdrawn or lowered by either of the Rating Agencies from the respective
ratings of such Investor Certificates immediately prior to such election or (y)
if the Credit Enhancement is not Funded Credit Enhancement, the Credit
Enhancement Provider ceases to be a Qualified Credit Enhancement Provider.
(b) Successor Credit Enhancement.
(i) If the Credit Enhancement is not Funded Credit Enhancement
and if, at any time, the provider of such Credit Enhancement ceases to be a
Qualified Credit Enhancement Provider, the Master Servicer shall obtain a
successor Credit Enhancement within 30 days or such longer period as will not
result in the lowering or withdrawal of the rating of any Class of any Series
then outstanding by the Rating Agencies (a) which, if such successor Credit
Enhancement is not to be Funded Credit Enhancement, will be issued by a
Qualified Credit Enhancement Provider and (b) with respect to which the
representations set forth in Section 11(a) will be satisfied; provided, however,
that the Master Servicer shall not be required to continue efforts to obtain a
successor Credit Enhancement if the then existing Credit Enhancement Provider
again becomes a Qualified Credit Enhancement Provider and remains such; and,
provided, further, that unless otherwise agreed to by the Rating Agencies, the
Credit Enhancement and Credit Enhancement Agreement will not be terminated and
no successor Credit Enhancement Provider shall be selected if the successor
Credit Enhancement, the successor Credit Enhancement Agreement, or the selection
of such successor Credit Enhancement Provider would cause the ratings of the
Investor Certificates of the Series established hereby to be withdrawn or
lowered by either Rating Agency from the respective ratings of such Investor
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Certificates immediately prior to such selection. The Master Servicer, the
Trustee and the Sellers shall promptly enter into any such successor Credit
Enhancement Agreement, and the Master Servicer shall use its best efforts to
secure the signature of any other required party to such agreement.
(ii) Regardless of whether the Credit Enhancement is Funded
Credit Enhancement, the Master Servicer may elect, at any time, to obtain a
successor Credit Enhancement, provided that such successor Credit Enhancement
does not cause the ratings of the Investor Certificates of the Series
established hereby to be withdrawn or lowered by either of the Rating Agencies
from the respective ratings of such Investor Certificates immediately prior to
such election.
(iii) In any case, subject to the foregoing, any successor
Credit Enhancement obtained by the Master Servicer need not consist of the same
type of Credit Enhancement as the Initial Credit Enhancement, but may consist of
a different type of facility, including, but not limited to, a reserve account,
a cash collateral account, an irrevocable standby letter of credit, a surety
bond or a combination of any of the above. Upon issuance of, or other provision
for, any such successor Credit Enhancement, the Trustee shall terminate the
prior Credit Enhancement and Credit Enhancement Agreement.
(c) Supplemental Credit Enhancement Event. Upon the occurrence of a
Supplemental Credit Enhancement Event, Greenwood as Servicer shall, within 60
days of notice from Standard & Poor's of the withdrawal or downgrade (or such
longer period as may be agreed to by Standard & Poor's), arrange for the payment
of the Supplemental Credit Enhancement Amount, if any, by a Person other than
Greenwood (or from Series Excess Servicing) to the Trustee as administrator of
the Credit Enhancement for application in accordance with the provisions of the
Credit Enhancement Agreement. Both the form and the provider of the Supplemental
Credit Enhancement Amount, if any, shall be determined at the time it is to be
paid; provided, that the Master Servicer shall have received confirmation from
Standard & Poor's that the arrangements with respect to the Supplemental Credit
Enhancement Amount, if any, will not result in the rating of the Investor
Certificates of the Series established hereby being withdrawn or lowered. In
addition to the foregoing, the Master Servicer shall notify Moody's of the
occurrence of a Supplemental Credit Enhancement Event as soon as practicable
after such occurrence, and shall notify Moody's in advance of its implementation
of the form and provider of the Supplemental Credit Enhancement Amount, if any.
SECTION 12. Alternative Credit Support Election.
(a) The Sellers may elect to effect a change in the calculation of the
Class Percentage with respect to Finance Charge Collections during the
Amortization Period, as set forth in the definition of "Class Percentage," and
increase the Available Class B Credit Enhancement Amount, by making an
Alternative Credit Support Election. An Alternative Credit Support Election may
be made as follows:
(i) at any time during the Revolving Period, Greenwood on
behalf of the Holder of the Seller Certificate shall deliver written
notice of such Alternative Credit Support Election to the Rating
Agencies, the Trustee and the Credit Enhancement Provider;
(ii) prior to the last day of the Revolving Period, the
Additional Credit Support Amount shall be paid to the Trustee as
administrator of the Credit Enhancement for application in accordance
with the provisions of the Credit Enhancement Agreement; provided,
however, that following an Amortization Event, the Additional Credit
Support Amount may be paid to the Trustee as administrator of the
Credit Enhancement at any time on or prior to the last day of the Due
Period in which the Amortization Event occurs;
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(iii) prior to the last day of the Revolving Period (or,
following an Amortization Event during the Revolving Period, on or
prior to the last day of the Due Period in which the Amortization Event
occurs), the Rating Agencies shall have confirmed that the Alternative
Credit Support Election shall not cause a reduction in or withdrawal of
the rating of any Class of Investor Certificates of the Series
established hereby; and
(iv) prior to the last day of the Revolving Period (or,
following an Amortization Event during the Revolving Period, on or
prior to the last day of the Due Period in which the Amortization Event
occurs), Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered to the Rating Agencies written confirmation that
the conclusions reached in the legal opinions delivered on the Initial
Closing Date regarding the absolute transfer of the Receivables and the
security interest of the Trust in the Receivables are not affected by
the Alternative Credit Support Election.
(b) If each of the actions set forth in Section 12(a) above has been
taken or satisfied as required, the Alternative Credit Support Election shall
become effective on the last day of the Due Period in which the Additional
Credit Support Amount has been paid to the Trustee as administrator of the
Credit Enhancement (an "Effective Alternative Credit Support Election").
(c) At any time until the Alternative Credit Support Election becomes
effective, such Alternative Credit Support Election may be cancelled upon notice
to the Rating Agencies, the Trustee and the Credit Enhancement Provider.
Thereafter, the Additional Credit Support Amount, if any, shall be returned by
the Trustee as administrator of the Credit Enhancement in accordance with the
Credit Enhancement Agreement.
SECTION 13. Calculation of Investor Losses.
(a) For each Distribution Date, the Master Servicer shall calculate the
Class Investor Charged-Off Amount and the Class Cumulative Investor Charged-Off
Amount with respect to each Class, in each case as of the end of the related Due
Period.
(b) If on any Distribution Date, the Class Investor Charged-Off Amount
with respect to any Class exceeds the Class Charge-Off Reimbursement Amount with
respect to such Class, the Class Investor Interest and the Class Invested Amount
for such Class shall each be reduced by the amount of such excess (an "Investor
Loss" with respect to such Class).
(c) On each Distribution Date the Class Investor Interest and the Class
Invested Amount for each Class shall be increased by, and the amount of
aggregate unreimbursed Investor Losses for each such Class shall be decreased
by, the positive difference, if any, between the Class Charge-Off Reimbursement
Amount on such Distribution Date and the Class Investor Charged-Off Amount for
such Distribution Date; provided, however, that neither the Class Invested
Amount nor the Class Investor Interest shall exceed the Class Initial Investor
Interest for such Class minus the sum of (x) the aggregate amount of payments of
Certificate Principal paid to the Investor Certificateholders of such Class
prior to such Distribution Date, (y) in the case of the Class Investor Interest,
the amount on deposit in the Series Principal Funding Account for the benefit of
such Class in respect of Collections of Principal Receivables and (z) the
aggregate amount of losses, if any, on investments of principal of funds on
deposit in the Series Principal Funding Account for the benefit of such Class;
and provided, further, that the amount of Investor Losses with respect to any
Class shall not be reduced to an amount less than zero.
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SECTION 14. Servicing Compensation. As compensation for its servicing
activities hereunder and under the Pooling and Servicing Agreement and
reimbursement of its expenses as set forth in Section 3.03 of the Pooling and
Servicing Agreement, the Master Servicer shall be entitled to receive a monthly
servicing fee with respect to the Series established hereby in respect of any
Due Period (or portion thereof) prior to the earlier of the date on which the
Series Investor Interest is reduced to zero and the Series Termination Date.
Such monthly servicing fees shall be composed of the Class Monthly Servicing
Fees and the Supplemental Servicing Fees, if any. The Class Monthly Servicing
Fees shall be paid to the Master Servicer on behalf of each Class on each
Distribution Date pursuant to Section 10. The Supplemental Servicing Fee, if
any, shall be paid to the Master Servicer on or before each Distribution Date
from the Series Additional Funds for such Distribution Date. In no event shall
the Trustee or the Investor Certificateholders be liable for the Supplemental
Servicing Fee.
SECTION 15. Class Interest Rate Caps.
(a) In the event that the Master Servicer has obtained a Class Interest
Rate Cap in favor of the Trustee for the benefit of a Class or Subclass that
does not have a fixed or maximum Certificate Rate, the Master Servicer hereby
represents that such Class Interest Rate Cap provides that (i) the Trust shall
not be required to make any payments thereunder and (ii) the Trust shall be
entitled to receive payments (determined in accordance with the Class Interest
Rate Cap) from the Interest Rate Cap Provider on an Interest Payment Date if
LIBOR or the Commercial Paper Rate, as applicable, for the related Calculation
Period exceeds the Class Cap Rate for the applicable Class or Subclass. Any
Class Interest Rate Cap Payment shall be deposited into the Series Interest
Funding Account.
(b) In the event that the commercial paper or certificate of deposit
rating of the Interest Rate Cap Provider is withdrawn or reduced below the
ratings specified in the Series Term Sheet (or, in either case, such lower
rating as the applicable Rating Agency shall allow), then within 30 days after
receiving notice of such decline in the creditworthiness of the Interest Rate
Cap Provider as determined by either Rating Agency, either (x) the Interest Rate
Cap Provider, with the prior confirmation of the Rating Agencies that such
arrangement will not result in the reduction or withdrawal of the rating of any
Investor Certificates of the Series established hereby, will enter into an
arrangement the purpose of which shall be to assure performance by the Interest
Rate Cap Provider of its obligations under the Class Interest Rate Caps; or (y)
the Master Servicer shall at its option either (i) with the prior confirmation
of the Rating Agencies that such action will not result in a reduction or
withdrawal of the rating of any Investor Certificates of the Series established
hereby, cause the Interest Rate Cap Provider to pledge securities in the manner
provided by applicable law, which shall be held by the Trustee or its agent free
and clear of the Lien of any third party, in a manner conferring on the Trustee
a perfected first Lien in such securities securing the Interest Rate Cap
Provider's performance of its obligations under the Class Interest Rate Caps, or
(ii) provided that Replacement Class Interest Rate Caps or Qualified Substitute
Cap Arrangements meeting the requirements of Section 15(c) have been obtained,
direct the Trustee (A) to provide written notice to the Interest Rate Cap
Provider of its intention to terminate the Class Interest Rate Caps within such
30-day period and (B) to terminate the Class Interest Rate Caps within such
30-day period, to request the payment to it of all amounts due to the Trust
under the Class Interest Rate Caps through the termination date and to deposit
any such amounts so received, on the day of receipt, to the Series Interest
Funding Account, or (iii) establish any other arrangement (including an
arrangement or arrangements in addition to or in substitution for any prior
arrangement made in accordance with the provisions of this Section 15(b))
satisfactory to the Rating Agencies such that the Rating Agencies will not
reduce or withdraw the rating of any Investor Certificates of the Series
established hereby (a "Qualified Substitute Cap Arrangement"); provided,
however, that in the event at any time any
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alternative arrangement established pursuant to clause (x) or (y)(i) or (y)(iii)
above shall cease to be satisfactory to the Rating Agencies then the provisions
of this Section 15(b) shall again be applied and in connection therewith the
30-day period referred to above shall commence on the date the Master Servicer
receives notice of such cessation.
(c) Unless an alternative arrangement pursuant to clause (x) or (y)(i)
of Section 15(b) is being established, the Master Servicer shall use its best
efforts to obtain Replacement Class Interest Rate Caps or Qualified Substitute
Cap Arrangements meeting the requirements of this Section 15(c) during the
30-day period referred to in Section 15(b). The Trustee shall not terminate the
Class Interest Rate Caps unless, prior to the expiration of the 30-day period
referred to in Section 15(b), the Master Servicer delivers to the Trustee (i)
Replacement Class Interest Rate Caps or Qualified Substitute Cap Arrangements,
(ii) to the extent applicable, an Opinion of Counsel as to the due
authorization, execution and delivery and validity and enforceability of each
such Replacement Class Interest Rate Cap or Qualified Substitute Cap
Arrangement, as the case may be, and (iii) confirmation from each Rating Agency
that the termination of the Class Interest Rate Caps and their replacement with
such Replacement Class Interest Rate Caps or Qualified Substitute Cap
Arrangements will not adversely affect its rating of the Investor Certificates
of the Series established hereby.
(d) The Master Servicer shall notify the Trustee, the Rating Agencies
and the Credit Enhancement Provider within five Business Days after obtaining
knowledge that the commercial paper or certificate of deposit rating of the
Interest Rate Cap Provider has been withdrawn or reduced by either Rating
Agency.
(e) Notwithstanding the foregoing, the Master Servicer may at any time
obtain Replacement Class Interest Rate Caps, provided that the Master Servicer
delivers to the Trustee (i) an Opinion of Counsel as to the due authorization,
execution and delivery and validity and enforceability of such Replacement Class
Interest Rate Caps and (ii) confirmation from the Rating Agencies that the
termination of the then current Class Interest Rate Caps and their replacement
with such Replacement Class Interest Rate Caps will not adversely affect the
rating of the Investor Certificates of the Series established hereby.
(f) The Trustee hereby appoints the Master Servicer to perform the
duties of the calculation agent under the Class Interest Rate Caps and the
Master Servicer accepts such appointment.
SECTION 16. Class Currency Swaps.
(a) In the event that the Investor Certificates of any Class are
payable in Foreign Currency, the Trustee will enter into a Class Currency Swap
in a form approved by the Master Servicer and the Rating Agencies pursuant to
which (A) the Trustee shall be required to make payments to the Currency Swap
Counterparty in Dollars and (B) the Trust shall be entitled to receive payments
from the Currency Swap Counterparty in such Foreign Currency. On the
Distribution Date occurring in the same calendar month as each Payment Date, any
payments to be made by the Trustee to the Currency Swap Counterparty under the
Class Currency Swap will be deposited in the Currency Swap Dollar Escrow
Account. Any payments made by the Currency Swap Counterparty pursuant to the
Class Currency Swap (other than payments in connection with the termination
thereof or the replacement of the Currency Swap Counterparty, which payments
will be made in accordance with the Class Currency Swap) will be deposited in
the Class Foreign Currency Distribution Account. In the event that a
Counterparty Currency Swap Default shall occur, remaining amounts on deposit in
the Currency Swap Dollar Escrow Account (after making any partial payments
required by the Class Currency Swap) shall be released to the Trustee in
accordance with the terms of the Escrow
52
<PAGE> 67
Agreement and converted by the Trustee to Foreign Currency at the then
prevailing spot exchange rate in New York and deposited in the Class Foreign
Currency Distribution Account for payment to the Investor Certificateholders of
such Class.
(b) In the event of a Currency Swap Downgrade Trigger, then within 60
days after receiving notice of such decline in the creditworthiness of the
Currency Swap Counterparty as determined by either Rating Agency, the Master
Servicer shall at its option, and subject to any applicable provisions of the
Class Currency Swap, either (i) with the prior confirmation of the Rating
Agencies that such action will not result in a reduction or withdrawal of the
rating of any Investor Certificates of the Series established hereby below the
Minimum Investor Certificate Ratings specified in the Series Term Sheet, cause
the Currency Swap Counterparty to pledge securities in the manner provided by
applicable law, which shall be held by the Trustee or its agent free and clear
of the Lien of any third party, in a manner conferring on the Trustee a
perfected first Lien in such securities securing the Currency Swap
Counterparty's performance of its obligations under the Class Currency Swap,
(ii) with the prior confirmation of the Rating Agencies that such arrangement
will not result in the reduction or withdrawal of the rating of any Investor
Certificates of the Series established hereby below the Minimum Investor
Certificate Ratings specified in the Series Term Sheet, cause the Currency Swap
Counterparty to enter into an arrangement the purpose of which shall be to
assure performance by the Currency Swap Counterparty of its obligations under
the Class Currency Swap, (iii) provided that a Replacement Class Currency Swap
or Qualified Substitute Class Currency Swap Arrangement meeting the requirements
of Section 16(c) has been obtained, direct the Trustee (A) to provide written
notice to the Currency Swap Counterparty of its intention to terminate the Class
Currency Swap within such 60-day period and (B) to terminate the Class Currency
Swap within such 60-day period, to request the payment to it of all amounts due
to the Trust under the Class Currency Swap through the termination date and to
pay or deposit any such amounts as provided in the Class Currency Swap, or (iv)
establish any other arrangement (including an arrangement or arrangements in
addition to or in substitution for any prior arrangement made in accordance with
the provisions of this Section 16(b)) satisfactory to the Rating Agencies such
that the Rating Agencies will not reduce or withdraw the rating of any Investor
Certificates of the Series established hereby below the Minimum Investor
Certificate Ratings specified in the Series Term Sheet (a "Qualified Substitute
Class Currency Swap Arrangement"); provided, however, that in the event at any
time any alternative arrangement established pursuant to clause (i), (ii) or
(iv) of this Section 16(b) shall cease to be satisfactory to the Rating Agencies
then the provisions of this Section 16(b) shall again be applied and in
connection therewith the 60-day period referred to above shall commence on the
date the Master Servicer receives notice of such cessation.
(c) Unless an alternative arrangement pursuant to clause (i), (ii) or
(iv) of Section 16(b) is being established, the Master Servicer shall use its
best efforts (without expenditure of funds unless in its sole discretion it
otherwise elects) to obtain Replacement Class Currency Swaps or Qualified
Substitute Class Currency Swap Arrangements meeting the requirements of this
Section 16(c) during the 60-day period referred to in Section 16(b). The Trustee
shall not terminate the Class Currency Swap unless, prior to the expiration of
the 60-day period referred to in Section 16(b), the Master Servicer delivers to
the Trustee (i) Replacement Class Currency Swaps or Qualified Substitute Class
Currency Swap Arrangements, (ii) to the extent applicable, an Opinion of Counsel
(which may be Counsel for the Replacement Currency Swap Counterparty or
Qualified Substitute Currency Swap Counterparty) as to the due authorization,
execution and delivery and validity and enforceability of each such Replacement
Class Currency Swap or Qualified Substitute Currency Swap Arrangement, as the
case may be, and (iii) confirmation from each Rating Agency that the termination
of the Class Currency Swap and its replacement with such Replacement Class
Currency Swaps or Qualified Substitute Class Currency Swap Arrangements will not
result in a reduction or withdrawal of the
53
<PAGE> 68
rating of the Investor Certificates of the Series established hereby below the
Minimum Investor Certificate Ratings specified in the Series Term Sheet.
(d) The Master Servicer shall notify the Trustee, the Rating Agencies
and the Credit Enhancement Provider within five Business Days after obtaining
knowledge that the long-term, unsecured and unguaranteed debt rating of the
Currency Swap Counterparty has been withdrawn or reduced by either Rating
Agency.
(e) Notwithstanding the foregoing, the Master Servicer may, subject to
the terms of the Class Currency Swap, at any time obtain (without expenditure of
funds unless it otherwise so elects), and the Trustee will enter into, a
Replacement Class Currency Swap, provided that the Master Servicer delivers to
the Trustee (i) an Opinion of Counsel (which may be Counsel for the Replacement
Currency Swap Counterparty or Qualified Substitute Class Currency Swap
Counterparty) as to the due authorization, execution and delivery and validity
and enforceability of such Replacement Class Currency Swap and (ii) confirmation
from the Rating Agencies that the termination of the then current Class Currency
Swap and its replacement with such Replacement Class Currency Swap will not
adversely affect the then-current rating of the Investor Certificates of the
Series established hereby.
SECTION 17. Investor Certificateholders' Monthly Statement. On the 25th
day of each calendar month, a statement substantially in the form of Exhibit N
prepared by the Trustee (based on information provided by the Master Servicer)
setting forth the information listed thereon shall be available from the
Trustee, the Listing Agent and each Paying Agent.
SECTION 18. Master Servicer's Monthly Certificate. On or before the
second Business Day preceding the 25th day of each calendar month, the Master
Servicer shall forward to Greenwood on behalf of the Holder of the Seller
Certificate, the Trustee and each Paying Agent a certificate of a Servicing
Officer substantially in the form of Exhibit O setting forth the information
listed thereon.
SECTION 19. Notices. Any notices to holders of Investor Certificates
issued in bearer form shall be given as described in the Series Term Sheet.
SECTION 20. Additional Amortization Events. If any one of the following
events shall occur:
(a) on any Distribution Date, the three month rolling average Series
Excess Spread is less than the Series Buffer Amount and the three month rolling
average Group Excess Spread is less than the Group Buffer Amount;
(b) if the Series established hereby has an Accumulation Period and,
after giving effect to payments and distributions on the Class Expected Final
Payment Date or the Class Final Maturity Date, as applicable, with respect to
any Class, the Class Invested Amount or the Class Foreign Currency Invested
Amount, as applicable, for such Class is not reduced to zero;
(c) if applicable, following either (i) the withdrawal or reduction of
the commercial paper or certificate of deposit rating of any Interest Rate Cap
Provider to below the ratings specified in the Series Term Sheet (or, in either
case, such lower rating as the applicable Rating Agency has allowed) or (ii)
notice from either Rating Agency that any Qualified Substitute Cap Arrangement
or any other arrangement established pursuant to Section 15 is no longer
satisfactory to such Rating Agency, the Master Servicer shall fail, within the
applicable time period specified in Section 15, to (x) obtain Replacement Class
Interest Rate Caps or Qualified Substitute Cap Arrangements or (y) cause the
54
<PAGE> 69
Interest Rate Cap Provider to pledge securities as collateral securing the
obligations of the Interest Rate Cap Provider or establish any other arrangement
as provided in Section 15, in each case in a manner satisfactory to the Trustee
and the Rating Agencies (such that neither Rating Agency will reduce or withdraw
the ratings of the Investor Certificates of the Series established hereby);
(d) if applicable, following either (i) a Currency Swap Downgrade
Trigger which results (following the expiration of the 60-day period referred to
in Section 16) in the withdrawal or reduction of the ratings of the Investor
Certificates below the Minimum Investor Certificate Ratings specified in the
Series Term Sheet or (ii) notice from either Rating Agency that any Qualified
Substitute Currency Swap Arrangement or any other arrangement established
pursuant to Section 16 is no longer satisfactory to such Rating Agency, the
Master Servicer shall fail, within the applicable time period specified in
Section 16, to (x) obtain Replacement Class Currency Swaps or Qualified
Substitute Class Currency Swap Arrangements or (y) cause the Currency Swap
Counterparty to pledge securities as collateral securing the obligations of the
Currency Swap Counterparty or establish any other arrangement as provided in
Section 16, in each case in a manner satisfactory to the Trustee and the Rating
Agencies (such that neither Rating Agency will reduce or withdraw the ratings of
the Investor Certificates below the Minimum Investor Certificate Ratings
specified in the Series Term Sheet);
(e) if applicable, a Currency Swap Termination shall have occurred;
(f) if a Supplemental Credit Enhancement Event shall have occurred and
Greenwood as Servicer shall have failed to arrange for the Supplemental Credit
Enhancement in accordance with the requirements of Section 11(c) hereof
(including, without limitation, receipt of the confirmation from Standard &
Poor's required thereby);
(g) if the Master Servicer determines that the Trust has or will become
obligated to deduct or withhold amounts from payments to be made on the Investor
Certificates of a Class that is subject to a Class Currency Swap on the next
succeeding Interest Payment Date with respect to such Class, for or on account
of any tax, assessment or other governmental charge by the United States or any
political subdivision or taxing authority thereof or therein on any amounts due
to the Certificateholders of such Class, as a result of any change in, or
amendment to, the laws (or any regulations or ruling promulgated thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
becomes effective on or after the Series Closing Date, provided that such
obligation to deduct or withhold cannot be avoided by the use of reasonable
measures available to the Trust that, in the good faith opinion of the Master
Servicer, will not have either (a) a material adverse impact on the conduct of
the business of the Sellers or the Master Servicer or (b) a material adverse
effect on the rights or interests of the certificateholders of any Class of any
other Series then outstanding; or
(h) if the Master Servicer determines that payments on the Investor
Certificates of a Class that is subject to a Class Currency Swap on the next
succeeding Interest Payment Date with respect to such Class made outside the
United States by the Trustee, the Master Servicer or any Paying Agent would,
under any present or future law or regulation of the United States, be subject
to any certification, documentation, information or other reporting requirement
of any kind, the effect of which requirement is the disclosure to the Trustee,
the Master Servicer, any Paying Agent or any governmental authority of the
nationality, residence or identity of a beneficial owner of an Investor
Certificate of such Class who is a Non-U.S. Holder (other than such a
requirement (a) which would not be applicable to a payment made by the Trustee,
the Master Servicer or by any Paying Agent (i)
55
<PAGE> 70
directly to the beneficial owner or (ii) to a custodian, nominee or other agent
of the beneficial owner, (b) which can be satisfied by such custodian, nominee
or agent certifying that the beneficial owner is a Non-U.S. Holder, provided
that, in any case referred to in clauses (a)(ii) or (b), payment by the
custodian, nominee or agent to the beneficial owner is not otherwise subject to
any such requirement or (c) which would not be applicable to a payment made by
at least one other Paying Agent) or such certification, documentation,
information or other reporting requirement cannot be avoided by the use of
reasonable measures available to the Trust that, in the good faith opinion of
the Master Servicer, will not have either (a) a material adverse effect on the
Certificateholders of such Class who are Non- U.S. Holders or on the conduct of
the business of the Sellers or the Master Servicer or (b) cause the withdrawal
or reduction of the then current ratings on any Class of any other Series then
outstanding;
an Amortization Event shall occur with respect to the Investor Certificates of
the Series established hereby, immediately upon the occurrence of such event. If
an Amortization Event described in this Section 20 shall occur, this Section 20
constitutes written notice by the Trustee and not less than 51% of the Class
Invested Amount of each Class of the Series established hereby to the Master
Servicer and the Sellers that such Amortization Event has occurred. No
additional notice of any kind, which is hereby waived by the Sellers and the
Master Servicer, shall be required as a condition of the occurrence of any
Amortization Event described in this Section 20.
The Master Servicer's determination that an event described in clause
(g) or (h) has occurred will be evidenced by delivery to the Trustee of (i) a
certificate setting forth a statement of facts showing that such Amortization
Event has occurred or will occur and (ii) an opinion of independent legal
counsel to such effect based on such statement of facts. In any such case, the
Amortization Event shall be deemed to have occurred on the first Distribution
Date following the Master Servicer's determination, without any notice or other
action on the part of the Trustee or the Investor Certificateholders.
SECTION 21. Purchase of Investor Certificates and Series Termination.
(a) If as of any Distribution Date during the Amortization Period
(after giving effect to any payments calculated pursuant to Section 9 made on
such Distribution Date) the Series Investor Interest of the Series established
hereby is less than or equal to 5% of the Series Initial Investor Interest,
Greenwood on behalf of the Holder of the Seller Certificate may purchase and
cancel the Investor Certificates of the Series established hereby by depositing
into the Series Distribution Account, on the immediately succeeding Distribution
Date, an amount equal to the Series Investor Interest as of the last day of the
Due Period related to such immediately succeeding Distribution Date. If any
amount deposited pursuant to this Section 21(a) is (i) allocable to the Investor
Certificateholders of a Class that is subject to a Class Currency Swap, the
Master Servicer shall direct the Trustee in writing (x) if no Currency Swap
Termination has occurred, to withdraw the amount allocable to such Class from
the Series Distribution Account and deposit such amount into the Currency Swap
Dollar Escrow Account or (y) if a Currency Swap Termination has occurred, to
convert such amount into Foreign Currency at the then prevailing spot exchange
rate in New York, as applicable, and cause such amount to be paid to the
Investor Certificateholders of such Class pursuant to Section 10(c) of this
Series Supplement or (ii) allocable to the Investor Certificateholders of a
Class that is not subject to a Class Currency Swap, the Master Servicer shall
direct the Trustee in writing to withdraw the amount allocable to such Class
from the Series Distribution Account and pay such amount to the Investor
Certificateholders of such Class pursuant to Section 12.02 of the Pooling and
Servicing Agreement. If Greenwood on behalf of the Holder of the Seller
Certificate elects to purchase Investor Certificates with respect to a Class
that is subject to a Class Currency Swap pursuant to this Section 21(a),
Greenwood on behalf of the Holder of the Seller Certificate shall give notice to
the Investor
56
<PAGE> 71
Certificateholders of such Class not less than 30 days and not more than 45 days
prior to such purchase in the manner set forth in Section 19 hereof. All
Investor Certificates of the Series established hereby that are purchased by
Greenwood on behalf of the Holder of the Seller Certificate pursuant to this
Section 21(a) shall be delivered by Greenwood on behalf of the Holder of the
Seller Certificate upon such purchase to, and be cancelled by, the Transfer
Agent and be disposed of in a manner satisfactory to the Trustee and Greenwood
on behalf of the Holder of the Seller Certificate.
(b) If as of any Distribution Date during the Accumulation Period or
the Controlled Liquidation Period, as applicable (after giving effect to any
payments calculated pursuant to Section 9 made on such Distribution Date), the
Series Investor Interest of the Series established hereby is less than or equal
to 5% of the Series Initial Investor Interest (before giving effect to any
reduction in the Series Initial Investor Interest pursuant to Section 6.14 of
the Pooling and Servicing Agreement), Greenwood on behalf of the Holder of the
Seller Certificate may, but shall not be obligated to, purchase the Investor
Certificates of the Series established hereby by depositing into the Series
Principal Funding Account, on such Distribution Date, an amount equal to such
Series Investor Interest. After giving effect to such deposit, such Series
Investor Interest shall be reduced to zero, and the Seller Interest shall be
increased by the amount of such deposit. If Greenwood on behalf of the Holder of
the Seller Certificate elects to purchase Investor Certificates with respect to
a Class that is subject to a Class Currency Swap pursuant to this Section 21(b),
Greenwood on behalf of the Holder of the Seller Certificate shall give notice to
the Investor Certificateholders of such Class not less than 30 days and not more
than 45 days prior to such purchase in the manner set forth in Section 19
hereof.
(c) Following the sale of Receivables pursuant to Section 12.02 of the
Pooling and Servicing Agreement, the Master Servicer shall direct the Trustee in
writing (i) with respect to Investor Certificateholders of a Class that is
subject to a Class Currency Swap (a) if no Currency Swap Termination has
occurred, to withdraw the amount allocable to such Class from the Series
Distribution Account and deposit such amount into the Currency Swap Dollar
Escrow Account or (b) if a Currency Swap Termination has occurred, to convert
such amount into Foreign Currency at the then prevailing spot exchange rate in
New York, as applicable, and cause such amount to be paid to the Investor
Certificateholders of such Class pursuant to Section 10(c) of this Series
Supplement or (ii) with respect to Investor Certificateholders of a Class that
is not subject to a Class Currency Swap, to withdraw the amount allocable to
such Class from the Series Distribution Account and pay such amount to the
Investor Certificateholders of such Class pursuant to Section 12.02 of the
Pooling and Servicing Agreement.
SECTION 22. Variable Accumulation Period. If the Series Term Sheet for
the Series established hereby so provides, the Master Servicer may elect, by
written notice to the Trustee, Greenwood on behalf of the Holder of the Seller
Certificate and the Credit Enhancement Provider, to delay the commencement of
the Accumulation Period, and extend the length of the Revolving Period, subject
to the conditions set forth in this Section 22; provided, however, that the
Accumulation Period shall commence no later than the first day of the Due Period
related to the Class A Expected Final Payment Date. Any such election by the
Master Servicer shall be made no later than the first day of the last scheduled
Due Period of the Revolving Period (including any prior extension of the
Revolving Period pursuant to this Section 22).
The Master Servicer may make such election only if the following
conditions are satisfied: (i) the Master Servicer shall have delivered to the
Trustee a certificate to the effect that the Master Servicer reasonably believes
that the delay in the commencement of the Accumulation Period would not result
in the Class Invested Amount with respect to any Class of the Series established
hereby not
57
<PAGE> 72
being paid in full on the relevant Class Expected Final Payment Date; (ii) the
Rating Agencies shall have advised the Master Servicer and Greenwood on behalf
of the Holder of the Seller Certificate that such election to delay the
commencement of the Accumulation Period would not cause the rating of any Class
of any Series then outstanding to be lowered or withdrawn; and (iii) the amount
to be deposited in the Series Principal Funding Account in respect of the
Accumulation Amount shall have been adjusted.
SECTION 23. Series Yield Factor. The Series Yield Factor for the Series
established hereby shall initially be the Series Yield Factor set forth in the
Series Term Sheet. The Master Servicer may change the Series Yield Factor upon
20 days prior written notice to the Trustee, Greenwood on behalf of the Holder
of the Seller Certificate, the Credit Enhancement Provider and the Rating
Agencies, provided that the following conditions are satisfied: (i) the Series
Yield Factor may not be reduced below the initial Series Yield Factor or
increased to more than a total of 0.05; (ii) the Master Servicer shall have
delivered to the Trustee a certificate to the effect that the Master Servicer
reasonably believes that the change in the Series Yield Factor would not (x)
result in any delay in the payment of principal to the Investor
Certificateholders of any Series then outstanding, or (y) cause an Amortization
Event to occur with respect to any Series then outstanding; and (iii) Standard &
Poor's shall have advised the Master Servicer and Greenwood on behalf of the
Holder of the Seller Certificate that such change in the Series Yield Factor
would not cause the rating of any Class of any Series then outstanding to be
lowered or withdrawn. Any such change shall be effective as of the first day of
the Due Period specified in the notice of the Master Servicer.
SECTION 24. Ratification of Pooling and Servicing Agreement. As
supplemented and amended by this Series Supplement, the Pooling and Servicing
Agreement is in all respects ratified and confirmed and the Pooling and
Servicing Agreement as so supplemented by this Series Supplement shall be read,
taken, and construed as one and the same instrument.
SECTION 25. 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 26. Governing Law. This Series Supplement shall be construed in
accordance with the internal 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.
58
<PAGE> 1
EXHIBIT 99.1
COMPOSITION OF THE DISCOVER CARD PORTFOLIO
Geographic Distribution. The Discover Card Portfolio is not concentrated
geographically. As of June 30, 1996, the five states with the largest
receivables balances were as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL RECEIVABLES BALANCE
OF DISCOVER CARD PORTFOLIO
STATE AS OF JUNE 30, 1996
-------------------------------------------------------------------------------
<S> <C>
California.............................. 11.2%
Texas................................... 9.1%
New York................................ 6.8%
Florida................................. 5.6%
Illinois................................ 5.1%
</TABLE>
No other state accounted for more than 5% of the total receivables balance
of the Discover Card Portfolio as of June 30, 1996.
Credit Limit Information. Credit limit information as of June 30, 1996 with
respect to the Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
CREDIT LIMIT (000'S) OUTSTANDING
--------------------------------------------- ----------- -----------
<S> <C> <C>
Less than or equal to $1,000.00.............. $ 736,590 2.9%
$1,000.01 to $2,000.00....................... $ 4,345,065 17.2%
$2,000.01 to $3,000.00....................... $ 3,174,849 12.6%
Over $3,000.00............................... $16,963,127 67.3%
---------- -----
Total................................... $25,219,631 100.0%
========== =====
</TABLE>
Seasoning. As of June 30, 1996, 76.1% of the accounts in the Discover Card
Portfolio were at least 24 months old. The distribution of the age of accounts
in the Discover Card Portfolio as of June 30, 1996 was as follows:
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
----------------------------------------------- ----------- -----------
<S> <C> <C>
Less than 12 Months............................ 11.7% 10.9%
12 to 23 Months................................ 12.2% 12.8%
24 to 35 Months................................ 11.1% 12.1%
36 Months and Greater.......................... 65.0% 64.2%
----- -----
100.0% 100.0%
===== =====
</TABLE>
<PAGE> 2
Summary Yield Information. The annualized aggregate monthly yield for the
Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1996
-------------
<S> <C>
Aggregate Monthly Yields(1)
Excluding Recoveries(2).................................... 17.27%
Including Recoveries(3).................................... 17.72%
</TABLE>
- ------------------------------
(1) Monthly Yield is calculated by dividing monthly finance charges billed by
beginning monthly balance. Monthly finance charges include cash advance
item charges, late fees, and as of March 1, 1996, overlimit fees, but
exclude certain other items, such as annual membership fees, if any.
Aggregate Monthly Yield is the average of monthly yields annualized for
each period shown.
(2) Monthly Yield excluding any recoveries received with respect to charged-off
accounts.
(3) Monthly Yield including recoveries received with respect to charged-off
accounts.
Summary Current Delinquency Information. Current delinquency information as
of June 30, 1996 with respect to the Discover Card Portfolio is summarized as
follows:
<TABLE>
<CAPTION>
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000'S) OF BALANCES
-------------------------------------------------- ----------- -----------
<S> <C> <C>
Current........................................... $21,881,125 86.8%
1 to 29 Days...................................... $ 1,878,751 7.5%
30 to 59 Days..................................... $ 629,271 2.5%
60 to 89 Days..................................... $ 304,157 1.2%
90 to 119 Days.................................... $ 237,569 0.9%
120 to 149 Days................................... $ 134,836 0.5%
150 to 179 Days................................... $ 153,922 0.6%
----------- -----
$25,219,631 100.0%
=========== =====
</TABLE>
<PAGE> 3
Summary Historical Delinquency Information. Historical delinquency
information with respect to the Discover Card Portfolio is summarized as
follows:
<TABLE>
<CAPTION>
AVERAGE OF
SIX MONTHS ENDED
JUNE 30, 1996
--------------------------
DELINQUENT
AMOUNT
(000'S) PERCENTAGE(1)
---------- -------------
<S> <C> <C>
30-59 Days......................................... $ 628,370 2.6%
60-89 Days......................................... $ 328,701 1.3%
90-179 Days........................................ $ 542,421 2.2%
-------- ---
Total......................................... $1,499,492 6.1%
======== ===
</TABLE>
- ------------------------------
(1) The percentages are the result of dividing Delinquent Amount by Average
Receivables Outstanding for the applicable period. Delinquent Amount is the
average of the monthly ending balances of delinquent accounts during the
periods indicated. Average Receivables Outstanding is the average of the
monthly average amount of receivables outstanding during the periods
indicated.
Summary Charge-Off Information. Charge-off information with respect to the
Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1996
--------------
<S> <C>
Average Receivables Outstanding(1)...................................... $ 24,569,144
Gross Charge-Offs....................................................... $ 668,604
Gross Charge-Offs as a Percentage of Average Receivables
Outstanding........................................................... 5.44%
</TABLE>
- ------------------------------
(1) Average Receivables Outstanding is the average of the monthly average amount
of receivables outstanding during the periods indicated.
Summary Payment Rate Information(1). The monthly rate of payments in the
Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1996
--------------
<S> <C>
Average Monthly Payment Rate(2)........................................ 15.56%
High Monthly Payment Rate.............................................. 18.08%
Low Monthly Payment Rate............................................... 13.91%
</TABLE>
- ------------------------------
(1) Monthly Payment Rate is calculated by dividing monthly cardmember
remittances by the cardmember receivable balance outstanding as of the
beginning of the month.
(2) Average Monthly Payment Rate for a period is equal to the sum of individual
monthly payment rates for the period divided by the number of months in the
period.
