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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): AUGUST 26, 1997
DISCOVER CARD MASTER TRUST I
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-23108 51-0020270
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(STATE OF (COMMISSION (IRS EMPLOYER
ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
C/O GREENWOOD TRUST COMPANY
12 READ'S WAY
NEW CASTLE, DELAWARE 19720
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 323-7184
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FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: NOT APPLICABLE
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ITEM 5. OTHER EVENTS
SERIES 1997-1. ON AUGUST 26, 1997, $750,000,000 AGGREGATE
PRINCIPAL AMOUNT OF SERIES 1997-1 FLOATING RATE CLASS A CREDIT CARD
PASS-THROUGH CERTIFICATES AND $39,474,000 AGGREGATE PRINCIPAL AMOUNT OF SERIES
1997-1 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 U.S. BANK NATIONAL ASSOCIATION D/B/A
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 AUGUST 26, 1997, FOR SERIES 1997-1 BETWEEN
GREENWOOD TRUST COMPANY AS MASTER SERVICER, SERVICER AND SELLER AND U.S. BANK
NATIONAL ASSOCIATION AS TRUSTEE.
ITEM 7. EXHIBITS
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EXHIBIT NO. DESCRIPTION
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EXHIBIT 1.1 UNDERWRITING AGREEMENT BETWEEN GREENWOOD TRUST COMPANY AND MORGAN
STANLEY & CO. INCORPORATED, DATED AUGUST 19, 1997.
EXHIBIT 1.2 TERMS AGREEMENT AMONG GREENWOOD TRUST COMPANY, MORGAN STANLEY &
CO. INCORPORATED, BANCAMERICA SECURITIES, INC., CHASE SECURITIES
INC. AND FIRST CHICAGO CAPITAL MARKETS, INC., DATED AUGUST 19,
1997.
EXHIBIT 4.1 SERIES SUPPLEMENT WITH RESPECT TO SERIES 1997-1 BETWEEN GREENWOOD
TRUST COMPANY AS MASTER SERVICER, SERVICER AND SELLER AND U.S.
BANK NATIONAL ASSOCIATION AS TRUSTEE, INCLUDING FORM OF CLASS A
CERTIFICATE AND FORM OF CLASS B CERTIFICATE, DATED AS OF AUGUST
26, 1997.
EXHIBIT 4.2 CREDIT ENHANCEMENT AGREEMENT AMONG U.S. BANK NATIONAL ASSOCIATION
AS TRUSTEE, GREENWOOD TRUST COMPANY AS MASTER SERVICER, SERVICER
AND SELLER AND DISCOVER RECEIVABLES FINANCING CORPORATION AS
CREDIT ENHANCEMENT PROVIDER, DATED AS OF AUGUST 26, 1997.
EXHIBIT 4.3 LETTER OF REPRESENTATIONS AMONG GREENWOOD TRUST COMPANY, U.S. BANK
NATIONAL ASSOCIATION AS TRUSTEE AND THE DEPOSITORY TRUST COMPANY
WITH RESPECT TO DISCOVER CARD MASTER TRUST I, SERIES 1997-1, DATED
AS OF AUGUST 26, 1997.
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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: AUGUST 26, 1997 BY: /S/ JOHN J. COANE
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JOHN J. COANE
VICE PRESIDENT, DIRECTOR OF ACCOUNTING
AND TREASURER
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION
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EXHIBIT 1.1 UNDERWRITING AGREEMENT BETWEEN GREENWOOD TRUST COMPANY
AND MORGAN STANLEY & CO. INCORPORATED, DATED AUGUST 19,
1997.
EXHIBIT 1.2 TERMS AGREEMENT AMONG GREENWOOD TRUST COMPANY, MORGAN
STANLEY & CO. INCORPORATED, BANCAMERICA SECURITIES, INC.,
CHASE SECURITIES INC. AND FIRST CHICAGO CAPITAL MARKETS,
INC., DATED AUGUST 19, 1997.
EXHIBIT 4.1 SERIES SUPPLEMENT WITH RESPECT TO SERIES 1997-1 BETWEEN
GREENWOOD TRUST COMPANY AS MASTER SERVICER, SERVICER
AND SELLER AND U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE,
INCLUDING FORM OF CLASS A CERTIFICATE AND FORM OF CLASS B
CERTIFICATE, DATED AS OF AUGUST 26, 1997.
EXHIBIT 4.2 CREDIT ENHANCEMENT AGREEMENT AMONG U.S. BANK NATIONAL
ASSOCIATION AS TRUSTEE, GREENWOOD TRUST COMPANY AS MASTER
SERVICER, SERVICER AND SELLER AND DISCOVER RECEIVABLES
FINANCING CORPORATION AS CREDIT ENHANCEMENT PROVIDER,
DATED AS OF AUGUST 26, 1997.
EXHIBIT 4.3 LETTER OF REPRESENTATIONS AMONG GREENWOOD TRUST COMPANY,
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE AND THE
DEPOSITORY TRUST COMPANY WITH RESPECT TO DISCOVER CARD
MASTER TRUST I, SERIES 1997-1, DATED AS OF AUGUST 26, 1997.
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EXHIBIT 1.1
DISCOVER CARD MASTER TRUST I
Credit Card Pass-Through Certificates
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Underwriting Agreement
(Standard Terms)
August 19, 1997
MORGAN STANLEY & CO. INCORPORATED
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Greenwood Trust Company ("Greenwood"), as originator of Discover Card
Master Trust I (the "Trust"), proposes, subject to the terms and conditions
stated herein, to cause to be issued and sold from time to time Credit Card
Pass-Through Certificates (the "Certificates") in one or more series (each, a
"Series"). The Certificates of each Series will consist of one or more Classes
(each, a "Class") of Certificates of such Series. Each Certificate will
evidence a fractional, undivided percentage interest or beneficial interest in
the Trust. The Certificates will be issued by the Trust pursuant to a Pooling
and Servicing Agreement, dated as of October 1, 1993, as amended, and as
supplemented by a Series Supplement relating to the specific
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Series of Certificates issued thereunder (the Pooling and Servicing Agreement,
as so supplemented, the "Pooling and Servicing Agreement"), between Greenwood
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 (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Pooling and Servicing Agreement.
Each offering of each Class of each Series of Certificates to which this
Agreement applies (the "Securities") made pursuant to the Registration
Statement (as defined herein) will be made through you or through you and other
underwriters for whom you are acting as representatives or through an
underwriting syndicate managed by you. Whenever Greenwood determines to make
such an offering of Securities to which this Agreement shall apply, Greenwood
and one or more Underwriters (as defined herein) will enter into an agreement
(the "Terms Agreement") providing for the sale of the Securities to, and the
purchase and offering thereof by, (i) you, (ii) you and such other underwriters
who execute the Terms Agreement and agree thereby to become obligated to
purchase the Securities from
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Greenwood, or (iii) you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (in each
case, the "Underwriters"). Such Terms Agreement shall specify the initial
principal amount of the Securities to be issued and their terms not otherwise
specified in this Agreement, the price at which such Securities are to be
purchased by the Underwriters from Greenwood, the aggregate amount of
Securities to be purchased by you and any other Underwriter that is a party to
such Terms Agreement and the initial public offering price or the method by
which the price at which such Securities are to be sold will be determined.
The Terms Agreement ("Terms Agreement"), which shall be substantially in the
form attached hereto, may take the form of an exchange of any standard form of
written communication between or among the Underwriters and Greenwood. Each
such offering of the Securities for which a Terms Agreement is entered into
will be governed by this Agreement, as supplemented by the applicable Terms
Agreement, and this Agreement and such Terms Agreement shall inure to the
benefit of and be binding upon the Underwriters participating in the offering
of such Securities.
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1. Greenwood represents and warrants to, and agrees with you, as of the
date hereof, and to each Underwriter named in the Terms Agreement as of the
date thereof, that:
(a) A registration statement on Form S-3 (Registration Statement No.
333-16103) including a prospectus and such amendments thereto as may have been
required to the date hereof, relating to the Certificates and the offering
thereof from time to time in accordance with Rule 415 under the Securities Act
of 1933, as amended (the "Act"), in the form heretofore delivered to you has
been filed with the Securities and Exchange Commission (the "Commission")
(which may have included one or more preliminary prospectuses and prospectus
supplements (each, a "Preliminary Prospectus") meeting the requirements of Rule
430 of the Act) and such registration statement, as amended, has become
effective; such registration statement, as amended, and the prospectus and
prospectus supplement relating to the sale of the Securities offered thereby
constituting a part thereof, as from time to time amended or supplemented
(including any prospectus and prospectus supplement filed with the Commission
pursuant to Rule 424(b) of the Act) are respectively referred to herein as the
"Registration Statement," the "Basic Prospectus" and the "Prospectus
Supplement" and the
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Basic Prospectus together with the Prospectus Supplement relating to the
Securities is hereinafter referred to as the "Prospectus"; the conditions of
Rule 415 under the Act have been satisfied with respect to the Registration
Statement; and no other amendment to the Registration Statement will be filed
which shall be reasonably disapproved by you promptly after reasonable notice
thereof.
(b) There is no request by the Commission for any further amendment of the
Registration Statement or the Prospectus or for any additional information; the
Commission has not issued any stop order suspending the effectiveness of the
Registration Statement and Greenwood is not aware of any proceeding for that
purpose having been instituted or threatened; and there has been no
notification with respect to the suspension of the qualification for sale of
the Certificates for sale in any jurisdiction or any proceeding for such
purpose having been instituted or threatened.
(c) As of the date of the Terms Agreement, when the Registration Statement
became effective, when the Prospectus Supplement is first filed pursuant to
Rule 424(b) under the Act, when any other amendment to the Registration
Statement becomes effective, and when any supplement to the Prospectus
Supplement
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is filed with the Commission, and at the Time of Delivery (as defined in
Section 4), the Registration Statement and the Prospectus (i) conformed, and
any amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder and (ii) will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to
Greenwood by an Underwriter through you expressly for use therein.
(d) Upon payment therefor as provided herein and in the Terms Agreement,
the Securities will have been duly and validly authorized and (assuming their
due authentication by the Trustee) will have been duly and validly issued and
will conform in all material respects to the description thereof in the
Prospectus and will be entitled to the benefits of the Pooling and Servicing
Agreement.
(e) The issue and sale of the Securities and the compliance by Greenwood
with all of the provisions of the Securities, the
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Pooling and Servicing Agreement, this Agreement and the Terms Agreement have
been or will have been duly authorized by Greenwood by all necessary corporate
action; and will not conflict with or result in any breach which would
constitute a material default under, or, except as contemplated by the Pooling
and Servicing Agreement, result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of Greenwood or NOVUS
Credit Services Inc. ("NOVUS"), material to Greenwood and NOVUS (whether or not
consolidated) considered as a whole, pursuant to the terms of, any indenture,
loan agreement or other agreement or instrument for borrowed money to which
Greenwood or NOVUS is a party or by which Greenwood or NOVUS may be bound or to
which any of the property or assets of Greenwood or NOVUS, material to
Greenwood and NOVUS (whether or not consolidated) considered as a whole, is
subject, nor will such action result in any material violation of the
provisions of the Certificate of Incorporation or By-Laws of Greenwood or, to
the best of Greenwood's knowledge, any statute or any order, rule or regulation
applicable to Greenwood of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over Greenwood, and no
consent, approval, authorization or other order of, or filing
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with, any court or any such regulatory authority or other governmental body is
required for the issue and sale of the Securities except as may be required
under the Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and securities laws of the various states and other jurisdictions which
are applicable to the issue and sale of the Securities and except for the
filing of any financing or continuation statement required to perfect or
continue the Trust's interest in the Receivables.
(f) The Principal Receivables conveyed by Greenwood to the Trust under
the Pooling and Servicing Agreement had an aggregate outstanding balance
determined as of the date stated in the Terms Agreement of not less than the
amount set forth in the Terms Agreement; and
(g) The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the Trust is not required to be registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
2. Subject to the terms and conditions herein set forth, Greenwood
agrees to cause to be issued and sold to each of the Underwriters, and each of
the Underwriters agrees, severally
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and not jointly, to purchase from Greenwood, at the purchase price
specified in the Terms Agreement, the principal amount of Securities set forth
in the Terms Agreement.
3. (a) From time to time, after the Registration Statement becomes
effective, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
(b) Each Underwriter severally represents and agrees that it will not
offer or sell or deliver any of the Securities in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof,
and without limiting the foregoing, each Underwriter severally represents and
agrees that (i) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom;
(ii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article II(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or who is a person to whom the document may otherwise lawfully be issued or
passed on;
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(iii) if it is an authorized person under Chapter III of the Financial
Services Act 1986, it has only promoted and will only promote (as that term is
defined in Regulation 1.02 of the Financial Services (Promotion of Unregulated
Schemes) Regulations 1995) to any person in the United Kingdom the scheme
described in the Prospectus Supplement if that person is of a kind described
either in Section 76(2) of the Financial Services Act 1986 or in Regulation
1.04 of the Financial Services (Promotion of Unregulated Schemes) Regulation
1995; and (iv) it is a person of a kind described in Article II(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995.
(c) Each Underwriter, severally, represents that it will not, at any time
that such Underwriter is acting as an "underwriter" (as defined in Section
2(11) of the Act) with respect to the Securities, transfer, deposit or
otherwise convey any Securities into a trust or other type of special purpose
vehicle that issues securities or other instruments backed in whole or in part
by, or that represents interests in, such Securities without the prior written
consent of Greenwood.
4. Securities to be purchased by each Underwriter hereunder and under the
Terms Agreement shall be delivered by or on behalf of Greenwood to you for the
account of such
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Underwriter, against payment by such Underwriter or on its behalf of
the purchase price thereof in immediately available funds. Unless otherwise
specified in the Terms Agreement, such delivery shall occur at the office of
Latham & Watkins, Chicago, Illinois or such other place as you and Greenwood
may agree upon in writing. The time and date of such delivery shall be set
forth in the Terms Agreement or at such other time and date as you and
Greenwood may agree upon in writing, such time and date being herein called the
"Time of Delivery." Unless otherwise specified in the Terms Agreement, the
Securities shall be represented by definitive certificates, registered in the
name of Cede & Co., as nominee for The Depository Trust Company. Such
definitive certificates will be made available for inspection at least
twenty-four hours prior to the Time of Delivery at the office of the Trustee,
111 East Wacker Drive, Chicago, Illinois 60601.
5. Greenwood agrees with each of the Underwriters:
(a) Immediately following the execution of each Terms Agreement,
Greenwood will prepare a Prospectus Supplement setting forth the amount of
Securities covered thereby and the terms thereof not otherwise specified in the
Basic Prospectus, the price at which such Securities are to be purchased by the
Underwriters from Greenwood, either the initial public offering
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price or the method by which the price at which such Securities are to be sold
will be determined, the selling concessions and allowances, if any, and such
other information as Greenwood deems appropriate in connection with the offering
of such Securities, and Greenwood will not make any further amendment or any
supplement to the Registration Statement or Prospectus without first having
furnished you with a copy of the proposed form thereof and given you a
reasonable opportunity to review the same; to advise you promptly after it
receives notice of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof; to
advise you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
the Prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of
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such Prospectus or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may reasonably request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith Greenwood shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and if at any time
the delivery of a Prospectus is required by law in connection with the offering
or sale of the Securities, and if at such time any event shall have occurred as
a result of which the Prospectus would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or, if for any other reason it shall be necessary
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during such same period to amend or supplement the Prospectus in order
to comply with the Act, to notify you and to prepare and furnish without charge
to each Underwriter and to any dealer in the Securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance and in case any Underwriter is required to deliver a
Prospectus in connection with sales of any Securities at any time nine months
or more after the effective date of the Registration Statement, upon your
request but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may reasonably request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To cause the Trust to make generally available to holders of the
Securities, in accordance with Rule 158 under the Act or otherwise, as soon as
practicable, but in any event not later than forty-five days after the end of
the fourth full fiscal quarter (ninety days in the case of the last fiscal
quarter in any fiscal year) following the fiscal quarter ending after the
effective date of the Registration Statement, an earning statement of the Trust
(which need not be audited)
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complying with Section 11(a) of the Act and covering a period of at
least twelve consecutive months beginning after the effective date of such
Registration Statement;
(e) To pay or cause to be paid all expenses incident to the performance of
its obligations hereunder, including the cost of all qualifications of the
Securities under state securities laws (including reasonable fees of counsel to
the Underwriters in connection with such qualifications and in connection with
legal investment surveys) and the cost of printing this Agreement and any blue
sky and legal investment memoranda.
Greenwood agrees with each of the Underwriters during the period beginning
from the date of the Terms Agreement and continuing to and including the
earlier of (i) the termination of trading restrictions on the Securities, of
which termination you agree to give Greenwood prompt notice confirmed in
writing, and (ii) the Time of Delivery, not to offer, sell, contract to sell or
otherwise dispose of any securities of Greenwood or any other affiliate thereof
or any other trust for which Greenwood or any other affiliate thereof is
depositor, which represent participation interests in Discover Card
receivables, without
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your prior written consent, which consent shall not be unreasonably
withheld.
6. The obligations of the several Underwriters hereunder shall be subject,
in their discretion, to the condition that all representations and warranties
and other statements of Greenwood herein are, at and as of the Time of
Delivery, true and correct, the condition that Greenwood shall have performed
all of its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) All actions required to be taken and all filings required to be made
by Greenwood under the Act prior to the Time of Delivery for the Securities
shall have been duly taken or made; and prior to the applicable Time of
Delivery, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Commission's satisfaction.
(b) All corporate proceedings and related matters in connection with the
organization of Greenwood, the validity of the Pooling and Servicing Agreement
and the registration,
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authorization, issue, sale and delivery of the Securities shall have
been satisfactory to counsel to the Underwriters, and such counsel shall have
been furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subdivision (b).
(c) Counsel to Greenwood (which for purposes of the opinions described in
clauses (i)-(iii) and the opinions as to the due authorization, execution and
delivery of the Pooling and Servicing Agreement and the due authorization,
execution, issuance and delivery of the Securities in clause (iv) may be
in-house counsel to Greenwood) shall have furnished to you their written
opinion, dated the Time of Delivery, in form and substance satisfactory to you
in your reasonable judgment, to the effect that:
(i) Greenwood is validly existing as a banking corporation in good
standing under the laws of the State of Delaware;
(ii) This Agreement and the Terms Agreement have been duly authorized,
executed and delivered on the part of Greenwood;
(iii) The compliance by Greenwood with all of the provisions of this
Agreement, the Terms Agreement and the Pooling
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and Servicing Agreement will not conflict with or result in any breach
which would constitute a material default under, or, except to the extent
contemplated in the Pooling and Servicing Agreement, result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or
assets of Greenwood or NOVUS, material to Greenwood and NOVUS (whether or not
consolidated) considered as a whole, pursuant to the terms of, any indenture,
loan agreement or other agreement or instrument for borrowed money known to
such counsel to which Greenwood or NOVUS is a party or by which Greenwood or
NOVUS may be bound or to which any of the property or assets of Greenwood or
NOVUS, material to Greenwood and NOVUS (whether or not consolidated) considered
as a whole, is subject, nor will such action result in any material violation
of the provisions of the Certificate of Incorporation or the By-Laws of
Greenwood, or to the best knowledge of such counsel, any statute or any order,
rule or regulation applicable to Greenwood of any court or any Federal, State
or other regulatory authority or other governmental body having jurisdiction
over Greenwood other than the Act, the Exchange Act, the Trust Indenture Act
and the Investment Company Act and the rules and regulations under each of such
acts and other than the securities laws of the various
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states or other jurisdictions which are applicable to the issue and
sale of the Securities and other state laws relating to the perfection of
security interests; and, to the best knowledge of such counsel, no consent,
approval, authorization or other order of, or filing with, any court or any
such regulatory authority or other governmental body is required for the issue
and sale of the Securities except as may be required under the Act, the
Exchange Act, the Trust Indenture Act and the Investment Company Act and
securities laws of the various states or other jurisdictions which are
applicable to the issue and sale of the Securities and except for the filing of
any financing or continuation statement required to perfect or continue the
Trust's interest in the Receivables;
(iv) The Pooling and Servicing Agreement has been duly authorized,
executed and delivered on the part of Greenwood and as to Greenwood is a valid
and binding instrument enforceable in accordance with its terms except as the
foregoing may be limited by insolvency, bankruptcy, reorganization, moratorium
or other laws relating to or affecting the enforcement of creditors' rights or
by general equity principles; the Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act; the Trust is not
required to be registered under
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the Investment Company Act; and the Securities have been duly
authorized and (assuming their due authentication by the Trustee) have been
duly executed, issued and delivered and constitute valid and binding
obligations of the Trust in accordance with their terms, entitled to the
benefits of the Pooling and Servicing Agreement, except as the foregoing may be
limited by insolvency, bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general equity principles;
and
(v) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by Greenwood prior to the Time of
Delivery (other than financial, statistical and accounting data therein as to
which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and regulations
thereunder.
In rendering such opinion, counsel may rely to the extent they deem
appropriate upon certificates of officers or other executives of Greenwood and
their affiliates and of public officials as to factual matters and upon
opinions of other counsel. Such counsel shall also state that nothing has come
to their attention which has caused them to believe that the
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Registration Statement as of its effective date or the Prospectus as of the
date thereof and as of the applicable Time of Delivery (other than financial,
statistical and accounting data therein, as to which such counsel need express
no belief) contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.
(d) At the Time of Delivery, Deloitte & Touche LLP shall have furnished to
you a letter or letters, dated the respective date of delivery thereof, in form
and substance satisfactory to you;
(e) (i) Greenwood and its affiliates (whether or not consolidated)
considered as a whole, shall not have sustained, since the date of the latest
audited financial statement previously delivered to you, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree and (ii) since the date of the Terms
Agreement there shall not have been any material change in the capital stock
accounts or long-term debt of Greenwood or any material adverse change in the
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general affairs, financial position, shareholders' equity or results of
operations of Greenwood and its affiliates (whether or not consolidated)
considered as a whole, the effect of which in any such case described in clause
(i) or (ii), in your judgment renders it inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(f) Subsequent to the date of the Terms Agreement none of (i) the United
States shall have become engaged in the outbreak or escalation of hostilities
involving the United States or there has been a declaration by the United
States of a national emergency or a declaration of war, (ii) a banking
moratorium shall have been declared by either Federal or New York State
authorities, or (iii) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established by such Exchange, any of which events, in your judgment, renders it
inadvisable to proceed with the public offering or the delivery of the
Securities;
(g) At or prior to the Time of Delivery, the Certificates shall be
assigned the ratings by Moody's Investors Service, Inc. ("Moody's") and by
Standard & Poor's Ratings Group,
-22-
<PAGE> 23
a division of The McGraw-Hill Companies Inc. ("Standard & Poor's") set
forth in the Terms Agreement;
(h) Greenwood shall have furnished or caused to be furnished to you at the
Time of Delivery certificates satisfactory to you as to the accuracy at and as
of such Time of Delivery of the representations and warranties of Greenwood
herein and as to the performance by Greenwood of all its obligations hereunder
to be performed at or prior to the Time of Delivery and Greenwood shall have
also furnished you similar certificates satisfactory to you as to the matters
set forth in subdivision (a) of this Section 6.
(i) The Underwriters shall be entitled to rely on the opinions of an
outside counsel acceptable to the Underwriters as special counsel to Greenwood
as delivered to Moody's and Standard & Poor's in connection with the rating of
the Securities.
7. (a) Greenwood will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or
-23-
<PAGE> 24
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereto furnished by Greenwood, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or (in the case of the Registration Statement or the Prospectus,
or any amendment or supplement thereto) necessary to make the statements therein
not misleading or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim; provided, however, that Greenwood shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to Greenwood by any Underwriter
through you expressly for use therein; and provided, further, that Greenwood
shall not be liable to any Underwriter or any
-24-
<PAGE> 25
person controlling such Underwriter under the indemnity agreement in
this subdivision (a) with respect to the Preliminary Prospectus or the
Prospectus, as the case may be, to the extent that any such loss, claim, damage
or liability of such Underwriter or controlling person results solely from the
fact that such Underwriter sold Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Prospectus or of the Prospectus as then amended or supplemented if
Greenwood had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold harmless Greenwood against
any losses, claims, damages or liabilities to which Greenwood may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or (in the case of the Registration Statement or the Prospectus,
or any amendment or supplement
-25-
<PAGE> 26
thereto) necessary to make the statements therein not misleading or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, or the Prospectus, or any such amendment or supplement
in reliance upon and in conformity with written information furnished to
Greenwood by such Underwriter through you expressly for use therein; and will
reimburse Greenwood for any legal or other expenses reasonably incurred by
Greenwood in connection with investigating or defending any such action or
claim.
(c) Within a reasonable period after receipt by an indemnified party under
subdivision (a) or (b) above of notice of the commencement of any action with
respect to which indemnification is sought under such subdivision or
contribution may be sought under subdivision (d) below, such indemnified party
shall notify the indemnifying party in writing of the commencement thereof. In
case any such action shall be brought against any indemnified party, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
-26-
<PAGE> 27
notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under subdivision (a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by Greenwood on the one
hand and the Underwriters on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of Greenwood on
-27-
<PAGE> 28
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by Greenwood on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by Greenwood bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the
cover page of the Prospectus Supplement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by Greenwood on the one
hand and the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission of Greenwood on the one hand and the Underwriters,
directly or through you, on the other hand. With respect to any Underwriter,
such relative fault shall also be determined by reference to the extent (if
any) to which such losses, claims, damages or liabilities (or actions in
respect thereof) with
-28-
<PAGE> 29
respect to any Preliminary Prospectus result from the fact that such
Underwriter sold the Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
Prospectus or of the Prospectus as then amended or supplemented if Greenwood
had previously furnished copies thereof to such Underwriter. Greenwood and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subdivision (d) were determined by per capita allocation among
the indemnifying parties (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subdivision
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subdivision (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subdivision (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
-29-
<PAGE> 30
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this subdivision (d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of Greenwood under this Section 7 shall be in addition
to any liability which Greenwood may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 7 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of Greenwood and to each person, if
any, who controls Greenwood within the meaning of the Act.
8. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to
-30-
<PAGE> 31
purchase hereunder and under the Terms Agreement, you may in your
discretion arrange for yourselves or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Securities, then Greenwood shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties to
purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify Greenwood that you have so arranged
for the purchase of such Securities, or Greenwood notifies you that it has so
arranged for the purchase of such Securities, you or Greenwood shall have the
right to postpone the Time of Delivery for such Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and Greenwood agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with like effect as if
-31-
<PAGE> 32
such person had originally been a party to this Agreement with respect
to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and Greenwood as
provided in subdivision (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then Greenwood shall have the
right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and
under the Terms Agreement and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the principal amount of
the Securities which such Underwriter agreed to purchase hereunder and under
the Terms Agreement) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and Greenwood as
provided in subdivision (a) above, the aggregate principal amount of Securities
which remains
-32-
<PAGE> 33
unpurchased exceeds one-eleventh of the aggregate principal amount of
all the Securities, as referred to in subdivision (b) above, or if Greenwood
shall not exercise the right described in subdivision (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then the Terms Agreement relating to the Securities shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or Greenwood, except for the expenses to be borne by Greenwood as
provided in Section 5(e) hereof and the indemnity and contribution agreements
in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of Greenwood and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or Greenwood
or any officer or director or controlling person of Greenwood, and shall
survive delivery of and payment for the Securities. Anything herein to the
contrary
-33-
<PAGE> 34
notwithstanding, the indemnity agreement of Greenwood in subdivisions
(a) and (e) of Section 7 hereof, the representations and warranties in
subdivisions (b) and (c) of Section 1 hereof and any representation or warranty
as to the accuracy of the Registration Statement or the Prospectus as amended
or supplemented contained in any certificate furnished by Greenwood pursuant to
subdivision (i) of Section 6 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by Greenwood of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Act, shall not extend to the extent of any interest therein
of an Underwriter or a controlling person of an Underwriter if a director,
officer or controlling person of Greenwood when the Registration Statement
becomes effective or a person who, with his consent, is named in the
Registration Statement as being about to become a director of Greenwood, is a
controlling person of such Underwriter, except in each case to the extent that
an interest of such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as expressed in the Act.
Unless in the opinion of counsel for Greenwood the matter has been settled by
controlling precedent, Greenwood will, if a claim for such indemnification is
-34-
<PAGE> 35
asserted, submit to a court of appropriate jurisdiction the question
whether such interest is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
10. If the Terms Agreement shall be terminated pursuant to Section 8
hereof, Greenwood shall not then be under any liability to any Underwriter with
respect to the Securities subject to such Terms Agreement except as provided in
Section 5(e) and Section 7 hereof; but, if for any other reason the Securities
are not delivered by or on behalf of Greenwood as provided herein, Greenwood
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but Greenwood shall not then be
under any further liability to any Underwriter with respect to the Securities
except as provided in Section 5(e) and Section 7 hereof.
11. In all dealings hereunder, you shall act on behalf of each of the
Underwriters and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or
-35-
<PAGE> 36
agreement on behalf of any Underwriter made or given by you, or by
Morgan Stanley & Co. Incorporated on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or sent by
registered mail to you jointly in care of Morgan Stanley & Co. Incorporated,
1585 Broadway, New York, New York 10036, Attention: ____________ and if to
Greenwood shall be sufficient in all respects if delivered or sent by
registered mail to Greenwood at 12 Read's Way, New Castle, Delaware 19720,
Attention: President.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, Greenwood and, to the extent provided in Section 7 and
Section 9 hereof, the officers and directors of Greenwood and each person who
controls Greenwood or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
13. Time shall be of the essence of this Agreement.
-36-
<PAGE> 37
14. This Agreement shall be construed in accordance with the laws of
the State of New York. "Business day" as used herein shall mean any day when
the Commission's office in Washington, D.C. is normally open for business.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one
and the same instrument.
-37-
<PAGE> 38
If the foregoing is in accordance with your under-standing, please sign
and return two counterparts hereof and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and
Greenwood.
Very truly yours,
GREENWOOD TRUST COMPANY
By: /s/ John J. Coane
--------------------------
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ David R. Warren
------------------------------
<PAGE> 1
EXHIBIT 1.2
DISCOVER CARD MASTER TRUST I
CREDIT CARD PASS-THROUGH CERTIFICATES
TERMS AGREEMENT
Dated: August 19, 1997
To: Greenwood Trust Company, as Seller under the Pooling and Servicing
Agreement, as amended, dated as of October 1, 1993.
Re: Underwriting Agreement dated August 19, 1997
Title: Discover Card Master Trust I, Series 1997-1, Credit Card Pass-Through
Certificates, Class A and Class B.
Initial Principal Amount of Certificates: $789,474,000
Series and Class Designation Schedule: Discover Card Master Trust I, Series
1997-1 $750,000,000 Floating Rate Class A Credit Card Pass-Through Certificates
Discover Card Master Trust I, Series 1997-1 $39,474,000 Floating Rate Class B
Credit Card Pass-Through Certificates
Series Cut-Off Date: August 1, 1997
<TABLE>
<CAPTION>
Certificate Rating: Moody's Investors Standard & Poor's
-------------------
Service, Inc. Ratings Services
------------------ -----------------
<S> <C> <C>
Class A Aaa AAA
Class B A2 A
</TABLE>
Aggregate outstanding balance of Principal Receivables as of August 1, 1997:
$17,830,375,466.48.
Date of Series Supplement: August 19, 1997.
Certificate Rate: Class A: LIBOR plus 0.09% per annum; and Class B: LIBOR plus
0.27% per annum
Terms of Sale: The purchase price for the Certificates to the Underwriters
will be 99.725% of the aggregate principal amount of
<PAGE> 2
the Class A Certificates and 99.700% of the aggregate principal amount of the
Class B Certificates as of August 26, 1997.
Time of Delivery: 9:00 A.M., Chicago, Illinois Time, on August 26, 1997, or at
such other time as may be agreed upon in writing.
-2-
<PAGE> 3
Notwithstanding anything in the Agreement or in this Terms Agreement to
the contrary, the Agreement and this Terms Agreement constitute the entire
agreement and understanding among the parties hereto with respect to the
purchase and sale of the Series 1997-1 Certificates. This Terms Agreement may
be amended only by written agreement of the parties hereto.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
As Representative of the
Underwriters named in
Schedule I hereto
By: /s/ David R. Warren
--------------------------
Accepted:
GREENWOOD TRUST COMPANY
By: /s/ John J. Coane
--------------------------
-3-
<PAGE> 4
SCHEDULE I
UNDERWRITERS
$750,000,000 Floating Rate Class A Credit Card Pass-Through Certificates,
Series 1997-1
Percentage
Morgan Stanley & Co. Incorporated 25%
BancAmerica Securities, Inc. 25%
Chase Securities Inc. 25%
First Chicago Capital Markets, Inc. 25%
$39,474,000 Floating Rate Class B Credit Card Pass-Through Certificates, Series
1997-1
Percentage
Morgan Stanley & Co. Incorporated 100%
-4-
<PAGE> 1
EXHIBIIT 4.1
GREENWOOD TRUST COMPANY
Master Servicer, Servicer and Seller
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders
------------
SERIES SUPPLEMENT
Dated as of August 26, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1993
------------
$750,000,000 Class A Certificates
$39,474,000 Class B Certificates
DISCOVER CARD MASTER TRUST I
SERIES 1997-1 CERTIFICATES
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SERIES TERM SHEET......................................................... 1
ANNEX..................................................................... 1
SECTION 1. Definitions.............................................. 1
SECTION 2. Subordination............................................ 23
SECTION 3. Representations and Warranties of the Sellers............ 23
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. Authentication of Certificates........................... 25
SECTION 8. Establishment and Administration of Investor Accounts
and the Credit Enhancement Account....................... 25
SECTION 9. Allocations of Collections............................... 29
SECTION 10. Payments................................................. 40
SECTION 11. Credit Enhancement....................................... 46
SECTION 12. Alternative Credit Support Election...................... 47
SECTION 13. Calculation of Investor Losses........................... 48
SECTION 14. Servicing Compensation................................... 49
SECTION 15. Class Interest Rate Caps................................. 49
SECTION 16. Class Currency Swaps..................................... 50
SECTION 17. Investor Certificateholders' Monthly Statement........... 52
SECTION 18. Master Servicer's Monthly Certificate.................... 52
SECTION 19. Notices.................................................. 52
SECTION 20. Additional Amortization Events........................... 52
SECTION 21. Purchase of Investor Certificates and Series Termination. 54
SECTION 22. Variable Accumulation Period............................. 55
SECTION 23. Series Yield Factor...................................... 56
SECTION 24. Ratification of Pooling and Servicing Agreement.......... 56
SECTION 25. Counterparts............................................. 56
SECTION 26. Governing Law............................................ 56
</TABLE>
<PAGE> 3
EXHIBITS
EXHIBIT A: Form of Investors Certificates
EXHIBIT B: Form of Certificateholders' Monthly Statement
EXHIBIT C: Form of Master Servicer's Monthly Certificate
<PAGE> 4
DISCOVER CARD MASTER TRUST I
SERIES 1997-1 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
U.S. BANK NATIONAL ASSOCIATION d/b/a 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 1997-1 CERTIFICATES.
SERIES TERM SHEET
<TABLE>
<CAPTION>
<S> <C>
Date of Series Term Sheet August 26, 1997.
Group One.
Series Initial Investor Interest $789,474,000.
Class Initial Investor Interest of each Class Class A - $750,000,000.
of Investor Certificates Class B - $39,474,000.
Class Initial Foreign Currency Investor
Interest of each Class of Investor Class A - Not applicable.
Certificates Class B - Not applicable.
Class A Expected Final Payment Date The Distribution Date in
August 2002.
Class B Expected Final Payment Date The Distribution Date in
September 2002.
Type of Structure Bullet Maturity.
</TABLE>
1
<PAGE> 5
<TABLE>
<S> <C>
Certificate Rates Class A - LIBOR plus 0.09%,
per annum, calculated on the
basis of the actual number of
days elapsed and a 360-day year.
Class B - LIBOR plus 0.27%,
per annum, calculated on the
basis of the actual number of
days elapsed and a 360-day year.
Foreign Currency Certificate Rates Class A - Not applicable.
Class B - Not applicable.
Class Cap Rate Not applicable.
Class Maximum Rate Not applicable.
Class Currency Swap Class A - Not applicable.
Class B - Not applicable.
Currency Swap Counterparty Not applicable.
Currency Swap Downgrade Trigger Not applicable.
Minimum Investor Certificate Ratings Class A - Not applicable.
Class B - Not applicable.
Currency Swap Dollar Escrow Account Not applicable.
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C>
Class Foreign Currency Distribution Account Not applicable.
Foreign Depository Not applicable.
Foreign Currency Not applicable.
Foreign Business Day Not applicable.
Escrow Agent Not applicable.
Escrow Agreement Not applicable.
Initial Exchange Date Not applicable.
Second Exchange Date Not applicable.
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 August 1, 1997.
Series Closing Date August 26, 1997.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
Date from which Interest for First
Interest Payment Date Shall Accrue Series Closing Date
Distribution Dates September 15, 1997 and the 15th
day of each calendar month
thereafter (or, if such day is
not a Business Day, the next
succeeding Business Day).
Interest Payment Dates The 15th day of each month
(or, if such day is not a
Business Day, the next
succeeding Business Day),
commencing in September 1997.
Statement Dates Each Distribution Date,
commencing in September 1997.
Principal Payment Date Not applicable.
Interest Calculation Dates Not applicable.
Principal Commencement Date The first day of the Due
Period related to the
September 2001 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.
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.
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C>
Accumulation Amount (a) Through the Class A
Expected Final Payment Date,
the greater of (i) $62,500,000
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, $39,474,000.
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 $59,210,550.
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 Election, the greater
of (i) $7,894,740 and (ii) an
amount equal to 7.5% 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)
$7,894,740 and (ii) an amount
equal to 12.5% 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
</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C>
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)
$39,473,700 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).
Supplemental Credit Enhancement Amount Not applicable.
Initial Subordinated Amount $98,684,250.
Additional Subordinated Amount $39,473,700.
Supplemental Subordinated Amount Not applicable.
Series Buffer Amount Zero.
</TABLE>
6
<PAGE> 10
<TABLE>
<S> <C>
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.
Eligible for Reallocations to and from Other Yes.
Series in Group
Series Termination Date The first Business Day
following the Distribution
Date in February 2005.
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 Not applicable.
restrictions
Classes, if any, subject to ERISA
restrictions Class B.
</TABLE>
7
<PAGE> 11
<TABLE>
<S> <C>
Bearer Certificates Not applicable.
Registered Certificates Class A and 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 A-1.
Class B Certificate Each certificate executed by
the Sellers and authenticated
by or on behalf of the Trustee,
substantially in the form of
Exhibit A-2.
Temporary Global Certificate Not applicable.
Permanent Global Certificate Not applicable.
Technical Global Certificate Not applicable.
Class A Coupon Not applicable.
Technical Global Coupon Not applicable.
Special Certificate Not applicable.
Monthly Payment Coupon Not applicable.
Notices Not applicable.
</TABLE>
8
<PAGE> 12
<TABLE>
<S> <C>
Representative of the Managers Not applicable.
Listing Agent Not applicable.
Principal Paying Agent Class A - Not applicable.
Class B - Not applicable.
Paying Agents Class A and Class B - the
Corporate Trust Office
of the Trustee.
</TABLE>
9
<PAGE> 13
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
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
/s/ G. M. Carroll
----------------------------------------------
G. M. Carroll
Vice President
<PAGE> 14
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> 15
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> 16
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 divided by the number of Distribution Dates from and including
the preceding Interest Payment Date to but excluding the current Interest
Payment Date (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.
3
<PAGE> 17
"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.
4
<PAGE> 18
"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 divided by the number of Distribution Dates from and including
the preceding Interest Payment Date to but excluding the current Interest
Payment Date (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," if applicable, 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
5
<PAGE> 19
Certificateholders of such Class prior to such Distribution Date, (b) the
aggregate amount of Investor 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 Foreign Currency 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
6
<PAGE> 20
(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.
"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.
7
<PAGE> 21
"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 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.
8
<PAGE> 22
"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 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, (A) if each
Interest Payment Date is also a Distribution Date, 360 divided by the actual
number of days from and including 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 current Distribution Date or (B) if each
Interest Payment Date is not also a Distribution Date, 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 current Distribution Date (if each Interest Payment Date is also a
Distribution Date) or the Interest Calculation Date following the current
Distribution Date (if each Interest Payment Date is not also a 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.
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<PAGE> 23
"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 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
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<PAGE> 24
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.
"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 Foreign 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.
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<PAGE> 25
"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.
"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.
"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
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<PAGE> 26
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 Business Day," if applicable, shall have the meaning set forth in
the Series Term Sheet.
"Foreign Currency," if applicable, shall have the meaning set forth in the
Series Term Sheet.
"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.
"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.
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<PAGE> 27
"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.
"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 Date," 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 Group Finance Charge Collections Reallocation Account
and the Group Principal Collections Reallocation Account and, if applicable,
the Class Foreign Currency Distribution Account, the Currency Swap Dollar
Escrow Account and the Class Currency Swap Termination 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
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<PAGE> 28
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).
"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)
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<PAGE> 29
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 non-resident alien individual, a foreign corporation, a foreign estate, a
foreign trust or a foreign partnership, as such terms are defined in the
Internal Revenue Code of 1986, as amended.
"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
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<PAGE> 30
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.
"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, (A) if each Interest
Payment Date is also a Distribution Date, 360 divided by the actual number of
days from and including the immediately preceding Distribution Date to but
excluding the current Distribution Date or (B) if each Interest Payment Date is
not also a Distribution Date, 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, (A) if each Interest
Payment Date is also a Distribution Date, 360 divided by the actual number of
days from and including the immediately preceding Distribution Date to but
excluding the current Distribution Date or (B) if each Interest Payment Date is
not also a Distribution Date, 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.
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<PAGE> 31
"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.
"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
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<PAGE> 32
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
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.
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"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.
"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 actual number
of days elapsed and a 360-day year, (A) if each Interest Payment Date is also a
Distribution Date, 360 divided by the actual number of days from and including
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 current Distribution Date or (B) if each Interest Payment Date is not also
a Distribution Date, 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 current Distribution Date (if each
Interest Payment Date is also a Distribution Date) or the Interest Calculation
Date following the current Distribution Date (if each Interest Payment Date is
not also a 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.
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"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 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.
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"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.
"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.
"Statement Date" shall mean each date designated as such 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," if applicable, 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
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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 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.
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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.
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.
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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. Authentication of Certificates. Pursuant to the request of
the Sellers, the Trustee shall cause Investor Certificates in authorized
denominations evidencing the Series established hereby to be duly authenticated
and delivered as of the Series Closing Date to or upon the order of the Sellers
pursuant to Section 6.06 of the Pooling and Servicing Agreement.
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 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.
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(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.
(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.
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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 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
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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.
(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
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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 Foreign
Currency 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 Currency
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 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
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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
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
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(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,
(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
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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
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
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(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.
(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
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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
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
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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 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.
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(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
(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.
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(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 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
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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 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
(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.
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(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
(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.
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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.
(3) On each Interest Payment Date (or, if such Interest Payment Date is
not also a Distribution Date, 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.
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(4) On each Interest Payment Date (or, if such Interest Payment Date is
not also a Distribution Date, 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.
(6) On each Foreign 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
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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 Principal Payment Date (or, if such Principal Payment Date is
not also a Distribution Date, 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 or with respect 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 (7) in excess of the
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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 or with respect 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 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
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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) With respect to any Class or Subclass that is subject to a Class
Currency Swap, on each Principal Payment Date or on the Foreign Business Day
following each Special Payment Date, if applicable, 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 Class Expected Final Payment Date or the Class Final Maturity
Date, if applicable (or, if such Class Expected Final Payment Date or Class
Final Maturity Date is not also a Distribution Date, 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 (i) such
amount shall be no greater than the Class Invested Amount and (ii) 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) With respect to any Class or Subclass that is subject to a Class
Currency Swap, on the Foreign Business Day immediately preceding the Class
Expected Final Payment Date or the Class Final Maturity Date, if applicable,
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, if any, will be made in
immediately available funds by wire transfer to such account as the Foreign
Depository with
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respect to such Permanent Global Certificate shall direct in writing;
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 outside of the United States which is recognized as an
international financial center (and at least one of which is located in each
city in which a paying agency must be maintained pursuant to the requirements
of the exchange(s) on which the Bearer Certificates are listed). 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
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withdrawn or lowered by either Rating Agency from the respective ratings of
such Investor 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
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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;
(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,
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further, that the amount of Investor Losses with respect to any Class shall
not be reduced to an amount less than zero.
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
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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
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
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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 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
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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 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 each
Statement Date, a statement substantially in the form of Exhibit B prepared by
the Trustee (based on information provided by the Master Servicer) setting
forth the information listed thereon shall be available from the Trustee, each
Paying Agent and, if applicable, the Listing Agent.
SECTION 18. Master Servicer's Monthly Certificate. On or before the
second Business Day preceding each Statement Date, 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 C 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
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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 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
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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)
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.
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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
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).
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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 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.
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EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
[FORM OF THE FACE OF THE CLASS A CERTIFICATES]
UNLESS THIS CLASS A CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS A CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
NO. $
CUSIP NO.
DISCOVER CARD MASTER TRUST I, SERIES 1997-1
FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATE
GREENWOOD TRUST COMPANY
MASTER SERVICER, SERVICER AND SELLER
(NOT AN INTEREST IN OR OBLIGATION OF GREENWOOD TRUST COMPANY AND NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.)
This certifies that Cede & Co. (the "Class A Certificateholder") is the
registered owner of a Fractional Undivided Interest in the Discover Card Master
Trust I (the "Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") existing as of the Cut-Off Date (or, with
respect to Receivables in Additional Accounts, as of the applicable Additional
Account Cut-Off Date) or thereafter created under certain open end credit card
accounts for specified Persons (the "Accounts") originated by Greenwood Trust
Company, a Delaware banking corporation ("Greenwood"), or an affiliate of
Greenwood, and transferred to the Trust by Greenwood or one or more Additional
Sellers, all monies due or to become due with respect thereto, all proceeds (as
defined in Section 9-306 of the Uniform Commercial Code as in effect in the
Applicable State) of such Receivables pursuant to a Pooling and Servicing
Agreement, dated as of October 1, 1993, by and between U.S. Bank National
Association d/b/a First Bank National Association (successor trustee to Bank of
America Illinois, formerly Continental Bank, National Association) as Trustee
(the "Trustee") and Greenwood as Master Servicer, Servicer and Seller, as
amended (the "Pooling and Servicing Agreement"), a summary of certain of the
pertinent provisions of which is set forth herein below, and benefits under any
Credit Enhancement with respect to any Series of investor certificates issued
from time to time pursuant to the Pooling and Servicing
A-1-1
<PAGE> 71
Agreement, to the extent applicable. Reference is hereby made to the
further provisions of this Class A Certificate set forth on the reverse hereof,
and such further provisions shall for all purposes have the same effect as if
set forth at this place.
This Class A Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement or any amendment thereto, or the Series
Supplement, dated as of August 26, 1997 (the "Series Supplement"), by and
between the Trustee and Greenwood or any amendment thereto, or become vested or
obligatory for any purpose until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under the Pooling and Servicing
Agreement.
A-1-2
<PAGE> 72
IN WITNESS WHEREOF, Greenwood has caused this Class A Certificate to be
duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:____________________________________
A-1-3
<PAGE> 73
[FORM OF THE REVERSE OF THE CLASS A CERTIFICATES]
It is the intent of the Sellers and the Investor Certificateholders that,
for federal, state and local income and franchise tax purposes only, the
Investor Certificates will be evidence of indebtedness of the Sellers. The
Sellers and the Class A Certificateholder, by the acceptance of this Class A
Certificate, agree to treat this Class A Certificate for federal, state and
local income and franchise tax purposes as indebtedness of the Sellers secured
by the Receivables and other assets held in the Trust.
To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement. This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement and the
Series Supplement, to which Pooling and Servicing Agreement and Series
Supplement, as each may be amended from time to time, the Class A
Certificateholder by virtue of the acceptance hereof assents and by which the
Class A Certificateholder is bound.
This Class A Certificate is one of a series of Certificates entitled
"Discover Card Master Trust I, Series 1997-1 Floating Rate Class A Credit Card
Pass-Through Certificates" (the "Class A Certificates"), each of which
represents a Fractional Undivided Interest in the Trust including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement and the Series Supplement to
be deposited in the Investor Accounts with respect to Discover Card Master
Trust I, Series 1997-1 or paid to the Class A Certificateholders. Also issued
under the Pooling and Servicing Agreement and the Series Supplement are
Investor Certificates designated as "Discover Card Master Trust I, Series
1997-1 Floating Rate Class B Credit Card Pass-Through Certificates" (the "Class
B Certificates"). The Class A Certificates and the Class B Certificates are
collectively referred to herein as the Investor Certificates.
The aggregate interest represented by the Class A Certificates at any time
in the assets of the Trust shall not exceed an amount equal to the Class A
Investor Interest at such time, plus accrued but unpaid Certificate Interest
for the Class A Certificates and any interest thereon. The Class Initial
Investor Interest of the Class A Certificates is $750,000,000. The Class A
Invested Amount on any Distribution Date will be an amount equal to the Class A
Initial Investor Interest minus the sum of (a) the aggregate amount of payments
of Certificate Principal paid to the Class A Certificateholders prior to such
Distribution Date, (b) the aggregate amount of Investor Losses for such Class
not reimbursed prior to such Distribution Date and (c) the aggregate amount of
losses of principal on investments in funds on deposit for the benefit of such
Class in the Series Principal Funding Account. In addition to the Investor
Certificates, a Seller Certificate has been issued pursuant to the Pooling and
Servicing Agreement which represents, at any time, the undivided interest in
the Trust not represented by the Investor Certificates or the investor
certificates of any other Series of investor certificates then outstanding.
Subject to the terms and conditions of the Pooling and Servicing Agreement, the
Sellers may from time to time direct the Trustee, on behalf of the Trust, to
issue one or more new Series of investor certificates, which will represent
Fractional Undivided Interests in the Trust.
During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each calendar month with respect to interest accrued during the
preceding Interest Accrual Period, commencing in September 1997, or if such
15th day is not a Business Day, on the next succeeding Business Day (an
"Interest Payment Date"), to the Class A Certificateholders of record as of the
last day of the month preceding the related Interest Payment Date. Principal
on the Class A Certificates will be paid in a single payment on the
Distribution Date in August 2002 (the "Class A Expected Final Payment Date"),
but may be paid sooner
A-1-4
<PAGE> 74
or later and in installments if an Amortization Event occurs. During the
Amortization Period, if any, Certificate Interest and Certificate Principal
collected by the Master Servicer will be distributed to the Class A
Certificateholders on the Distribution Date of each calendar month, commencing
in the month following the commencement of the Amortization Period. In any
event, the final payment of principal of either class will be made no later
than the first Business Day following the Distribution Date in February 2005
(the "Series Termination Date").
The amount to be distributed on each Distribution Date to the holder of
this Class A Certificate will be equal to the product of (a) the percentage
equivalent of a fraction, the numerator of which is the portion of the Class A
Initial Investor Interest evidenced by this Class A Certificate and the
denominator of which is the Class A Initial Investor Interest and (b) the
aggregate of all payments to be made to the Class A Certificateholders on such
Distribution Date. Distributions with respect to this Class A Certificate will
be made by the Paying Agent by check mailed to the address of the Class A
Certificateholder of record appearing in the Certificate Register (except for
the final distribution in respect of this Class A Certificate) without the
presentation or surrender of this Class A Certificate or the making of any
notation thereon, except that with respect to Class A Certificates registered
in the name of Cede & Co., the nominee registrant for The Depository Trust
Company, distributions will be made in the form of immediately available funds.
This Class A Certificate does not represent an obligation of, or an
interest in, the Master Servicer. This Class A Certificate is limited in right
of payment to certain Collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement
and the Series Supplement.
The Pooling and Servicing Agreement permits, with certain exceptions, the
amendment and modification of the rights and obligations of the Master
Servicer, and the rights of Investor Certificateholders under the Pooling and
Servicing Agreement and Series Supplement, at any time by the Master Servicer,
the Sellers and the Trustee in certain cases (some of which require
confirmation from the Rating Agencies that such amendment will not result in
the downgrading or withdrawal of the rating assigned to the Investor
Certificates) without the consent of the Investor Certificateholders, and in
all other cases with the consent of the Investor Certificateholders owning
Fractional Undivided Interests aggregating not less than 66-2/3% of the Class
Invested Amount of each such affected Class (and with confirmation from the
Rating Agencies that such amendment will not result in the downgrading or
withdrawal of the rating assigned to the Investor Certificates); provided,
however, that no such amendment shall (a) have a material adverse effect on any
Class of Investor Certificateholders by reducing in any manner the amount of,
or delaying the timing of, distributions which are required to be made on any
Investor Certificate without the consent of the affected Investor
Certificateholders or (b) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of each Investor Certificateholder
of each affected Class then of record. Any such amendment and any such consent
by the Class A Certificateholder shall be conclusive and binding on such Class
A Certificateholder and upon all future Holders of this Class A Certificate and
of any Class A Certificate issued in exchange hereof or in lieu hereof whether
or not notation thereof is made upon this Class A Certificate.
The transfer of this Class A Certificate shall be registered in the
Certificate Register upon surrender of this Investor Certificate for
registration of transfer at any office or agency maintained by the Transfer
Agent and Registrar accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Class A Certificateholder or such Class A Certificateholder's attorney
duly authorized in writing, and thereupon one or more new Class
A-1-5
<PAGE> 75
A Certificates of authorized denominations and for the same aggregate
Fractional Undivided Interest will be issued to the designated transferee or
transferees.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A Certificates are exchangeable for new
Class A Certificates evidencing like aggregate Fractional Undivided Interests,
as requested by the Class A Certificateholder surrendering such Class A
Certificates. No service charge may be imposed for any such exchange but the
Master Servicer or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
The Master Servicer, the Trustee, the Paying Agent and the Transfer Agent,
and any agent of any of them, may treat the person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and neither the
Master Servicer, the Trust nor the Trustee, the Paying Agent, the Transfer
Agent, nor any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described in the Pooling
and Servicing Agreement.
Subject to certain conditions in the Pooling and Servicing Agreement and
the Series Supplement, if the principal of the Investor Certificates has not
been paid in full prior to the Series Termination Date, the obligations created
by the Pooling and Servicing Agreement and the Series Supplement with respect
to the Investor Certificates shall terminate on the Series Termination Date.
A-1-6
<PAGE> 76
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Class A Certificates referred to in the within
mentioned Pooling and Servicing Agreement and Series Supplement.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:____________________________________
Authorized Officer
A-1-7
<PAGE> 77
EXHIBIT A-2
FORM OF CLASS B CERTIFICATE
[FORM OF THE FACE OF THE CLASS B CERTIFICATES]
UNLESS THIS CLASS B CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
NO. $
CUSIP NO.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND TO THE RIGHTS OF THE MASTER SERVICER AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT AND SERIES SUPPLEMENT REFERRED TO HEREIN.
DISCOVER CARD MASTER TRUST I, SERIES 1997-1
FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATE
GREENWOOD TRUST COMPANY
MASTER SERVICER, SERVICER AND SELLER
(NOT AN INTEREST IN OR OBLIGATION OF GREENWOOD TRUST COMPANY AND NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.)
THIS INVESTOR CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF ANY
EMPLOYEE BENEFIT PLAN (AS DEFINED BELOW).
This certifies that Cede & Co. (the "Class B Certificateholder") is the
registered owner of a Fractional Undivided Interest in the Discover Card Master
Trust I (the "Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") existing as of the Cut-Off Date (or, with
respect to Receivables in Additional Accounts, as of the applicable Additional
Account Cut-Off Date) or thereafter created under certain open end credit card
accounts for specified Persons (the "Accounts") originated by Greenwood Trust
Company, a Delaware banking corporation ("Greenwood"), or an affiliate of
Greenwood, and transferred to the Trust by Greenwood or one or more Additional
Sellers, all monies due or to become due with respect thereto, all proceeds (as
defined in Section 9-306 of the Uniform
A-2-1
<PAGE> 78
Commercial Code as in effect in the Applicable State) of such Receivables
pursuant to a Pooling and Servicing Agreement, dated as of October 1, 1993, by
and between U.S. Bank National Association d/b/a First Bank National
Association (successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association) as Trustee (the "Trustee") and
Greenwood as Master Servicer, Servicer and Seller, as amended (the "Pooling and
Servicing Agreement"), a summary of certain of the pertinent provisions of
which is set forth herein below, and benefits under any Credit Enhancement with
respect to any Series of investor certificates issued from time to time
pursuant to the Pooling and Servicing Agreement, to the extent applicable.
Reference is hereby made to the further provisions of this Class B Certificate
set forth on the reverse hereof, and such further provisions shall for all
purposes have the same effect as if set forth at this place.
This Class B Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement or any amendment thereto, or the Series
Supplement, dated as of August 26, 1997 (the "Series Supplement"), by and
between the Trustee and Greenwood or any amendment thereto, or become vested or
obligatory for any purpose until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under the Pooling and Servicing
Agreement.
A-2-2
<PAGE> 79
IN WITNESS WHEREOF, Greenwood has caused this Class B Certificate to be
duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:________________________________
A-2-3
<PAGE> 80
[FORM OF THE REVERSE OF THE CLASS B CERTIFICATES]
It is the intent of the Sellers and the Investor Certificateholders that,
for federal, state and local income and franchise tax purposes only, the
Investor Certificates will be evidence of indebtedness of the Sellers. The
Sellers and the Class B Certificateholder, by the acceptance of this Class B
Certificate, agree to treat this Class B Certificate for federal, state and
local income and franchise tax purposes as indebtedness of the Sellers secured
by the Receivables and other assets held in the Trust.
To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement. This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement and the
Series Supplement, to which Pooling and Servicing Agreement and Series
Supplement, as each may be amended from time to time, the Class B
Certificateholder by virtue of the acceptance hereof assents and by which the
Class B Certificateholder is bound.
This Class B Certificate is one of a series of Certificates entitled
"Discover Card Master Trust I, Series 1997-1 Floating Rate Class B Credit Card
Pass-Through Certificates" (the "Class B Certificates"), each of which
represents a Fractional Undivided Interest in the Trust including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement and the Series Supplement to
be deposited in the Investor Accounts with respect to Discover Card Master
Trust I, Series 1997-1 or paid to the Class B Certificateholders. Also issued
under the Pooling and Servicing Agreement and the Series Supplement are
Investor Certificates designated as "Discover Card Master Trust I, Series
1997-1 Floating Rate Class A Credit Card Pass-Through Certificates" (the "Class
A Certificates"). The Class A Certificates and the Class B Certificates are
collectively referred to herein as the Investor Certificates.
The aggregate interest represented by the Class B Certificates at any time
in the assets of the Trust shall not exceed an amount equal to the Class
Investor Interest of the Class B Certificates at such time, plus accrued but
unpaid Certificate Interest for the Class B Certificates and any interest
thereon. The Class B Certificateholders are also entitled to the benefit of
the Credit Enhancement, to the extent provided in the Series Supplement. The
Class Initial Investor Interest of the Class B Certificates is $39,474,000.
The Class B Invested Amount on any Distribution Date will be an amount equal to
the Class B Initial Investor Interest minus the sum of (a) the aggregate amount
of payments of Certificate Principal paid to the Class B Certificateholders
prior to such Distribution Date, (b) the aggregate amount of Investor Losses
for such Class not reimbursed prior to such Distribution Date and (c) the
aggregate amount of losses of principal on investments in funds on deposit for
the benefit of such Class in the Series Principal Funding Account. In addition
to the Investor Certificates, a Seller Certificate has been issued pursuant to
the Pooling and Servicing Agreement which represents, at any time, the
undivided interest in the Trust not represented by the Investor Certificates or
the investor certificates of any other Series of investor certificates then
outstanding. Subject to the terms and conditions of the Pooling and Servicing
Agreement, the Sellers may from time to time direct the Trustee, on behalf of
the Trust, to issue one or more new Series of investor certificates, which will
represent Fractional Undivided Interests in the Trust.
During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each calendar month with respect to interest accrued during the
preceding Interest Accrual Period, commencing in September 1997, or if such
15th day is not a Business Day, on the next succeeding Business Day (an
"Interest Payment Date"), to the Class B Certificateholders of record as of the
last day of the month preceding the related
A-2-4
<PAGE> 81
Interest Payment Date. Principal on the Class B Certificates will be
paid in a single payment on the Distribution Date in September 2002 (the "Class
B Expected Final Payment Date), but may be paid sooner or later and in
installments if an Amortization Event occurs. During the Amortization Period,
if any, Certificate Interest and Certificate Principal collected by the Master
Servicer will be distributed to the Class B Certificateholders on the
Distribution Date of each calendar month, commencing in the month following the
commencement of the Amortization Period; provided, however, that no Certificate
Principal will be distributed to the Class B Certificateholders until the Class
A Investor Interest has been reduced to zero. The rights of the Class B
Certificateholders to receive the distributions to which they would otherwise
be entitled on the Receivables will be subordinated to the rights of the Class
A Certificateholders and the Master Servicer to the extent described in the
Pooling and Servicing Agreement and Series Supplement. In any event, the final
payment of principal of either Class will be made no later than the first
Business Day following the Distribution Date in February 2005 (the "Series
Termination Date").
The amount to be distributed on each Distribution Date to the holder of
this Class B Certificate will be equal to the product of (a) the percentage
equivalent of a fraction, the numerator of which is the portion of the Class B
Initial Investor Interest evidenced by this Class B Certificate and the
denominator of which is the Class B Initial Investor Interest and (b) the
aggregate of all payments to be made to the Class B Certificateholders on such
Distribution Date. Distributions with respect to this Class B Certificate will
be made by the Paying Agent by check mailed to the address of the Class B
Certificateholder of record appearing in the Certificate Register (except for
the final distribution in respect of this Class B Certificate) without the
presentation or surrender of this Class B Certificate or the making of any
notation thereon, except that with respect to Class B Certificates registered
in the name of Cede & Co., the nominee registrant for The Depository Trust
Company, distributions will be made in the form of immediately available funds.
This Class B Certificate does not represent an obligation of, or an
interest in, the Master Servicer. This Class B Certificate is limited in right
of payment to certain Collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement
and the Series Supplement.
The Pooling and Servicing Agreement permits, with certain exceptions, the
amendment and modification of the rights and obligations of the Master
Servicer, and the rights of Investor Certificateholders under the Pooling and
Servicing Agreement and Series Supplement, at any time by the Master Servicer,
the Sellers and the Trustee in certain cases (some of which require
confirmation from the Rating Agencies that such amendment will not result in
the downgrading or withdrawal of the rating assigned to the Investor
Certificates) without the consent of the Investor Certificateholders, and in
all other cases with the consent of the Investor Certificateholders owning
Fractional Undivided Interests aggregating not less than 66-2/3% of the Class
Invested Amount of each such affected Class (and with confirmation from the
Rating Agencies that such amendment will not result in the downgrading or
withdrawal of the rating assigned to the Investor Certificates); provided,
however, that no such amendment shall (a) have a material adverse effect on any
Class of Investor Certificateholders by reducing in any manner the amount of,
or delaying the timing of, distributions which are required to be made on any
Investor Certificate without the consent of the affected Investor
Certificateholders or (b) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of each Investor Certificateholder
of each affected Class then of record. Any such amendment and any such consent
by the Class B Certificateholder shall be conclusive and binding on such Class
B Certificateholder and upon all future Holders of this Class B Certificate and
of any Class B Certificate issued in exchange hereof or in lieu hereof whether
or not notation thereof is made upon this Class B Certificate.
A-2-5
<PAGE> 82
The transfer of this Class B Certificate shall be registered in the
Certificate Register upon surrender of this Investor Certificate for
registration of transfer at any office or agency maintained by the Transfer
Agent and Registrar accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Class B Certificateholder or such Class B Certificateholder's attorney
duly authorized in writing, and thereupon one or more new Class B Certificates
of authorized denominations and for the same aggregate Fractional Undivided
Interest will be issued to the designated transferee or transferees.
The transfer of this Investor Certificate is subject to certain
restrictions set forth in the Pooling and Servicing Agreement. In no event
shall this Investor Certificate, or any interest therein, be transferred to an
employee benefit plan, trust or account subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), and
not excepted under Section 4975(g). Any Holder of this Investor Certificate,
by its acceptance hereof, shall be deemed to represent and warrant that it is
not (i) an employee benefit plan (as defined in Section 3(3) of ERISA), that is
subject to Title I of ERISA, (ii) a plan described in Section 4975(e)(l) of the
Code, and not excepted under Section 4975(g), or (iii) an entity using assets
to purchase such Certificates which constitute plan assets by reason of a
plan's investment in such Holder.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class B Certificates are exchangeable for new
Class B Certificates evidencing like aggregate Fractional Undivided Interests,
as requested by the Class B Certificateholder surrendering such Class B
Certificates. No service charge may be imposed for any such exchange but the
Master Servicer or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
The Master Servicer, the Trustee, the Paying Agent and the Transfer Agent,
and any agent of any of them, may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Master Servicer, the Trust nor the Trustee, the Paying Agent, the Transfer
Agent, nor any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described in the Pooling
and Servicing Agreement.
Subject to certain conditions in the Pooling and Servicing Agreement and
the Series Supplement, if the principal of the Investor Certificates has not
been paid in full prior to the Series Termination Date, the obligations created
by the Pooling and Servicing Agreement and the Series Supplement with respect
to the Investor Certificates shall terminate on the Series Termination Date.
A-2-6
<PAGE> 83
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Class B Certificates referred to in the within
mentioned Pooling and Servicing Agreement and Series Supplement.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:____________________________________
Authorized Officer
A-2-7
<PAGE> 84
Exhibit B
Form of Investor Certificateholders' Monthly Statement
Discover Card Master Trust I
Series 1997-1 Monthly Statement
Trust Distribution Date: __________ __, ____ Due Period Ending: __________ __,
____
Pursuant to the Series Supplement dated as of August 26, 1997 relating to the
Pooling and Servicing Agreement dated as of October 1, 1993 by and between
Greenwood Trust Company and U.S. Bank National Association d/b/a First Bank
National Association (successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association) as Trustee, as amended, the Trustee is
required to prepare certain information each month regarding current
distributions to Certificateholders and the performance of the Trust. The
information for the Due Period and the Trust Distribution Date listed above is
set forth below.
1. Payments for the benefit of Series Investors this Due Period (per $1,000 of
Class Initial Investor Interest)
<TABLE>
<CAPTION>
Total Interest Principal
<S> <C> <C> <C>
Series 1997-1
Class A $____________ $____________ $____________
Class B $____________ $____________ $____________
2. Principal Receivables at the end of the Due Period
(a) Aggregate Investor Interest $____________
Seller Interest $____________
TOTAL MASTER TRUST $____________
(b) Group One Investor Interest $____________
(c) Group Two Investor Interest $____________
(d) Series 1997-1 Series Investor Interest $____________
(e) Class A Investor Interest $____________
Class B Investor Interest $____________
</TABLE>
3. Allocation of Receivables Collected During the Due Period
<TABLE>
<CAPTION>
Finance Charge Principal Yield Additional
Collections Collections Collections Funds
<S> <C> <C> <C> <C>
(a) Allocation of Collections
between Investors and Seller
Aggregate Investor Allocation $____________ $___________ N/A N/A
Seller Allocation $____________ $___________ N/A N/A
(b) Group One Allocation $____________ $___________ N/A N/A
(c) Group Two Allocation $____________ $___________ N/A N/A
(d) Series 1997-1 Allocations $____________ $___________ $_________ N/A
(e) Class A Allocations $___________ $___________ $_________ N/A
Class B Allocations $___________ $___________ $_________ N/A
</TABLE>
B-1
<PAGE> 85
4. Information Concerning the Series Principal Funding Accounts ("SPFA")
<TABLE>
<CAPTION>
Deposits into the SPFAs Deficit Amount
This Due Period This Due Period Total Deposits Investment Income
<S> <C> <C> <C> <C>
Series 1997-1 $ $ $ $
--------- --------- --------- ---------
</TABLE>
5. Information Concerning Amount of Controlled Liquidation Payments
<TABLE>
<CAPTION>
Amount Paid Deficit Amount Total Payments Through
This Due Period This Due Period The Due Period
<S> <C> <C> <C>
Series 1997-1 N/A N/A N/A
</TABLE>
6. Information Concerning the Series Interest Funding Accounts ("SIFA")
<TABLE>
<CAPTION>
Deposits into the SIFAs
This Due Period SIFA Balance
<S> <C> <C>
Series 1997-1 N/A N/A
</TABLE>
7. Pool Factors
<TABLE>
<CAPTION>
This Due Period
<S> <C>
Class A $_________
Class B $_________
</TABLE>
8. Investor Charged-Off Amount
<TABLE>
<CAPTION>
This Due Period Cumulative Investor
Charged-Off Amount
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-1 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
9. Investor Losses This Due Period
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-1 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
B-2
<PAGE> 86
10. Reimbursement of Investor Losses This Due Period
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-1 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
11. Aggregate Amount of Unreimbursed Investor Losses
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-1 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
12. Investor Monthly Servicing Fee Payable This Due Period
<TABLE>
<CAPTION>
<S> <C> <C>
(a) Group One $_________
(b) Group Two $_________ $_________
(c) Series 1997-1 $_________
(d) Class A $_________
Class B $_________
</TABLE>
13. Class Available Subordinated Amount at the end of the Due Period
<TABLE>
<CAPTION>
as a percentage of
Total Class A Invested Amount
<S> <C> <C>
Series 1997-1, Class B $____________ $__________
</TABLE>
14. Total Available Credit Enhancement Amounts
<TABLE>
<CAPTION>
Shared Amount Class B Amount
<S> <C> <C>
Maximum Amount N/A $__________
Available Amount N/A $__________
Amount of Drawings on Credit
Enhancement for this Due Period N/A $__________
</TABLE>
B-3
<PAGE> 87
15. Delinquency Summary
<TABLE>
<CAPTION>
<S> <C> <C>
End of Due Period Mater Trust Receivables Outstanding $_________
Delinquent Amount Percentage of Ending
Payment Status Ending Balance Receivables Outstanding
30 - 59 days $_________ _________%
60 - 179 days $_________ _________%
</TABLE>
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_____________________________________
B-4
<PAGE> 88
Exhibit C
Form of Master Servicer's Monthly Certificate
Discover Card Master Trust I
Series 1997-1
CREDIT CARD
PASS-THROUGH CERTIFICATES
____________________
The undersigned, a duly authorized representative of Greenwood Trust
Company ("Greenwood"), as Master Servicer pursuant to the Pooling and Servicing
Agreement dated as of October 1, 1993, as amended (the "Pooling and Servicing
Agreement"), and the Series Supplement, dated as of August 26, 1997 (the
"Series Supplement") by and between Greenwood and U.S. Bank National
Association d/b/a First Bank National Association (successor trustee to Bank of
America Illinois, formerly Continental Bank, National Association) as Trustee,
does hereby certify as follows with respect to the Series Supplement for the
Discover Card Master Trust I, Series 1997-1 Certificates for the Distribution
Date occurring on _______________:
<TABLE>
<CAPTION>
<S> <C> <C>
1. Greenwood is Master Servicer under the Pooling and
Servicing Agreement.
2. The undersigned is a Servicing Officer of Greenwood as
Master Servicer.
3. The aggregate amount of Collections processed
during the related Due Period is equal to................. $_____
4. The aggregate amount of Class A Principal
Collections processed during the related Due Period
is equal to............................................... $_____
5. The aggregate amount of Class A Finance Charge
Collections processed during the related Due Period
is equal to............................................... $_____
6a. The aggregate amount of Class A Principal Collections
recharacterized as Series Yield Collections during the
related Due Period is equal to ........................... $_____
6b. The aggregate amount of Class A Additional Funds for this
Distribution Date is equal to ............................ $_____
7. The sum of all amounts payable to the Class A
Certificate-holders on the current Distribution Date
is equal to............................................... $_____
8. The aggregate amount of Class B Principal
Collections processed during the related Due Period
is equal to............................................... $_____
</TABLE>
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<TABLE>
<CAPTION>
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9. The aggregate amount of Class B Finance Charge
Collections processed during the related Due
Period is equal to ....................................... $_____
10a. The aggregate amount of Class B Principal Collections
recharacterized as Series Yield Collections during the
related Due Period is .................................... $_____
10b. The aggregate amount of Class B Additional Funds for this
Distribution Date is equal to ............................ $_____
11. The amount of drawings under the Credit
Enhancement required to be made on the related
Drawing Date pursuant to the Series Supplement:
(a) with respect to the Class B Required
Amount Shortfall is equal to.......................... $_____
(b) with respect to the Class B Cumulative
Investor Charged-Off Amount is equal to............... $_____
(c) with respect to the Class B Investor
Interest is equal to.................................. $_____
12. The sum of all amounts payable to the Class B
Certificate-holders on the current Distribution Date
is equal to............................................... $_____
13. Attached hereto is a true copy of the statement
required to be delivered by the Master Servicer on the
date of this Certificate to the Trustee pursuant to
Section 16 of the Series Supplement.
</TABLE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this ____day of ____________, 19__.
GREENWOOD TRUST COMPANY,
as Master Servicer
By:________________________________
Title:
C-2
<PAGE> 1
Exhibit 4.2
CREDIT ENHANCEMENT AGREEMENT
among
FIRST BANK NATIONAL ASSOCIATION
as Trustee,
GREENWOOD TRUST COMPANY
as Master Servicer, Servicer and Seller
and
DISCOVER RECEIVABLES FINANCING CORPORATION
as Credit Enhancement Provider
_____________________________
Dated as of August 26, 1997
____________________________
DISCOVER CARD MASTER TRUST I
SERIES 1997-1
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
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PAGE
<S> <C> <C>
Section 1. Defined Terms................................................................. 2
Section 2. Loan.......................................................................... 3
Section 3. Calculation of Amount of Interest Payable on the Loan......................... 3
Section 4. Payment of Interest on the Loan............................................... 4
Section 5. Repayment of Principal of the Loan............................................ 4
Section 6. Payments to the Holder of the Seller Certificate and the Master Servicer...... 5
Section 7. Deposits to and Withdrawals from the Credit Enhancement Account............... 5
Section 8. Certain Additional Loans...................................................... 6
Section 9. Limited Obligation; Waiver of Setoff; Obligations Absolute.................... 7
Section 10. Investments and Information................................................... 7
Section 11. Servicing Transfer............................................................ 8
Section 12. Representations and Warranties................................................ 8
Section 13. Covenants..................................................................... 10
Section 14. Governing Law................................................................. 10
Section 15. Termination................................................................... 10
Section 16. Notices....................................................................... 11
Section 17. Bankruptcy.................................................................... 11
Section 18. Limitation of Remedies........................................................ 12
Section 19. No Petition................................................................... 12
Section 20. Amendments.................................................................... 12
</TABLE>
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<TABLE>
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Section 21. Successors and Assigns; Replacement of Credit Enhancement Provider.... 12
Section 22. Participation......................................................... 13
</TABLE>
ii
<PAGE> 4
CREDIT ENHANCEMENT AGREEMENT, dated as of August 26, 1997, among U.S.
BANK NATIONAL ASSOCIATION d/b/a First Bank National Association (successor
trustee to Bank of America Illinois, formerly Continental Bank, National
Association) as trustee (together with its successors and assigns as trustee,
the "Trustee") for Discover Card Master Trust I (the "Trust"), GREENWOOD TRUST
COMPANY ("Greenwood") as Master Servicer, Servicer and Seller with respect to
the Trust and DISCOVER RECEIVABLES FINANCING CORPORATION as cash collateral
depositor (the "Credit Enhancement Provider").
W I T N E S S E T H
WHEREAS, Greenwood as Master Servicer, Servicer and Seller and the
Trustee have entered into a Pooling and Servicing Agreement, dated as of
October 1, 1993 (as the same may from time to time be amended, modified or
otherwise supplemented, the "Pooling and Servicing Agreement"), and that
certain Series Supplement, dated as of August 26, 1997 (as the same may from
time to time be amended, modified or otherwise supplemented, the "Series
Supplement");
WHEREAS, the Trust, pursuant to the Pooling and Servicing Agreement and
the Series Supplement, is issuing $789,474,000 in aggregate principal amount of
Investor Certificates of Discover Card Master Trust I, Series 1997-1 (the
"Series"), which will entitle the holders thereof to interest during the
Revolving Period, the Accumulation Period and the Amortization Period, if any,
and principal on the Class A Expected Final Payment Date, the Class B Expected
Final Payment Date and during the Amortization Period, if any;
WHEREAS, the principal and interest payments on the Investor
Certificates are to be funded by Principal Collections and Finance Charge
Collections received by the Trust on the Receivables;
WHEREAS, it is a condition to the issuance of the Investor Certificates
that at the closing on the date hereof, the Credit Enhancement Provider make a
term loan (the "Loan") to the Trust, for the benefit of the Investor
Certificateholders of the Series, of $59,210,550 (7.5% of the Series Initial
Investor Interest), for deposit in the Credit Enhancement Account to provide
additional funds to make payments on the Investor Certificates under certain
circumstances;
WHEREAS, principal on the Loan will be payable to the Credit
Enhancement Provider after the Investor Certificates are paid in full, except
for certain prepayments funded by certain Finance Charge Collections with
respect to the Receivables, as set forth herein; and
WHEREAS, interest on the Loan will be payable monthly to the Credit
Enhancement Provider, as available, by the Trust at one rate to the extent the
amount in the
<PAGE> 5
Credit Enhancement Account equals or exceeds the unpaid principal on the Loan
and at a higher rate to the extent the unpaid principal on the Loan exceeds the
amount in the Credit Enhancement Account.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby expressly acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINED TERMS. (a) The capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Pooling and Servicing Agreement or the Series Supplement, as applicable.
(b) The following terms have the definitions set forth below:
"Interest Period" means (i) with respect to the initial Distribution
Date, the period commencing on the Series Closing Date and ending on the day
immediately preceding the initial Distribution Date and (ii) with respect to
each subsequent Distribution Date, the period commencing on the preceding
Distribution Date and ending on the day immediately preceding such Distribution
Date.
"Lender Rate" means, with respect to each Interest Period, the prime
commercial lending rate per annum established by the Trustee, as in effect on
each day in the Interest Period.
"LIBOR-Based Rate" means, with respect to each Interest Period, the per
annum interest rate equal to the London Interbank Offered Rate as shown on the
Reuters Screen LIBO Page at approximately 11:00 a.m. (London time) two LIBOR
Business Days prior to the first day of such Interest Period for deposits of
United States dollars for a period of time comparable to the Interest Period,
and in an amount comparable to the principal amount of the Loan, plus 0.40%.
"Portfolio Yield" means, 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.
"Provider Amount" means, with respect to each Distribution Date, the
lesser of (i) the unpaid principal amount of the Loan (including any amounts
loaned by the Credit Enhancement Provider pursuant to Section 8 hereof) and
(ii) the amount on deposit in the
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<PAGE> 6
Credit Enhancement Account, in each case before giving effect to any payments,
allocations or distributions on such Distribution Date.
"Series Interest Payment Amount" means, for any Distribution Date, an
amount equal to the amount of interest payable on the Loan on such Distribution
Date, including any accrued but unpaid interest with respect to previous
Interest Periods and interest thereon, less the amount paid to the Credit
Enhancement Provider on such Distribution Date pursuant to Section 4(a) hereof.
The Series Interest Payment Amount shall be the amount of interest payable
pursuant to this Agreement for purposes of calculating the "Credit Enhancement
Fee" for the purpose of, and as such term is defined in, the Series Supplement
and such amount shall be paid in accordance with the provisions of the Series
Supplement.
SECTION 2. LOAN. The Credit Enhancement Provider hereby makes a term
loan to the Trust, for the benefit of the Investor Certificateholders of the
Series, on the Series Closing Date in an amount equal to $59,210,550 (which
amount is the Stated Class B Credit Enhancement Amount), receipt of which is
hereby acknowledged by the Trustee. The amount of such Loan shall be increased
by the amount of any additional loan made by the Credit Enhancement Provider
pursuant to Section 8 hereof.
SECTION 3. CALCULATION OF AMOUNT OF INTEREST PAYABLE ON THE LOAN.
(a) The Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum determined for such day as
follows. To the extent the unpaid portion of the principal of the Loan during
such Interest Period equals or is less than the amount on deposit in the Credit
Enhancement Account, the rate for such Interest Period on such principal
portion shall be the LIBOR-Based Rate. To the extent any portion of the unpaid
principal of the Loan exceeds such amount on deposit, the rate for such
Interest Period on such principal portion shall be the Lender Rate.
(b) Interest shall be payable monthly in arrears on each Distribution
Date. Interest on the Loan shall be calculated on the basis of the actual
number of days elapsed during the applicable Interest Period divided by (i)
360, to the extent the LIBOR-Based Rate is applicable, or (ii) 365 or 366, as
the case may be, to the extent the Lender Rate is applicable. The Trustee
shall, as soon as practicable, notify the Seller, the Master Servicer and the
Credit Enhancement Provider of each determination of the Lender Rate and of the
LIBOR-Based Rate. Each determination thereof by the Trustee pursuant to the
provisions of this Agreement shall be conclusive and binding on the Seller, the
Master Servicer and the Credit Enhancement Provider, in the absence of manifest
error.
(c) If any portion of interest due and payable on a Distribution Date
is not paid on such Distribution Date, the unpaid portion of such interest
shall be due and payable on the next succeeding Distribution Date. Any
interest that is not paid on the due date
3
<PAGE> 7
thereof shall accrue interest from the Distribution Date on which such interest
was due and payable to the date such interest is actually paid at a rate per
annum equal to the Lender Rate.
SECTION 4. PAYMENT OF INTEREST ON THE LOAN. On each Distribution
Date, the Trustee as administrator of the Credit Enhancement shall pay or cause
to be paid to the Credit Enhancement Provider the amount of accrued but unpaid
interest on the Loan from the funds and in the order of priority set forth
below; provided, however, that such payments shall not exceed the amount of
accrued but unpaid interest on the Loan and that such payments will be made
only to the extent such funds are available:
(a) interest and earnings (net of losses and investment expenses)
accrued since the preceding Distribution Date on the Provider Amount; and
(b) the Series Interest Payment Amount, to the extent such amount has
been paid to the Trustee as administrator of the Credit Enhancement
pursuant to the Series Supplement.
SECTION 5. REPAYMENT OF PRINCIPAL OF THE LOAN. The principal amount
of the Loan shall be due and payable on the Series Termination Date. The Trust
shall repay the unpaid principal balance of the Loan in full on or before the
Series Termination Date in accordance with the provisions of this Agreement;
provided, however, that the unpaid principal amount of the Loan shall only be
paid from the funds described below, and only to the extent such funds are
available.
(a) On each Distribution Date an amount equal to the lesser of (i) the
amount, if any, paid to the Trustee as administrator of the Credit Enhancement
pursuant to Section 9(b)(26) of the Series Supplement, and (ii) the unpaid
principal amount of the Loan, shall be paid to the Credit Enhancement Provider
for application toward the unpaid principal amount of the Loan.
(b) If, as of 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
exceeds the Total Maximum Credit Enhancement Amount, the amount of such excess,
up to the unpaid principal amount of the Loan, shall be withdrawn from the
Credit Enhancement Account and paid to the Credit Enhancement Provider for
application toward the unpaid principal amount of the Loan.
(c) On the earlier to occur of (i) the Series Termination Date and
(ii) the day on which the Class Invested Amount with respect to each Class of
the Series is paid in full, and after payment of any amounts to be paid on such
day from the Credit Enhancement Account to or for the benefit of the Investor
Certificateholders of the Series, all amounts remaining on deposit in the
Credit Enhancement Account, up to the amount of the unpaid
4
<PAGE> 8
principal amount of the Loan, shall be withdrawn from such account and paid to
the Credit Enhancement Provider for application toward the unpaid principal
amount of the Loan.
SECTION 6. PAYMENTS TO THE HOLDER OF THE SELLER CERTIFICATE AND THE
MASTER SERVICER.
(a) On each Distribution Date, the Trustee as administrator of the
Credit Enhancement shall pay or cause to be paid to Greenwood on behalf of the
Holder of the Seller Certificate (i) the interest and earnings (net of losses
and investment expenses) accrued since the preceding Distribution Date on an
amount equal to the positive difference, if any, between (x) the amount on
deposit in the Credit Enhancement Account and (y) the Provider Amount and (ii)
the positive difference, if any, between (x) the amount of interest and
earnings (net of losses and investment expenses) accrued since the preceding
Distribution Date on the Provider Amount and (y) the amount paid to the Credit
Enhancement Provider on such Distribution Date pursuant to Section 4(a).
(b) On each Distribution Date, an amount equal to (i) the amount, if
any, paid to the Trustee as administrator of the Credit Enhancement pursuant to
Section 9(b)(26) of the Series Supplement, less (ii) the amount, if any, paid
to the Credit Enhancement Provider pursuant to Section 5(a) hereof, shall be
paid to Greenwood on behalf of the Holder of the Seller Certificate.
(c) If, as of any Distribution Date, and after any payment to the
Credit Enhancement Provider pursuant to Section 5(b) has been made, the amount
remaining on deposit in the Credit Enhancement Account exceeds the Total
Maximum Credit Enhancement Amount, the amount of such excess shall be withdrawn
from the Credit Enhancement Account and paid to Greenwood on behalf of the
Holder of the Seller Certificate.
(d) On the earlier to occur of (i) the Series Termination Date and
(ii) the day on which the Class Invested Amount with respect to each Class of
the Series is paid in full, and after payment of any amounts to be paid on such
day from the Credit Enhancement Account to or for the benefit of the Investor
Certificateholders of the Series, any amounts remaining on deposit in the
Credit Enhancement Account that are not paid to the Credit Enhancement Provider
pursuant to Section 5(c) hereof shall be withdrawn from such account and paid
to Greenwood on behalf of the Holder of the Seller Certificate.
SECTION 7. DEPOSITS TO AND WITHDRAWALS FROM THE CREDIT ENHANCEMENT
ACCOUNT.
(a) The proceeds of the Loan made by the Credit Enhancement Provider
pursuant to Section 2 hereof, and the proceeds of any additional loan made by
the Credit Enhancement Provider pursuant to Section 8 hereof, shall be
deposited into the Credit
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<PAGE> 9
Enhancement Account. In addition, any amounts paid to the Trustee as
administrator of the Credit Enhancement on any Distribution Date with respect
to the Total Available Credit Enhancement Amount or the Available Class B
Credit Enhancement Amount pursuant to the terms of the Series Supplement also
shall be deposited into the Credit Enhancement Account upon receipt of such
funds by the Trustee.
(b) Any withdrawals from the Credit Enhancement Account for the benefit
of the Investor Certificateholders pursuant to Section 9 of the Series
Supplement may be made by the Master Servicer or by the Trustee as
administrator of the Credit Enhancement and shall be deemed to be made first
from amounts on deposit in the Credit Enhancement Account as a result of
payments of Series Excess Servicing and other amounts to the Trustee as
administrator of the Credit Enhancement to fund the Total Available Credit
Enhancement Amount, including any Series Excess Servicing or other such amounts
on deposit in the Credit Enhancement Account as a result of an Alternative
Credit Support Election having been made, and only after such amounts are
exhausted shall any such withdrawals be deemed to be made from amounts on
deposit in the Credit Enhancement Account that are attributable to the Loan.
(c) On or before any Distribution Date on which Greenwood is the
Master Servicer, all payments made pursuant to this Agreement or the Series
Supplement between the Master Servicer or the Holder of the Seller Certificate
and the Credit Enhancement Account, may be aggregated for such Distribution
Date such that Greenwood, acting as Master Servicer and as agent of the Holder
of the Seller Certificate, may make only one payment to the Credit Enhancement
Account in satisfaction of all payments of the Master Servicer and the Holder
of the Seller Certificate pursuant to this Agreement or the Series Supplement,
to the extent that all payment obligations of the Master Servicer and the
Holder of the Seller Certificate to the Credit Enhancement Account on such
Distribution Date exceed all payment obligations of the Credit Enhancement
Account to the Master Servicer and the Holder of the Seller Certificate on such
Distribution Date.
SECTION 8. CERTAIN ADDITIONAL LOANS.
(a) ALTERNATIVE CREDIT SUPPORT ELECTION. In the event that an
Alternative Credit Support Election is made pursuant to the provisions of the
Series Supplement, Greenwood on behalf of the Holder of the Seller Certificate
may cause the Additional Credit Support Amount to be funded by Series Excess
Servicing and other amounts paid to the Trustee as administrator of the Credit
Enhancement to fund the Available Class B Credit Enhancement Amount, pursuant
to Section 9 of the Series Supplement, or may request that the Credit
Enhancement Provider make an additional loan in the amount of the Additional
Credit Support Amount. If Greenwood on behalf of the Holder of the Seller
Certificate makes such request, and if the Credit Enhancement Provider elects
to make such loan, the amount of such loan shall be added to the unpaid
principal amount of the Loan. In the event that the Alternative Credit Support
Election does not become effective, the Additional Credit
6
<PAGE> 10
Support Amount (or, if the entire amount of the Additional Credit Support
Amount is not then on deposit in the Credit Enhancement Account, the portion of
the Additional Credit Support Amount that is then on deposit) shall be
withdrawn from the Credit Enhancement Account and repaid to Greenwood on behalf
of the Holder of the Seller Certificate (or, if such amount was loaned by the
Credit Enhancement Provider, returned to the Credit Enhancement Provider).
(b) NOTICE. The Credit Enhancement Provider shall give prior written
notice to Moody's of the making of any loan by the Credit Enhancement Provider
other than the additional loans described in this Section 8.
SECTION 9. LIMITED OBLIGATION; WAIVER OF SETOFF; OBLIGATIONS ABSOLUTE.
(a) Notwithstanding any provision in any other section of this
Agreement to the contrary, the obligation to repay the Loan, together with
interest thereon, shall be without recourse to any Seller, the Master Servicer,
any Servicer, the Trustee, the Trust, any Certificateholder, or any affiliate,
officer, director, employee or person acting on behalf of any of them, and the
obligation to pay such amounts shall be limited solely to the application of
funds pursuant to this Agreement, in the manner and to the extent such funds
are available, except for the direct recourse indemnification obligation of
each successor Master Servicer pursuant to Section 11 hereof. The Credit
Enhancement Provider agrees that its interest in funds on deposit in the Credit
Enhancement Account is subordinated to the interests of the Investor
Certificateholders of the Series, as provided in this Agreement and in the
Series Supplement. The Credit Enhancement Provider further agrees that it
shall have no right of setoff or lender's lien against any Seller, the Master
Servicer, any Servicer, the Trustee, the Trust, or any Certificateholder.
(b) The obligations of the Seller, the Trustee, the Credit Enhancement
Provider and the Master Servicer under this Agreement shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement.
SECTION 10. INVESTMENTS AND INFORMATION.
(a) The Trustee shall from time to time during the term of this
Agreement invest all amounts on deposit in the Credit Enhancement Account as
the Master Servicer shall direct, which investments shall at all times be made
in compliance with the terms of the Pooling and Servicing Agreement and the
Series Supplement.
(b) The Master Servicer shall provide the Credit Enhancement Provider
with such background information and data with respect to the Credit
Enhancement Account as the Credit Enhancement Provider may reasonably request.
7
<PAGE> 11
(c) The Master Servicer shall obtain the consent of the Credit
Enhancement Provider prior to the investment in any Permitted Investments with
a stated maturity, the maturity of which is longer than as would cause them to
mature on or prior to the following Distribution Date as provided in Section
8(e) of the Series Supplement.
SECTION 11. SERVICING TRANSFER. In the event that a successor Master
Servicer is appointed pursuant to the Pooling and Servicing Agreement, from and
after the effective date of such transfer of servicing, the successor Master
Servicer appointed pursuant to the Pooling and Servicing Agreement, and not the
former Master Servicer, shall (a) be responsible for the performance of all
servicing functions to be performed from and after such date, (b) agree to be
bound by the terms, covenants and conditions contained herein applicable to the
Master Servicer and be subject to the duties and obligations of the Master
Servicer hereunder, and (c) agree to indemnify and hold harmless the Credit
Enhancement Provider from and against any and all claims, damages, losses,
liabilities, costs or expenses whatsoever which the Credit Enhancement Provider
may incur (or which may be claimed against the Credit Enhancement Provider) by
reason of the gross negligence or willful misconduct of the successor Master
Servicer in exercising its powers and carrying out its obligations under the
Pooling and Servicing Agreement and the Series Supplement. Such transfer of
servicing shall not affect any rights or obligations of the former Master
Servicer under this Agreement that arose prior to the effective date of the
transfer of servicing, except that such former Master Servicer shall have no
obligation to indemnify the Credit Enhancement Provider as a result of any act
or failure to act of any successor Master Servicer in the performance of the
servicing functions.
SECTION 12. REPRESENTATIONS AND WARRANTIES.
(a) The Credit Enhancement Provider hereby represents and warrants to
the Master Servicer and the Trustee that:
(i) The Credit Enhancement Provider has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, and has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
(ii) This Agreement has been duly authorized, executed and delivered
on the part of the Credit Enhancement Provider.
(iii) When executed and delivered, this Agreement will constitute a
valid and binding agreement of the Credit Enhancement Provider enforceable
against the Credit Enhancement Provider in accordance with its terms,
except (A) as the same may be limited by insolvency, bankruptcy or
reorganization or other laws relating to or affecting the enforcement of
creditors' rights and (B) as the same may be limited by
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general equity principles (whether considered in a proceeding at law or in
equity) and by the discretion of the court before which any proceeding
therefor may be brought.
(b) The Master Servicer hereby represents and warrants to the Credit
Enhancement Provider and the Trustee that:
(i) The Master Servicer has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
State of Delaware, and has the corporate power and authority to execute,
deliver and perform its obligations under the Pooling and Servicing
Agreement, the Series Supplement and this Agreement.
(ii) This Agreement, the Pooling and Servicing Agreement and the
Series Supplement have been duly authorized, executed and delivered on the
part of the Master Servicer.
(iii) When executed and delivered, each of this Agreement, the Pooling
and Servicing Agreement and the Series Supplement will constitute a valid
and binding agreement of the Master Servicer enforceable against the
Master Servicer in accordance with its terms, except (A) as the same may
be limited by insolvency, bankruptcy, receivership or reorganization or
other laws relating to or affecting the enforcement of creditors' rights
and (B) as the same may be limited by general equity principles (whether
considered in a proceeding at law or in equity) and by the discretion of
the court before which any proceeding therefor may be brought.
(c) The Trustee hereby represents and warrants to the Credit
Enhancement Provider and the Master Servicer that:
(i) The Trustee is organized, existing and in good standing under the
laws of the United States of America.
(ii) The Trustee has full power, authority and right to execute,
deliver and perform this Agreement, the Pooling and Servicing Agreement
and the Series Supplement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement, the
Pooling and Servicing Agreement and the Series Supplement.
(iii) Each of this Agreement, the Pooling and Servicing Agreement and
the Series Supplement have been duly executed and delivered by the Trustee.
SECTION 13. COVENANTS. Greenwood, as Master Servicer and on behalf of
the Holder of the Seller Certificate, covenants and agrees that, so long as
this Agreement shall remain in effect or any monetary obligation arising
hereunder or under the Series Supplement
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shall remain unpaid, it will change the terms and provisions of a Credit
Agreement with respect to a Greenwood Discover Card Account or any other
Account with respect to which it is the Servicer (including, without
limitation, the calculation of the amount, or the timing, of charge-offs) only
if it does not believe, after a good faith assessment of the expected effects
of such change, that such change will result in a reduction of the Portfolio
Yield, for any Due Period beginning prior to the termination of the Series, to
less than the Base Rate unless such change (i) is required by any Requirements
of Law or (ii) is deemed necessary by Greenwood in its sole reasonable judgment
to maintain its credit card business on a competitive basis. For purposes of
this Section 13, "Base Rate" shall mean (i) the weighted average of the
Certificate Rates for each Class of each Series then outstanding plus (ii) 1%
per annum. For purposes of the immediately preceding sentence, the Certificate
Rate for each Class that does not have a fixed Certificate Rate shall be the
actual Certificate Rate for such Class for the Interest Accrual Period
commencing in the immediately preceding Due Period. In the event that any
Additional Seller shall transfer Receivables in Additional Accounts to the
Trust, Greenwood on behalf of the Holder of the Seller Certificate shall cause
the Servicer with respect to such Additional Accounts to make the covenant set
forth above with respect to such Additional Accounts.
SECTION 14. GOVERNING LAW. THIS AGREEMENT 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.
SECTION 15. TERMINATION. This Agreement shall terminate on the date
on which the Series terminates in accordance with the provisions of the Pooling
and Servicing Agreement and the Series Supplement; provided, however, that this
Agreement may be terminated by the Master Servicer at any time, without
penalty, provided that such termination does not cause the ratings of the
Investor Certificates to be lowered or withdrawn by either of the Rating
Agencies; and provided, further, that all amounts owing to the Credit
Enhancement Provider hereunder with respect to principal and interest on the
Loan shall have been paid in full. Notwithstanding the foregoing, the Credit
Enhancement Provider shall have no rights under this Agreement, and shall not
be entitled to any payments hereunder, if and for so long as there is no Loan
outstanding hereunder and no accrued but unpaid interest.
SECTION 16. NOTICES. Unless specifically indicated otherwise herein,
all notices and other communications provided for hereunder shall be in writing
and, if to the Credit Enhancement Provider, addressed to:
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Discover Receivables Financing Corporation
12 Read's Way
New Castle, Delaware 19720
Attn: Executive Vice President and Secretary
Phone: (302) 323-7167
Fax: (302) 323-7393
or, if to the Seller or the Master Servicer, addressed to:
Greenwood Trust Company
12 Read's Way
New Castle, Delaware 19720
Attn: John J. Coane
Phone: (302) 323-7184
Fax: (302) 323-7393
or, if to the Trustee, addressed to:
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive - Suite 3000
Chicago, Illinois 60601
Attn: Gwen Carroll
Phone: (312) 228-9451
Fax: (312) 228-9459
or as to any party at such other address as shall be designated by such party
in a written notice to the other parties.
Any notice or other communication shall be sufficiently given and shall
be deemed given when delivered to the addressee in writing or when transmitted
by telecopier, receipt of which by the addressee is confirmed by telephone.
SECTION 17. BANKRUPTCY. To the extent that the Trustee, the Master
Servicer or Greenwood on behalf of the Holder of the Seller Certificate makes a
payment to the Credit Enhancement Provider or the Credit Enhancement Provider
receives any payment or proceeds with respect to the Loan, which payment or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any state or federal insolvency or bankruptcy
law then, to the extent such payment or proceeds are set aside, the amount or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by the
Credit Enhancement Provider.
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<PAGE> 15
SECTION 18. LIMITATION OF REMEDIES. The Credit Enhancement Provider
shall not have the right to cause the Loan or any portion thereof to become due
and payable prior to the due date for the Loan as set forth herein.
SECTION 19. NO PETITION.
(a) The Credit Enhancement Provider, by entering into this Agreement,
hereby covenants and agrees that it will not at any time institute, join in or
otherwise cause the institution of, against any Seller, the Master Servicer or
the Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state or similar law prior to a year and a day after the final payment of
all investor certificates issued by any trust with respect to which Greenwood
is the seller.
(b) Each of Greenwood and the Trustee, by entering into this
Agreement, hereby covenants and agrees that it will not at any time institute,
join in or otherwise cause the institution of, against the Credit Enhancement
Provider, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state or similar law prior to a year and a day after the final payment of
all investor certificates issued by any trust with respect to which Greenwood
is the seller.
SECTION 20. AMENDMENTS. This Agreement shall not be amended or
modified without the written consent of each of the parties hereto. No
amendment hereto shall become effective without prior confirmation from the
Rating Agencies that such amendment will not cause a lowering or withdrawal of
the then current ratings of the Investor Certificates of the Series. The
Master Servicer shall provide a copy of any amendment hereto to the Rating
Agencies.
SECTION 21. SUCCESSORS AND ASSIGNS; REPLACEMENT OF CREDIT ENHANCEMENT
PROVIDER.
(a) This Agreement shall be binding upon, and inure to the benefit of,
the Trustee, the Sellers, the Servicers, the Master Servicer and the Credit
Enhancement Provider and their respective successors and permitted assigns.
(b) No Seller shall assign its interests hereunder and under the
Pooling and Servicing Agreement or the Series Supplement, or any portion of
such interests, except by an assignment that transfers each such interest to
the same assignee.
(c) In the event that a successor trustee is appointed pursuant to the
provisions of the Pooling and Servicing Agreement to replace the then current
Trustee, such successor trustee, from and after its appointment, shall be the
Trustee for purposes of this Agreement and shall assume all of the rights and
obligations of the Trustee hereunder.
12
<PAGE> 16
(d) The Credit Enhancement Provider may not assign any of its rights
or obligations hereunder without the prior written consent of Greenwood on
behalf of the Holder of the Seller Certificate and without prior written
confirmation from the Rating Agencies that such assignment will not result in
the lowering or withdrawal of the rating of any Class of any Series then
outstanding.
SECTION 22. PARTICIPATION. Any successor Credit Enhancement Provider
that is not a special-purpose corporation that is an affiliate of Greenwood
may, without the consent of the Trustee, the Trust, any Seller, the Master
Servicer, any Servicer or any Certificateholder of the Series, sell
participations to one or more banks or other entities in all or a portion of
its rights under this Agreement (including all or a portion of the Loan);
provided, however, that (a) the Credit Enhancement Provider's obligations under
this Agreement shall remain unchanged, (b) the Credit Enhancement Provider
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (c) the Trustee, the Trust, the Sellers and the Master
Servicer shall continue to deal solely and directly with the Credit Enhancement
Provider in connection with the Credit Enhancement Provider's rights and
obligations under this Agreement, and (d) the Credit Enhancement Provider shall
retain the sole right to enforce the obligations of the Trustee, the Trust, the
Sellers or the Master Servicer under this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement.
13
<PAGE> 17
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed and delivered by the undersigned thereunto duly authorized as of
the day and year first above written.
DISCOVER RECEIVABLES FINANCING
CORPORATION,
as Credit Enhancement Provider
By /s/ Birendra Kumar
--------------------------------------------------
Name: Birendra Kumar
Title: Vice President and Treasurer
GREENWOOD TRUST COMPANY,
as Master Servicer, Servicer
and Seller
By /s/ John J. Coane
--------------------------------------------------
Name: John J. Coane
Title: Vice President, Director of Accounting
and Treasurer
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By /s/ G. M. Carroll
--------------------------------------------------
Name: G. M. Carroll
Title: Vice President
S-1
<PAGE> 1
EXHIBIT 4.3
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
LETTER OF REPRESENTATIONS*
[To be Completed by Issuer and Trustee]
Greenwood Trust Company on behalf of
Discover Card Master Trust I, Series 1997-1
-------------------------------------------
[Name of Issuer]
U.S. Bank National Association
------------------------------
[Name of Trustee]
August 26, 1997
---------------
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: Floating Rate Class A Credit Card Pass-Through Certificates
and Floating Rate Class B Credit Card Pass-Through
Certificates, Discover Card Master Trust I, Series 1997-1
--------------------------------------------------------------
[Insert Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trustee will act as
trustee with respect to the Securities pursuant to a trust indenture dated
October 1 , 1993 (the "Document"). Morgan Stanley & Co. Incorporated,
BancAmerica Securities, Inc., Chase Securities Inc. and First Chicago Capital
Markets, Inc. are distributing the Securities through The Depository Trust
Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Trustee make the following representations to DTC:
1. Prior to closing on the Securities on August 26, 1997, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede &
_______________________
* This Letter of Representations includes the Addendum attached hereto, which
modifies and supersedes this Letter of Representations to the extent set
forth therein.
<PAGE> 2
Co., for each stated maturity of the Securities in the face amounts set forth
on Schedule A hereto, the total of which represents 100% of the principal
amount of such Securities. If, however, the aggregate principal amount of any
maturity exceeds $200 million, one certificate will be issued with respect to
each $200 million of principal amount and an additional certificate will be
issued with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purpose (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC not less
than 15 calendar days in advance of such record date. Notices to DTC pursuant
to this Paragraph by telecopy shall be sent to DTC's Reorganization Department
at (212) 709-6896 or (212) 709-6897, and receipt of such notices shall be
confirmed by telephoning (212) 709-6870. Notices to DTC pursuant to this
Paragraph by mail or by any other means shall be sent to DTC's Reorganization
Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
2
<PAGE> 3
Manager; Call Notification Department
The Depository Trust Company
711 Steward Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trustee
to Security holders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth
in the preceding Paragraph. Notices to DTC pursuant to this Paragraph and
notices of other corporate actions by telecopy shall be sent to DTC's
Reorganization Department at (212) 709-1093 or (212) 709-1094, and receipt of
such notices shall be confirmed by telephoning (212) 709-6884. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the
CUSIP number of the Securities.
6. Trustee shall send DTC written notice with respect to the
dollar amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereunder preferably 5,
but not less than 2, business days prior to such payments date. Such notices,
which shall also contain the current pool factor, any special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Trustee contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 709-1723, or if by mail or by
any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
7. [NOTICE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS
OUT THE OTHER:] [*The interest accrual period is record date to record date.]
[The interest accrual period is payment date to payment date.]
8. Trustee must provide DTC, no later than noon (Eastern Time) on
the payment date, CUSIP numbers for each issue for which payment is being sent,
as well as the dollar amount of the payment for each issue. Notification of
payment details should be sent using automated communications.
____________________________
*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
3
<PAGE> 4
9. Interest payments and principal payments that are part of
periodic principal-and-interest payments shall be received by Cede & Co., as
nominee of DTC, or its registered assigns in same-day funds, no later than 2:30
p.m. (Eastern Time) on each payment date (in accordance with existing
arrangements between Issuer or Trustee and DTC). Absent any other arrangements
between Issuer or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Trustee and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and
receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated
with respect to each CUSIP number on the payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between Trustee and DTC,
such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Trustee.
11. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings,
or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
4
<PAGE> 5
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
15. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
5
<PAGE> 6
Nothing herein shall be deemed to require Trustee to advance funds on
behalf of Issuer.
Notes: Very truly yours,
- ------
A. If there is a Trustee (as defined in
this Letter of Representations), Trustee
as well as Issuer must sign this Letter.
If there is no Trustee, in signing this
Letter, Issuer itself undertakes to
perform all of the obligations set forth
herein.
GREENWOOD TRUST COMPANY
-----------------------------
B. Schedule B contains statements that
DTC believes accurately describe DTC, the
method of effecting book-entry transfers
of securities distributed through DTC,
and certain related matters By: /s/ John J. Coane
-------------------------
(Authorized Officer's Signature)
U.S. BANK NATIONAL ASSOCIATION
------------------------------
Received and Accepted: By: /s/ G. M. Carroll
---------------------------
(Authorized Officer's Signature)
THE DEPOSITORY TRUST COMPANY
By: /s/ Authorized Signatory
----------------------------
cc: Underwriter
Underwriter's Counsel
6
<PAGE> 7
REPRESENTATIONS FOR RULE 144A SECURITIES --
TO BE INCLUDED IN DTC LETTER OF REPRESENTATIONS
1. Issuer represents that at the time of initial registration in
the name of DTC's nominee, Cede & Co., the Securities were Legally or
Contractually Restricted Securities(1), eligible for transfer under Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act"), and
identified by a CUSIP or CINS identification number that was different from any
CUSIP or CINS number assigned to any securities of the same class that were not
Legally or Contractually Restricted Securities. Issuer shall ensure that a
CUSIP or CINS identification number is obtained for all unrestricted securities
of the same class that is different from any CUSIP or CINS identification
number assigned to a Legally or Contractually Restricted Security of such
class, and shall notify DTC promptly in the event that it is unable to do so.
Issuer represents that it has agreed to comply with all applicable information
requirements of Rule 144A.
2. Issuer represents that the Securities are [NOTE: ISSUER MUST
REPRESENT ONE OF THE FOLLOWING, AND MAY CROSS OUT THE OTHER].
[an issue of nonconvertible debt securities or nonconvertible preferred stock
which is rated in one of the top four categories by a nationally recognized
statistical rating organization ("Investment-Grade Securities").]
[*included within ____________________________ a Self-Regulatory Organization
system approved by the Securities and Exchange Commission for the reporting of
quotation and trade information of securities eligible for transfer pursuant to
Rule 144A (an "SRO Rule 144A System").]
3. If the Securities are not Investment-Grade Securities, Issuer
and Agent acknowledge that if such Securities cease to be included in an SRO
Rule 144A System during any period in which such Securities are Legally or
Contractually Restricted Securities, such Securities shall no longer be
eligible for DTC's services. Furthermore, DTC may discontinue providing its
services as securities depository with respect to the Securities at any time by
giving
____________________________
1. A "Legally Restricted Security" is a security that is a restricted security
that is a restricted security, as defined in Rule 144(a)(3). A "Contractually
Restricted Security" is a security that upon issuance and continually
thereafter can only be sold pursuant to Regulation S under the Securities Act,
Rule 144A, Rule 144, or in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4 of the Securities Act
and not involving any public offering; provided, however, that once the
security is sold pursuant to the provisions of Rule 144, including Rule 144(k),
it will thereby cease to be a "Contractually Restricted Security." For
purposes of this definition, in order for a depositary receipt to be considered
a "Legally or Contractually Restricted Security," the underlying security must
also be a "Legally or Contractually Restricted Security."
____________________________
*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 8
reasonable notice to Issuer or Agent. Under any of the aforementioned
circumstances, at DTC's request, Issuer and Agent shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any Participant having Securities
credited to its DTC accounts.*
4. Issuer and Agent acknowledge that so long as Cede & Co. is a
record owner of the Securities, Cede & Co. shall be entitled to all applicable
voting rights and to receive the full amount of all distributions payable with
respect thereto. Issuer and Agent acknowledge that DTC shall treat any DTC
Participant ("Participant") having Securities credited to its DTC accounts as
entitled to the full benefits of ownership of such Securities. Without
limiting the generality of the preceding sentence, Issuer and Agent acknowledge
that DTC shall treat any Participant having Securities credited to its DTC
accounts as entitled to receive distributions (and voting rights, if any) in
respect of Securities, and to receive from DTC certificates evidencing
Securities. Issuer and Agent recognize that DTC does not in any way undertake
to, and shall not have any responsibility to, monitor or ascertain the
compliance of any transactions in the Securities with any of the provisions:
(a) of Rule 144A; (b) of other exemptions from registration under the
Securities Act or of any other state or federal securities laws; or (c) of the
offering documents.
______________________
* This Paragraph 3 is superseded in its entirety by Paragraph 15 of the Letter
of Representations and the Addendum thereto.
2
<PAGE> 9
REPRESENTATIONS FOR DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC") --
to be included in DTC Letter of Representations
---------------------------------------------------------------
The Security certificate(s) shall remain in Agent's custody as a "Balance
Certificate" subject to the provisions of the Balance Certificate Agreement
between Agent and DTC currently in effect.
On each day on which Agent is open for business and on which it receives
an instruction originated by a Participant through DTC's Deposit/Withdrawal at
Custodian ("DWAC") system to increase the Participant's account by a specified
number of shares, units, or obligations (a "Deposit Instruction"), Agent shall,
before 6:30 p.m. (Eastern Time) that day, either approve or cancel the Deposit
Instruction through the DWAC system.
On each day on which Agent is open for business and on which it receives
an instruction originated by a Participant through the DWAC system to decrease
the Participant's account by a specified number of shares, units, or
obligations (a "Withdrawal Instruction"), Agent shall, before 6:30 p.m.
(Eastern Time) that day, either approve or cancel the Withdrawal Instruction
through the DWAC system.
Agent agrees that its approval of a Deposit or Withdrawal Instruction
shall be deemed to be the receipt by DTC of a new, reissued or reregistered
certificated security on registration of transfer to the name of Cede & Co. for
the quantity of Securities evidenced by the Balance Certificate after the
Deposit or Withdrawal Instruction is effected.
<PAGE> 10
A D D E N D U M
---------------
to
Letter of Representations dated August 26, 1997
Discover Card Master Trust I, Series 1997-1
General: For purposes of this Letter of Representations:
"Securities" shall mean the $750,000,000 aggregate principal
amount of Floating Rate Class A Credit Card Pass-Through
Certificates and the $39,474,000 aggregate principal amount of
Floating Rate Class B Credit Card Pass-Through Certificates
issued by Discover Card Master Trust I, Series 1997-1 and
"Security holders" shall mean the holders of such certificates;
"Issuer" shall mean Greenwood Trust Company ("Greenwood")
on behalf of Discover Card Master Trust I, Series 1997-1; and
"Document" shall mean the Pooling and Servicing Agreement
dated as of October 1, 1993, as amended and as supplemented by
the Series Supplement dated as of August 26, 1997, each by and
between Greenwood as Master Servicer, Servicer and Seller and the
Trustee.
Paragraph 1: The following is hereby added after the third sentence of
Paragraph 1:
"Each certificate shall remain in the Trustee's custody
subject to the provisions of the Fast Balance Certificate
Agreement currently in effect between the Trustee and DTC."
Paragraph 2: The first sentence of Paragraph 2 is hereby deleted in its
entirety and replaced with the following:
"The Document provides for the solicitation of consents from
and voting by holders of the Securities under certain
circumstances. The Issuer or Trustee shall establish a record
date for such purposes (with no provision for revocation of
consents or votes by subsequent holders) and shall, to the extent
possible, send notice of such record date to DTC not less than 15
calendar days in advance of such record date."
Paragraph 3: The first sentence in Paragraph 3 is hereby deleted in its
entirety and replaced with the following:
"There will be no case in which a partial redemption of the
Securities will occur. In the event of a full redemption, Issuer
or Trustee
<PAGE> 11
shall send a notice to DTC not less than 10 days nor more than 60
days prior to the redemption date (except that failure to provide
timely notice shall not be a breach under this letter if Issuer
shall become obligated less than 10 days prior to such redemption
date under the Document to redeem the Securities) specifying: (a)
the amount of the redemption or refunding; (b) in the case of a
refunding, the maturity date(s) established under the refunding;
and (c) the date such notice is to be mailed to Security holders
or published (the "Publication Date")."
Paragraph 4: The first sentence of Paragraph 4 is hereby deleted in its
entirety and replaced with the following:
"In the event of an invitation to tender the Securities,
notice by Issuer or Trustee to Security holders specifying the
terms of the tender and the date such notice is to be mailed to
Security holders or published (the "Publication Date") shall be
sent to DTC in the manner set forth in the preceding Paragraph by
a secure means (e.g., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure
that such notice is in DTC's possession no later than 8:00 A.M.
on the Publication Date. (The party sending such notice shall
have a method to verify subsequently the use of such means and
the timeliness of such notice.)"
Paragraph 5: The following is hereby added after the first sentence of
Paragraph 5:
"Issuer or Trustee will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which
includes a manifest or list of each CUSIP submitted in that
transmission."
Paragraph 12: The following is hereby inserted after the word "Trustee" in
line 1 of Paragraph 12:
", and if requested, shall confirm such direction in
writing,"
Paragraph 13: Paragraph 13 is hereby deleted in its entirety.
Paragraph 15: Paragraph 15 is hereby deleted in its entirety and replaced with
the following:
"DTC may discontinue its services as securities
depository with respect to the Securities at any time by giving
reasonable notice (60 days) to Trustee (at which time DTC will
confirm with Trustee the aggregate principal amount of
Securities outstanding); provided, however, that if DTC is
required to discontinue its services as securities depository
with respect to the Securities pursuant to any governmental,
judicial or
2
<PAGE> 12
regulatory order or decree, and such discontinuation is required
in less than 60 days from the date of such order or decree, then
DTC may discontinue such services by giving notice to the Trustee
as soon as reasonably possible, but in no event more than three
business days after DTC receives notice of such order or decree.
Under such circumstances, at DTC's request Trustee shall
cooperate with DTC by taking appropriate action to make available
one or more separate definitive certificates evidencing
Securities to any DTC Participant having Securities credited to
its DTC accounts."
Paragraph 18: This Letter of Representations is further amended by inserting
this Paragraph 18:
"Issuer and Agent recognize that DTC does not in any way
undertake to, and shall not have any responsibility to, monitor
or ascertain whether a transfer of Securities could give rise to
a transaction prohibited or not otherwise permissible under the
Employee Retirement Income Security Act of 1974 or under Section
4975 of the Internal Revenue Code of 1986. Issuer and Agent
acknowledge that: a) so long as Cede & Co. is the sole record
owner of the Securities, it shall be entitled to all voting
rights in respect thereof and to receive the full amount of all
principal, premium, if any, and interest payable with respect
thereto; and b) DTC shall treat any DTC Participant having
Securities credited to its DTC accounts as entitled to the full
benefits of ownership of such Securities even if the crediting of
such Securities to the DTC accounts of such Participant results
from transfers or failures to transfer in violation of such laws.
(The treatment by DTC of the effects of the crediting by it of
Securities to the accounts of DTC Participants shall not affect
the rights of Issuer or purchasers, sellers, or holders of
Securities against any DTC Participant.)"
3
<PAGE> 13
SCHEDULE A
(Describe Issue)
FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
AND FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES,
DISCOVER CARD MASTER TRUST I, SERIES 1997-1
<TABLE>
<CAPTION>
Principal Amount Maturity Date* Interest Rate
---------------- -------------- -------------
CLASS A
CERTIFICATES
CUSIP Number
- -------------------
25466KBD0
Certificate Number:
- -------------------
<S> <C> <C> <C>
1 $200,000,000 February 16, 2005 Floating
2 $200,000,000 February 16, 2005 Floating
3 $200,000,000 February 16, 2005 Floating
4 $150,000,000 February 16, 2005 Floating
CLASS B
CERTIFICATES
CUSIP Number
- -------------------
25466KBE8
Certificate Number:
- -------------------
1 $39,474,000 February 16, 2005 Floating
</TABLE>
* Last Possible Distribution Date
4
