<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 1997
Discover Card Master Trust I
--------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-23108 51-0020270
-------- ------- ----------
(State of (Commission (IRS Employer
Organization) File Number) Identification No.)
c/o Greenwood Trust Company
12 Read's Way
New Castle, Delaware
- ------------------------------------------------
(Address of principal executive offices) 19720
(Zip Code)
Registrant's Telephone Number, including area code: (302) 323-7184
Former name or former address, if changed since last report: Not Applicable
<PAGE> 2
Item 5. Other Events
Series 1997-2. On October 15, 1997, $500,000,000 aggregate
principal amount of Series 1997-2 6.792% Class A Credit Card Pass- Through
Certificates and $26,316,000 aggregate principal amount of Series 1997-2
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 October 15, 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
Exhibit No. Description
Exhibit 1.1 Underwriting Agreement between Greenwood Trust Company and
Morgan Stanley & Co. Incorporated, dated August 19, 1997
(incorporated by reference to Exhibit 1.1 of Discover Card
Master Trust I's Current Report on Form 8-K dated August 26,
1997).
Exhibit 1.2 Terms Agreement between Greenwood Trust Company and Morgan
Stanley & Co. Incorporated, dated October 9, 1997.
Exhibit 4.1 Series Supplement with respect to Series 1997-2 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 October 15, 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 October 15, 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
1997-2, dated as of October 15, 1997.
Page 2
<PAGE> 3
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: October 15, 1997 By: /s/ John J. Coane
----------------------------------
John J. Coane
Vice President, Director of Accounting
and Treasurer
Page 3
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INDEX TO EXHIBITS
<TABLE>
Exhibit Description Page
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Exhibit 1.1 Underwriting Agreement between Greenwood Trust Company and [ ]
Morgan Stanley & Co. Incorporated, dated August 19,
1997 (incorporated by reference to Exhibit 1.1 of Discover
Card Master Trust I's Current Report on Form 8-K dated
August 26, 1997).
Exhibit 1.2 Terms Agreement between Greenwood Trust Company and Morgan [ ]
Stanley & Co. Incorporated, dated October 9, 1997.
Exhibit 4.1 Series Supplement with respect to Series 1997-2 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 October 15, 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 October 15, 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 1997-2, dated as of October 15, 1997.
</TABLE>
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EXHIBIT 1.2
DISCOVER CARD MASTER TRUST I
CREDIT CARD PASS-THROUGH CERTIFICATES
TERMS AGREEMENT
Dated: October 9, 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 October 9, 1997
Title: Discover Card Master Trust I, Series 1997-2, Credit Card Pass-Through
Certificates, Class A and Class B.
Initial Principal Amount of Certificates: $526,316,000
Series and Class Designation Schedule: Discover Card Master Trust I, Series
1997-2 $500,000,000 6.792% Class A Credit Card Pass-Through Certificates
Discover Card Master Trust I, Series 1997-2 $26,316,000 Floating Rate Class B
Credit Card Pass-Through Certificates
Series Cut-Off Date: October 1, 1997
Certificate Rating: Moody's Investors Standard & Poor's
Service, Inc. Ratings Services
------------------ -----------------
Class A Aaa AAA
Class B A2 A
<PAGE> 2
Aggregate outstanding balance of Principal Receivables as of September 1, 1997:
$17,998,317,290.42.
Date of Series Supplement: October 15, 1997.
Certificate Rate: Class A: 6.792% per annum; and Class B: LIBOR plus 0.40% per
annum
Terms of Sale: The purchase price for the Certificates to the Underwriters
will be 99.725% of the aggregate principal amount of the Class A Certificates
and 99.600% of the aggregate principal amount of the Class B Certificates as of
October 15, 1997.
The Underwriters shall also pay certain expenses in connection with the
issuance of the Certificates in accordance with, and as set forth in, a certain
side-letter agreement between Greenwood and the Underwriters.
Time of Delivery: 9:00 A.M., Chicago, Illinois Time, on October 15, 1997, or at
such other time as may be agreed upon in writing.
<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 1997-2 Certificates. This Terms Agreement may
be amended only by written agreement of the parties hereto.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Gail McDonnell
----------------------------
Accepted:
GREENWOOD TRUST COMPANY
By: /s/ John J. Coane
--------------------------------
<PAGE> 1
EXHIBIT 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 October 15, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1993
$500,000,000 Class A Certificates
$26,316,000 Class B Certificates
DISCOVER CARD MASTER TRUST I
SERIES 1997-2 CERTIFICATES
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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SERIES TERM SHEET......................................................................................1
ANNEX..................................................................................................1
SECTION 1. Definitions.................................................................................1
SECTION 2. Subordination..............................................................................28
SECTION 3. Representations and Warranties of the Sellers..............................................28
SECTION 4. Representations and Warranties of Greenwood as Master Servicer and Servicer................29
SECTION 5. Representations and Warranties of Other Servicers..........................................29
SECTION 6. Representations and Warranties of the Trustee..............................................30
SECTION 7. Authentication of Certificates.............................................................30
SECTION 8. Establishment and Administration of Investor Accounts and the Credit
Enhancement Account........................................................................30
SECTION 9. Allocations of Collections.................................................................36
SECTION 10. Payments..................................................................................47
SECTION 11. Credit Enhancement........................................................................55
SECTION 12. Alternative Credit Support Election.......................................................57
SECTION 13. Calculation of Investor Losses............................................................58
SECTION 14. Servicing Compensation....................................................................58
SECTION 15. Class Interest Rate Caps..................................................................59
SECTION 16. Class Interest Rate Swaps.................................................................60
SECTION 17. Class Currency Swaps......................................................................61
SECTION 18. Investor Certificateholders' Monthly Statement............................................63
SECTION 19. Master Servicer's Monthly Certificate.....................................................63
SECTION 20. Notices...................................................................................63
SECTION 21. Additional Amortization Events............................................................63
SECTION 22. Early Accumulation Events.................................................................65
SECTION 23. Purchase of Investor Certificates and Series Termination..................................66
SECTION 24. Variable Accumulation Period..............................................................67
SECTION 25. Optional Accumulation Period Commencement.................................................66
SECTION 26. Series Yield Factor
SECTION 27. Ratification of Pooling and Servicing Agreement...........................................68
SECTION 28. Counterparts..............................................................................68
SECTION 29. Governing Law.............................................................................68
</TABLE>
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EXHIBITS
<TABLE>
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EXHIBIT A: Form of Investors Certificates
EXHIBIT B: Form of Certificateholders' Monthly Statement
EXHIBIT C: Form of Master Servicer's Monthly Certificate
EXHIBIT D: Prepayment Calculation Table
</TABLE>
ii
<PAGE> 4
DISCOVER CARD MASTER TRUST I
SERIES 1997-2 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 1997-2 CERTIFICATES.
SERIES TERM SHEET
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Date of Series Term Sheet October 15, 1997.
Group One.
Series Initial Investor Interest $526,316,000.
Class Initial Investor Interest of each Class Class A - $500,000,000.
of Investor Certificates Class B - $26,316,000.
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 October 2007.
Class B Expected Final Payment Date The Distribution Date in November 2007
</TABLE>
1
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<TABLE>
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Type of Structure Class A - Amortizing.
Class B - Bullet Maturity.
Certificate Rates Class A - 6.792 %, per annum, calculated on
the basis of a 360-day year of twelve
30-day months (or, in the case of accrual
of interest to be allocated on the November
1997 Distribution Date, on the basis of the
actual number of days elapsed from and
including the Series Closing Date to but
excluding November 15, 1997 (assuming
October has 30 days) and a 360-day year).
Class B - LIBOR plus 0.40%, per annum,
calculated on the basis of the actual
number of days elapsed and a 360-day year.
Monthly Amortization Rate With respect to any Distribution Date, the
rate that corresponds to the PSA Index Rate
set forth in the Prepayment Calculation
Table for such Distribution Date, as
determined on the applicable Prepayment
Determination Date.
Prepayment Calculation Table The prepayment calculation table set forth
in Exhibit D.
Prepayment Determination Date For any Distribution Date commencing with
the Distribution Date in April 2000, the
first Business Day of the calendar month in
which such Distribution Date occurs. The
Trustee will notify the Master Servicer of
the PSA Index Rate for each such
Distribution Date promptly after its
determination thereof.
Foreign Currency Certificate Rates Class A - Not applicable.
Class B - Not applicable.
</TABLE>
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<TABLE>
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Class Cap Rate Not applicable.
Class Maximum Rate Not applicable.
Class Interest Rate Swap Class A - The interest rate swap agreement,
dated the Series Closing Date, between the
Trust and the Swap Counterparty.
Class B - Not applicable.
Interest Rate Swap Counterparty NOVUS Services, Inc.
Swap Rate The rate payable by the Trust pursuant to
the Class Interest Rate Swap, calculated on
the basis of the actual number of days
elapsed and a 360-day year.
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>
3
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<TABLE>
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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 October 1, 1997.
Series Closing Date October 15, 1997.
</TABLE>
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<TABLE>
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Date from which Interest for First Interest
Payment Date Shall Accrue Series Closing Date.
Distribution Dates November 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 November 1997.
Statement Dates Each Distribution Date, commencing in
November 1997.
Principal Payment Date Class A - Unless an Amortization Event has
previously occurred, the 15th day of each
month (or, if such day is not a Business
Day, the next succeeding Business Day),
commencing in April 2000.
Class B -The earlier to occur of (i) the
Fully Funded Date and (ii) the Distribution
Date following the Distribution Date on
which the Class A Invested Amount is
reduced to zero.
Interest Calculation Dates Not applicable.
Accumulation Commencement Date The first day of the Due Period specified
in the Master Servicer's notice to the
Trustee of its election to commence the
Accumulation Period; provided, however,
that such Due Period shall not be earlier
than the October 2006 Due Period.
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Accumulation Period The period from and including the
Accumulation Commencement Date to but
excluding the earliest to occur of (w) the
payment in full of the Series Invested
Amount, (x) the Amortization Commencement
Date, (y) the Early Accumulation
Commencement Date and (z) the Series
Termination Date.
Controlled Accumulation Amount With respect to any Distribution Date
related to the Accumulation Period, an
amount equal to the greater of (i) the
amount specified by the Master Servicer as
the Controlled Accumulation Amount for such
Distribution Date and (ii) the Controlled
Liquidation Amount for such Distribution
Date; provided, however, that the
Controlled Accumulation Amount shall not be
less than zero and shall not exceed an
amount equal to the Series Investor
Interest.
Principal Commencement Date The first day of the Due Period related to
the April 2000 Distribution Date.
Revolving Period From the Series Cut-Off Date to, but not
including, the earlier to occur of (i) the
Principal Commencement Date, (ii) the
Amortization Commencement Date and (iii)
the Early Accumulation Commencement Date.
Controlled Liquidation Period Unless an Amortization Event or an Early
Accumulation Event shall have occurred
prior thereto, the period commencing on the
Principal Commencement Date and ending upon
the earliest to occur of (i) the payment in
full of the Series Invested Amount, (ii)
the Amortization Commencement Date, (iii)
the Early Accumulation Commencement Date,
(iv) the Accumulation Commencement Date and
(v) the Series Termination Date.
</TABLE>
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<TABLE>
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Early Accumulation Period The period from and including the Early
Accumulation Commencement Date to and
including the earliest of (i) the
Amortization Commencement Date, (ii) the
date of the payment in full of the Series
Invested Amount and (iii) the Series
Termination Date.
Liquidation Amount With respect to any Distribution Date, (i)
commencing with the April 2000 Distribution
Date up to but excluding the earlier to
occur of (a) the first Distribution Date
following the Distribution Date on which
the Class A Invested Amount is reduced to
5% or less of the Class A Initial Investor
Interest and (b) the Class A Expected Final
Payment Date, an amount equal to the
product of (x) the Monthly Amortization
Rate for such Distribution Date and (y) the
Class A Invested Amount for such
Distribution Date; provided, however, that
on the Fully Funded Date, if any, the
Liquidation Amount shall be an amount equal
to the sum of (a) the product of clause (x)
and clause (y) above and (b) the Class B
Invested Amount, (ii) on the earlier to
occur of (a) the first Distribution Date
following the Distribution Date on which
the Class A Invested Amount is reduced to
5% or less of the Class A Initial Investor
Interest and (b) the Class A Expected Final
Payment Date, the Class A Invested Amount
and (iii) on each Distribution Date
following the earlier to occur of (a) the
first Distribution Date following the
Distribution Date on which the Class A
Invested Amount is reduced to 5% or less of
the Class A Initial Investor Interest and
(b) Class A Expected Final Payment Date,
the Class B Invested Amount.
Type of Credit Enhancement Cash collateral account.
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<TABLE>
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Stated Shared Credit Enhancement Amount There shall be no Shared Credit Enhancement.
Stated Class B Credit Enhancement Amount $21,052,640.
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)
$5,263,160 and (ii) (x) if a Supplemental
Credit Enhancement Event has not occurred,
an amount equal to the lesser of (a) 3.5%
of the Series Initial Investor Interest and
(b) 5.0% of the Series Investor Interest as
of the last day of the related Due Period;
provided, however, that such amount shall
not be less than 4.0% of the Series
Investor Interest as of the last day of the
related Due Period; or (y) if a
Supplemental Credit Enhancement Event has
occurred, an amount equal to the lesser of
(a) 4.5% of the Series Initial Investor
Interest and (b) 6.0% of the Series
Investor Interest as of the last day of the
related Due Period or (b) subsequent to the
making of an Effective Alternative Credit
Support Election, the greater of (i)
$5,263,160 and (ii) an amount equal to 9.0%
of the Series Investor Interest as of the
last day of the related Due Period;
provided, however, that if an Early
Accumulation Event or an Amortization Event
with respect to the Series established
hereby occurs, the Maximum Class B Credit
Enhancement Amount for each Distribution
Date thereafter shall equal the Maximum
Class B Credit Enhancement Amount for the
Distribution Date immediately preceding the
occurrence of the Early Accumulation Event
</TABLE>
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or the Amortization Event; and provided,
further, that if a Credit Enhancement
Drawing has been made, until such time as
the Available Class B Credit Enhancement
Amount has been reinstated in an amount at
least equal to the amount of such Credit
Enhancement Drawing, the Maximum Class B
Credit Enhancement Amount shall be the
Maximum Class B Credit Enhancement Amount
as of the date of such Credit Enhancement
Drawing.
Total Maximum Credit Enhancement Amount On any Distribution Date, the Maximum Class
B Credit Enhancement Amount for such
Distribution Date.
Additional Credit Support Amount The lesser of (x) (i) $26,315,800 prior to
the occurrence of a Supplemental Credit
Enhancement Event or (ii) $23,684,220
following the occurrence of a Supplemental
Credit Enhancement Event and (y) the
difference between the Maximum Class B
Credit Enhancement Amount (after giving
effect to an Alternative Credit Support
Election) and the Available Class B Credit
Enhancement Amount (immediately before
giving effect to the Alternative Credit
Support Election).
Supplemental Credit Enhancement Amount The lesser of (x) (i) $5,263,160 prior to
the occurrence of an Alternative Credit
Support Election or (ii) zero following the
occurrence of an Alternative Credit Support
Election and (y) the difference between the
Maximum Class B Credit Enhancement Amount
(after giving effect to the occurrence of a
Supplemental Credit Enhancement Event) and
the Available Class B Credit Enhancement
Amount (immediately before giving effect to
the occurrence of a Supplemental Credit
Enhancement Event).
</TABLE>
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<TABLE>
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Initial Subordinated Amount $47,368,440.
Additional Subordinated Amount $26,315,800.
Supplemental Subordinated Amount Zero.
Variable Accumulation Period Not applicable.
Series Buffer Amount Zero.
Group Buffer Amount Zero.
Investor Servicing Fee Percentage 2.0% per annum calculated on the basis of a
360-day year of twelve 30-day months.
Supplemental Servicing Fee Percentage Zero.
Amount of Additional Funds Initially, zero.
Eligible for Reallocations to and from Other
Series in Group Yes.
Series Termination Date The first Business Day following the
Distribution Date in April 2010.
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
</TABLE>
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<TABLE>
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Account are held
as of such date of determination and (ii)
the lesser of (x) 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 and (y) the yield (expressed
as a Money Market Yield) available in the
market on Permitted Investments as of such
date of determination less, in the case of
(y), 1.00% per annum.
Estimated Yield On any date of determination, the lesser of
(x) the Portfolio Yield for the immediately
preceding Due Period (or, with respect to
any date of determination occurring on the
last day of a Due Period, for such Due
Period) less 2.00% and (y) the annualized
percentage equivalent of a fraction, the
numerator of which is the amount of Finance
Charge Receivables in the Trust and the
denominator of which is the amount of
Principal Receivables in the Trust, in each
case calculated as of the first day of the
following Due Period.
Classes, if any, subject to Regulation S
restrictions Not applicable.
Classes, if any, subject to ERISA restrictions Class B.
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,
</TABLE>
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<TABLE>
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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.
Representative of the Managers Not applicable.
Listing Agent Not applicable.
</TABLE>
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<TABLE>
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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>
13
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IN WITNESS WHEREOF, the Sellers, the Master Servicer, the Servicers and
the Trustee have caused this Series Supplement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.
GREENWOOD TRUST COMPANY,
as Seller, Master Servicer and Servicer
/s/ John J. Coane
----------------------------------------
John J. Coane
Vice President, Director of Accounting
and Treasurer
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
/s/ Martha Sanders
----------------------------------------
Martha Sanders
Vice President
<PAGE> 18
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 24 or 25.
"Accumulation Commencement Date," if applicable, shall have the meaning
set forth in the Series Term Sheet.
"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 date on which an
Amortization Event is deemed to occur pursuant to Section 21 hereof.
"Amortization Event" shall mean any event specified in clause (c), (d),
(e), (f), (h) or (j) of Section 9.01 of the Pooling and Servicing Agreement or
in Section 21 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.
<PAGE> 19
"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 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; provided, however, that from
and after the Fully Funded Date, if any, the Available Class B Credit
Enhancement Amount shall equal zero.
"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; provided, however, that from and after the
Fully Funded Date, if any, the Available Subordinated Amount will equal zero.
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
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<PAGE> 20
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 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 15th day of the month in which current Interest Payment Date
occurs, 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.
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<PAGE> 21
"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.
"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.
4
<PAGE> 22
"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.
"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
5
<PAGE> 23
Accumulation Period or the Early 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 or the Early 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 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
6
<PAGE> 24
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 Interest Rate Swap," if applicable, shall mean, with respect to a
Class or Subclass, the interest rate swap agreement or other interest rate
protection agreement with respect to any Class or Subclass, dated on the Series
Closing Date, between the Trust and the Swap Counterparty and any replacement
or successor interest rate swap agreement or interest rate protection
agreement.
"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
7
<PAGE> 25
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 (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 or the Early 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.
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<PAGE> 26
"Class Monthly Deficiency Amount" with respect to any Class on any
Distribution Date, shall have the meaning set forth in Section 10. The Class
Monthly Deficiency Amount for each Class initially shall be zero.
"Class Monthly Servicing Fee" with respect to any Class for any
Distribution Date, shall mean an amount equal to the product of (x) a fraction
the numerator of which shall be the Class Investor Interest and the denominator
of which shall be the Series Investor Interest, in each case on the first day
of the related Due Period and (y) the amount of the Investor Servicing Fee for
the related Due Period.
"Class Percentage" shall mean, with respect to any Class with respect to
any Distribution Date or any Trust Distribution Date, as applicable:
(a) when used with respect to the Charged-Off Amount, the
percentage equivalent of a fraction the numerator of which shall
be the amount of the Class Investor Interest and the denominator
of which shall be the greater of (i) the amount of Principal
Receivables in the 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;
provided, however, that from and after the Fully Funded Date, if
any, the Class Percentage with respect to Principal Collections
will equal zero; or
(d) when used with respect to Finance Charge Collections
during the Revolving Period and the Accumulation Period or the
Controlled Liquidation Period, as applicable, and provided that an
Effective Alternative Credit Support
9
<PAGE> 27
Election has been made, during the Early Accumulation Period or
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; provided, however, that from and
after the Fully Funded Date, if any, the Class Percentage with
respect to Finance Charge Collections will equal zero; or
(e) when used with respect to Finance Charge Collections
during the Early Accumulation Period or 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 Early Accumulation Event or 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; provided, however, that from and
after the Fully Funded Date, if any, the Class Percentage with
respect to Finance Charge Collections will equal zero.
"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
10
<PAGE> 28
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.
"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 the Controlled Liquidation
11
<PAGE> 29
Period, as applicable, and, provided that an Effective Alternative Credit
Support Election has been made, during the Early Accumulation Period or 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 Early Accumulation Period or
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 Early Accumulation
Event or 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" shall have the meaning set forth in the
Series Term Sheet.
"Controlled Liquidation Amount," if applicable, with respect to any
Distribution Date related to the Controlled Liquidation Period, the
Accumulation Period or the Early Accumulation 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 the Series
Invested Amount.
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<PAGE> 30
"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.
"Currency Swap Exchange Rate," if applicable, shall mean the fixed Foreign
Currency-to-Dollar exchange rate specified in the Class Currency Swap.
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<PAGE> 31
"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 relating to the Due Period commencing on the Principal
Commencement Date, zero, and with respect to any subsequent Distribution Date,
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.
"Early Accumulation Commencement Date," if applicable, shall mean the date
on which an Early Accumulation Event is deemed to occur.
"Early Accumulation Event," if applicable, shall mean any event specified
in Section 22 hereof.
"Early Accumulation Period," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"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 Principal Distribution Amount," if applicable, shall mean, with
respect to any date of determination during the Early Accumulation Period, an
amount equal to the Series Principal Collections for the prior Distribution
Date; provided, however, that such amount shall not exceed the Series Investor
Interest as of such prior Distribution Date.
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<PAGE> 32
"Estimated Yield," if applicable, shall have the meaning specified in the
Series Term Sheet.
"Excess Income" on any Distribution Date shall mean an amount equal to the
excess, if any, of (a) interest and other income (net of investment expenses)
on such Distribution Date with respect to the funds on deposit in the Series
Principal Funding Account during the related Interest Period over (b) the
amount on deposit in the Series Principal Funding Account in respect of
Certificate Principal during such Interest Period multiplied by a fraction, the
numerator of which is the Certificate Rate or the Class Weighted Average
Certificate Rate, as applicable, for the Class for whose benefit the amounts on
deposit in the Series Principal Funding Account are held during such Interest
Period and the denominator of which is (x) if the relevant Certificate Rate is
to be calculated on the basis of the actual number of days elapsed and a
360-day year, 360 divided by the actual number of days from and including the
immediately preceding Distribution Date to but excluding the current
Distribution Date or (y) if the relevant Certificate Rate is to be calculated
on the basis of a 360-day year of twelve 30-day months, twelve.
"Fixed Principal Allocation Event" shall mean the earliest of (a) the
beginning of the Due Period immediately following the Due Period related to the
first Distribution Date during the Controlled Liquidation Period or the
Accumulation Period, as applicable, with respect to the Series established
hereby on which the Series Available Principal Amount is less than zero; (b)
the date on which an Early Accumulation Event or 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,
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<PAGE> 33
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.
"Fully Funded Date," if applicable, shall mean the first Distribution Date
on which the amount of funds on deposit in the Series Principal Funding Account
(after giving effect to all deposits made on such date pursuant to Section 9)
equals the Series Invested Amount for such Distribution Date (prior to any
payments of principal on such date pursuant to Section 10); provided, however,
that the Fully Funded Date shall only occur during the Early Accumulation
Period.
"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)(35)).
"Group Buffer Amount," if applicable, shall have the meaning set forth in
the Series Term Sheet.
"Group Excess Spread" shall mean, for any Distribution Date, the sum of
the Series Excess Spreads for each Series (including the Series established
hereby) that is a member of the same Group as the Series established hereby, in
each case for such Distribution Date.
"Group Finance Charge Collections Reallocation Account" shall have the
meaning specified in Section 8.
"Group Principal Allocation Event" shall mean the first Distribution Date,
if any, on which (i) the sum of the amount of Series Principal Collections less
the amount of Series Yield Collections for each Series that is a member of the
same Group as the Series established hereby (including the Series established
hereby) that is not in its Early Accumulation Period or 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
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<PAGE> 34
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 earlier to occur of (i) the first Distribution Date of the
Early Accumulation Period or (ii) 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.
"Interest Rate Swap Counterparty," if applicable, shall have the meaning
set forth in the Series Term Sheet.
"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 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)
17
<PAGE> 35
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:
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<PAGE> 36
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the related Interest Accrual Period.
"Monthly Amortization Rate," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"Net Swap Payment," if applicable, shall mean, with respect to any Class
that is subject to a Class Interest Rate Swap, on any Distribution Date, the
positive difference, if any, between (i) the amount owed by the Trust to the
Interest Rate Swap Counterparty under the Class Interest Rate Swap on such
Distribution Date and (ii) the amount owed by the Interest Rate Swap
Counterparty to the Trust under the Class Interest Rate Swap on such
Distribution Date.
"Net Swap Receipt," if applicable, shall mean, with respect to any Class
that is subject to a Class Interest Rate Swap, on any Distribution Date, the
positive difference, if any, between (i) the amount owed by the Interest Rate
Swap Counterparty to the Trust under the Class Interest Rate Swap on such
Distribution Date and (ii) the amount owed by the Trust to the Interest Rate
Swap Counterparty under the Class Interest Rate Swap on such Distribution Date.
"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.
"Prepayment Calculation Table," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"Prepayment Determination Date," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"Principal Commencement Date" shall mean the date designated as such in
the Series Term Sheet.
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<PAGE> 37
"Principal Distribution Amount" shall mean, with respect to any
Distribution Date occurring in (i) the Accumulation Period, the Controlled
Accumulation Amount, (ii) the Controlled Liquidation Period, the Controlled
Liquidation Amount, (iii) the Early Accumulation Period, the Series Investor
Interest, or (iv) in the Amortization Period, the Series Investor Interest.
"Principal Distribution Amount Shortfall" with respect to any Distribution
Date in the Accumulation Period, the Controlled Liquidation Period or the
Amortization Period, as applicable, shall have the meaning set forth in Section
9.
"Principal Payment Date" shall mean, if applicable, each date designated
as such in the Series Term Sheet.
"Qualified Credit Enhancement Provider" shall mean, (i) if the Credit
Enhancement is not Funded Credit Enhancement, an institution that meets the
Qualified Credit Enhancement Provider Rating Requirements established by each
Rating Agency, which requirements are set forth in the Series Term Sheet if the
Initial Credit Enhancement is not Funded Credit Enhancement, or (ii) if the
Initial Credit Enhancement is Funded Credit Enhancement, an institution that
meets the Qualified Credit Enhancement Provider Rating Requirements established
by each Rating Agency, which requirements will be established by the Rating
Agencies at the time, if any, that the Master Servicer elects to replace the
Initial Credit Enhancement with Credit Enhancement that is not Funded Credit
Enhancement (or, in either case, such lesser requirements as the applicable
Rating Agency shall allow); provided, however, that in the event the Master
Servicer elects to obtain Credit Enhancement that is not Funded Credit
Enhancement and is unable after the exercise of its best efforts to obtain from
a Qualified Credit Enhancement Provider as so defined such Credit Enhancement
with respect to which the representations set forth in Section 11(a) shall be
true, the term "Qualified Credit Enhancement Provider" shall mean a Person who
satisfies such requirements except that its long-term unsecured debt rating by
any nationally recognized rating agency may be lower than that set forth in
such requirements, but shall not be lower than the highest credit rating of any
Person who otherwise satisfies said requirements and from whom the Master
Servicer is able to obtain such a Credit Enhancement.
"Qualified Substitute Cap Arrangement," if any, shall have the meaning
specified in Section 15.
"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
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<PAGE> 38
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.
"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.
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<PAGE> 39
"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 provided, however, that with respect to any day on which
the Controlled Accumulation Amount or the Controlled
Liquidation Amount, as applicable, for the related
Distribution Date can not be determined, the aggregate amount
to be deposited for such Due Period shall be the Controlled
Accumulation Amount or the Controlled Liquidation Amount, as
applicable, for the Distribution Date preceding the related
Distribution Date; 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
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<PAGE> 40
day multiplied by a fraction the numerator of which shall be
the Series Initial Investor Interest and the denominator of
which shall be sum of the Series Initial Investor Interest
for each Series then outstanding minus (B) the Series
Investor Interest as of the end of the immediately preceding
Due Period (after giving effect to payments of principal made
or to be made on the related Distribution Date) and (ii) an
amount equal to the positive difference between the Series
Minimum Principal Receivables Balance and the Series Investor
Interest; provided, however, that any calculation under this
paragraph (y) that results in a number less than zero shall
be treated as zero; or
(b) during the Early Accumulation Period and 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
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<PAGE> 41
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 Early Accumulation Event
or 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)(34)). For purposes of calculating the Series
Available Principal Amount for each other such Series, the Group Available
Principal Amount shall be reduced by the Series Available Principal Amount for
the prior Series for which the Series Available Principal Amount was
calculated.
"Series Buffer Amount," if applicable, shall have the meaning set forth in
the Series Term Sheet.
"Series Closing Date" shall mean the date designated as such in the Series
Term Sheet.
"Series Collections Account" shall have the meaning specified in Section
8.
"Series Cut-Off Date" shall mean the date designated as such in the Series
Term Sheet.
"Series Distribution Account" shall have the meaning specified in Section
8.
"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
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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.
"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, (ii) if a Fixed
Principal Allocation Event has occurred but the Fully Funded Date has not
occurred, the Series Investor Interest as of the date of the occurrence of the
Fixed Principal Allocation Event, divided by 0.93 or (iii) on and after the
Fully Funded Date, if any, zero, 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 (x) the Early
Accumulation Period, if any, the Estimated Principal Distribution Amount for
the next Distribution Date and (y) for any date of determination during the
Accumulation Period, the amount specified in the Master Servicer's notice of
its election to commence the Accumulation Period as the Controlled Accumulation
Amount for such 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.
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"Series Percentage" shall mean, with respect to any specified category,
with respect to any Distribution Date or Trust Distribution Date, as
applicable, the sum of the Class Percentages with respect to such category for
each Class of the Series established hereby on such Distribution Date or Trust
Distribution Date, as applicable.
"Series Principal Collections" shall mean, with respect to any day or any
Distribution Date or Trust Distribution Date, as applicable, the sum of the
amount of Class Principal Collections for each Class for such day or for the
related Due Period, as applicable.
"Series Principal Collections Account" shall have the meaning specified in
Section 8.
"Series Principal Funding Account" shall mean the Series Principal Funding
Account established pursuant to Section 8. Amounts "on deposit in" the Series
Principal Funding Account shall be deemed to be on deposit for the benefit of
(i) the Class A Certificateholders for the period up to and including the Class
A Expected Final Payment Date or Class A Final Maturity Date, as applicable,
and (ii) if there is a Subordinate Class with respect to Class A, the Class B
Certificateholders for the period beginning immediately after the Class A
Expected Final Payment Date or Class A Final Maturity Date, as applicable, and
ending on the Class B Expected Final Payment Date or Class B Final Maturity
Date, as applicable. Amounts "on deposit in" the Series Principal Funding
Account shall be deemed to include amounts invested in Permitted Investments
pursuant to Section 8 unless the context clearly requires otherwise.
"Series Required Principal Amount" shall mean, with respect to each
Distribution Date, with respect to each Series that is a member of the same
Group as the Series established hereby (including the Series established
hereby) that is in its Controlled Liquidation Period or Accumulation Period, as
applicable, the product of (x) (i) if the related Due Period does not occur in
February, 1.25 or (ii) if the related Due Period occurs in February, 1.05, and
(y) the Controlled Liquidation Amount or the Controlled Accumulation Amount, as
applicable, for such Series for such Distribution Date.
"Series Term Sheet" shall mean the Series Term Sheet setting forth the
terms of the Series of Investor Certificates issued hereby, to which this Annex
is attached.
"Series Termination Date" shall mean the date designated as such in the
Series Term Sheet.
"Series Yield Collections" shall mean, with respect to any day or any
Distribution Date, as applicable, an amount equal to the product of the Series
Yield Factor and the amount of Series Principal Collections for such day or the
related Due Period, as applicable.
"Series Yield Factor" shall mean the number identified as such in the
Series Term Sheet, as such number may be changed from time to time pursuant to
Section 26.
"Shared Credit Enhancement" shall mean Credit Enhancement available for
the benefit of both the Class A Investor Certificates and the Class B Investor
Certificates.
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"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" shall occur the first time the
long-term debt or deposit rating of Greenwood or any Additional Seller is
withdrawn or reduced below BBB- by Standard & Poor's.
"Supplemental Servicing Fee" shall mean, if applicable, with respect to
any Distribution Date, an amount equal to the product of the Supplemental
Servicing Fee Percentage and the Series Investor Interest on the first day of
the Due Period related to such Distribution Date (or in the case of the first
Distribution Date for the Series established hereby, the Series Investor
Interest on the Series Cut-Off Date).
"Supplemental Servicing Fee Percentage," if applicable, shall mean the
percentage identified as such in the Series Term Sheet.
"Supplemental Subordinated Amount," if applicable, shall have the meaning
set forth in the Series Term Sheet.
"Swap Rate," if applicable, with respect to any Class Interest Rate Swap,
shall have the meaning specified in the Series Term Sheet.
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"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.
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
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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
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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.
(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
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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. 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
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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 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.
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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
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
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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 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.
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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, Early Accumulation 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 Early Accumulation 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 the Early Accumulation Period,
if any, 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,
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(y) the Available Subordinated Amount, and
(z) Class B Available Collections
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class B Subordinated Payment shall
be increased by, and the Class A Cumulative Investor Charged-Off Amount, the
Available Subordinated Amount and Class B Available Collections shall be
reduced by, the amount of such deposit.
(8) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Required Amount and
(y) the positive difference, if any, between
(1) the amount of Class B Available Finance Charge
Collections, and
(2) the Class B Subordinated Payment
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The amount by which the Class B Required Amount
exceeds the amount of such deposit shall be the "Class B Required Amount
Shortfall."
(9) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) funds, if any, available to pay such Class B Required Amount
Shortfall from funds initially allocated to any Subordinate
Series
shall be deposited into the Series Distribution Account. The Class B Required
Amount Shortfall shall be reduced by the amount of such deposit.
(10) If there is a Subordinate Class with respect to Class A, an
amount equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) funds, if any, available to pay such Class B Cumulative
Investor Charged-Off Amount from funds initially allocated
to any Subordinate Series
shall be deposited into the Series Principal Collections Account. The Class B
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
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(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
(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
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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) On each Distribution Date prior to the Fully Funded Date, if any,
an amount equal to the lesser of
(x) the amount by which the Total Available Credit Enhancement
Amount is less than the Total Maximum Credit Enhancement
Amount and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and paid to the Trustee
as administrator of the Credit Enhancement for application in accordance with
the provisions of the Credit Enhancement Agreement. If there is Shared Credit
Enhancement, such deposit shall increase the Available Shared Credit
Enhancement Amount until the Available Shared Credit Enhancement Amount equals
the Maximum Shared Credit Enhancement Amount. If there is a Subordinate Class
with respect to Class A, any remaining portion of such deposit shall increase
the Available Class B Credit Enhancement Amount until the Available Class B
Credit Enhancement Amount equals the Maximum Class B Credit Enhancement Amount.
The Total Available Credit Enhancement Amount shall be increased by, and the
amount of Series Excess Servicing shall be decreased by, the amount of such
deposit.
(16) If there is Shared Credit Enhancement, and if the Class A
Required Amount Shortfall is greater than zero, the Master Servicer, on the
related Drawing Date, shall make a Credit Enhancement Drawing in an amount
equal to the lesser of
(x) the Class A Required Amount Shortfall and
(y) the Available Shared Credit Enhancement Amount
and such amount shall be deposited into the Series Distribution Account. The
Class A Required Amount Shortfall and the Available Shared Credit Enhancement
Amount shall be reduced by the amount of such deposit.
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(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 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
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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) The Net Swap Payment, up to the remaining amount of Series Excess
Servicing, shall be withdrawn from the Series Collections Account and paid to
the Interest Rate Swap Counterparty in accordance with the provisions of the
Class Interest Rate Swap.
(24) 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.
(25) The allocations set forth in clauses (25)(A) and (25)(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 (25)(A) and
(25)(B) shall be made with respect to Class B, to the extent that funds are
available pursuant to this clause (25):
(A) An amount equal to the lesser of
(x) the Class Required Amount Shortfall and
(y) the product of
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(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 (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 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 (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 deposited into the Series Principal Collections Account. The Class
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
(26) The allocations set forth in clauses (26)(A) and (26)(B) shall be
made, to the extent that funds are available pursuant to this clause (26):
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(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 (26))
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
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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
(26)) and
(2) the amount on deposit in the Group Finance Charge
Collections Reallocation Account before any
withdrawals therefrom with respect to any other
Series pursuant to a comparable clause in the
applicable Series Supplements,
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and paid to the Trustee as administrator of the Credit Enhancement for
application in accordance with the provisions of the Credit Enhancement
Agreement. Such deposit shall increase the Available Class B Credit
Enhancement Amount.
(27) 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.
(28) 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.
(29) The Net Swap Receipt, to the extent paid to the Trustee by the
Interest Rate Swap Counterparty pursuant to the Class Interest Rate Swap, shall
be deposited in the Series Collections Account.
(30) Any amount remaining on deposit in the Series Collections Account
will be withdrawn from the Series Collections Account and paid to the Holder of
the Seller Certificate.
(31) Unless the Distribution Date is a Distribution Date in the
Revolving Period, the lesser of
(x) the Principal Distribution Amount and
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(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."
(32) 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.
(33) 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.
(34) 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
(34):
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 (34)) and
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(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.
(35) 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.
(36) 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.
SECTION 10. Payments.
(a) Payments.
(1) On each Distribution Date related to a Due Period in the
Accumulation Period or the Early 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
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(x) the Class Modified Required Amount and
(y) the amount on deposit in the Series Distribution Account.
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.
(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
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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 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.
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(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), after giving effect to the
payments described above on such day, an amount equal to the lesser of
(x) the Controlled Liquidation Amount and
(y) the amount deposited into the Series Principal Funding
Account on any 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;
provided, however, that on the Fully Funded Date, if any, the Class B Invested
Amount shall be withdrawn from the Series Principal Funding Account and paid to
the Class B Investor Certificateholders. In no event shall any amounts be paid
with respect to any Class of Investor Certificates pursuant to this clause (7)
in excess of the Class Invested Amount for such Class, nor shall any amounts be
paid in excess of the Class Foreign Currency Invested Amount, if applicable.
Any amounts remaining on deposit in the Series Principal Funding Account after
the Class Invested Amount or the Class Foreign Currency Invested Amount, as
applicable, for each Class has been reduced to zero shall be paid to the Holder
of the Seller Certificate. Any amounts withdrawn from the Series Principal
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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 each Special Payment Date during the Amortization Period, 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 Special Payment 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 (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
clause (8) and not paid or converted into Foreign Currency shall be paid to the
Holder of the Seller Certificate.
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(9) 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 (9) in excess of the Class Invested Amount
for such Class, nor shall any amounts be paid in excess of the Class Foreign
Currency Invested Amount, if applicable. Any amounts remaining on deposit in
the Series Principal Funding Account after the Class Invested Amount or the
Class Foreign Currency Invested Amount, as applicable, for each Class has been
reduced to zero shall be paid to the Holder of the Seller Certificate. Any
amounts withdrawn from the Series Principal Funding Account pursuant to this
clause (9) and not paid or converted into Foreign Currency shall be paid to the
Holder of the Seller Certificate.
(10) 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
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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.
(11) 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)(10)
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.
(12) 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:
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(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 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 (12) and not paid or converted into Foreign Currency shall be paid
to the Holder of the Seller Certificate.
(13) 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)(12) 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
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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 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.
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(b) Successor Credit Enhancement.
(i) If the Credit Enhancement is not Funded Credit Enhancement and
if, at any time, the provider of such Credit Enhancement ceases to be a
Qualified Credit Enhancement Provider, the Master Servicer shall obtain
a successor Credit Enhancement within 30 days or such longer period as
will not result in the lowering or withdrawal of the rating of any Class
of any Series then outstanding by the Rating Agencies (a) which, if such
successor Credit Enhancement is not to be Funded Credit Enhancement,
will be issued by a Qualified Credit Enhancement Provider and (b) with
respect to which the representations set forth in Section 11(a) will be
satisfied; provided, however, that the Master Servicer shall not be
required to continue efforts to obtain a successor Credit Enhancement if
the then existing Credit Enhancement Provider again becomes a Qualified
Credit Enhancement Provider and remains such; and, provided, further,
that unless otherwise agreed to by the Rating Agencies, the Credit
Enhancement and Credit Enhancement Agreement will not be terminated and
no successor Credit Enhancement Provider shall be selected if the
successor Credit Enhancement, the successor Credit Enhancement
Agreement, or the selection of such successor Credit Enhancement
Provider would cause the ratings of the Investor Certificates of the
Series established hereby to be withdrawn or lowered by either Rating
Agency from the respective ratings of such Investor 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
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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 Early
Accumulation Period or 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 Early Accumulation Event or an Amortization Event, the Additional
Credit Support Amount may be paid to the Trustee as administrator of the
Credit Enhancement at any time on or prior to the last day of the Due
Period in which the Early Accumulation Event or the Amortization Event
occurs;
(iii) prior to the last day of the Revolving Period (or, following
an Early Accumulation Event or an Amortization Event during the
Revolving Period, on or prior to the last day of the Due Period in which
the Early Accumulation Event or 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 Early Accumulation Event or an Amortization Event during the
Revolving Period, on or prior to the last day of the Due Period in which
the Early Accumulation Event or 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
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transfer of the Receivables and the security interest of the Trust in
the Receivables are not affected by the Alternative Credit Support
Election.
(b) If each of the actions set forth in Section 12(a) above has been
taken or satisfied as required, the Alternative Credit Support Election shall
become effective on the last day of the Due Period in which the Additional
Credit Support Amount has been paid to the Trustee as administrator of the
Credit Enhancement (an "Effective Alternative Credit Support Election").
(c) At any time until the Alternative Credit Support Election becomes
effective, such Alternative Credit Support Election may be cancelled upon notice
to the Rating Agencies, the Trustee and the Credit Enhancement Provider.
Thereafter, the Additional Credit Support Amount, if any, shall be returned by
the Trustee as administrator of the Credit Enhancement in accordance with the
Credit Enhancement Agreement.
SECTION 13. Calculation of Investor Losses.
(a) For each Distribution Date, the Master Servicer shall calculate the
Class Investor Charged-Off Amount and the Class Cumulative Investor Charged-Off
Amount with respect to each Class, in each case as of the end of the related Due
Period.
(b) If on any Distribution Date, the Class Investor Charged-Off Amount
with respect to any Class exceeds the Class Charge-Off Reimbursement Amount with
respect to such Class, the Class Investor Interest and the Class Invested Amount
for such Class shall each be reduced by the amount of such excess (an "Investor
Loss" with respect to such Class).
(c) On each Distribution Date the Class Investor Interest and the Class
Invested Amount for each Class shall be increased by, and the amount of
aggregate unreimbursed Investor Losses for each such Class shall be decreased
by, the positive difference, if any, between the Class Charge-Off Reimbursement
Amount on such Distribution Date and the Class Investor Charged-Off Amount for
such Distribution Date; provided, however, that neither the Class Invested
Amount nor the Class Investor Interest shall exceed the Class Initial Investor
Interest for such Class minus the sum of (x) the aggregate amount of payments of
Certificate Principal paid to the Investor Certificateholders of such Class
prior to such Distribution Date, (y) in the case of the Class Investor Interest,
the amount on deposit in the Series Principal Funding Account for the benefit of
such Class in respect of Collections of Principal Receivables and (z) the
aggregate amount of losses, if any, on investments of principal of funds on
deposit in the Series Principal Funding Account for the benefit of such Class;
and provided, further, that the amount of Investor Losses with respect to any
Class shall not be reduced to an amount less than zero.
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
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composed of the Class Monthly Servicing Fees and the Supplemental Servicing
Fees, if any. The Class Monthly Servicing Fees shall be paid to the Master
Servicer on behalf of each Class on each Distribution Date pursuant to Section
10. The Supplemental Servicing Fee, if any, shall be paid to the Master
Servicer on or before each Distribution Date from the Series Additional Funds
for such Distribution Date. In no event shall the Trustee or the Investor
Certificateholders be liable for the Supplemental Servicing Fee.
SECTION 15. Class Interest Rate Caps.
(a) In the event that the Master Servicer has obtained a Class Interest
Rate Cap in favor of the Trustee for the benefit of a Class or Subclass that
does not have a fixed or maximum Certificate Rate, the Master Servicer hereby
represents that such Class Interest Rate Cap provides that (i) the Trust shall
not be required to make any payments thereunder and (ii) the Trust shall be
entitled to receive payments (determined in accordance with the Class Interest
Rate Cap) from the Interest Rate Cap Provider on an Interest Payment Date if
LIBOR or the Commercial Paper Rate, as applicable, for the related Calculation
Period exceeds the Class Cap Rate for the applicable Class or Subclass. Any
Class Interest Rate Cap Payment shall be deposited into the Series Interest
Funding Account.
(b) In the event that the commercial paper or certificate of deposit
rating of the Interest Rate Cap Provider is withdrawn or reduced below the
ratings specified in the Series Term Sheet (or, in either case, such lower
rating as the applicable Rating Agency shall allow), then within 30 days after
receiving notice of such decline in the creditworthiness of the Interest Rate
Cap Provider as determined by either Rating Agency, either (x) the Interest Rate
Cap Provider, with the prior confirmation of the Rating Agencies that such
arrangement will not result in the reduction or withdrawal of the rating of any
Investor Certificates of the Series established hereby, will enter into an
arrangement the purpose of which shall be to assure performance by the Interest
Rate Cap Provider of its obligations under the Class Interest Rate Caps; or (y)
the Master Servicer shall at its option either (i) with the prior confirmation
of the Rating Agencies that such action will not result in a reduction or
withdrawal of the rating of any Investor Certificates of the Series established
hereby, cause the Interest Rate Cap Provider to pledge securities in the manner
provided by applicable law, which shall be held by the Trustee or its agent free
and clear of the Lien of any third party, in a manner conferring on the Trustee
a perfected first Lien in such securities securing the Interest Rate Cap
Provider's performance of its obligations under the Class Interest Rate Caps, or
(ii) provided that Replacement Class Interest Rate Caps or Qualified Substitute
Cap Arrangements meeting the requirements of Section 15(c) have been obtained,
direct the Trustee (A) to provide written notice to the Interest Rate Cap
Provider of its intention to terminate the Class Interest Rate Caps within such
30-day period and (B) to terminate the Class Interest Rate Caps within such
30-day period, to request the payment to it of all amounts due to the Trust
under the Class Interest Rate Caps through the termination date and to deposit
any such amounts so received, on the day of receipt, to the Series Interest
Funding Account, or (iii) establish any other arrangement (including an
arrangement or arrangements in addition to or in substitution for any prior
arrangement made in accordance with the provisions of this Section 15(b))
satisfactory to the Rating Agencies such that the Rating Agencies will not
reduce or withdraw the rating of any Investor Certificates of the Series
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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) 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 Interest Rate Swaps. In the event that the Investor
Certificates of any Class are subject to a Class Interest Rate Swap, the Trust
will enter into a Class Interest Rate Swap in a form approved by the Master
Servicer. Pursuant to the terms of the Class Interest Rate Swap, on each
Distribution Date, the Interest Rate Swap Counterparty shall pay to the Trust
the Net Swap Receipt or the Trust shall pay to the Interest Rate Swap
Counterparty the Net Swap Payment, as applicable. If the Trust does not receive
payment from the Interest Rate Swap Counterparty on each Distribution Date (if
due), the Trustee, on behalf of the Trust, shall attempt to determine from the
Interest Rate Swap Counterparty the reasons therefore and whether such
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payment is to be made by the Interest Rate Swap Counterparty on such
Distribution Date. If the Class Interest Rate Swap has not been terminated and
the Trust has not received any payment due from the Interest Rate Swap
Counterparty on the related Distribution Date, the Trustee shall notify the
Master Servicer of such fact prior to 1:00 p.m. Chicago time on such
Distribution Date.
SECTION 17. Class Currency Swaps.
(a) In the event that the Investor Certificates of any Class are
payable in Foreign Currency, the Trustee will enter into a Class Currency Swap
in a form approved by the Master Servicer and the Rating Agencies pursuant to
which (A) the Trustee shall be required to make payments to the Currency Swap
Counterparty in Dollars and (B) the Trust shall be entitled to receive payments
from the Currency Swap Counterparty in such Foreign Currency. On the
Distribution Date occurring in the same calendar month as each Payment Date, any
payments to be made by the Trustee to the Currency Swap Counterparty under the
Class Currency Swap will be deposited in the Currency Swap Dollar Escrow
Account. Any payments made by the Currency Swap Counterparty pursuant to the
Class Currency Swap (other than payments in connection with the termination
thereof or the replacement of the Currency Swap Counterparty, which payments
will be made in accordance with the Class Currency Swap) will be deposited in
the Class Foreign Currency Distribution Account. In the event that a
Counterparty Currency Swap Default shall occur, remaining amounts on deposit in
the Currency Swap Dollar Escrow Account (after making any partial payments
required by the Class Currency Swap) shall be released to the Trustee in
accordance with the terms of the Escrow 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
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to the Currency Swap Counterparty of its intention to terminate the Class
Currency Swap within such 60-day period and (B) to terminate the Class Currency
Swap within such 60-day period, to request the payment to it of all amounts due
to the Trust under the Class Currency Swap through the termination date and to
pay or deposit any such amounts as provided in the Class Currency Swap, or (iv)
establish any other arrangement (including an arrangement or arrangements in
addition to or in substitution for any prior arrangement made in accordance
with the provisions of this Section 16(b)) satisfactory to the Rating Agencies
such that the Rating Agencies will not reduce or withdraw the rating of any
Investor Certificates of the Series established hereby below the Minimum
Investor Certificate Ratings specified in the Series Term Sheet (a "Qualified
Substitute Class Currency Swap Arrangement"); provided, however, that in the
event at any time any alternative arrangement established pursuant to clause
(i), (ii) or (iv) of this Section 16(b) shall cease to be satisfactory to the
Rating Agencies then the provisions of this Section 16(b) shall again be
applied and in connection therewith the 60-day period referred to above shall
commence on the date the Master Servicer receives notice of such cessation.
(c) Unless an alternative arrangement pursuant to clause (i), (ii) or
(iv) of Section 16(b) is being established, the Master Servicer shall use its
best efforts (without expenditure of funds unless in its sole discretion it
otherwise elects) to obtain Replacement Class Currency Swaps or Qualified
Substitute Class Currency Swap Arrangements meeting the requirements of this
Section 16(c) during the 60-day period referred to in Section 16(b). The
Trustee shall not terminate the Class Currency Swap unless, prior to the
expiration of the 60-day period referred to in Section 16(b), the Master
Servicer delivers to the Trustee (i) Replacement Class Currency Swaps or
Qualified Substitute Class Currency Swap Arrangements, (ii) to the extent
applicable, an Opinion of Counsel (which may be Counsel for the Replacement
Currency Swap Counterparty or Qualified Substitute Currency Swap Counterparty)
as to the due authorization, execution and delivery and validity and
enforceability of each such Replacement Class Currency Swap or Qualified
Substitute Currency Swap Arrangement, as the case may be, and (iii) confirmation
from each Rating Agency that the termination of the Class Currency Swap and its
replacement with such Replacement Class Currency Swaps or Qualified Substitute
Class Currency Swap Arrangements will not result in a reduction or withdrawal of
the 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
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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 18. 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 19. 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 20. Notices. Any notices to holders of Investor Certificates
issued in bearer form shall be given as described in the Series Term Sheet.
SECTION 21. Additional Amortization Events. If any one of the following
events shall occur:
(a) 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;
(b) if applicable, following either (i) the withdrawal or reduction of
the commercial paper or certificate of deposit rating of any Interest Rate Cap
Provider to below the ratings specified in the Series Term Sheet (or, in either
case, such lower rating as the applicable Rating Agency has allowed) or (ii)
notice from either Rating Agency that any Qualified Substitute Cap Arrangement
or any other arrangement established pursuant to Section 15 is no longer
satisfactory to such Rating Agency, the Master Servicer shall fail, within the
applicable time period specified in Section 15, to (x) obtain Replacement Class
Interest Rate Caps or Qualified Substitute Cap Arrangements or (y) cause the
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);
(c) 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,
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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);
(d) if applicable, a Currency Swap Termination shall have occurred;
(e) 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
(f) if the Master Servicer determines that payments on the Investor
Certificates of a Class that is subject to a Class Currency Swap on the next
succeeding Interest Payment Date with respect to such Class made outside the
United States by the Trustee, the Master Servicer or any Paying Agent would,
under any present or future law or regulation of the United States, be subject
to any certification, documentation, information or other reporting requirement
of any kind, the effect of which requirement is the disclosure to the Trustee,
the Master Servicer, any Paying Agent or any governmental authority of the
nationality, residence or identity of a beneficial owner of an Investor
Certificate of such Class who is a Non-U.S. Holder (other than such a
requirement (a) which would not be applicable to a payment made by the Trustee,
the Master Servicer or by any Paying Agent (i) 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)
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cause the withdrawal or reduction of the then current ratings on any Class of
any other Series then outstanding;
(g) if the amount of Principal Receivables in the Trust at the end of
any Due Period for three consecutive Due Periods of the Early Accumulation
Period shall be less than the Minimum Principal Receivables Balance and
Greenwood shall have failed to assign Receivables in Additional Accounts or
Participation Interests to the Trust in at least the amount of the deficiency by
the tenth day of the calendar month of the following Due Period;
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 21 shall occur, this Section
21 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 21. In addition, if the Series
established hereby is not eligible to have an Early Accumulation Period, each
of the events described in Section 22 as "Early Accumulation Events" shall
instead be Amortization Events.
The Master Servicer's determination that an event described in clause
(e) or (f) 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 22. Early Accumulation Events. If the Series established hereby
is eligible to have an Early Accumulation Period, each of the events described
in clause (a), (b), (g) or (i) of Section 9.01 of the Pooling and Servicing
Agreement shall not be Amortization Events but shall instead be Early
Accumulation Events. In addition, each of the following events shall be Early
Accumulation Events for purposes of this Series Supplement:
(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 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).
If any event described in clause (a), (b), (g) or (i) of Section 9.01 of the
Pooling and Servicing Agreement occurs, an Early Accumulation Event shall occur
with respect to the Investor
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Certificates of such Class only if the event has a material adverse effect on
the Investor Certificateholders of such Class and if, after the applicable
grace period described in those clauses, either the Trustee declares or the
Investor Certificateholders of such Class evidencing Fractional Undivided
Interests aggregating not less than 51% of the Class Invested Amount for either
Class declare by written notice to Greenwood and the Master Servicer (and to
the Trustee if given by the Investor Certificateholders) that an Early
Accumulation Event has occurred as of the date of the notice. In the case of
any event described in clause (a) or (b) of this Section 22, an Early
Accumulation Event shall occur with respect to the Investor Certificates of
such Class immediately upon the occurrence of the event without any notice or
other action on the part of the Trustee or the Investor Certificateholders of
such Class. On the date on which an Early Accumulation Event is deemed to have
occurred the Early Accumulation Period will commence.
SECTION 23. 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 23(a) is (i) allocable to the Investor
Certificateholders of a Class that is subject to a Class Currency Swap, the
Master Servicer shall direct the Trustee in writing (x) if no Currency Swap
Termination has occurred, to withdraw the amount allocable to such Class from
the Series Distribution Account and deposit such amount into the Currency Swap
Dollar Escrow Account or (y) if a Currency Swap Termination has occurred, to
convert such amount into Foreign Currency at the then prevailing spot exchange
rate in New York, as applicable, and cause such amount to be paid to the
Investor Certificateholders of such Class pursuant to Section 10(c) of this
Series Supplement or (ii) allocable to the Investor Certificateholders of a
Class that is not subject to a Class Currency Swap, the Master Servicer shall
direct the Trustee in writing to withdraw the amount allocable to such Class
from the Series Distribution Account and pay such amount to the Investor
Certificateholders of such Class pursuant to Section 12.02 of the Pooling and
Servicing Agreement. If Greenwood on behalf of the Holder of the Seller
Certificate elects to purchase Investor Certificates with respect to a Class
that is subject to a Class Currency Swap pursuant to this Section 23(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 23(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.
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(b) If as of any Distribution Date during the Accumulation Period, the
Early 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 23(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 24. 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 24 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 24).
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
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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 25. Optional Accumulation Period Commencement. If the Series
Term Sheet for the Series established hereby so provides, unless the
Amortization Period or the Early Accumulation Period shall have commenced prior
thereto, the Master Servicer may elect to commence the Accumulation Period by
delivering written notice to the Trustee, Greenwood, on behalf of the Holder of
the Seller Certificate and the Credit Enhancement Provider at least 5 Business
Days prior to the Accumulation Commencement Date subject to the conditions set
forth in this Section 25; provided, however, that the Accumulation Period shall
commence no later than the first day of the following Due Period. Such written
notice shall set forth the Accumulation Amount for each Distribution Date
relating to the Accumulation Period.
SECTION 26. 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 27. 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 28. 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 29. 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 1997-2
6.792% 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
<PAGE> 87
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 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 October 15, 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> 88
IN WITNESS WHEREOF, Greenwood has caused this Class A Certificate to be
duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:____________________________________
A-2-3
<PAGE> 89
[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 1997-2 6.792 % 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 1997-2 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
1997-2 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 $500,000,000. 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.
A-2-4
<PAGE> 90
During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Controlled Liquidation Period, the Early Accumulation Period and 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 November 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 installments on each Principal Payment Date
commencing in April 2000 and ending on the earlier to occur of (i) the date on
which the Class A Invested Amount is reduced to zero and (ii) the Distribution
Date in October 2007, but may be paid sooner or later 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 April 2010
(the "Series Termination Date").
The amount to be distributed on each Principal Payment 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-2-5
<PAGE> 91
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 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-2-6
<PAGE> 92
[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-2-7
<PAGE> 93
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 1997-2
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
<PAGE> 94
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 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 October 15, 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> 95
IN WITNESS WHEREOF, Greenwood has caused this Class B Certificate to be
duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:________________________________
A-2-3
<PAGE> 96
[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 1997-2 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 1997-2 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
1997-2 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 $26,316,000.
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
A-2-4
<PAGE> 97
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 Controlled Liquidation Period, the Early Accumulation Period and 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 November 15, 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 Interest Payment Date. Principal on the Class B
Certificates is scheduled to be paid in a single payment on the Distribution
Date in November 2007 (the "Class B Expected Final Payment Date), but may be
paid sooner or later or in installments under certain circumstances. 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 April 2010 (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
A-2-5
<PAGE> 98
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.
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.
A-2-6
<PAGE> 99
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-2-7
<PAGE> 100
[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-2-8
<PAGE> 101
Exhibit B
Form of Investor Certificateholders' Monthly Statement
Discover Card Master Trust I
Series 1997-2 Monthly Statement
<TABLE>
<S> <C>
Trust Distribution Date: __________ __, ____ Due Period Ending: __________ __, ____
</TABLE>
Pursuant to the Series Supplement dated as of October 15, 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.
<TABLE>
1. Payments for the benefit of Series Investors this Due Period (per
$1,000 of Class Initial Investor Interest)
<S> <C> <C> <C>
Total Interest Principal
Series 1997-2
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 1997-2 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> <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 1997-2 Allocations $____________ $___________ N/A N/A
(e) Class A Allocations $____________ $___________ N/A N/A
Class B Allocations $____________ $___________ N/A N/A
</TABLE>
B-2
<PAGE> 102
4. Information Concerning the Series Principal Funding Accounts ("SPFA")
<TABLE>
<S> <C> <C> <C> <C>
Deposits into the SPFAs Deficit Amount
This Due Period This Due Period Total Deposits Investment Income
Series 1997-2 $________ $______ $________ $_________
</TABLE>
5. Information Concerning Amount of Controlled Liquidation Payments
<TABLE>
<S> <C> <C> <C> <C> <C>
Amount Paid This PSA Index Rate Monthly Deficit Amount This Total Payments Through
Due Period Amortization Rate Due Period The Due Period
Series 1997-2
Class A $___________ ________% ___________% $___________ $___________
Class B $___________ N/A N/A $___________ $___________
</TABLE>
6. Information Concerning the Series Interest Funding Accounts ("SIFA")
<TABLE>
<CAPTION>
Deposits into the SIFA
This Due Period SIFA Balance
<S> <C> <C>
Series 1997-2 N/A N/A
</TABLE>
7. Pool Factors
<TABLE>
<S> <C> <C>
This Due Period
Class A $_________
Class B $_________
8. Investor Charged-Off Amount
This Due Period Cumulative Investor
Charged-Off Amount
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-2 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
9. Investor Losses This Due Period
Total per $1,000 of Original
Invested Principal
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-2 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
B-3
<PAGE> 103
10. Reimbursement of Investor Losses This Due Period
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-2 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
11. Aggregate Amount of Unreimbursed Investor Losses
Total per $1,000 of Original
Invested Principal
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1997-2 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
12. Investor Monthly Servicing Fee Payable This Due Period
(a) Group One $_________
(b) Group Two $_________ $_________
(c) Series 1997-2 $_________
(d) Class A $_________
Class B $_________
13. Class Available Subordinated Amount at the end of the Due Period
as a percentage of
Total Class A Invested Amount
Series 1997-2, Class B $____________ $__________
14. Total Available Credit Enhancement Amounts
Shared Amount Class B Amount
Maximum Amount N/A $__________
Available Amount N/A $__________
Amount of Drawings on Credit
Enhancement for this Due Period N/A $__________
15. Delinquency Summary
</TABLE>
B-4
<PAGE> 104
<TABLE>
<S> <C> <C>
End of Due Period Master 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-5
<PAGE> 105
Exhibit C
Form of Master Servicer's Monthly Certificate
Discover Card Master Trust I
Series 1997-2
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 October, 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 1997-2 Certificates for the Distribution Date occurring
on _______________:
<TABLE>
<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........................... $_____
</TABLE>
C-1
<PAGE> 106
<TABLE>
<S> <C> <C>
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.............. $_____
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>
C-2
<PAGE> 107
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-3
<PAGE> 108
Exhibit D
Discover Card Master Trust I
Series 1997-2
Prepayment Calculation Table
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
0-110 0.339
111 0.350
112 0.362
113 0.373
114 0.384
115 0.395
116 0.407
117 0.418
118 0.429
119 0.440
120 0.452
121 0.463
122 0.474
123 0.485
124 0.497
125 0.508
126 0.531
127 0.554
128 0.578
129 0.601
130 0.624
131 0.647
132 0.670
133 0.694
134 0.717
135 0.740
136 0.769
137 0.798
138 0.827
139 0.855
140 0.884
141 0.913
142 0.942
143 0.971
144 1.000
145 1.029
146 1.057
147 1.086
148 1.115
149 1.144
150 1.173
151 1.202
152 1.230
153 1.259
154 1.288
155 1.317
156 1.332
157 1.346
</TABLE>
<PAGE> 109
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
158 1.361
159 1.375
160 1.390
161 1.405
162 1.419
163 1.434
164 1.448
165 1.463
166 1.478
167 1.492
168 1.507
169 1.521
170 1.536
171 1.551
172 1.565
173 1.580
174 1.594
175 1.609
176 1.624
177 1.638
178 1.653
179 1.667
180 1.682
181 1.697
182 1.711
183 1.726
184 1.740
185 1.755
186 1.770
187 1.784
188 1.799
189 1.813
190 1.828
191 1.843
192 1.857
193 1.872
194 1.886
195 1.901
196 1.916
197 1.930
198 1.945
199 1.959
200 1.974
201 1.995
202 2.016
203 2.037
204 2.058
205 2.080
206 2.101
207 2.122
208 2.143
209 2.164
210 2.185
211 2.206
212 2.227
213 2.248
214 2.269
</TABLE>
2
<PAGE> 110
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
215 2.291
216 2.312
217 2.333
218 2.354
219 2.375
220 2.396
221 2.417
222 2.438
223 2.459
224 2.480
225 2.502
226 2.523
227 2.544
228 2.565
229 2.586
230 2.607
231 2.628
232 2.649
233 2.670
234 2.691
235 2.713
236 2.734
237 2.755
238 2.776
239 2.797
240 2.818
241 2.839
242 2.860
243 2.881
244 2.902
245 2.924
246 2.945
247 2.966
248 2.987
249 3.008
250-400 3.029
401 3.055
402 3.082
403 3.108
404 3.135
405 3.161
406 3.187
407 3.214
408 3.240
409 3.267
410 3.293
411 3.319
412 3.346
413 3.372
414 3.399
415 3.425
416 3.451
417 3.478
418 3.504
419 3.531
420 3.557
421 3.583
</TABLE>
3
<PAGE> 111
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
422 3.610
423 3.636
424 3.663
425 3.689
426 3.715
427 3.742
428 3.768
429 3.795
430 3.821
431 3.847
432 3.874
433 3.900
434 3.927
435 3.953
436 3.979
437 4.006
438 4.032
439 4.059
440 4.085
441 4.111
442 4.138
443 4.164
444 4.191
445 4.217
446 4.243
447 4.270
448 4.296
449 4.323
450 4.349
451 4.375
452 4.402
453 4.428
454 4.455
455 4.481
456 4.507
457 4.534
458 4.560
459 4.587
460 4.613
461 4.639
462 4.666
463 4.692
464 4.719
465 4.745
466 4.771
467 4.798
468 4.824
469 4.851
470 4.877
471 4.903
472 4.930
473 4.956
474 4.983
475 5.009
476 5.124
477 5.239
478 5.354
</TABLE>
4
<PAGE> 112
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
479 5.469
480 5.584
481 5.699
482 5.814
483 5.929
484 6.044
485 6.159
486 6.274
487 6.389
488 6.505
489 6.620
490 6.735
491 6.850
492 6.965
493 7.080
494 7.195
495 7.310
496 7.425
497 7.540
498 7.655
499 7.770
500 7.885
501 8.000
502 8.115
503 8.230
504 8.345
505 8.460
506 8.575
507 8.690
508 8.805
509 8.920
510 9.035
511 9.150
512 9.265
513 9.381
514 9.496
515 9.611
516 9.726
517 9.841
518 9.956
519 10.071
520 10.186
521 10.301
522 10.416
523 10.531
524 10.646
525 10.761
526 10.876
527 10.991
528 11.106
529 11.221
530 11.336
531 11.451
532 11.566
533 11.681
534 11.796
535 11.911
</TABLE>
5
<PAGE> 113
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
536 12.026
537 12.141
538 12.257
539 12.372
540 12.487
541 12.602
542 12.717
543 12.832
544 12.947
545 13.062
546 13.177
547 13.292
548 13.407
549 13.522
550 13.637
551 13.705
552 13.773
553 13.841
554 13.909
555 13.977
556 14.046
557 14.114
558 14.182
559 14.250
560 14.318
561 14.386
562 14.454
563 14.522
564 14.590
565 14.658
566 14.726
567 14.794
568 14.863
569 14.931
570 14.999
571 15.067
572 15.135
573 15.203
574 15.271
575 15.339
576 15.407
577 15.475
578 15.543
579 15.612
580 15.680
581 15.748
582 15.816
583 15.884
584 15.952
585 16.020
586 16.088
587 16.156
588 16.224
589 16.292
590 16.360
591 16.429
592 16.497
</TABLE>
6
<PAGE> 114
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
593 16.565
594 16.633
595 16.701
596 16.769
597 16.837
598 16.905
599 16.973
600 17.041
601 17.109
602 17.178
603 17.246
604 17.314
605 17.382
606 17.450
607 17.518
608 17.586
609 17.654
610 17.722
611 17.790
612 17.858
613 17.926
614 17.995
615 18.063
616 18.131
617 18.199
618 18.267
619 18.335
620 18.403
621 18.471
622 18.539
623 18.607
624 18.675
625 18.744
626 18.812
627 18.880
628 18.948
629 19.016
630 19.084
631 19.152
632 19.220
633 19.288
634 19.356
635 19.424
636 19.492
637 19.561
638 19.629
639 19.697
640 19.765
641 19.833
642 19.901
643 19.969
644 20.037
645 20.105
646 20.173
647 20.241
648 20.309
649 20.378
</TABLE>
7
<PAGE> 115
<TABLE>
<CAPTION>
Monthly
PSA Index Amortization
Rate (%) Rate (%)
--------- ------------
<S> <C>
650 20.446
651 20.514
652 20.582
653 20.650
654 20.718
655 20.786
656 20.854
657 20.922
658 20.990
659 21.058
660 21.127
661 21.195
662 21.263
663 21.331
664 21.399
665 21.467
666 21.535
667 21.603
668 21.671
669 21.739
670 21.807
671 21.875
672 21.944
673 22.012
674 22.080
675 22.148
676 22.216
677 22.284
678 22.352
679 22.420
680 22.488
681 22.556
682 22.624
683 22.693
684 22.761
685 22.829
686 22.897
687 22.965
688 23.033
689 23.101
690 23.169
691 23.237
692 23.305
693 23.373
694 23.441
695 23.510
696 23.578
697 23.646
698 23.714
699 23.782
700 or
greater 23.850
</TABLE>
8
<PAGE> 116
As used in this Exhibit D, the following terms have the following meanings:
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation or any
successor thereto.
"PSA Index Rate" shall mean, with respect to any Distribution Date (in the
following order of priority):
(i) the rate that appears as of 3:00 p.m. (New York City time) on the
related Prepayment Determination Date on the Reference Bloomberg Page under the
column heading "1 MO" opposite the row "PSA";
(ii) if such rate does not appear on the Reference Bloomberg Page as of
3:00 p.m. (New York City time) on such Prepayment Determination Date, the
Trustee shall request FHLMC to provide a quotation of the monthly prepayment
speed (calculated according to the PSA Standard Prepayment Model for the
Reference Collateral Pool for the applicable month). If FHLMC provides such
quotation, the PSA Index Rate shall be the quotation provided by FHLMC;
(iii) if the Trustee determines that FHLMC has not provided such quotation
by 5:00 p.m. on the second Business Day following such Prepayment Determination
Date, the Trustee shall request five major securities dealers selected by the
Trustee to provide a quotation of the monthly prepayment speed (calculated
according to the PSA Standard Prepayment Model) for the Reference Collateral
Pool for the applicable month. If only one quotation is so provided, then the
PSA Index Rate shall be the quotation so provided. If two or three such
quotations are so provided, then the PSA Index Rate shall be the arithmetic
mean of such quotations (rounded to the nearest whole integer) as determined by
the Trustee. If four or five such quotations are provided, the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest) shall be eliminated
and the PSA Index Rate shall be the arithmetic mean (rounded to the nearest
whole integer) of the remaining quotations as determined by the Trustee; and
(iv) if no such quotation is provided as requested in clause (iii) above,
then the PSA Index Rate shall be the PSA Index Rate determined with respect to
the Distribution Date preceding the applicable Distribution Date (or, in the
case of the first Distribution Date following the Principal Commencement Date,
the monthly prepayment speed (calculated according to the PSA Standard
Prepayment Model) for the Reference Collateral Pool obtained from the sources
specified in clauses (i)-(iii) above, in that order, with respect to the most
recent month for which such information is available).
"PSA Standard Prepayment Model" or "PSA" shall mean the methodology set
forth under "Mortgage Prepayment Models -- The PSA Standard Prepayment Model"
in the "Uniform Practices for the Clearance and Settlement of Mortgage-Backed
Securities and Other Related Securities of the Public Securities Association."
9
<PAGE> 117
"Reference Bloomberg Page" shall mean the display designated as page
"FMAC A " 017" and titled "Reference Collateral 30-year Gold 8.00, Issued in
1996" (or such other page selected by the Master Servicer as may replace page
FMAC A017 for the purpose of displaying the monthly prepayment speed
(calculated based on the PSA Standard Prepayment Model) for the Reference
Collateral Pool) on the Bloomberg Financial Markets Service (or such other
service selected by the Master Servicer as may replace such service).
"Reference Collateral Pool" shall mean the 30-year FHLMC Gold 8.00%
mortgage participation certificates issued in 1996.
10
<PAGE> 1
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 OCTOBER 15, 1997
____________________________
DISCOVER CARD MASTER TRUST I
SERIES 1997-2
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
PAGE
<S> <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. ......... 6
SECTION 8. CERTAIN ADDITIONAL LOANS. ................................................ 6
SECTION 9. LIMITED OBLIGATION; WAIVER OF SETOFF; OBLIGATIONS ABSOLUTE. .............. 7
SECTION 10. INVESTMENTS AND INFORMATION. ............................................. 8
SECTION 11. SERVICING TRANSFER ....................................................... 8
SECTION 12. REPRESENTATIONS AND WARRANTIES. .......................................... 9
SECTION 13. COVENANTS ................................................................ 10
SECTION 14. GOVERNING LAW ............................................................ 11
SECTION 15. TERMINATION .............................................................. 11
SECTION 16. NOTICES .................................................................. 11
SECTION 17. BANKRUPTCY ............................................................... 12
SECTION 18. LIMITATION OF REMEDIES ................................................... 12
SECTION 19. NO PETITION. ............................................................. 12
SECTION 20. AMENDMENTS ............................................................... 13
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 21. SUCCESSORS AND ASSIGNS; REPLACEMENT OF CREDIT ENHANCEMENT PROVIDER...... 13
SECTION 22. PARTICIPATION .......................................................... 13
</TABLE>
ii
<PAGE> 4
CREDIT ENHANCEMENT AGREEMENT, dated as of October 15, 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 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 October 15, 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 $526,316,000 in aggregate principal amount of
Investor Certificates of Discover Card Master Trust I, Series 1997-2 (the
"Series"), which will entitle the holders thereof to interest during the
Revolving Period, the Controlled Liquidation Period, the Accumulation Period,
the Early Accumulation Period and the Amortization Period, if any, and
principal commencing on the April 2000 Distribution Date.
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 $21,052,640 (4.0% 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 or on the Fully
Funded Date, if any, 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 Credit Enhancement Account equals or exceeds the unpaid principal
on the Loan and at a higher
<PAGE> 5
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 0.35%.
"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 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
2
<PAGE> 6
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 $21,052,640 (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 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
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<PAGE> 7
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)(27) 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 earliest to occur of (i) the Series Termination Date, (ii) the
day on which the Class Invested Amount with respect to each Class of the
Series is paid in full and (iii) the Fully Funded Date, if any, 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 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
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<PAGE> 8
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)(27) 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 earliest to occur of (i) the Series Termination Date, (ii)
the day on which the Class Invested Amount with respect to each Class of the
Series is paid in full and (iii) the Fully Funded Date, if any, 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 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
5
<PAGE> 9
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 or as a result of the
occurrence of a Supplemental Credit Enhancement Event, 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 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) SUPPLEMENTAL CREDIT ENHANCEMENT EVENT. In the event that a
Supplemental Credit Enhancement Event occurs, Greenwood as Servicer may cause
the Supplemental Credit Enhancement Amount to be funded by Series Excess
Servicing and other
6
<PAGE> 10
amounts paid to the Trustee as administrator of the Credit Enhancement to fund
the Available Class B Credit Enhancement Amount, or may request that the Credit
Enhancement Provider make an additional loan in the amount of the Supplemental
Credit Enhancement Amount. If Greenwood as Servicer makes such a request, and
if the Credit Enhancement Provider elects to make such loan, the amount of such
loan shall be equal to the Supplemental Credit Enhancement Amount and shall be
added to the unpaid principal amount of the Loan.
(c) 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.
(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
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<PAGE> 11
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
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:
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<PAGE> 12
(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 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
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<PAGE> 13
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:
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
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<PAGE> 14
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: Martha Sanders
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.
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.
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(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.
(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
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<PAGE> 16
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.
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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/ Martha Sanders
---------------------------------------
Name: Martha Sanders
Title: Vice President
14
<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 1997-2
[Name of Issuer]
U.S. Bank National Association
[Name of Trustee]
October 15, 1997
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: 6.792% Class A Credit Card Pass-Through
Certificates and Floating Rate Class B Credit Card
Pass-Through Certificates, Discover Card Master Trust I,
Series 1997-2
------------------------------------------------------------
[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 is
["Underwriter"]
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 October 15, 1997, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede &
- -------------------------
* This Letter of Representation 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:
Manager; Call Notification Department
The Depository Trust Company
2
<PAGE> 3
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 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.
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.
17. Nothing herein shall be deemed to require Trustee to advance funds on
behalf of Issuer.
5
<PAGE> 6
<TABLE>
<S><C>
Notes:
- ------
A. If there is a Trustee (as defined in this Very truly yours,
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 GREENWOOD TRUST COMPANY
obligations set forth herein. ----------------------------------------
B. Schedule B contains statements that DTC By: /s/ John J. Coane
believes accurately describe DTC, the method ------------------------------------
of effecting book-entry transfers of (Authorized Officer's Signature)
securities distributed through DTC, and
certain related matters U.S. BANK NATIONAL ASSOCIATION
----------------------------------------
By: /s/ Martha L. Sanders
Received and Accepted: -----------------------------------
(Authorized Officer's Signature)
THE DEPOSITORY TRUST COMPANY
By:/s/Authorized Signatory
--------------------------
cc: Underwriter
Underwriter's Counsel
</TABLE>
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").]
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
reasonable notice to Issuer or Agent. Under any of the aforementioned
circumstances, at DTC's
- --------------
(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."
<PAGE> 8
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
A D D E N D U M
to
Letter of Representations dated October 15, 1997
Discover Card Master Trust I, Series 1997-2
General: For purposes of this Letter of Representations:
"Securities" shall mean the $500,000,000 aggregate principal
amount of 6.792% Class A Credit Card Pass-Through Certificates and
the $26,316,000 aggregate principal amount of Floating Rate Class
B Credit Card Pass-Through Certificates issued by Discover Card
Master Trust I, Series 1997-2 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 1997-2; 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 October 15, 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 shall send a notice to DTC not less than 10 days nor
more than 60 days
<PAGE> 10
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 regulatory order or
decree, and such discontinuation is required in less
2
<PAGE> 11
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> 12
SCHEDULE A
(Describe Issue)
6.792% CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
AND FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES,
DISCOVER CARD MASTER TRUST I, SERIES 1997-2
<TABLE>
<CAPTION>
Principal Amount Maturity Date* Interest Rate
---------------- -------------- -------------
CLASS A
CERTIFICATES
CUSIP Number
- -------------------
25466KBF5
Certificate Number:
- -------------------
<S> <C> <C> <C>
1 $200,000,000 October 16, 2007 6.792%
2 $200,000,000 October 16, 2007 6.792%
3 $100,000,000 October 16, 2007 6.792%
CLASS B
CERTIFICATES
CUSIP Number
- -------------------
25466KBG3
Certificate Number:
- ------------------- $ 26,316,000 November 16, 2007 Floating
1
</TABLE>
* Last Possible Distribution Date
4
