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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1998.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DISCOVER CARD MASTER TRUST I
(Issuer with respect to the Certificates)
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GREENWOOD TRUST COMPANY
(Exact name of registrant as specified in its charter)
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DELAWARE 6022 51-0020270
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification Number)
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12 READ'S WAY, NEW CASTLE, DELAWARE 19720
(302) 323-7826
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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GREENWOOD TRUST COMPANY
12 READ'S WAY, NEW CASTLE, DELAWARE 19720
ATTENTION: JOHN J. COANE
(302) 323-7474
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
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CARL E. WITSCHY, ESQ. RICHARD M. SCHETMAN, ESQ.
LATHAM & WATKINS CADWALADER, WICKERSHAM & TAFT
Sears Tower, Suite 5800 100 Maiden Lane
Chicago, Illinois 60606 New York, New York 10038
Counsel to Registrant Counsel to Underwriters
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number for the earlier effective registration statement
for the same offering. [ ]
If delivery of prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) REGISTRATION FEE
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Credit Card Pass-Through Certificates of
Discover Card Master Trust I............ $7,000,000,000 100% $7,000,000,000 $2,065,000
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(1) This registration statement and the registration fee pertain to the initial
offering of $7,000,000,000 aggregate principal amount of Credit Card
Pass-Through Certificates of Discover Card Master Trust I, and in addition
cover offers and sales related to market-making transactions by Morgan
Stanley & Co. Incorporated and Dean Witter Reynolds Inc., affiliates of the
registrant, and offers and sales in connection with the proportionate share
of underwriters' stabilization activities (if any) by Morgan Stanley & Co.
Incorporated and Dean Witter Reynolds Inc., with respect to all such Credit
Card Pass-Through Certificates.
(2) Estimated solely for purpose of calculating the registration fee.
Pursuant to Rule 429 promulgated under the Securities Act of 1933, the
Prospectus which forms part of this Registration Statement also relates to
$1,667,901,000 of Credit Card Pass-Through Certificates of Discover Card Master
Trust I registered under the Registrant's Registration Statement on Form S-3,
File No. 333-16103, which was declared effective on November 14, 1996, as
amended by Post-Effective Amendment No. 1 thereto, which was declared effective
on July 7, 1997.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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EXPLANATORY NOTE
This Registration Statement pertains to (i) the initial offering of
$7,000,000,000 aggregate principal amount of Credit Card Pass-Through
Certificates of Discover Card Master Trust I (all such Pass-Through
Certificates, the "Investor Certificates") registered hereunder by the
registrant, (ii) offers and sales in connection with the proportionate share of
underwriters' stabilization activities (if any) by Morgan Stanley & Co.
Incorporated and Dean Witter Reynolds Inc., affiliates of the registrant, with
respect to the Investor Certificates and (iii) offers and sales related to
market-making transactions in the Investor Certificates by Morgan Stanley & Co.
Incorporated and Dean Witter Reynolds Inc.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED , 199
PROSPECTUS
Discover(R) Card Master Trust I
Credit Card Pass-Through Certificates
Greenwood Trust Company
Master Servicer, Servicer and Seller
------------------------
Greenwood Trust Company ("Greenwood") intends to sell from time to time up
to $8,667,901,000 aggregate principal amount of Credit Card Pass-Through
Certificates ("investor certificates") consisting of one or more series,
representing an undivided interest in the Discover Card Master Trust I (the
"Trust "), formed pursuant to a Pooling and Servicing Agreement between
Greenwood as Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association, successor trustee to Bank
of America Illinois, formerly Continental Bank, National Association), as
Trustee, dated as of October 1, 1993, as amended. The property of the Trust
includes a pool of receivables (the "Receivables") arising under selected
Discover Card accounts in the portfolio of Discover Card accounts originated by
Greenwood and all monies due or to become due in payment of the Receivables.
Investor certificates will be sold from time to time under this Prospectus on
terms determined for each series at the time of sale and described in the
related Prospectus Supplement. Each series will consist of one or more classes
of investor certificates. Each investor certificate will represent an undivided
interest in the Trust and the interest of the investor certificateholders of
each class of a series will include the right to receive a varying percentage of
each month's collections with respect to the Receivables at the times, in the
manner and to the extent described herein and in the related Prospectus
Supplement.
Although the specific terms of each series in respect to which this
Prospectus is being delivered will be described in the related Prospectus
Supplement, the terms of such series will not be subject to prior review by, or
consent of, the holders of the investor certificates of any previously issued
series.
Interest and principal payments with respect to each series will be made as
specified in the related Prospectus Supplement. One or more classes of a series
may be entitled to the benefits of a form of credit enhancement as specified in
the related Prospectus Supplement. In addition, each series may include one or
more classes that are subordinated in right and priority to payment of principal
of, and/or interest on, one or more other classes of such series or another
series, in each case, to the extent described in the related Prospectus
Supplement.
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THE INVESTOR CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST AND WILL NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF GREENWOOD TRUST COMPANY. NEITHER THE
INVESTOR CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The investor certificates may be sold through underwriting syndicates
represented by one or more managing underwriters, which may include Morgan
Stanley & Co. Incorporated ("MS & Co."), Morgan Stanley International Limited
("MSIL"), Dean Witter Reynolds Inc. ("DWR") or other affiliates of Greenwood, by
underwriters without a syndicate, through agents designated from time to time,
or directly to purchasers. If underwriters or agents are involved in the
offering of investor certificates, the name of the managing underwriter or
underwriters or agents will be set forth in the related Prospectus Supplement.
If an underwriter, agent or dealer is involved in the offering of investor
certificates, the underwriter's discount, agent's commission or dealer's
purchase price will be set forth in, or may be calculated from the information
contained in, the related Prospectus Supplement, and the net proceeds to
Greenwood from such offering will be the public offering price of such investor
certificates less such discount in the case of an underwriter, the purchase
price of such investor certificates less such commission in the case of an
agent, or the purchase price of such investor certificates in the case of a
dealer, and less, in each case, the other expenses of Greenwood associated with
the issuance and distribution of such investor certificates. See "Plan of
Distribution."
Following the initial distribution of a series of investor certificates, MS
& Co., MSIL, DWR and other affiliates of Greenwood may offer and sell previously
issued investor certificates in the course of their businesses as
broker-dealers. MS & Co., MSIL, DWR and such other affiliates may act as a
principal or agent in such transactions. This Prospectus and the accompanying
Prospectus Supplement may be used by MS & Co., MSIL, DWR and such other
affiliates in connection with such transactions. Such sales, if any, will be
made at varying prices relating to market prices prevailing at the time of sale.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF ANY SERIES OF
INVESTOR CERTIFICATES UNLESS ACCOMPANIED BY THE RELATED PROSPECTUS SUPPLEMENT.
------------------------
MORGAN STANLEY DEAN WITTER
, 199
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TABLE OF CONTENTS
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Reports to Investor Certificateholders.................. 2
Incorporation of Certain Documents by Reference......... 2
Prospectus Summary...................................... 3
Risk Factors............................................ 6
The Trust............................................... 12
Formation of the Trust................................ 12
The Trustee........................................... 12
Indemnification of the Trust and the Trustee.......... 13
Sale and Assignment of Receivables to the Trust....... 13
Addition of Accounts.................................. 13
Removal of Accounts................................... 15
Termination of the Trust.............................. 15
Description of the Investor Certificates................ 15
General............................................... 15
Interest Payments..................................... 16
Principal Payments.................................... 16
Issuance of Additional Series......................... 17
Collections Account and Group Collections Accounts.... 17
Class Percentages and Seller Percentage............... 18
Allocations, Reallocations and Subordination of
Collections......................................... 18
Adjustments to Receivables............................ 19
Distributions of Collections and Application of
Collections and Certain Other Amounts............... 20
Additional Funds...................................... 20
Final Payment of Principal; Termination of Series..... 20
Credit Enhancement.................................... 21
Repurchase of Trust Portfolio......................... 21
Repurchase of Specified Receivables................... 22
Repurchase of a Series................................ 23
Repurchase of Investor Certificates................... 23
Sale of Seller Interest............................... 23
Reallocation of Series Among Groups................... 24
Amendments............................................ 24
List of Investor Certificateholders................... 25
Meetings.............................................. 25
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Book-Entry Registration............................... 25
Definitive Certificates............................... 28
Servicing............................................... 28
Master Servicer and Servicer.......................... 28
Servicing Compensation and Payment of Expenses........ 29
Certain Matters Regarding the Master Servicer and the
Servicers........................................... 30
Master Servicer Termination Events.................... 30
Servicer Termination Events........................... 31
Evidence as to Compliance............................. 32
The Seller.............................................. 32
Greenwood............................................. 32
Insolvency-Related Matters............................ 33
Certain Legal Matters Relating to the Receivables....... 34
Transfer of Receivables............................... 34
Certain UCC Matters................................... 34
Consumer Protection Laws and Debtor Relief Laws
Applicable to the Receivables....................... 35
Claims and Defenses of Cardmembers Against the
Trust............................................... 35
Use of Proceeds......................................... 36
Certain Federal Income Tax Consequences................. 36
General............................................... 36
Tax Treatment of the Investor Certificates as
Indebtedness........................................ 36
United States Investor Certificateholders............. 37
Foreign Investor Certificateholders................... 39
Backup Withholding and Information Reporting.......... 40
Possible Characterization of the Investor
Certificates........................................ 40
Certain State Income Tax Consequences................... 42
ERISA Considerations.................................... 43
Plan of Distribution.................................... 44
Legal Matters........................................... 46
Available Information................................... 46
Glossary of Terms....................................... 47
ANNEX I -- Global Clearance, Settlement and Tax
Documentation Procedures.............................. 57
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REPORTS TO INVESTOR CERTIFICATEHOLDERS
Monthly and annual reports with respect to each outstanding series of
investor certificates containing information concerning the Trust and such
outstanding series of investor certificates, prepared by the Master Servicer,
will be made available to certificate owners free of charge upon request by
calling 302-323-7130, extension 328. See "Reports to Investor
Certificateholders" in the related Prospectus Supplement. The annual reports
will not contain financial information that has been examined and reported on by
independent public accountants. Greenwood does not intend to send any of its
financial reports to investor certificateholders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
by Greenwood on behalf of the previously formed Trust are incorporated in this
Prospectus by reference: the Trust's Annual Reports on Form 10-K for the years
ended December 31, 1993, December 31, 1994, December 31, 1995, December 31, 1996
and December 31, 1997 and Current Reports on Form 8-K filed since the formation
of the Trust.
All reports and other documents filed by Greenwood on behalf of the Trust
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Securities Exchange Act of 1934"), subsequent to the date
of this Prospectus and prior to the termination of the offering of the investor
certificates shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to constitute
a part of this Prospectus.
The Master Servicer will provide without charge to each person, including
any beneficial owner of investor certificates, to whom a copy of this Prospectus
is delivered, a copy of any and all the documents incorporated herein by
reference (other than exhibits to such documents) upon request by calling
813-288-3418.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety with respect to any
series of investor certificates issued by the Trust by the more detailed
information appearing elsewhere in this Prospectus and in the related Prospectus
Supplement. Reference is made to the Glossary of Terms contained in this
Prospectus and in the related Prospectus Supplement for the definitions of
certain capitalized terms. Unless the context requires otherwise, capitalized
terms used in this Prospectus relate separately to individual series of investor
certificates issued by the Trust.
OVERVIEW OF TRUST............ Discover Card Master Trust I has issued, and is
expected to issue, series of investor
certificates from time to time. The securities
offered in each series will represent a
Fractional Undivided Interest in the Trust. The
assets of the Trust include the accounts
receivable arising under certain Discover(R) Card
accounts selected from the Discover Card
Portfolio of accounts originated by Greenwood,
the cash received in payment of those Receivables
(including recoveries on charged-off
Receivables), Participation Interests, if any,
included in the Trust, funds available with
respect to the Credit Enhancement for any
outstanding series of investor certificates, any
additional funds that are included in the Trust,
interest rate swaps, currency swaps for any
outstanding series of investor certificates that
has one or more classes denominated in a foreign
currency, and interest rate cap or other interest
rate protection agreements for any outstanding
series of investor certificates that has one or
more classes with a floating certificate rate
that is not capped at a specified maximum rate.
The Trust was formed pursuant to the Pooling and
Servicing Agreement between Greenwood and the
Trustee. Upon formation of the Trust, Greenwood
transferred to the Trust all the Receivables in
the Accounts selected for inclusion in the Trust
prior to the Initial Closing Date. In addition,
Greenwood has transferred the Receivables in
Additional Accounts to the Trust, and may do so
again in the future. Greenwood also transfers
additional Receivables generated in the Accounts
to the Trust on an ongoing basis. Greenwood, the
originator of the Accounts, will continue to
service the Accounts. U.S. Bank National
Association (formerly First Bank National
Association, successor trustee to Bank of America
Illinois, formerly Continental Bank, National
Association), is Trustee for the Trust.
The Trust, as a master trust, has issued series
of investor certificates, and is expected to
issue additional series of investor certificates
in the future, subject to certain requirements
and restrictions set forth in the Pooling and
Servicing Agreement. The consent of the
certificateholders of outstanding series will not
be required or requested in order for the Trust
to issue additional series of investor
certificates.
The terms governing each particular series of
investor certificates are set forth in the
Pooling and Servicing Agreement (which applies to
all series issued from the Trust) and will be set
forth in a Series Supplement (which will be
specific to each particular series). The Series
Supplement for each series will specify, among
other things, the number of classes of investor
certificates in the series, the size of the
series, its payment terms, and the kind and size
of the Credit Enhancement for the series.
The investor certificates of each series issued
from the Trust will represent a Fractional
Undivided Interest in the Trust and will be
entitled to receive a specified portion of funds
received in payment of the Receivables, plus the
benefits of the Credit Enhancement for that
series, the currency swap and interest rate cap
or other interest rate protection agreements for
that series, if any. The remaining Fractional
3
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Undivided Interest in the Trust not represented
by investor certificates of any series is
represented by the Seller Certificate, which is
owned by Greenwood.
SELLER....................... Greenwood Trust Company ("Greenwood"). The
executive office of Greenwood (302-323-7184) is
located at 12 Read's Way, New Castle, Delaware
19720.
MASTER SERVICER AND
SERVICER..................... Greenwood.
TRUSTEE...................... U.S. Bank National Association (formerly First
Bank National Association, successor trustee to
Bank of America Illinois, formerly Continental
Bank, National Association), its successors and
assigns.
INTEREST ON INVESTOR
CERTIFICATES............... Interest on the investor certificates will accrue
at the per annum rate either specified in, or
determined in the manner specified in, the
related Prospectus Supplement.
See "Description of the Investor Certificates --
Interest Payments" herein and in the related
Prospectus Supplement.
PRINCIPAL ON INVESTOR
CERTIFICATES................. The principal of the investor certificates of
each series will be scheduled to be paid either
in full on a date specified in the related
Prospectus Supplement (the "Expected Final
Payment Date"), in which case such series will
have an Accumulation Period as described below
under "-- Accumulation Period," or in
installments commencing on the Principal
Commencement Date specified in the related
Prospectus Supplement, in which case such series
will have a Controlled Liquidation Period as
described below under "-- Controlled Liquidation
Period." Certain series may have both a
Controlled Liquidation Period and an Accumulation
Period. If a series has more than one class of
investor certificates, a different method of
paying principal, Expected Final Payment Date
and/or Principal Commencement Date may be
specified for each class. The payment of
principal with respect to the investor
certificates of a series or class may commence
earlier than the Expected Final Payment Date or
Principal Commencement Date specified in the
related Prospectus Supplement, and the final
principal payment with respect to the investor
certificates of a series or class may be made
earlier or later than the Expected Final Payment
Date or other expected date specified in the
related Prospectus Supplement, if an Amortization
Event occurs with respect to such series or class
or under certain other circumstances described
herein and in the related Prospectus Supplement.
See "Description of the Investor Certificates --
Principal Payments" herein and in the related
Prospectus Supplement.
REVOLVING PERIOD............. The investor certificates of each series will
have a Revolving Period, which will commence on
the Series Cut-Off Date specified in the related
Prospectus Supplement and continue to, but not
including, the earlier of (i) the Principal
Commencement Date, (ii) the Amortization
Commencement Date with respect to such series and
(iii) if applicable, the Early Accumulation
Commencement Date with respect to such series.
CONTROLLED LIQUIDATION
PERIOD....................... If the related Prospectus Supplement specifies
that a series will have a Controlled Liquidation
Period, unless an Amortization Event or, if
applicable, an Early Accumulation Event has
occurred during the Revolving Period, the
Controlled Liquidation Period will begin on the
Principal Commencement Date specified in such
Prospectus Supplement and continue until the
earliest of (i) the payment in full of the Series
Invested Amount, (ii) the Amortization
Commencement Date
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with respect to such series, (iii) if applicable,
the Early Accumulation Commencement Date with
respect to such series and (iv) the Series
Termination Date.
ACCUMULATION PERIOD.......... If the related Prospectus Supplement specifies
that a series will have an Accumulation Period,
unless an Amortization Event or, if applicable,
an Early Accumulation Event has occurred during
the Revolving Period, the Accumulation Period
will begin on the Principal Commencement Date
specified in such Prospectus Supplement and
continue until the earliest of (i) the payment in
full of the Series Invested Amount, (ii) the
Amortization Commencement Date with respect to
such series, (iii) if applicable, the Early
Accumulation Commencement Date with respect to
such series and (iv) the Series Termination Date.
EARLY ACCUMULATION PERIOD.... If the related Prospectus Supplement specifies
that a series may have an Early Accumulation
Period, unless an Amortization Event has occurred
prior to the Early Accumulation Commencement
Date, the Early Accumulation Period will begin on
the Early Accumulation Commencement Date and
continue until the earliest of (i) the payment in
full of the Series Invested Amount, (ii) the
Amortization Commencement Date with respect to
such series and (iii) the Series Termination
Date.
AMORTIZATION PERIOD.......... The Amortization Period with respect to a series,
if any, will begin on the Amortization
Commencement Date and continue until the earlier
of (i) the payment in full of the Series Invested
Amount and (ii) the Series Termination Date.
CREDIT ENHANCEMENT........... The Credit Enhancement with respect to a series
may include a cash collateral account, a letter
of credit, a surety bond, an insurance policy or
any other form of credit enhancement described in
the related Prospectus Supplement. The Credit
Enhancement may also be provided to a series or
class of a series by subordination provisions
that require distributions of principal and/or
interest to be made with respect to the investor
certificates of such series or class before
distributions are made to one or more other
series or other classes of such series.
See "Risk Factors -- Credit Enhancement" herein
and "Description of the Investor Certificates --
Principal Payments" and "-- Credit Enhancement"
herein and in the related Prospectus Supplement.
CLEARANCE AND SETTLEMENT..... Unless otherwise specified in the Series
Supplement, investor certificateholders may elect
to hold their investor certificates through any
of DTC (in the United States) or Cedel or
Euroclear (in Europe). Transfers within DTC,
Cedel or Euroclear, as the case may be, will be
in accordance with the usual rules and operating
procedures of the relevant system. Cross-market
transfers between persons holding directly or
indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly
through Cedel or Euroclear, on the other hand,
will be effected in DTC through the relevant
Depositaries of Cedel or Euroclear. See
"Description of the Investor Certificates --
Book-Entry Registration."
5
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RISK FACTORS
Limited Liquidity. Morgan Stanley & Co. Incorporated and Dean Witter
Reynolds Inc. may, from time to time, make a market in the investor certificates
of any series and may deliver this Prospectus and any Prospectus Supplements
hereto in connection with such market-making activity. There can be no
assurance, however, that a secondary market will develop or, if a secondary
market does develop, that it will provide holders of investor certificates of
any particular series with adequate liquidity or that it will continue until the
termination of any such series.
Certain Legal Aspects. Greenwood has agreed in the Pooling and Servicing
Agreement to repurchase all of the Receivables in the event that the transfer of
the Receivables by Greenwood or any Additional Seller to the Trust is neither a
sale of the Receivables to the Trust nor a grant to the Trust of a security
interest in the Receivables, or, if the transfer by a Seller to the Trust is
deemed to be a grant to the Trust of a security interest in the Receivables, the
Trustee does not have a perfected security interest therein of first priority
under the Uniform Commercial Code (the "UCC") as in effect in the state in which
the chief executive office of each Seller is located (the "Applicable State"
with respect to each Seller). See "Description of the Investor Certificates --
Repurchase of Trust Portfolio." Greenwood has taken certain actions to perfect
and will (along with Additional Sellers, if any) continue the perfection of the
Trust's interest in the Receivables. Unless continuation statements are filed
within the time specified in the UCC in respect of the security interest of the
Sellers or the Trust in the Receivables, the perfection of the security interest
will lapse. A tax or statutory lien on property of a Seller may have priority
over the Trust's interest in the Receivables.
It is anticipated that Greenwood will be the only Servicer until such time
as receivables in credit accounts other than accounts originated by Greenwood
are added to the Trust. See "The Trust -- Addition of Accounts." Under certain
conditions, a Servicer may use Collections received by it in each Due Period
until the related Distribution Date. If these conditions are not met, however,
the Servicer will pay from Collections with respect to Receivables serviced by
such Servicer for any day an amount equal to the sum of the Required Daily
Deposits for each series then outstanding with respect to such Servicer to, or
at the direction of, Greenwood as Master Servicer, for deposit into the
Collections Account, within two business days following the date of processing
of such Collections. Any such Collections not deposited into the Collections
Account will be used by the Servicer for its own benefit until the related
Distribution Date. If Greenwood or any other future Servicer is so entitled to
use Collections received by it and becomes insolvent, the Trust may not have a
perfected interest in such Collections. See "The Seller -- Insolvency-Related
Matters," "Certain Legal Matters Relating to the Receivables -- Transfer of
Receivables" and "Description of the Investor Certificates -- Collections
Account and Group Collections Accounts."
Effect of Subordination. With respect to any series having a class of
subordinated certificates (referred to herein as the "Class B Certificates"),
although the Class B Certificates may have the benefit of Credit Enhancement,
which may include the exclusive direct benefit of all or a portion of such
Credit Enhancement, the Class B Certificates will be subordinated in right of
payment to the senior certificates (the "Class A Certificates") to the extent
described herein and in the related Prospectus Supplement. See "Description of
the Investor Certificates -- Allocations, Reallocations and Subordination of
Collections -- Subordination of Class B Certificates" herein and, if applicable,
in the related Prospectus Supplement and, if applicable, "Description of the
Investor Certificates -- Distributions of Collections and Application of
Collections and Certain Other Amounts" in the related Prospectus Supplement. If
the Class B Investor Interest suffers a reduction as a result of such
subordination, the Class B Percentage of Finance Charge Collections and
Principal Collections on future Distribution Dates may be reduced and future
interest payments, as well as final payment of principal, also may be reduced or
delayed.
Consumer Protection Laws and Regulations. The Accounts and the Receivables
are subject to numerous federal and state consumer protection laws and
regulations that impose requirements on the making and enforcement of consumer
loans. Such laws, as well as any new laws or new rulings regarding new or
existing laws that may be adopted, may adversely affect a Servicer's ability to
collect on the Receivables or maintain previous levels of monthly periodic
finance charges, and failure by any Servicer to comply with such requirements
could adversely affect such Servicer's ability to collect the Receivables with
respect to which it is
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the Servicer. Greenwood has agreed in the Pooling and Servicing Agreement that
if a Receivable was not created in compliance in all material respects with all
Requirements of Law applicable to a Seller with respect to such Receivable, and
if such noncompliance continues beyond a specified cure period and has a
material adverse effect on the interest of the Trust in all the Receivables,
Greenwood will repurchase all Receivables in the Accounts containing the
Receivables affected by such noncompliance. See "Description of the Investor
Certificates -- Repurchase of Specified Receivables." It is not anticipated that
the Trustee will make any examination of the Receivables or the records relating
thereto for the purpose of establishing the presence or absence of defects in
the Accounts, or for any other purpose. See "Certain Legal Matters Relating to
the Receivables -- Consumer Protection Laws and Debtor Relief Laws Applicable to
the Receivables."
Consumer Protection Laws and Regulations; Litigation. Greenwood is involved
from time to time in various legal proceedings that arise in the ordinary course
of its business. Greenwood does not believe that the resolution of any of these
proceedings will have a material adverse effect on Greenwood's financial
condition or on the Receivables. There can be no assurance, however, regarding
any of these effects.
Legislation. The Competitive Equality Banking Act of 1987 ("CEBA") contains
provisions that limit the ability of nonbanking companies, such as Morgan
Stanley Dean Witter & Co. ("MSDW") and NOVUS Credit Services Inc. ("NOVUS"), to
own banks. However, the legislation permits any nonbanking company that owned a
bank on March 5, 1987 to retain control of the bank. MSDW and NOVUS are
permitted to retain control of Greenwood under this legislation. CEBA provides
that if MSDW, NOVUS or Greenwood fails to comply with certain statutory
restrictions, MSDW and NOVUS will be required to divest control of Greenwood or
to limit its activities significantly. Greenwood believes, however, that in
light of the programs it has in place, the limitations of CEBA will not have a
material impact on Greenwood's ability to service, or maintain the level of, the
Receivables. In addition, future federal or state legislation, regulation or
interpretation of federal or state legislation or regulation could adversely
affect the business of Greenwood or the relationship of MSDW or NOVUS with
Greenwood. See "The Seller -- Greenwood."
Social, Legal and Economic Factors. Changes in account use and payment
patterns by cardmembers may result from a variety of social and economic
factors, as well as from legislative initiatives. Economic factors, including
the rate of inflation and relative interest rates offered for various types of
loans, also may be reflected in changes in account use and payment patterns,
including increased risk of defaults by cardmembers. Discover Card accounts from
all of the states of the United States and from the United States' territories
and possessions are represented in the Accounts. Greenwood is unable to
determine and has no basis to predict whether, or to what extent, economic or
social factors will affect future credit use or payment patterns. However,
heightened levels of consumer debt, large numbers of personal bankruptcies and a
weakened national economy may cause increases in delinquencies in, and
charge-offs of, credit card receivables underlying securities such as the
investor certificates.
Competition in the Credit Card Industry. The credit card industry in which
the Discover Card competes is highly competitive. This competition focuses on
features and financial incentives of credit cards such as annual fees, finance
charges, rebates and other enhancement features. The market includes bank-issued
credit cards (including "co-branded" cards issued by banks in cooperation with
industrial, retail or other companies) and charge cards issued by travel and
entertainment companies. The vast majority of the bank-issued credit cards bear
the Visa or MasterCard service mark and are issued by the many banks that
participate in one or both of the national bank card networks operated by Visa
U.S.A. Inc. and MasterCard International Incorporated. The Visa and MasterCard
associations have been in existence for approximately 30 years. Cards bearing
their service marks have worldwide acceptance by merchants of goods and services
and recognition by consumers and the general public. Co-branded credit cards,
which offer the cardholder certain benefits relating to the industrial, retail
or other business of the bank's co-branding partner (e.g., credits towards
purchases of airline tickets or rebates for the purchase of an automobile),
currently represent a large segment of the bank-issued credit card market. The
majority of travel and entertainment cards are issued by American Express
Company, which has been issuing cards since 1958. Travel and entertainment cards
differ in many cases from bank cards in that they generally have no
pre-established credit limits and have limited provisions for repayment in
installments. American Express Company, through a subsidiary bank, also issues
cards with both a pre-established credit limit and provisions for repayment in
installments. The Discover Card was introduced nationwide in 1986 and competes
with general purpose credit cards issued by other banks and with
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travel and entertainment cards. Greenwood currently is the only issuer of the
Discover Card. Greenwood has also issued, and may from time to time introduce,
additional general purpose credit cards; however, none of the accounts
associated with these cards is included in the Discover Card Portfolio.
Many bank credit card issuers have instituted balance transfer programs.
Generally, under these transfer programs, cardholders are offered a favorable
annual percentage rate or other financial incentives for a specified length of
time on any portion of their account balances arising from the transfer to their
accounts of outstanding account balances maintained on another credit card. The
annual percentage rates for balance transfers often are more favorable to
cardholders than the annual percentage rates for account balances arising from
purchases or cash advances.
This competition affects Greenwood's ability to obtain applicants for
Discover Card accounts, to encourage usage of the accounts by cardmembers and to
obtain participation in the Discover Card program by merchants. A significant
adverse change in any of these factors could result in a decrease in the level
of the Receivables, and of the receivables in the Discover Card Portfolio. If
there is a decrease in the level of Receivables, and if sufficient Receivables
in Additional Accounts or sufficient Participation Interests are not available
to be added to the Trust or are not added, an Amortization Event with respect to
one or more series could result, causing the commencement of the Amortization
Period with respect to such series. See "--Payments and Maturity" herein and
"Description of the Investor Certificates -- Amortization Events" in the related
Prospectus Supplement.
MSDW, the indirect owner of Greenwood, generally has a strategy of issuing
additional card products as appropriate in the marketplace. For example,
Greenwood issues the Private Issue(R) card, certain co-branded credit cards, and
expects that from time to time additional general purpose credit card products
will be introduced through Greenwood or other MSDW subsidiaries in order to
attract additional consumers. The introduction of a new general purpose credit
card product by any market competitor poses incremental competition for Discover
Card and for other credit card issuers. Although Greenwood currently does not
expect that the issuance of any new card by Greenwood or another MSDW subsidiary
will have a materially greater impact on the Discover Card program than the
introduction of a comparable product by any other market competitor, no
assurance can be given with respect to the future competitive impact of such
programs on the Discover Card Portfolio.
Ability of the Seller to Change Terms of the Accounts. Pursuant to the
Pooling and Servicing Agreement, a Seller does not transfer Accounts to the
Trust, but only the Receivables arising in the Accounts. As owner of any
Account, the Seller has the right to determine the periodic finance charges
applicable from time to time to the Account, to alter the minimum monthly
payment required under the Account, to change the credit limit with respect to
the Account and to change various other terms with respect to the Account. A
decrease in the periodic finance charges or other fees with respect to an
Account could decrease the Finance Charge Collections, which would decrease the
effective yield on the Receivables and could also cause commencement of the
Amortization Period with respect to one or more series, as well as decreased
protection to investor certificateholders against shortfalls in Certificate
Interest and against charged-off Receivables. In addition, an increase in credit
limits could result in increases in Charged-Off Amounts, which could result in a
decrease in the level of the Receivables, and of the receivables in the Discover
Card Portfolio. If there is a decrease in the level of Receivables, and if
sufficient Receivables in Additional Accounts or sufficient Participation
Interests are not available to be added to the Trust or are not added, an
Amortization Event with respect to one or more series could result, causing the
commencement of the Amortization Period with respect to such series. See
"Description of the Investor Certificates -- Distributions of Collections and
Application of Collections and Certain Other Amounts" and "-- Amortization
Events" in the related Prospectus Supplement.
The Pooling and Servicing Agreement provides that each Servicer must
administer, process and enforce the Accounts with respect to which it is the
Servicer in accordance with its customary and usual servicing procedures for
servicing credit accounts comparable to the Accounts and in accordance with its
Credit Guidelines. Each Seller also must agree that the terms governing an
Account will not be changed unless the change is also made to the terms of other
accounts of such Seller of the same general type, obligors of which are resident
in a particular affected state or similar jurisdiction. There can be no
assurance that any such
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change may not affect the Accounts to a greater or lesser degree than other such
accounts. Except as set forth above, there are no restrictions on the ability of
any Seller to change the terms of the Accounts or the Receivables.
There can be no assurance that changes in applicable laws, changes in the
marketplace or prudent business practice might not result in a determination by
Greenwood to take actions that would result in other changes in the terms of
some or all of the Greenwood Discover Card Accounts.
Payments and Maturity. The Receivables may be paid at any time, and there
is no assurance that there will be additional Receivables created in the
Accounts or that any particular pattern of payments will occur. Changes in
credit use and payment patterns may result from a variety of social, legal and
economic factors. A significant decline in the amount of Receivables generated
could result in a decline in the Seller Interest to an amount that would require
Greenwood to transfer to the Trust the Receivables in Additional Accounts or
Participation Interests in order to avoid an Amortization Event with respect to
one or more series and commencement of the Amortization Period with respect to
such series. Greenwood's ability to continue to compete in the current industry
environment will affect the generation of new Receivables to be conveyed to the
Trust and also may affect payment patterns. In addition, increased convenience
use, where cardmembers pay their Receivables within the grace period to avoid
all finance charges on purchases of merchandise and services, would decrease the
effective yield on the Receivables and also could cause commencement of the
Amortization Period with respect to one or more series, as well as decreased
protection to the investor certificateholders against shortfalls in Certificate
Interest and against charged-off Receivables. Conversely, the terms governing
the Accounts require only a minimum monthly payment, and a significant decrease
in the percentage of repayment by cardmembers or in the usage of the Accounts
could delay the payment of principal to the investor certificateholders of one
or more series. Any delay in the payment of principal with respect to any series
will extend the period during which charged-off Receivables may be allocated to
the investor certificates of such series. See "Description of the Investor
Certificates -- Amortization Events" and "Composition and Historical Performance
of the Discover Card Portfolio" in the related Prospectus Supplement.
Basis Risk. In general, accounts in the Discover Card Portfolio accrue
periodic finance charges at variable rates based upon factors such as the
prevailing prime rate, the amount of a cardmember's annual purchases and his or
her payment status (although certain account balances may accrue periodic
finance charges at fixed rates, in most instances for specified periods of
time). See "The Accounts -- Billing and Payments" in the related Prospectus
Supplement. As a result, a significant portion of the Receivables currently bear
interest at the prevailing prime rate plus a margin, while the investor
certificates of a series may bear interest at fixed rates or rates that float
against a different index, as specified in the related Prospectus Supplement. If
there is a decline in the prime rate, the amount of Series Finance Charge
Collections with respect to one or more series may be reduced, which could cause
the commencement of the Amortization Period with respect to such series or
result in either shortfalls of Certificate Interest or losses to the investor
certificateholders of such series. In addition, the investor certificates of a
series may bear interest at a floating rate and may not be subject to a maximum
rate. If increases in the Certificate Rate of such investor certificates are not
offset by increases in Series Finance Charge Collections, Series Excess Spread
may be reduced, which could cause the commencement of the Amortization Period
with respect to such series, and, in the event that the Available Class B Credit
Enhancement Amount of such series has been reduced to zero, shortfalls of
Certificate Interest or losses to the investor certificateholders of such series
may result.
Rating of the Investor Certificates. Any rating assigned to the investor
certificates of a series or class of a series by a Rating Agency will not be a
recommendation to purchase, hold or sell such investor certificates, inasmuch as
the ratings do not reflect market price or suitability for a particular
investor. There is no assurance that any rating will remain in effect for any
given period of time or that such rating will not be lowered or withdrawn
entirely if, in the judgment of the applicable Rating Agency, circumstances in
the future so warrant.
Book-Entry Registration. Unless otherwise specified in the related
Prospectus Supplement, the investor certificates of each class of a series will
be represented initially by one or more certificates registered in the name of
Cede & Co., the nominee for The Depository Trust Company ("DTC"), and will not
be registered in
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the names of the certificate owners or their nominees. Because of this, unless
and until definitive certificates are issued, certificate owners will not be
recognized by the Trustee as holders of such investor certificates, as the term
is used in the Pooling and Servicing Agreement or any Series Supplement. Hence,
until such time, certificate owners only will be able to exercise the rights of
investor certificateholders indirectly through DTC, Cedel or Euroclear and their
participating organizations. See "Description of the Investor Certificates --
Book-Entry Registration" and "-- Definitive Certificates."
Issuance of Additional Series. The Trust, as a master trust, has issued,
and in the future is expected to issue, from time to time, additional series of
investor certificates. Although the terms of any such series will be specified
in a Series Supplement with respect to such series, the provisions of each
Series Supplement and, therefore, terms of any additional series will not be
subject to the prior review or consent of holders of the investor certificates
of any previously issued series. Such terms may include methods for determining
applicable Class Percentages and allocating Collections, provisions creating
different or additional security or other Credit Enhancement, provisions
establishing one or more classes of investor certificates (including one or more
classes subordinated to other classes of such series), provisions subordinating
such series to one or more other series (if the Series Supplement relating to
such series provides for such subordination), and any other amendment or
supplement to the Pooling and Servicing Agreement that is made applicable to
that series.
The Trustee will authenticate and deliver a new series of investor
certificates only upon satisfaction of certain conditions, including
confirmation from the Rating Agencies that the issuance of the new series will
not result in the reduction or withdrawal of the rating of any class of investor
certificates of any series outstanding at the time of such new issuance. See
"Description of the Investor Certificates -- Issuance of Additional Series."
There can be no assurance, however, that the issuance of one or more additional
series from time to time hereafter might not have an impact on the timing and
amount of payments received by an investor certificateholder of any previously
issued series.
The Pooling and Servicing Agreement permits the issuance of one or more
series that would be subordinate in right of payment to another series. The
terms of any such subordination will be set forth in the Series Supplement for
the Subordinate Series. Unless otherwise specified in the related Prospectus
Supplement, a series will not be subordinated to any other series. The Seller
may, but is under no obligation to, issue a series in the future that is
subordinate in right of payment to one or more series. See "Description of the
Investor Certificates -- Allocations, Reallocations and Subordination of
Collections -- Subordinate Series."
Credit Enhancement Account. Although Credit Enhancement may be provided
with respect to a series of investor certificates or any class thereof, the
amount available from such Credit Enhancement will be limited and may be subject
to certain reductions. If the amount under any Credit Enhancement is reduced to
zero, investor certificateholders of the series or class thereof covered by the
Credit Enhancement will bear directly the credit and other risks associated with
their Fractional Undivided Interest in the Trust. See "Description of the
Investor Certificates -- Adjustments to Receivables" and "-- Distributions of
Collections and Application of Collections and Certain Other Amounts --
Distributions and Application of Funds" in the related Prospectus Supplement and
"Description of the Investor Certificates -- Credit Enhancement" herein and in
the related Prospectus Supplement.
Reallocations of Cash Flows Among Series. The Series Supplement for a
series may provide that, under certain limited circumstances, Collections
originally available to one series in a Group will be reallocated to other
series in such Group. Under no circumstances, however, will Collections
originally allocated to one series on any Distribution Date be reallocated to
any other series unless all amounts to be funded with respect to the first
series by the Collections allocated to such series on that Distribution Date
have been funded. There can be no assurance that any series will not be moved
from its original Group to any other Group, in which event such provisions
allowing such reallocations with respect to the original Group may not be
operative and reallocation provisions with respect to the other Group may apply.
See "Description of the Investor Certificates -- Reallocation of Series Among
Groups" herein and "Description of the Investor Certificates -- Allocations,
Reallocations and Subordination of Collections" in the related Prospectus
Supplement.
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Addition of Accounts. Greenwood has designated, and may voluntarily, and in
certain circumstances may be obligated to, designate Additional Accounts to be
included as Accounts, the receivables in which will be transferred to the Trust,
or to add Participation Interests to the Trust. Additional Accounts may be
Discover Card accounts originated by Greenwood or any other type of credit
account originated by Greenwood or an affiliate of Greenwood. Additional
Accounts also may be newly originated accounts. All assignments of Additional
Accounts or Participation Interests to the Trust are subject to certain
conditions set forth in the Pooling and Servicing Agreement, including, with
respect to Additional Accounts, the condition that the assignment of Additional
Accounts to the Trust comply with the conditions established by the Rating
Agencies or that the assignment of such Additional Accounts to the Trust will
not cause the rating of any class of any series of investor certificates then
outstanding to be lowered or withdrawn. See "The Trust -- Addition of Accounts."
However, because any such Additional Accounts, or the accounts underlying any
Participation Interests, need not be accounts of the same type as the Accounts
already included in the Trust, may contain a different proportion of newly
originated accounts than the Accounts already included in the Trust or be
composed entirely of newly originated accounts, and may include accounts
originated using criteria different from those that were applied to the Accounts
already included in the Trust, there can be no assurance that any Additional
Accounts, or the accounts underlying any Participation Interests, will be of the
same credit quality as the Accounts already included in the Trust. Also, any
Additional Accounts, or the accounts underlying any Participation Interests, may
consist of credit accounts that have different terms than the Accounts already
included in the Trust, including lower periodic finance charges, which may have
the effect of reducing the average yield on the Accounts.
Historical Information and Performance Characteristics. All of the
information describing the composition and historical performance of the
Discover Card accounts in the related Prospectus Supplement reflects the
composition and historical performance of the Discover Card Portfolio (except as
presented under "The Accounts -- Composition of the Accounts" and where
otherwise noted), and not that of the Accounts. See "The Accounts -- Effects of
the Selection Process" in the related Prospectus Supplement. There can be no
assurance that the historical performance of the Discover Card Portfolio will be
representative of its performance in the future in all material respects. In
addition, there can be no assurance that the payment performance of the Obligors
on the Accounts will be representative of the Discover Card Portfolio in all
material respects.
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THE TRUST
FORMATION OF THE TRUST
The Trust was formed pursuant to the Pooling and Servicing Agreement
between Greenwood and the Trustee. As discussed below, the property of the Trust
currently includes, among other things, Receivables arising under certain
Greenwood Discover Card Accounts. Greenwood, pursuant to the Pooling and
Servicing Agreement, has transferred and will transfer to the Trust all
Receivables existing as of the Cut-Off Date and any Additional Account Cut-Off
Date. On a daily basis as the Receivables arise, Greenwood is obligated to
transfer and will continue to transfer to the Trust all Receivables arising in
the Accounts (including any Additional Accounts) from time to time until the
termination of the Trust. In exchange for the transfer of Receivables, Greenwood
received the Seller Certificate. As additional Receivables are transferred,
Greenwood receives an additional interest in the Seller Certificate. Greenwood
also received the net cash proceeds from the sale of the investor certificates
of each previously issued series and will receive the net cash proceeds from
each future sale of investor certificates.
The property of the Trust includes the Receivables, all monies due or to
become due thereunder, all proceeds of the Receivables, including Collections
that may be used by Greenwood or any other Servicer for its own benefit prior to
each Distribution Date, all monies on deposit in the Investor Accounts,
Participation Interests included in the Trust, if any, any additional funds that
may be added to the Trust from time to time, any Credit Enhancement and any
interest rate swap, currency swap or interest rate cap or other interest rate
protection agreements with respect to any outstanding series of investor
certificates. Pursuant to the Pooling and Servicing Agreement, Greenwood has the
right, and in some circumstances the obligation, to designate Additional
Accounts, which may be Greenwood Discover Card accounts or credit accounts
originated by Greenwood or an affiliate of Greenwood, to be included as
Accounts, or to add Participation Interests to the Trust, subject to certain
conditions. See "-- Addition of Accounts." In addition, Greenwood has the right,
subject to certain conditions, to designate Accounts for removal from the Trust.
See "-- Removal of Accounts."
The Trust was formed for the purpose of issuing investor certificates of
various series pursuant to the Pooling and Servicing Agreement and a Series
Supplement for each series. The Trust, as a master trust, has issued and is
expected to issue additional series from time to time and to continue as a trust
after the Series Termination Date of any particular series. The Trust will not
engage in any business activity other than acquiring and holding the Receivables
and the proceeds therefrom, issuing investor certificates and the Seller
Certificate and making payments thereon, selling receivables in Charged-Off
Accounts, investing funds on deposit in the Investor Accounts pursuant to the
Pooling and Servicing Agreement and the relevant Series Supplements and entering
into interest rate swap, currency swap or interest rate cap or other rate
protection agreements and other agreements with third parties for the benefit of
the investor certificateholders of one or more series. As a consequence, the
Trust is not expected to have any need for additional capital resources except
for the Receivables in Additional Accounts or Participation Interests, if
applicable.
THE TRUSTEE
U.S. Bank National Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly Continental Bank,
National Association), is the Trustee under the Pooling and Servicing Agreement.
Greenwood and its affiliates may from time to time enter into normal banking and
trustee relationships with the Trustee. The Trustee, Greenwood and any of their
respective affiliates may hold investor certificates in their own names. In
addition, for purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee has the power to appoint a co-trustee or separate
trustees of all or any part of the Trust. In the event of such an appointment,
all rights, powers, duties and obligations conferred or imposed upon the Trustee
by the Pooling and Servicing Agreement or any Series Supplement will be
conferred or imposed upon the Trustee and such separate trustee or co-trustee
jointly or, in any jurisdiction in which the Trustee will be incompetent or
unqualified to perform certain acts, singly upon such separate trustee or
co-trustee, who will exercise and perform such rights, powers, duties and
obligations solely at the direction of the Trustee.
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The Trustee may resign at any time, in which event the Master Servicer will
be obligated to appoint a successor Trustee. The Master Servicer also may remove
the Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. In such
circumstances, the Master Servicer may be obligated to appoint a successor
Trustee. Any resignation or removal of the Trustee and appointment of a
successor Trustee will not become effective until acceptance of the appointment
by the successor Trustee.
INDEMNIFICATION OF THE TRUST AND THE TRUSTEE
The Pooling and Servicing Agreement provides that the Holder of the Seller
Certificate will indemnify the Trust and the Trustee from and against any loss,
liability, expense, damage or injury suffered or sustained arising out of the
activities of the Sellers with respect to the Trust or the Trustee; provided,
however, that the Holder of the Seller Certificate will not indemnify (a) the
Trustee for liabilities imposed by reason of fraud, negligence, breach of
fiduciary duty or misconduct by the Trustee in the performance of its duties
under the Pooling and Servicing Agreement or any Series Supplement, (b) the
Trust or the investor certificateholders for liabilities arising from actions
taken by the Trustee at the request of investor certificateholders or (c) the
Trust or the investor certificateholders with respect to any federal, state or
local income or franchise taxes (or any interest or penalties with respect
thereto) required to be paid by the Trust or the investor certificateholders.
Any such indemnification only will be from the assets of the related Seller,
will be subordinate to the security interest of the Trust in the Receivables and
will not constitute a claim against such Seller in excess of the lesser of (i)
that Seller's assets available to pay such claim or (ii) the amount of such
claim multiplied by a fraction the numerator of which is the aggregate amount of
Principal Receivables in the Trust that were transferred to the Trust by that
Seller and the denominator of which is the aggregate amount of Principal
Receivables in the Trust.
SALE AND ASSIGNMENT OF RECEIVABLES TO THE TRUST
On the Initial Closing Date and the Addition Dates to date, Greenwood sold
and transferred to the Trust, and as of any future Addition Date Greenwood will
sell and transfer to the Trust, all of its right, title and interest in and to
existing Receivables and in and to all Receivables created thereafter, on a
daily basis as they arise, until the termination of the Trust, in exchange for
the Seller Certificate and the right to direct the issuance of, and receive the
proceeds from the sale of, new series of investor certificates. See "--
Formation of the Trust."
In connection with the transfer of the Receivables to the Trust by
Greenwood, Greenwood has indicated in its computer files that the Receivables
have been transferred to the Trust. In addition, Greenwood has provided (and,
with respect to any Additional Accounts, will provide) to the Trustee a computer
file containing a true and complete list of each Account (including each
Additional Account) identified by account number. Greenwood is not obligated to
deliver to the Trustee any other records or agreements relating to the Accounts
or the Receivables. Greenwood will not segregate the records and agreements that
it maintains relating to the Accounts and the Receivables from records and
agreements relating to other credit accounts and receivables, nor will Greenwood
mark these records or agreements to reflect the sale of the Receivables to the
Trust, except insofar as an electronic or other indicator is necessary to
service the Accounts in accordance with the Pooling and Servicing Agreement and
any Series Supplement. The Trustee will have reasonable access to these records
and agreements as required by applicable law and to enforce the rights of the
certificateholders. Greenwood filed a UCC-1 financing statement in accordance
with applicable state law to perfect the Trust's interest in the Receivables,
and will file any continuation statements with respect thereto which may be
necessary to maintain such perfection. See "Certain Legal Matters Relating to
the Receivables."
ADDITION OF ACCOUNTS
Pursuant to the Pooling and Servicing Agreement, Greenwood, in its sole
discretion, has designated, and may again in the future designate, credit
accounts originated by Greenwood or an affiliate of Greenwood as Additional
Accounts, the receivables in which have been or will be transferred to the
Trust, or may convey
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Participation Interests to the Trust. In addition, Greenwood will be required to
designate Additional Accounts or convey Participation Interests if the aggregate
amount of Principal Receivables in the Trust on the last day of any Due Period
is less than the Minimum Principal Receivables Balance.
Additional Accounts may consist of additional Discover Card accounts
originated by Greenwood or other credit accounts originated by Greenwood or an
affiliate of Greenwood, including, in each case, newly originated accounts. Each
assignment of Additional Accounts will be subject to certain conditions,
including the execution and delivery of a written assignment and an Opinion or
Opinions of Counsel relating to the Trust's security interest in the Receivables
in the Additional Accounts and insolvency and related matters, and delivery of a
certificate of a Servicing Officer regarding the selection criteria used to
select such Additional Accounts. Each assignment of Additional Accounts will
also be subject to the condition that either (i) the Rating Agencies confirm
that the proposed assignment of Additional Accounts will not cause the rating of
any class of any series of investor certificates then outstanding to be lowered
or withdrawn or (ii) the proposed assignment of Additional Accounts complies
with any limitations established by the Rating Agencies on the ability of
Greenwood to designate Additional Accounts. Unless each Rating Agency otherwise
consents, as of the last day of any calendar year, the number of Accounts
designated as Additional Accounts in reliance on clause (ii) of the preceding
sentence with respect to such calendar year or the amount of Principal
Receivables in those Accounts, as applicable, will not exceed a number equal to
20% of the number of Accounts in the Trust or the amount of Principal
Receivables in the Trust, as applicable, in each case as of the first day of
that calendar year; and, as of the last day of any three calendar month period,
the number of Accounts designated as Additional Accounts in reliance on clause
(ii) of the preceding sentence with respect to such three-month period or the
amount of Principal Receivables in those Accounts, as applicable, will not
exceed a number equal to 15% of the number of Accounts in the Trust or the
amount of Principal Receivables in the Trust, as applicable, in each case as of
the first day of such three-month period.
Additional Accounts will be selected on the basis of selection criteria
that are believed by the Servicer of such accounts to be not materially adverse
to the interests of the holders of any class of any series of investor
certificates then outstanding or any Credit Enhancement Provider.
The Trust will receive all Collections in respect of Receivables in
Additional Accounts in the same manner as Collections in respect of other
Receivables, except that Finance Charge Receivables deemed billed on the
Receivables in the Additional Accounts for the Due Period during which the
Additional Accounts were added to the Trust may be an estimate of such amount
prepared by the Servicer with respect to the Additional Accounts.
The terms governing any Additional Accounts or Participation Interests may
differ from the terms governing the Accounts initially included in the Trust,
including the possibility that some or all Additional Accounts or Participation
Interests will have lower periodic finance charges or fees than the initial
Accounts, which may have the effect of reducing the percentage of Finance Charge
Collections relative to the amount of Principal Collections.
The addition of Participation Interests to the Trust will be effected by an
amendment to the Pooling and Servicing Agreement that will not require the
consent of any investor certificateholders. Each conveyance of Participation
Interests to the Trust will be subject to certain conditions, including delivery
of a certificate of Greenwood stating that Greenwood reasonably believes that
the addition of the Participation Interests will not be materially adverse to
the interests of the holders of any class of any series of investor certificates
then outstanding or any Credit Enhancement Provider, delivery of an Opinion of
Counsel relating to the Trust's security interest in Participation Interests and
insolvency and related matters and confirmation from the Rating Agencies that
the proposed conveyance of Participation Interests will not cause the rating of
any class of any series of investor certificates then outstanding to be lowered
or withdrawn.
Additional Accounts or accounts underlying Participation Interests need not
be Discover Card accounts or accounts originated by Greenwood, may be composed
entirely of newly originated accounts or contain a higher proportion of newly
originated accounts than the Accounts currently included in the Trust and may
contain accounts originated using criteria different from those applied to the
Accounts currently included in
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the Trust. Accordingly, there can be no assurance that any Additional Accounts
or accounts underlying Participation Interests will be of the same credit
quality as the Accounts currently included in the Trust.
REMOVAL OF ACCOUNTS
Pursuant to the Pooling and Servicing Agreement, Greenwood may, but will
not be obligated to, designate Accounts for removal from the Trust (such
Accounts being referred to hereinafter as the "Removed Accounts"). Such removal
will be effective as of the last day of the Due Period in which Greenwood
designates Accounts for removal from the Trust.
Each removal of Accounts will be subject to certain conditions, including
the delivery of an Officer's Certificate confirming that (i) the aggregate
amount of Principal Receivables in the Trust less the aggregate amount of
Principal Receivables in the Removed Accounts is not less than the Minimum
Principal Receivables Balance, (ii) the removal of the Removed Accounts will
not, in the reasonable belief of Greenwood, cause either (A) an Amortization
Event to occur with respect to any series then outstanding or (B) the Deficit
Accumulation Amount or Deficit Liquidation Amount, as applicable, with respect
to any series then outstanding to be greater than zero on any Distribution Date
with respect to that series, (iii) no selection procedures believed by Greenwood
to be materially adverse to the investor certificateholders were utilized in
selecting the Removed Accounts and (iv) the Rating Agencies have advised
Greenwood that the removal will not cause the rating of any class of any
outstanding series of investor certificates to be lowered or withdrawn.
TERMINATION OF THE TRUST
The Pooling and Servicing Agreement provides that the Trust will terminate
on October 16, 2014 (the "Final Trust Termination Date") or, if earlier, at the
option of the Sellers, on the day after the Distribution Date on which funds
have been deposited into the Series Distribution Accounts sufficient to pay in
full the Aggregate Investor Interest plus all accrued and unpaid Certificate
Interest on all series then outstanding.
DESCRIPTION OF THE INVESTOR CERTIFICATES
The investor certificates of a series will be issued pursuant to the
Pooling and Servicing Agreement, which was filed as an exhibit to the
Registration Statement of which this Prospectus is a part, and a Series
Supplement. The following summary of the investor certificates does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the Pooling and Servicing Agreement and the applicable Series Supplement. On
written request to the Trustee at its principal corporate trust office, the
Trustee will provide to any investor certificateholder without charge a copy of
the Pooling and Servicing Agreement (without exhibits or schedules) and the
applicable Series Supplement (without exhibits).
GENERAL
Each series will be issued pursuant to the Pooling and Servicing Agreement
and a Series Supplement. The Series Supplement will consist of two parts, a
Series Term Sheet and an Annex. The Series Term Sheet will set forth the basic
terms pertaining to the series. The Annex will constitute the bulk of the Series
Supplement and will contain the detailed provisions regarding allocations of
Collections and payments to the investor certificateholders of the series. The
Annex is designed to be used for a variety of different types of series, and,
accordingly, contains some provisions that will not be applicable to all series.
The Series Term Sheet, in conjunction with the Annex, will set forth all of the
specific terms of the series.
Each series will consist of one or more classes of investor certificates.
Each investor certificate will represent a Fractional Undivided Interest in the
Trust, including the right to a percentage of all Collections on the Receivables
in the Trust. See "-- Class Percentages and Seller Percentage." Each investor
certificate of a series will represent the right to receive payments of interest
on Interest Payment Dates with respect to such series at the applicable
Certificate Rate on the Class Invested Amount with respect to such investor
certificate. If a series has a Controlled Liquidation Period, each investor
certificate of such series will represent
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the right to receive monthly payments of principal from the Principal
Commencement Date and during the Amortization Period, if any, with respect to
such series. If a series has an Accumulation Period, each investor certificate
of such series will represent the right to receive repayment of principal on an
applicable Expected Final Payment Date and monthly payments of principal during
the Amortization Period, if any, with respect to such series. See "Description
of the Investor Certificates -- Interest Payments" and "-- Principal Payments"
herein and in the related Prospectus Supplement. With respect to a series having
a class of subordinated certificates, the rights of the Class B
Certificateholders to receive payments will be subordinated to the rights of the
Class A Certificateholders with respect to such series to the extent described
in the related Prospectus Supplement. See "Description of the Investor
Certificates -- Allocations, Reallocations and Subordination of Collections --
Subordination of Class B Certificates" herein and in the related Prospectus
Supplement.
Greenwood holds a residual interest in the Trust (the "Seller Interest"),
which is represented by the Seller Certificate. The Seller Interest represents
the interest in the Principal Receivables not represented by the investor
certificates of any series outstanding at any given time. The Seller Certificate
represents an undivided interest in the Principal Receivables, including the
right to a varying percentage (the "Seller Percentage") of all Collections on
the Receivables in the Trust. See "-- Class Percentages and Seller Percentage."
The amount of Principal Receivables in the Trust will vary each day as new
Principal Receivables are created and others are paid. The amount of the Seller
Interest, therefore, will fluctuate each day to reflect the changes in the
amount of Principal Receivables in the Trust. The amount of the Seller Interest
also will change when additional series are issued, when the Series Investor
Interest for any series declines as principal payments are made to, or
segregated into Investor Accounts for the benefit of, the investor
certificateholders of that series, and when Receivables in Additional Accounts
are added to the Trust or Receivables in Removed Accounts are removed from the
Trust.
INTEREST PAYMENTS
Interest will accrue on the Invested Amount of the investor certificates of
a series or class at the per annum rate either specified in or determined in the
manner specified in the related Prospectus Supplement. Except as otherwise
provided herein or in the related Prospectus Supplement, Finance Charge
Collections and certain other amounts allocable to the investor
certificateholders of a series will be used to make interest payments to
investor certificateholders of such series on each Interest Payment Date
specified in the related Prospectus Supplement. If the Interest Payment Dates
for a series or class occur less frequently than monthly, such Finance Charge
Collections or other amounts (or the portion thereof allocable to such series or
class) will be deposited in one or more Series Interest Funding Accounts and
used to make interest payments to investor certificateholders of such series or
class on the following Interest Payment Date. If a series has more than one
class of investor certificates, each such class may have a separate Interest
Funding Account. Funds on deposit in a Series Interest Funding Account will be
invested in Permitted Investments. Any earnings (net of losses and investment
expenses) on funds in a Series Interest Funding Account will be paid to, or at
the direction of, Greenwood except as otherwise specified in the Prospectus
Supplement. Interest with respect to the investor certificates of each series
will accrue and be calculated on the basis described in the related Prospectus
Supplement.
PRINCIPAL PAYMENTS
The investor certificates of each series will have a Revolving Period
during which no distributions of Principal Collections will be made to the
investor certificateholders unless otherwise specified in the related Prospectus
Supplement. Principal Collections allocable to the investor certificates during
the Revolving Period will first be made available, under certain circumstances,
to fund Certificate Principal with respect to other series then outstanding in
the Group to which such series belongs that are eligible for such reallocation.
Any remaining Principal Collections generally will be paid to Greenwood, up to
the amount of the Seller Interest. See "-- Allocations, Reallocations and
Subordination of Collections -- Allocations Among Series and to Sellers."
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Unless otherwise specified in the related Prospectus Supplement, following
the Revolving Period, unless an Amortization Period or an Early Accumulation
Period commences with respect to a series, each series will have either an
Accumulation Period or a Controlled Liquidation Period. If a series has an
Accumulation Period, the principal of the investor certificates of the series
will be scheduled to be paid in full on an Expected Final Payment Date. If a
series has a Controlled Liquidation Period, the principal of the investor
certificates of the series will be paid in installments commencing on the
Principal Commencement Date. If a series has more than one class of investor
certificates, a different method of paying principal, Expected Final Payment
Date and/or Principal Commencement Date may be specified for each class. If an
Early Accumulation Event occurs, principal will be paid as scheduled unless an
Amortization Event occurs subsequently. If an Amortization Event occurs with
respect to a series, the payment of principal with respect to the investor
certificates of such series may commence earlier than the Expected Final Payment
Date or Principal Commencement Date, as applicable, and the final principal
payment with respect to the investor certificates of such series may be made
earlier or later than the Expected Final Payment Date or other expected date.
See "Description of the Investor Certificates -- Distributions of Collections
and Application of Collections and Certain Other Amounts" in the related
Prospectus Supplement.
ISSUANCE OF ADDITIONAL SERIES
Series of investor certificates have previously been issued and are
outstanding. The Pooling and Servicing Agreement provides that Greenwood may
direct the Trustee from time to time to issue additional series of investor
certificates, subject to certain conditions (each such issuance, a "New
Issuance"). Each New Issuance will be pursuant to the Pooling and Servicing
Agreement and a Series Supplement. Unless otherwise specified in the related
Prospectus Supplement, each New Issuance will have the effect of reducing the
amount of the Seller Interest by an amount equal to the Series Initial Investor
Interest for the new series.
Pursuant to the Pooling and Servicing Agreement, Greenwood will designate
the terms of any New Issuance including, but not limited to, its Series Initial
Investor Interest, the number of classes, the Class Initial Investor Interest
for each class, the Certificate Rate for each class, the Payment Dates, the
Series Termination Date and the Group to which the series will belong. The
Pooling and Servicing Agreement does not require the consent of investor
certificateholders of any series to issue a new series, and Greenwood, any
Additional Sellers, the Master Servicer, the Servicer and the Trustee do not
intend to request the consent of investor certificateholders of any series to
the issuance of a new series.
Greenwood and any Additional Sellers may offer for sale any series under a
prospectus or other disclosure document in transactions either registered under
the Securities Act of 1933, as amended (the "Securities Act of 1933"), or exempt
from registration thereunder. Such offerings may be direct, through one or more
underwriters or placement agents, in fixed price offerings or in negotiated
transactions or otherwise. Any such series may be issued in fully registered or
book-entry form (or in bearer form, if offered outside the United States), in
minimum denominations determined by the Sellers. Greenwood intends to offer
additional series from time to time, but is under no obligation to do so. See
"Plan of Distribution."
COLLECTIONS ACCOUNT AND GROUP COLLECTIONS ACCOUNTS
The Trustee has established and maintains in the name of the Trust a
"Collections Account" and, for each Group of series, a "Group Collections
Account." Each such account is a segregated trust account established with the
Trustee or a "Qualified Institution," defined as a depository institution
organized under the laws of the United States or any one of the states thereof
that at all times has a short-term certificate of deposit rating of A-1/P-1 or
better from the Rating Agencies and whose deposits are insured by the FDIC.
Funds on deposit in the Collections Account or any Group Collections Account are
invested in Permitted Investments pursuant to the Pooling and Servicing
Agreement. The Master Servicer has the revocable power to instruct the Trustee
to make withdrawals from the Collections Account and each Group Collections
Account for the purpose of carrying out its duties under the Pooling and
Servicing Agreement and any Series Supplement.
Greenwood as Servicer deposits from Collections for any day an amount equal
to the sum of its Required Daily Deposits for each series then outstanding
directly into the Collections Account within two Business
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Days following the Date of Processing of such Collections. Any Collections with
respect to Greenwood Discover Card Accounts not deposited into the Collections
Account are used by Greenwood for its own benefit until the Distribution Date on
which those Collections are to be allocated to certificateholders. Greenwood may
cease to deposit Collections into the Collections Account, and instead use all
Collections with respect to Greenwood Discover Card Accounts received in each
Due Period until the Distribution Date on which those Collections are to be
allocated to certificateholders, if and when such use will not result in the
lowering or withdrawal of the rating of any class of any series of investor
certificates then outstanding by the Rating Agencies. In the event that there
are additional Servicers, each such additional Servicer also will deposit from
Collections for any day an amount equal to the sum of its required daily
deposits for each series then outstanding directly into the Collections Account
within two Business Days following the Date of Processing of such Collections,
unless the use by such Servicer of Collections received by it for its own
account prior to the applicable Distribution Date will not result in the
lowering or withdrawal of the rating of any class of any series then outstanding
by the Rating Agencies.
On or before each Distribution Date with respect to each Group, Greenwood
as Master Servicer directs the Trustee, first, to withdraw that portion of the
amount of Collections allocable to the Seller Interest with respect to that
Distribution Date from the Collections Account and pay such amount to the Holder
of the Seller Certificate and second, to withdraw all remaining Collections from
the Collections Account and deposit such Collections in each Group Collections
Account, on or before the Distribution Date with respect to that Group, in an
amount equal to the sum of (x) the sum of the Series Finance Charge Collections
for each series that is a member of that Group and (y) the sum of the Series
Principal Collections for each series that is a member of that Group. However,
allocations to Investor Accounts may be deemed to be made and payments to the
Holder of the Seller Certificate or to the Master Servicer may be made, prior to
a Distribution Date, on the date the Master Servicer delivers the monthly master
servicer statement and the information required to be included in the monthly
investor certificateholders' statement with respect to each series then
outstanding to the Trustee. With respect to each Group, Collections in the Group
Collections Account for such Group will be allocated, deposited or paid on or
prior to each Distribution Date with respect to such Group according to the
terms of each Series Supplement relating to the outstanding series in such
Group.
Any earnings (net of losses and investment expenses) on funds on deposit in
the Collections Account or any Group Collections Account will be paid to the
Holder of the Seller Certificate.
CLASS PERCENTAGES AND SELLER PERCENTAGE
Pursuant to the Pooling and Servicing Agreement and all Series Supplements
for series then outstanding, the Master Servicer will allocate among the Class
Investor Interests for each class of each series then outstanding, the Seller
Interest, and any other interests in the Receivables (such as, under certain
circumstances, the CCA Investor Interest with respect to certain outstanding
series), all Finance Charge Collections, all Principal Collections and the
Charged-Off Amount. The Master Servicer will make each allocation by multiplying
the amount of Finance Charge Collections, Principal Collections and the Charged-
Off Amount by the applicable Class Percentage, Seller Percentage or other
percentage.
For convenience, this Prospectus refers to the Class Percentage for each
class (and certain other percentages with respect to outstanding series) with
respect to Finance Charge Collections, Principal Collections and the Charged-Off
Amount as if those percentages will not in each case vary. The Class Percentages
(and certain other percentages), however, may vary in each case as detailed in
the "Glossary of Terms" contained in the related Prospectus Supplement. The
method of calculating Class Percentages and other percentages with respect to
each series of investor certificates will be set forth in the applicable Series
Supplement. The Seller Percentage, in all cases, will equal 100% minus the sum
of the Series Percentages for each series then outstanding.
ALLOCATIONS, REALLOCATIONS AND SUBORDINATION OF COLLECTIONS
Allocations Among Series and to Sellers. On or before each Distribution
Date, the Master Servicer will deposit into the Collections Account that portion
of Collections with respect to the related Due Period that are to be allocated
on that Distribution Date and that have not previously been deposited into the
Collections
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Account and direct the Trustee to withdraw from the Collections Account and pay
to Greenwood that portion of the sum of (x) the total amount of Finance Charge
Collections for the related Due Period less the sum of the amount of Series
Finance Charge Collections for each series then outstanding for the related Due
Period and (y) the total amount of Principal Collections for the related Due
Period less the sum of the amount of Series Principal Collections for each
series then outstanding for the related Due Period that is to be allocated to
the Holder of the Seller Certificate for that Distribution Date. The Master
Servicer will direct the Trustee to withdraw from the Collections Account and
pay to each Group Collections Account, on or before the Distribution Date with
respect to that Group, the sum of (x) the Series Finance Charge Collections for
each series that is a member of that Group and (y) the Series Principal
Collections for each series that is a member of that Group. Allocations of
Collections to the series within each Group will be as set forth in the Series
Supplements for each series within such Group. With respect to each Group,
Collections in the Group Collections Account for such Group will be allocated,
deposited or paid on or prior to each Distribution Date with respect to such
Group according to the terms of each Series Supplement relating to the
outstanding series of such Group.
Subordinate Series. The Pooling and Servicing Agreement permits the
issuance of series of investor certificates that are subordinate in right of
payment, in whole or in part, to one or more other series (any such subordinate
series, a "Subordinate Series"). Unless otherwise specified in the related
Prospectus Supplement, a series will not be subordinate to any other series.
Unless otherwise specified in the related Prospectus Supplement, the Series
Supplement for each series, however, will provide for the possibility that a
Subordinate Series with respect to such series may be issued in the future. The
Seller may, but is under no obligation to, issue a series that is subordinate to
one or more series at any time. The extent to which such Subordinate Series, if
issued, will be subordinated to one or more series will be set forth in the
Series Supplement with respect to such Subordinate Series.
Subordination of Class B Certificates. Unless otherwise specified in the
related Prospectus Supplement, in the case of a series of investor certificates
issued with two classes, the Class B Certificates will be subordinated to the
Class A Certificates. Certain amounts originally allocable to the Class B
Certificates may be reallocated to the extent necessary to fund certain amounts
with respect to the Class A Certificates. If these reallocations are not
reimbursed, the Investor Interest with respect to the Class B Certificates will
be reduced. If applicable, see "Description of the Investor Certificates --
Allocations, Reallocations and Subordination of Collections -- Subordination of
Class B Certificates" in the related Prospectus Supplement.
ADJUSTMENTS TO RECEIVABLES
The aggregate amount of Receivables will increase or decrease, as the case
may be, to the extent any Receivable is adjusted without payment by or on behalf
of a cardmember. Such adjustments include, but are not limited to, any
Receivable that was created as a result of a fraudulent or counterfeit charge
that the Servicer with respect to such Receivable adjusts, increases, reduces,
modifies or cancels in accordance with its Credit Guidelines, or any Receivable
that was created in respect of merchandise returned by the cardmember. If the
exclusion of the amount of an adjustment from the calculation of the Seller
Interest would cause the Seller Interest to be an amount less than zero,
Greenwood is obligated to make, no later than the business day following the
last day of the Due Period during which the adjustment is made, a deposit into
the Collections Account in immediately available funds in an amount equal to the
amount by which the adjustment exceeds the Seller Interest.
In addition, under certain limited circumstances, a credit account that is
not an Account may be combined with an Account. Such a combination may result in
an increase or decrease in the amount of Receivables, depending on whether the
Account is the account surviving the combination. Greenwood has no reason to
believe that such account combinations will have a material effect on the
aggregate amount of Receivables in the Trust.
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DISTRIBUTIONS OF COLLECTIONS AND APPLICATION OF COLLECTIONS AND CERTAIN OTHER
AMOUNTS
Distribution Among Series. On or before each Distribution Date, Greenwood
as Master Servicer will direct the Trustee to withdraw from the Collections
Account and pay to each Group Collections Account, on or before the Distribution
Date with respect to that Group, an amount equal to the sum of (x) the sum of
the Series Finance Charge Collections for each series that is a member of that
Group and (y) the sum of the Series Principal Collections for each series that
is a member of that Group. On or before each Distribution Date with respect to
each Group, amounts on deposit in the Group Collections Account with respect to
that Group will be distributed in accordance with the terms of the Series
Supplements for each series in that Group. With respect to each Group,
Collections in the Group Collections Account for such Group will be allocated,
deposited or paid on or prior to each Distribution Date with respect to the
series in such Group according to the terms of each Series Supplement relating
to the outstanding series in such Group.
Net Payments. All payments made pursuant to the Pooling and Servicing
Agreement or any Series Supplement on any Trust Distribution Date or
Distribution Date on which Greenwood is the Master Servicer, between the Master
Servicer or the Holder of the Seller Certificate and the Investor Accounts, may
be aggregated for such Trust Distribution Date or Distribution Date. Therefore,
Greenwood, acting as Master Servicer and as agent of the Holder of the Seller
Certificate, may make only one payment to each account in satisfaction of all
payments of the Holder of the Seller Certificate and the Master Servicer
pursuant to the Pooling and Servicing Agreement or any Series Supplement, to the
extent that all payment obligations of the Master Servicer and of the Holder of
the Seller Certificate to each account on each Trust Distribution Date or
Distribution Date exceed all amounts to be paid out of that account to the
Master Servicer and the Holder of the Seller Certificate on such Trust
Distribution Date or Distribution Date.
ADDITIONAL FUNDS
The Pooling and Servicing Agreement provides that Greenwood may, from time
to time, elect to add certain funds to the Trust ("Additional Funds") by
delivering a written notice of the election to the Trustee, the Master Servicer
and the Rating Agencies, which notice will specify the method of calculating the
amount of such funds to be added to the Trust as of any Distribution Date and
the source of those funds. No election will become effective until Standard &
Poor's has advised the Master Servicer and Greenwood that the election will not
cause the rating of any class of any series then outstanding to be lowered or
withdrawn. During any time that Additional Funds are being added to the Trust,
with respect to each series then outstanding, on or before the Distribution Date
with respect to each such series, the Master Servicer will cause an amount equal
to the product of (i) a fraction the numerator of which will be the Series
Investor Interest and the denominator of which will be the Aggregate Investor
Interest and (ii) the amount of Additional Funds for the preceding Due Period,
to be deposited into the Series Collections Account for each series. The amount
of Additional Funds allocated to each series will be further allocated in
accordance with the provisions of each Series Supplement. Unless otherwise
specified in the related Prospectus Supplement, the Series Supplement for each
series will specify that any Additional Funds allocated to such series will be
further allocated between the classes of such series based on the Class Investor
Interest of each class as of the relevant Distribution Date (the "Class
Additional Funds" for each class). Unless otherwise specified in the related
Prospectus Supplement, no Additional Funds have been added to the Trust as of
any Series Closing Date, and Greenwood is under no obligation to add Additional
Funds to the Trust at any time in the future.
FINAL PAYMENT OF PRINCIPAL; TERMINATION OF SERIES
The final payment of principal and interest on investor certificates of a
series will be due and payable no later than the Series Termination Date
specified in the related Prospectus Supplement.
The final payment of principal of and interest on any investor certificate
will be made only upon presentation and surrender of such investor certificate
at the office or agency specified in the notice from the Trustee to the investor
certificateholders regarding the final distribution. The Trustee will provide
such notice to the investor certificateholders not later than the tenth day of
the month of the final distribution.
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Each series will terminate on the earlier of (i) the Series Termination
Date with respect to such series and (ii) the day following the Distribution
Date on which the final payment of principal is made to the investor
certificateholders of such series.
If, as of the Distribution Date in the month preceding the Series
Termination Date with respect to a series (after giving effect to all transfers,
withdrawals and deposits to occur on such Distribution Date), the Series
Investor Interest with respect to such series would be greater than zero,
Receivables (or interests therein) in an amount sufficient to yield proceeds
equal to the Series Investor Interest plus any accrued but unpaid Certificate
Interest will be sold; provided, however, that the amount of Receivables to be
sold will not exceed the product of (i) the aggregate amount of Receivables in
the Trust and (ii) a fraction, the numerator of which is the Series Investor
Interest and the denominator of which is the Aggregate Investor Interest, in
each case on the Distribution Date in the month preceding the Series Termination
Date; and provided, further, that the Receivables selected to be sold will not
be materially different from the Receivables remaining in the Trust as of that
Distribution Date. The proceeds from this sale will be deposited into the Series
Distribution Account and paid to the investor certificateholders of such series
on the Distribution Date immediately following the deposit. The payment will be
deemed to be the final distribution with respect to the investor certificates of
such series.
CREDIT ENHANCEMENT
The Credit Enhancement with respect to a series may include a cash
collateral account, a letter of credit, a surety bond, an insurance policy or
any other form of credit enhancement described in the related Prospectus
Supplement. Credit Enhancement also may be provided to a series or class of a
series by subordination provisions that require distributions of principal
and/or interest be made with respect to the investor certificates of such series
or class before distributions are made to one or more other series or other
classes of such series.
A description of any Credit Enhancement provided with respect to a series
will be set forth in the related Prospectus Supplement. The description will
include such information as (a) the amount payable under the Credit Enhancement,
(b) any conditions to such payment, (c) the circumstances under which the Credit
Enhancement will be available, (d) the class or classes of the series that will
receive the direct benefit of the Credit Enhancement, (e) the conditions (if
any) under which the amount payable under the Credit Enhancement may be
terminated, reduced or replaced and (f) other material provisions of the related
Credit Enhancement Agreement.
REPURCHASE OF TRUST PORTFOLIO
A Trust Portfolio Repurchase Event will occur upon discovery that as of the
Initial Closing Date or, with respect to any Additional Accounts, as of any date
on which there is an assignment of the Receivables in such Additional Accounts
to the Trust, (a) the Pooling and Servicing Agreement or appropriate assignment,
as the case may be, does not constitute a valid and binding obligation of each
Seller, subject to usual and customary exceptions relating to bankruptcy,
insolvency and general equity principles, (b) the Pooling and Servicing
Agreement or appropriate assignment, as the case may be, does not constitute (1)
a valid transfer and assignment to the Trust of all right, title and interest of
each Seller in and to the Receivables, whether then existing or thereafter
created, and the proceeds thereof, or (2) the grant of a perfected security
interest of first priority under the UCC as in effect in the Applicable State
with respect to each Seller in such Receivables and proceeds thereof effective
as to each Receivable upon the creation thereof, (c) any Seller or a Person
claiming through or under any Seller has any claim to or interest in any
Investor Account, other than the interests of the investor certificateholders or
the interest of any Seller as a debtor for purposes of the UCC as in effect in
the Applicable State with respect to each Seller, or (d) certain representations
and warranties of any Seller regarding (1) its corporate status, authority with
regard to the assignment of Receivables and performance of such Seller's
obligations under the Pooling and Servicing Agreement and any Series Supplement
and (2) the accuracy of information furnished by such Seller to the Trustee, are
not true and the breach is not cured within a specified time period.
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Upon the occurrence of a Trust Portfolio Repurchase Event, either the
Trustee or holders of investor certificates evidencing undivided interests in
the Trust aggregating not less than 51% of the Aggregate Invested Amount may
direct Greenwood to purchase Receivables transferred to the Trust on or before
the Distribution Date with respect to each series then outstanding within 60
days of such notice; provided, however, that if an assignment of Additional
Accounts results in a Trust Portfolio Repurchase Event, only the Receivables in
those Additional Accounts will be repurchased. Greenwood will not be required to
make such a purchase, however, if, on any day during the applicable period, the
Trust Portfolio Repurchase Event does not adversely affect in any material
respect the interests of the investor certificateholders as a whole. The
determination of materiality referred to above will be made by an officer of the
Master Servicer in his sole reasonable judgment.
The price for any such purchase with respect to each series then
outstanding will be equal to the sum of the Series Investor Interest and all
accrued but unpaid Certificate Interest with respect to the series; provided,
however, that if an assignment of Additional Accounts results in a Trust
Portfolio Repurchase Event, only the Receivables in those Additional Accounts
shall be repurchased at a price with respect to each series equal to the product
of (i) the Series Investor Percentage with respect to Principal Collections for
the next following Distribution Date with respect to the series and (ii) the
amount of Receivables attributable to the Additional Accounts, and the purchase
price shall be applied as Collections in respect of those Receivables in
accordance with each applicable Series Supplement and deposited in the Group
Collections Account relating to that series. In the event that the obligation of
Greenwood to repurchase the Trust portfolio is at any time the subject of
concurrent obligations of one or more other parties to the Seller Certificate
Ownership Agreement then Greenwood's obligation to repurchase the Trust
portfolio will be conditioned on Greenwood's ability to enforce those concurrent
obligations against one or more other parties to the Seller Certificate
Ownership Agreement.
REPURCHASE OF SPECIFIED RECEIVABLES
A Receivable Repurchase Event will occur in the event that each Receivable
that is transferred to the Trust is not, as of the time of such transfer, an
Eligible Receivable and such event has a material adverse effect on the investor
certificateholders' interest in the Receivables as a whole and is not cured
within 60 days of the earlier of (i) actual knowledge of the breach by the
relevant Seller or (ii) receipt by such Seller of written notice of any such
event given by the Trustee. The determination of materiality referred to above
will be made by an officer of the Master Servicer in his sole reasonable
judgment. "Eligible Receivable" means each Receivable (a) that is payable in
United States dollars, (b) that was created in compliance, in all material
respects, with all Requirements of Law applicable to the Seller and the Servicer
with respect to the Receivable and pursuant to a Credit Agreement that complies,
in all material respects, with all Requirements of Law applicable to the Seller
and Servicer, (c) as to which, if the Receivable was created before the Initial
Closing Date or the relevant Addition Date, as applicable, (i) at the time of
the creation of the Receivable, the applicable Seller had good and marketable
title thereto free and clear of all liens ("Liens") arising under or through the
Seller and (ii) at the time of the conveyance of such Receivable to the Trust,
the Seller had, or the Trust will have, good and marketable title thereto free
and clear of all Liens arising under or through the Seller, (d) as to which, if
the Receivable was created on or after the Initial Closing Date, at the time of
the creation of the Receivable, the Trust will have good and marketable title
thereto free and clear of all Liens arising under or through the Seller and (e)
which constitutes, or would have constituted, an "account" or "general
intangible" under and as defined in Article 9 of the UCC as then in effect in
the Applicable State with respect to the Receivable. Greenwood will purchase all
the Receivables in each Account in which there is any Receivable to which the
Receivable Repurchase Event relates ("Ineligible Receivables") on the terms and
conditions set forth below.
Greenwood will purchase the Receivables in those Accounts by directing the
Master Servicer to deduct the amount of the Receivables that are Principal
Receivables from the aggregate amount of Principal Receivables in the Trust. In
the event that the exclusion of those Receivables from the calculation of the
Seller Interest would cause the Seller Interest to be an amount less than zero,
on the following Trust Distribution Date, Greenwood will deposit into the
Collections Account in immediately available funds an amount equal to the amount
by which the Seller Interest would be reduced below zero. The deposit will be
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considered a repayment in full of the Receivables, and will be treated as
Collections in respect of Principal Receivables for such Due Period. See
"Description of the Investor Certificates -- Distributions of Collections and
Application of Collections and Certain Other Amounts" herein and in the related
Prospectus Supplement. In the event that the obligation of Greenwood to
repurchase Receivables is at any time the subject of concurrent obligations of
one or more other parties to the Seller Certificate Ownership Agreement, then
Greenwood's obligation to repurchase Receivables will be conditioned on
Greenwood's ability to enforce those concurrent obligations against one or more
other parties to the Seller Certificate Ownership Agreement.
REPURCHASE OF A SERIES
A Series Repurchase Event with respect to a series will occur upon
discovery that as of the Series Closing Date, the applicable Series Supplement
does not constitute a legal, valid and binding obligation of each Seller
enforceable against each Seller in accordance with its terms, subject to usual
and customary exceptions relating to bankruptcy, insolvency and general equity
principles.
Upon the occurrence of a Series Repurchase Event with respect to a series,
either the Trustee or holders of investor certificates of such series evidencing
undivided interests in the Trust aggregating not less than 51% of the Series
Invested Amount with respect to such series may direct Greenwood to purchase the
investor certificates of such series within 60 days after Greenwood receives a
direction to purchase the investor certificates. Greenwood will not be required
to make the purchase, however, if, on any day during the 60-day period, the
Series Repurchase Event does not adversely affect in any material respect the
interests of the investor certificateholders of such series as a whole.
On the Distribution Date set for the purchase, Greenwood will deposit into
the Series Distribution Account with respect to such series an amount equal to
the sum of the Series Investor Interest and all accrued but unpaid Certificate
Interest. The amount on deposit in the Series Distribution Account will be paid
to the investor certificateholders of such series upon presentation and
surrender of their investor certificates.
REPURCHASE OF INVESTOR CERTIFICATES
The Pooling and Servicing Agreement provides that Sellers may become
holders of investor certificates and that Greenwood may cancel any investor
certificates owned by a Seller by providing notice of such cancellation to the
Trustee; provided, however, that Class B Certificates of any series may not be
cancelled unless Greenwood has been advised by the Rating Agencies that such
cancellation will not cause the ratings of any investor certificates then
outstanding to be lowered or withdrawn. Simultaneously with any cancellation of
investor certificates of a series, the Class Invested Amount of the applicable
class of such series and the Series Invested Amount with respect to such series
will be reduced, and the Seller Interest will be increased, by the aggregate
Class Invested Amount represented by the cancelled investor certificates of such
series. No reduction of Class Invested Amount as described in the preceding
sentence will result in a decrease in any Class Percentage with respect to the
affected class if a Fixed Principal Allocation Event with respect to such series
has previously occurred.
SALE OF SELLER INTEREST
The Seller Certificate was issued to Greenwood. Any Additional Sellers also
will become holders of the Seller Certificate, as tenants-in-common with
Greenwood, and will enter into a Seller Certificate Ownership Agreement with
Greenwood. In such event, all references to actions taken by Greenwood as Holder
of the Seller Certificate shall be deemed to be taken by Greenwood on behalf of
the Holders of the Seller Certificate. Pursuant to the Pooling and Servicing
Agreement, neither Greenwood nor any Additional Seller (if any) may transfer,
assign, sell or otherwise convey, pledge or hypothecate or otherwise grant a
security interest in any portion of the Seller Interest represented by the
Seller Certificate, except for the transfer of all or part of any Seller's
interest in the Seller Certificate to an affiliate of Greenwood that is included
in the same "affiliated group" as Greenwood for United States federal income tax
purposes; provided, however, that any Seller may transfer a portion of the
Seller Interest on terms substantially similar to the terms of the Pooling and
Servicing Agreement so long as the agreements and other documentation relating
thereto are consistent with, and subject to, the terms of the Pooling and
Servicing Agreement and any Series Supplement and do not require
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any action prohibited or prohibit any action that is either required on the part
of the Master Servicer, any Seller, the Trustee or any Servicer by the terms of
the Pooling and Servicing Agreement and any Series Supplement or necessary to
protect the interests of the investor certificateholders; and provided, further,
that the Seller is advised by the Rating Agencies that the rating of any class
of any series then outstanding would not be lowered or withdrawn as a result of
such transfer. Notwithstanding the above, no such advice from the Rating
Agencies is required if the transfer is made to comply with certain regulatory
requirements.
REALLOCATION OF SERIES AMONG GROUPS
The Pooling and Servicing Agreement provides that the Master Servicer may
elect, at any time, subject to certain conditions, to move any series from the
Group of which it is then a member to any other Group, including without
limitation to a new Group established at such time of which the series to be
moved is the only series. A series may be moved from one Group to another only
if the following conditions are satisfied: (i) the Group from which the series
is moved and the Group to which the series is moved have the same Distribution
Date; (ii) the Master Servicer shall have certified to the Trustee that the
Master Servicer reasonably believes that the movement of the applicable series
would not (a) result in any delay in the payment of principal to the investor
certificateholders of any series then outstanding, or (b) cause an Amortization
Event to occur with respect to any series then outstanding; and (iii) the Rating
Agencies shall have advised the Master Servicer and Greenwood that the movement
of the applicable series would not cause the rating of any class of any series
then outstanding to be lowered or withdrawn.
AMENDMENTS
The Pooling and Servicing Agreement and any Series Supplement may be
amended from time to time by the Master Servicer, the Sellers, the Trustee and
the Servicers, without the consent of the investor certificateholders of any
outstanding series, for any of the following purposes: (i) to add to the
covenants and agreements contained therein or to surrender any right or power
therein reserved to or conferred upon the Sellers, the Master Servicer or any
Servicer; provided, however, that such action will not adversely affect in any
material respect the interests of the holders of any class of any series then
outstanding; (ii) to add provisions to or change or eliminate any of the
provisions of the Pooling and Servicing Agreement or any Series Supplement;
provided, however, that any such addition, change or elimination will not
adversely affect in any material respect the interests of the holders of any
class of any series then outstanding; (iii) to add provisions to or change any
of the provisions of the Pooling and Servicing Agreement or any Series
Supplement for the purpose of accommodating the addition of Participation
Interests to the Trust; or (iv) to cure any ambiguity or to correct or
supplement any defective or inconsistent provision contained in the Pooling and
Servicing Agreement, in any Series Supplement or in any amendment to the Pooling
and Servicing Agreement or any Series Supplement.
The Pooling and Servicing Agreement and the Series Supplement for any
series also may be amended from time to time by the Master Servicer, the
Sellers, the Trustee and the Servicers with the consent of the holders of
investor certificates evidencing Fractional Undivided Interests aggregating not
less than 66 2/3% of the Class Invested Amount of each class of such series
adversely affected for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, the Pooling and Servicing
Agreement or the applicable Series Supplement, or of modifying in any manner the
rights of the investor certificateholders of such series; provided, however,
that the Trustee will have been advised by each Rating Agency that such
amendment will not result in the withdrawal or lowering of the ratings assigned
to the investor certificates of such series by that Rating Agency; and,
provided, further, that no such amendment will materially and adversely affect
the interests of the investor certificateholders of any class of such series by
reducing in any manner the amount of, or delaying the timing of, distributions
that are required to be made to any investor certificate without the consent of
the affected investor certificateholders, or by reducing the aforesaid
percentage required to consent to any such amendment, without the consent of
each investor certificateholder of each affected class. For purposes of
calculating whether a 66 2/3% consent has been achieved, the applicable Class
Invested Amount or Series Invested Amount will be calculated without taking into
account the Class Invested Amount represented by any investor certificates
beneficially owned by any
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Seller or any affiliate of any Seller, and no Seller or affiliate of a Seller
will be entitled to vote on any amendment described in this paragraph. If any
such amendment to the Pooling and Servicing Agreement would adversely affect the
interests of any class of any other series of investor certificates then
outstanding the consent of the investor certificateholders of each class
adversely affected by such amendment to the Pooling and Servicing Agreement also
will be required. Promptly after the execution of any amendment or consent
described in this paragraph, the Trustee will notify the investor
certificateholders of the substance of the amendment.
None of the execution and delivery of any Series Supplement, the addition
of Receivables to the Trust, the removal of Receivables from the Trust, the
addition or removal of any Seller or Servicer in connection with an addition to
or removal from the Trust of Receivables, or the replacement of any Servicer,
Master Servicer or Trustee will constitute an amendment to the Pooling and
Servicing Agreement or any Series Supplement for the purposes of the preceding
two paragraphs, provided that any such action described in this sentence is
completed in accordance with the provisions of the Pooling and Servicing
Agreement and/or any applicable Series Supplement, as applicable.
LIST OF INVESTOR CERTIFICATEHOLDERS
In the event that Definitive Certificates are issued with respect to the
investor certificates of any series, upon written request of three or more
investor certificateholders of record of any class of such series representing
Fractional Undivided Interests in the Trust aggregating not less than 5% of the
Class Invested Amount, after having been adequately indemnified by those
investor certificateholders for its costs and expenses, the Trustee will afford
those investor certificateholders access during business hours to the current
list of investor certificateholders of such series for purposes of communicating
with other investor certificateholders of such series with respect to their
rights under the Pooling and Servicing Agreement and the applicable Series
Supplement. See "-- Definitive Certificates."
MEETINGS
The Pooling and Servicing Agreement does not provide for any annual or
other meetings of investor certificateholders of any series.
BOOK-ENTRY REGISTRATION
The information in this section concerning DTC, Cedel Bank, societe anonyme
("Cedel") and Euroclear and their book-entry systems and procedures has been
obtained from sources that Greenwood and the Trust believe to be reliable, but
Greenwood and the Trust take no responsibility for the accuracy of the
information in this section.
Unless otherwise provided in the Series Supplement, Certificate Owners may
hold their investor certificates through DTC (in the United States) or Cedel or
Euroclear (in Europe). The investor certificates will be registered in the name
of the nominee of DTC. Cedel and Euroclear will hold omnibus positions on behalf
of the Cedel Participants and the Euroclear Participants, respectively, through
customers' securities accounts in Cedel's and Euroclear's names on the books of
their respective depositaries (collectively, the "Depositaries") which in turn
will hold such positions in customers' securities accounts in the Depositaries'
names on the books of DTC. Greenwood has been informed by DTC that DTC's nominee
will be Cede & Co. ("Cede"). Accordingly, Cede is expected to be the holder of
record of the investor certificates. Unless otherwise provided in the Series
Supplement, the investor certificates will be available for purchase in
book-entry form in minimum denominations of $1,000 and integral multiples
thereof. No person acquiring an interest in the investor certificates (each, a
"Certificate Owner") will be entitled to receive a certificate representing that
person's interest in the investor certificates. Unless and until Definitive
Certificates are issued under the limited circumstances described herein, all
references herein to actions by investor certificateholders will refer to
actions taken by DTC upon instructions from its Participants, as hereinafter
defined, and all references herein to distributions and notices to investor
certificateholders will refer to distributions and notices to DTC or Cede, as
the registered holder of the investor certificates, for distribution to
Certificate Owners in accordance with DTC procedures. See "-- Definitive
Certificates."
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DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York UCC and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC was created to hold securities for its participating
organizations ("Participants") and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movements of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations, and may include
certain other organizations. Indirect access to the DTC system also is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other hand, will be effected in
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depositary to take action to effect final settlement on its behalf by delivering
or receiving securities in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC. Cedel
Participants and Euroclear Participants may not deliver instructions directly to
the Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant Cedel
Participant or Euroclear Participant on such business day. Cash received in
Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following settlement
in DTC. For additional information regarding clearance and settlement procedures
for the investor certificates, see Annex I, hereto, and for information with
respect to tax documentation procedures relating to the investor certificates,
see Annex I, hereto and "Certain Federal Income Tax Consequences -- Non-United
States Investor Certificateholders."
Certificate Owners that are not Participants or Indirect Participants may
purchase, sell or otherwise transfer ownership of, or other interests in, the
investor certificates only through Participants and Indirect Participants. In
addition, Certificate Owners will receive all distributions of principal and
Certificate Interest from the Trustee through the Participants. Under a
book-entry format, Certificate Owners may experience some delay in their receipt
of payments, since the payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward the payments to its Participants, which
thereafter will forward them to Indirect Participants or Certificate Owners. It
is anticipated that the only investor certificateholder will be Cede, as nominee
of DTC. Certificate Owners will not be recognized by the Trustee as investor
certificateholders, as that term is used in the Pooling and Servicing Agreement,
and Certificate Owners only will be permitted to exercise the rights of investor
certificateholders indirectly through the Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the investor certificates
and is required to receive and transmit distributions of the principal of and
interest on the investor certificates. Participants and Indirect Participants
with which Certificate Owners have accounts with respect to the investor
certificates similarly are required to make book-entry transfers and receive and
transmit such payments on behalf of their respective Certificate Owners.
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Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Certificate
Owner to pledge investor certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of those
investor certificates, may be limited due to the lack of a physical certificate
for those investor certificates.
DTC has advised Greenwood that it will take any action permitted to be
taken by an investor certificateholder under the Pooling and Servicing Agreement
or any applicable Series Supplement only at the direction of one or more
Participants to whose account with DTC the investor certificates are credited.
DTC may take conflicting action with respect to other undivided interests in the
investor certificates to the extent that those actions are taken on behalf of
Participants whose holdings include those undivided interests.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations or
customers ("Cedel Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Participants through electronic book-entry
changes in accounts of Cedel Participants, thereby eliminating the need for
physical movement of certificates. Transactions may now be settled in Cedel in
any of 28 currencies, including United States dollars. Cedel provides to its
Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel interfaces with domestic markets in
several countries. As a professional depository, Cedel is subject to regulation
by the Luxembourg Monetary Institute. Cedel Participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the Underwriters. Indirect access to Cedel
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Cedel
Participant, either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to clear and
settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may now be settled in any of 33
currencies, including United States dollars. The Euroclear System includes
various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described above. The Euroclear
System is operated by Morgan Guaranty Trust Company of New York, Brussels,
Belgium office (the "Euroclear Operator" or "Euroclear"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for the Euroclear System on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
Underwriters. Indirect access to the Euroclear System is also available to other
firms that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
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Distributions with respect to investor certificates held through Cedel or
Euroclear will be credited to the cash accounts of Cedel Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions will be
subject to tax reporting in accordance with relevant United States tax laws and
regulations. See "Certain Federal Income Tax Consequences." Cedel or the
Euroclear Operator, as the case may be, will take any other action permitted to
be taken by an investor certificateholder under the Pooling and Servicing
Agreement or any applicable Series Supplement on behalf of a Cedel Participant
or Euroclear Participant only in accordance with its relevant rules and
procedures and subject to its Depositary's ability to effect such actions on its
behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of investor certificates among participants of
DTC, Cedel and Euroclear, they are under no obligation to perform or continue to
perform such procedures and such procedures may be discontinued at any time.
DEFINITIVE CERTIFICATES
Unless otherwise provided in the Series Supplement, a class of investor
certificates will be issued in fully registered, certificated form to
Certificate Owners or their nominees ("Definitive Certificates"), rather than to
DTC or its nominees, only if (i) the Master Servicer advises the Trustee in
writing that DTC is no longer willing or able to discharge properly its
responsibilities as Depository with respect to such class, and the Trustee or
the Master Servicer is unable to locate a qualified successor, (ii) the Master
Servicer, at its option, elects to terminate the book-entry system through DTC,
or (iii) after the occurrence of a Master Servicer Termination Event,
Certificate Owners representing in the aggregate not less than 51% of the
respective Class Invested Amount advise the Trustee and DTC through Participants
in writing that the continuation of a book-entry system through DTC (or a
successor thereto) is no longer in the best interest of the Certificate Owners
of such class.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates of such class affected by
the event. Upon surrender by DTC of the applicable definitive certificates and
upon the issuance of instructions for re-registration, the Trustee will issue
the applicable investor certificates as Definitive Certificates. Thereafter the
Trustee will recognize the registered holders of such Definitive Certificates as
investor certificateholders under the Pooling and Servicing Agreement and the
applicable Series Supplement.
The Trustee will distribute principal and interest on the investor
certificates directly to Holders of Definitive Certificates in accordance with
the procedures set forth in the Pooling and Servicing Agreement and the
applicable Series Supplement. Distributions on each Distribution Date will be
made to Holders in whose names the Definitive Certificates were registered at
the close of business on the related Record Date by check mailed to the address
of such Holder as it appears on the register maintained by the Trustee. The
final payment on any investor certificate (whether Definitive Certificates or
one of the investor certificates registered in the name of Cede representing the
investor certificates), however, will be made only upon presentation and
surrender of the investor certificate at the office or agency specified in the
notice of final distribution to investor certificateholders. The Trustee will
provide the notice to registered investor certificateholders not later than the
tenth day of the month of such final payment.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee, or at such other office as Greenwood designates. No
service charge will be imposed for any registration of transfer or exchange, but
the Transfer Agent may require payment of a sum sufficient to cover any tax or
other governmental charge imposed in connection therewith.
SERVICING
MASTER SERVICER AND SERVICER
Greenwood acts as Master Servicer with respect to the Trust. In addition to
the Master Servicer, there also may be one or more Servicers, each of which will
be a "Servicer" for purposes of the Trust with respect to
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the Accounts which that Servicer services. Currently, Greenwood, as Servicer
with respect to the Greenwood Discover Card Accounts, is the only Servicer.
Additional Servicers may be added to the Trust at a later date if receivables in
accounts other than credit accounts originated by Greenwood are added to the
Trust. Each Servicer will perform servicing functions with respect to the
Accounts for which it is the Servicer. The Master Servicer, in its role as
Master Servicer, will coordinate the activities of the various Servicers with
respect to the Trust. The duties of the Master Servicer include aggregating
Collections from the Servicers and distributing such Collections to the various
Investor Accounts, directing the investment of funds on deposit in the Investor
Accounts and the Credit Enhancement Accounts in Permitted Investments, receiving
the Monthly Servicing Fee and allocating it among the Servicers, preparing
reports for investor certificateholders and making any filings on behalf of the
Trust with the Securities and Exchange Commission or other governmental
agencies. The Master Servicer has no duty to pay any amount in lieu of
Collections from its own funds in the event of a failure on the part of any
Servicer to transfer Collections to the Master Servicer or to the Trust, at the
direction of the Master Servicer. Upon the appointment of any additional
Servicer, Greenwood as Master Servicer and Servicer and the additional Servicer
will enter into a Master Servicing Agreement, which will govern the relationship
among the Master Servicer and the Servicers.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Master Servicer is paid a monthly servicing fee, on behalf of the
investor certificateholders of each series then outstanding and the Sellers, in
respect of each Due Period in an amount equal to no less than 2% per annum
(calculated on the basis of a 360-day year of twelve 30-day months) of the
amount of Principal Receivables in the Trust on the first day of such Due Period
(the "Monthly Servicing Fee"), as compensation for its activities as Master
Servicer and reimbursement for its expenses. In the event that there is more
than one Servicer, the Master Servicer's expenses will include the payment of a
servicing fee to each Servicer, pursuant to the terms of a Master Servicing
Agreement to be entered into by Greenwood as Master Servicer and Servicer and
any other Servicer. The Monthly Servicing Fee is allocated among the Seller
Interest and each series then outstanding. The share of each Monthly Servicing
Fee allocable to the Holder of the Seller Certificate (the "Seller Servicing
Fee") on any Trust Distribution Date is equal to the product of (i) the product
of (x) the Investor Servicing Fee Percentage and (y) and the amount of Principal
Receivables in the Trust as of the first day of the Due Period related to that
Trust Distribution Date and (ii) a fraction the numerator of which is the amount
of the Seller Interest and the denominator of which is the greater of (a) the
amount of Principal Receivables in the Trust and (b) the Aggregate Investor
Interest, and is paid to the Master Servicer by the Holder of the Seller
Certificate on or before each Trust Distribution Date. Unless otherwise
specified in the related Prospectus Supplement, the portion of the fee allocated
to the Class Investor Interest for each class of each series (the "Class Monthly
Servicing Fee") is equal to the product of the amount of the Investor Servicing
Fee for a given Due Period and a fraction the numerator of which is the Class
Investor Interest and the denominator of which is the Series Investor Interest,
in each case on the first day of that Due Period. The Investor Servicing Fee for
any given Due Period with respect to each Series will be equal to the product of
the Investor Servicing Fee Percentage and the Series Investor Interest on the
first day of the Due Period (or in the case of the first Distribution Date, on
the Series Cut-Off Date). The Class Monthly Servicing Fee for each class will be
funded from Class Finance Charge Collections and may be funded from certain
other sources as described in "Description of the Investor Certificates --
Distributions of Collections and Application of Collections and Certain Other
Amounts" in the related Prospectus Supplement. The remainder of the Monthly
Servicing Fee will be allocated to each other outstanding series. Neither the
Trustee nor the investor certificateholders of any series will have any
obligation to pay that portion of the Monthly Servicing Fee that is payable by
any class of any other series issued by the Trust or that is payable by the
Sellers.
The Master Servicer pays from its servicing compensation the servicing fees
for each Servicer and certain other expenses incurred in connection with
servicing the Receivables. These include, without limitation, payment of the
fees and disbursements of the Trustee and independent accountants and other fees
and expenses of the Trust not expressly stated in the Pooling and Servicing
Agreement or any Series Supplement to be for the account of the
certificateholders; provided that neither the Master Servicer nor any Servicer
will
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be liable for any federal, state or local income or franchise tax, or any
interest or penalties with respect thereto, assessed on the Trust, the Trustee
or the certificateholders.
CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE SERVICERS
Pursuant to the Pooling and Servicing Agreement, neither the Master
Servicer nor any Servicer may resign from its obligations and duties as Master
Servicer or Servicer under the Pooling and Servicing Agreement or any Series
Supplement, except upon determination that such duties are no longer permissible
under applicable law and under certain other limited circumstances. No such
resignation will become effective until the Trustee or a successor to the Master
Servicer or Servicer, as applicable, has assumed such Master Servicer's or
Servicer's responsibilities and obligations under the Pooling and Servicing
Agreement and such Series Supplements.
The Master Servicer or any Servicer may delegate any of its duties under
the Pooling and Servicing Agreement or any Series Supplement; provided, however,
that the delegation of any duties will not relieve the Master Servicer or such
Servicer of its liabilities and responsibilities with respect to such duties and
will not constitute a resignation under the Pooling and Servicing Agreement.
Any corporation into which, in accordance with the Pooling and Servicing
Agreement, the Master Servicer or any Servicer may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Master
Servicer or any Servicer is a party, or any corporation succeeding to the
business of the Master Servicer or any Servicer will be, upon execution of a
supplement to the Pooling and Servicing Agreement and each Series Supplement
then outstanding, the successor to the Master Servicer or that Servicer, as
applicable, under the Pooling and Servicing Agreement and those Series
Supplements.
MASTER SERVICER TERMINATION EVENTS
If any Master Servicer Termination Event occurs, either the Trustee or
investor certificateholders evidencing Fractional Undivided Interests
aggregating not less than 51% of the Class Invested Amount for any class of any
series then outstanding that is materially adversely affected thereby, by
written notice to Greenwood as Master Servicer (and to the Trustee if given by
the investor certificateholders), may terminate all of the rights and
obligations of Greenwood as Master Servicer under the Pooling and Servicing
Agreement and any Series Supplement then outstanding. The Trustee will appoint a
successor Master Servicer as promptly as possible. If the Trustee has not
appointed a successor Master Servicer who has accepted the appointment by the
time Greenwood ceases to act as Master Servicer, all authority, power and
obligations of Greenwood as Master Servicer under the Pooling and Servicing
Agreement and any Series Supplement then outstanding will pass to and be vested
in the Trustee.
A "Master Servicer Termination Event" refers to any of the following
events:
(a) failure by the Master Servicer to make any payment, transfer or
deposit, or to give instructions to the Trustee to make any withdrawal, on
the date it is required to do so under the Pooling and Servicing Agreement,
any Series Supplement or the Master Servicing Agreement (or within the five
business days thereafter);
(b) failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Master Servicer set forth in the Pooling and Servicing Agreement, any
Series Supplement or the Master Servicing Agreement that continues
unremedied for a period of 60 days after written notice of the failure
requiring the same to be remedied has been given to the Master Servicer by
the Trustee or to the Master Servicer and the Trustee by holders of
investor certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Class Invested Amount for any class of any series
materially adversely affected thereby;
(c) any representation, warranty or certification made by the Master
Servicer in the Pooling and Servicing Agreement, any Series Supplement, the
Master Servicing Agreement or in any certificate delivered pursuant to the
Pooling and Servicing Agreement, any Series Supplement or the Master
Servicing Agreement proves to have been incorrect when made, which has a
material adverse effect on
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the rights of the investor certificateholders of any class of any series
then outstanding, and which continues to be incorrect in any material
respect for a period of 60 days after written notice of such failure
requiring the same to be remedied has been given to the Master Servicer by
the Trustee or to the Master Servicer and the Trustee by holders of
investor certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Class Invested Amount for any class of any series
materially adversely affected thereby; or
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Master Servicer. However, the FDIC may have the power
to prevent the Trustee or investor certificateholders from effecting a
transfer of servicing if the relevant Master Servicer Termination Event
relates only to the appointment of a conservator or receiver or the
insolvency of Greenwood, or any other FDIC-insured depository institution,
as Master Servicer. Similarly, if a Master Servicer Termination Event
occurs with respect to a Master Servicer subject to Title 11 of the United
States Code, and no Master Servicer Termination Event exists other than the
filing of a bankruptcy petition by or against such Master Servicer, the
Trustee or investor certificateholders may be prevented from effecting a
transfer of servicing.
SERVICER TERMINATION EVENTS
If any Servicer Termination Event occurs with respect to any Servicer,
either the Trustee or investor certificateholders evidencing Fractional
Undivided Interests aggregating not less than 51% of the Class Invested Amount
for any class of any series then outstanding that is materially adversely
affected thereby, by written notice to Greenwood as Master Servicer and to the
Servicer to which any such Servicer Termination Event relates (and to the
Trustee if given by the investor certificateholders), may terminate all of the
rights and obligations of that Servicer under the Pooling and Servicing
Agreement, any Series Supplement then outstanding and the Master Servicing
Agreement. The Trustee will appoint a successor Servicer with respect to the
Servicer as promptly as possible. If the Trustee has not appointed a successor
Servicer who has accepted the appointment by the time the Servicer ceases to act
as a Servicer, all authority, power and obligations of that Servicer under the
Pooling and Servicing Agreement, any Series Supplement then outstanding and the
Master Servicing Agreement will pass to and be vested in the Trustee.
A "Servicer Termination Event," with respect to any Servicer, refers to any
of the following events:
(a) failure by the Servicer to make any payment, transfer or deposit
on the date it is required to do so under the Pooling and Servicing
Agreement, any Series Supplement or the Master Servicing Agreement (or
within the five business days thereafter);
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set
forth in the Pooling and Servicing Agreement, any Series Supplement or the
Master Servicing Agreement which continues unremedied for a period of 60
days after written notice of the failure requiring the same to be remedied
has been given to that Servicer by the Trustee or to the Servicer and the
Trustee by holders of investor certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Class Invested Amount for
any class of any series materially adversely affected thereby;
(c) any representation, warranty or certification made by the Servicer
in the Pooling and Servicing Agreement, any Series Supplement, the Master
Servicing Agreement or in any certificate delivered pursuant to the Pooling
and Servicing Agreement, any Series Supplement or the Master Servicing
Agreement proves to have been incorrect when made, which has a material
adverse effect on the rights of the investor certificateholders of any
class of any series then outstanding, and which continues to be incorrect
in any material respect for a period of 60 days after written notice of the
failure requiring the same to be remedied has been given to that Servicer
by the Trustee or to the Servicer and the Trustee by holders of investor
certificates evidencing Fractional Undivided Interests aggregating not less
than 25% of the Class Invested Amount for any class of any series
materially adversely affected thereby; or
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer. However, the FDIC may have the power to
prevent the Trustee or investor certificateholders from
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effecting a transfer of servicing if the relevant Servicer Termination
Event relates only to the appointment of a conservator or receiver or the
insolvency of that Servicer, or any other FDIC-insured depository
institution, as Servicer. Similarly, if a Servicer Termination Event occurs
with respect to a Servicer subject to Title 11 of the United States Code,
and no Servicer Termination Event exists other than the filing of a
bankruptcy petition by or against that Servicer, the Trustee or investor
certificateholders may be prevented from effecting a transfer of servicing.
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that on or about April 15 of
each calendar year the Master Servicer will cause a firm of nationally
recognized independent public accountants to furnish a report to the Trustee,
the Master Servicer and each Servicer (i) to the effect that those accountants
are of the opinion that the system of internal accounting controls in effect on
the date of such report relating to the servicing procedures performed by the
Master Servicer and each Servicer under the Pooling and Servicing Agreement and
any Series Supplement were sufficient for the prevention of errors and
irregularities that would be material to the assets of the Trust and that
nothing has come to the accountants' attention that would cause them to believe
such servicing has not been conducted in compliance with the Pooling and
Servicing Agreement and any Series Supplement, except for such exceptions as the
accountants believe to be immaterial and such other exceptions as will be set
forth in such report and (ii) to the effect that those accountants have compared
the mathematical calculations of the amounts set forth in the Master Servicer's
monthly certificates delivered during the preceding calendar year covered by
such report with the computer reports of the Master Servicer and each Servicer
that generated those amounts, confirming that those amounts are in agreement,
except for such exceptions as the accountants believe to be immaterial and such
other exceptions as will be set forth in the report. The procedures to be
followed by those accountants will not constitute an audit conducted in
accordance with generally accepted auditing standards.
The Pooling and Servicing Agreement provides for delivery to the Trustee,
Greenwood on behalf of the Holder of the Seller Certificate and the Rating
Agencies on or before April 15 of each calendar year of an annual statement
signed by an officer of the Master Servicer to the effect that (a) in the course
of the officer's duties as an officer of the Master Servicer, the officer would
normally obtain knowledge of any Master Servicer Termination Event, and (b)
whether or not the officer has obtained knowledge of any such Master Servicer
Termination Event and, if so, specifying each Master Servicer Termination Event
of which the signing officer has knowledge and the nature of such Master
Servicer Termination Event. The Pooling and Servicing Agreement also provides
for delivery of a similar annual statement by each Servicer with respect to
Servicer Termination Events.
THE SELLER
GREENWOOD
Greenwood is a wholly owned subsidiary of NOVUS and an indirect subsidiary
of MSDW. Greenwood was acquired by NOVUS in January 1985. Greenwood was
chartered as a banking corporation under the laws of the State of Delaware in
1911, and its deposits are insured by the FDIC. Greenwood is not a member of the
Federal Reserve System. The executive office of Greenwood is located at 12
Read's Way, New Castle, Delaware 19720. In addition to the experience obtained
by Greenwood in the bank card business since 1985, a majority of the senior
management of the credit, operations and data processing functions for the
Discover Card at Greenwood and NOVUS Services, Inc. ("NSI") has had extensive
experience in the credit operations of other credit card issuers. NSI performs
sales and marketing activities, provides operational support for the Discover
Card program and maintains merchant relationships.
By virtue of the enactment of CEBA, there are certain limitations placed on
Greenwood, including a requirement that Greenwood not engage in activities in
which it was not engaged as of March 5, 1987. Since its acquisition by NOVUS, as
a result of these and earlier limitations, Greenwood has not engaged in the
business of making commercial loans. See "Risk Factors -- Legislation."
Greenwood believes that in light of
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the programs it has in place, the limitations of CEBA will not have a material
impact on the level of the Receivables or on Greenwood's ability to service the
Receivables.
INSOLVENCY-RELATED MATTERS
It is possible that a receiver or conservator of Greenwood may argue that
the transaction between Greenwood and the Trust, whereby Greenwood has
transferred to the Trust all of its right, title and interest in and to the
Receivables, whether existing on the Cut-Off Date or thereafter arising, is a
pledge of the Receivables rather than an absolute transfer. Accordingly,
Greenwood has granted to the Trustee, on behalf of the Trust, a security
interest in the Receivables. To the extent that this security interest is
validly perfected prior to an insolvency of Greenwood and not taken in
contemplation of such insolvency or with the intent to hinder, delay or defraud
Greenwood or its creditors, this security interest should not be subject to
avoidance by a receiver or conservator of Greenwood, and payments made in
respect of the Receivables (other than payments made to Greenwood by the Trust
with respect to Greenwood's interest in the Seller Certificate) should not be
subject to recovery by a receiver or conservator of Greenwood. If, however, a
receiver or conservator of Greenwood were to assert a contrary position or were
to require the Trust to establish its right to cash Collections in the
possession of Greenwood as Servicer or otherwise by submitting a claim and
completing the administrative claims procedure established under the Federal
Deposit Insurance Act, as amended, delays in payments on the Certificates and
possible reductions in the amount of those payments could occur. In addition,
the Federal Deposit Insurance Corporation, if appointed as conservator or
receiver for Greenwood, has the power under the Federal Deposit Insurance Act,
as amended, to repudiate contracts, including contracts of Greenwood such as the
Pooling and Servicing Agreement. The Federal Deposit Insurance Act, as amended,
provides that a claim for damages arising from the repudiation of a contract is
limited to "actual direct compensatory damages." In the event the Federal
Deposit Insurance Corporation were to be appointed as conservator or receiver of
Greenwood and were to repudiate the Pooling and Servicing Agreement, then the
amount payable out of available collateral to the Certificateholders could be
lower than the outstanding principal and accrued interest on the Certificates.
In a 1993 case involving the repudiation by the Resolution Trust Corporation,
which has ceased to exist as of December 31, 1995 (the Federal Deposit Insurance
Corporation has taken over its responsibilities), of certain secured zero-coupon
bonds issued by a savings association, a United States federal district court
held that "actual direct compensatory damages" in the case of a marketable
security meant the market value of the repudiated bonds as of the date of
repudiation.
Unless otherwise specified in the related Prospectus Supplement, Greenwood
will receive, on each Series Closing Date, an opinion of Latham & Watkins,
counsel to Greenwood, concluding on a reasoned basis (although there is no
precedent based on directly similar facts) that subject to certain facts,
assumptions and qualifications specified therein (including matters set forth
under "Certain Legal Matters Relating to the Receivables -- Transfer of
Receivables" and "-- Certain UCC Matters"), (i) under New York law, the
perfection and the effect of perfection or nonperfection of a security interest
in the Receivables are governed by the law of the jurisdiction in which the
debtor is located, (ii) if the transfer of the Receivables to the Trust by
Greenwood constitutes an absolute transfer, then the transfer is a transfer of
all right, title and interest of Greenwood in and to those Receivables to the
Trust and (iii) if the transfer is deemed not to be an absolute transfer, it
would be treated as a security interest created by the Pooling and Servicing
Agreement in favor of the Trust in Greenwood's right, title and interest in and
to the Receivables. Unless otherwise specified in the related Prospectus
Supplement, Greenwood also will receive, on each Series Closing Date, an opinion
of Young Conaway Stargatt & Taylor, LLP, Delaware counsel to Greenwood,
concluding on a reasoned basis that, subject to certain facts, assumptions and
qualifications specified therein (including matters set forth under "Certain
Legal Matters Relating to the Receivables -- Transfer of Receivables" and "--
Certain UCC Matters"), (i) to the extent Delaware law applies, the security
interest created by the Pooling and Servicing Agreement in favor of the Trust is
a valid security interest in all right, title and interest of Greenwood in and
to the Receivables, (ii) the security interest is a perfected security interest
and (iii) the security interest is a first priority security interest.
The above descriptions are qualified in their entirety by reference to the
forms of opinions filed as exhibits to the Registration Statement of which this
Prospectus is a part.
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CERTAIN LEGAL MATTERS RELATING TO THE RECEIVABLES
TRANSFER OF RECEIVABLES
Upon formation of the Trust, Greenwood conveyed to the Trust without
recourse, all Receivables existing under the Accounts as of the Cut-Off Date. In
addition, Greenwood conveyed to the Trust all Receivables existing under
Additional Accounts as of the applicable Additional Account Cut-Off Date, and
may do so again in the future. Greenwood also transfers additional Receivables
generated in the Accounts to the Trust on an ongoing basis. In exchange,
Greenwood received the Seller Certificate and the right to direct the issuance
of, and receive the proceeds from the sale of, new series of investor
certificates. Greenwood has agreed to repurchase Receivables if either the sale
of the Receivables is not a valid transfer of all right, title and interest of
Greenwood or any Additional Seller in and to the Receivables or, if the transfer
of Receivables by Greenwood or any Additional Seller to the Trust is deemed to
be a pledge of Receivables, the Trust does not have a first priority perfected
security interest in the Receivables. In the event that the obligation of
Greenwood to repurchase Receivables is at any time the subject of concurrent
obligations of one or more other parties to the Seller Certificate Ownership
Agreement, then Greenwood's obligation to repurchase Receivables will be
conditioned on Greenwood's ability to enforce those concurrent obligations
against one or more parties to the Seller Certificate Ownership Agreement. A tax
or statutory lien on property of Greenwood arising before Receivables came into
existence may have priority over the Trust's interest in those Receivables. In
addition, subject to certain conditions, each Servicer will be permitted to use
all or a portion of the cash Collections received by it during any given Due
Period until the applicable Distribution Date and, in the event of the
receivership, custodianship or bankruptcy of any such Servicer, the Trust may
not have a perfected interest in such Collections. See "Description of the
Investor Certificates -- Repurchase of the Trust Portfolio."
The Receivables are "accounts" or "general intangibles" as defined in
Article 9 of the UCC as in effect in the Applicable State with respect to each
Receivable. To the extent the Receivables constitute accounts, both the absolute
transfer of such Receivables and the transfer of such Receivables as security
for an obligation are treated under Article 9 of the UCC as creating a security
interest therein and are subject to its provisions, including the filing of
financing statements to perfect the Trust's security interest. To the extent
Receivables constitute general intangibles and the transfer of such Receivables
is deemed to be a transfer as security for an obligation, Article 9 of the UCC
is applicable to the same extent as it is applicable to Receivables constituting
accounts. A financing statement has been filed, and continuation statements
covering the Receivables will be filed, under the UCC as in effect in Delaware
to protect the Trust in the event the transfer of Receivables to the Trust by
Greenwood is subject to Article 9 of the UCC. If a transfer of Receivables
constituting general intangibles is deemed to be an absolute transfer, then the
UCC is not applicable, and no further action is required to perfect the Trust's
interest in such Receivables from third-party claims. However, if the FDIC were
appointed as receiver of Greenwood, certain administrative expenses of the
receiver might have priority over the interest of the Trust in Receivables
originated by Greenwood, whether such Receivables are accounts or general
intangibles.
CERTAIN UCC MATTERS
Unless continuation statements are filed within the time specified in the
UCC in respect of the security interest of the Sellers or the Trust in the
Receivables, the perfection of the security interest will lapse.
There are also certain limited circumstances under the UCC under which
Receivables could be subject to an interest that has priority over the interest
of the Sellers or the Trust. Under the Pooling and Servicing Agreement, however,
Greenwood has agreed to repurchase the Receivables in any Account containing a
Receivable that has been transferred to the Trust and that is not free and clear
of the lien of any third party, if the existence of such liens has a material
adverse effect on the certificateholders' interest in the Receivables as a
whole. In the event that the obligation of Greenwood to repurchase Receivables
is at any time the subject of concurrent obligations of one or more other
parties to the Seller Certificate Ownership Agreement, then Greenwood's
obligation to repurchase Receivables will be conditioned on Greenwood's ability
to enforce those concurrent obligations against one or more parties to the
Seller Certificate Ownership Agreement. See
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"Description of the Investor Certificates -- Repurchase of Specified
Receivables." Each Seller also will covenant that it will not sell, pledge,
assign, transfer or grant any lien on any of the Receivables transferred by it
(or any interest therein) other than to the Trust. A tax or other statutory lien
on property of a transferor also may have priority over the interest of the
Sellers or the Trust in the Receivables.
Because the Trust's interest in the Receivables is dependent upon the
relevant Seller's interest in the Receivables, any adverse change in the
priority or perfection of a Seller's security interest would correspondingly
affect the Trust's interest in the affected Receivables.
As set forth under "Risk Factors -- Certain Legal Aspects," under certain
circumstances all or a portion of the cash Collections of Receivables received
by each Servicer will be made available for use by such Servicer prior to each
Distribution Date. In the event of the insolvency or receivership of any such
Servicer or, in certain circumstances, the lapse of certain time periods, the
Trust may not have a perfected interest in those cash Collections.
CONSUMER PROTECTION LAWS AND DEBTOR RELIEF LAWS APPLICABLE TO THE RECEIVABLES
The relationships among credit cardmembers, credit card issuers and sellers
of merchandise and services in transactions financed by the extension of credit
under credit accounts are extensively regulated by federal and state consumer
protection laws and regulations. Such laws and regulations include the Federal
Truth-in-Lending Act and Fair Credit Billing Act (and the provisions of the
Federal Reserve Board's Regulation Z issued under each of them), Equal Credit
Opportunity Act (and the provisions of the Federal Reserve Board's Regulation B
issued thereunder), Fair Credit Reporting Act and Fair Debt Collection Practices
Act. These statutes and regulations require credit disclosures on credit card
applications and solicitations, on an initial disclosure statement required to
be provided when a credit card account is first opened, and with each monthly
billing statement. They also prohibit certain discriminatory practices in
extending credit, impose certain limitations on the charges that may be imposed
and regulate practices utilized in collections. In addition, cardmembers are
entitled, under these laws and regulations, to have payments and credits
promptly applied on credit accounts and to require billing errors to be promptly
resolved. A cardmember may be entitled to assert violations of certain of these
consumer protection laws and, in certain cases, claims against the lender or
seller, by way of set-off against his obligation to pay amounts owing on his
account. For example, under the Federal Truth-in-Lending Act, a credit card
issuer is subject to all claims (other than tort claims) and defenses arising
out of transactions in which a credit card is used to purchase merchandise or
services, if certain conditions are met. These conditions include requirements
that the cardmember make a good faith attempt to obtain satisfactory resolution
of the dispute from the person honoring the credit card and meet certain
jurisdictional requirements. Where the seller of the goods or services is the
same party as the card issuer, or controls or is controlled by the card issuer
directly or indirectly, these jurisdictional requirements are not applicable.
These statutes further provide that in certain cases a cardmember's liability
may not exceed $50 with respect to charges to the credit card account that
resulted from unauthorized use of the credit card. The application of federal
and state consumer protection, bankruptcy and debtor relief laws would affect
the interests of the investor certificate-holders if those laws result in any
Receivables being charged off as uncollectible. Greenwood has agreed in the
Pooling and Servicing Agreement that if a Receivable was not created in
compliance in all material respects with all Requirements of Law with respect to
such Receivable, and if such noncompliance continues beyond a specified cure
period and has a material adverse effect on the interest of the Trust in all the
Receivables, Greenwood will repurchase all Receivables in the Accounts
containing the Receivable affected by such noncompliance. Greenwood also has
agreed in the Pooling and Servicing Agreement to indemnify the Trust, among
other things, for any liability arising from such violations. For a discussion
of the Trust's rights arising from the breach of these warranties, see "The
Trust -- Indemnification of Trust and Trustee." See also "Risk Factors --
Consumer Protection Laws and Regulations; Litigation."
CLAIMS AND DEFENSES OF CARDMEMBERS AGAINST THE TRUST
The UCC provides that (a) unless an obligor has made an enforceable
agreement not to assert defenses or claims arising out of a sale, the rights of
the Trust, as assignee, are subject to all the terms of the contract between
Greenwood and the obligor and any defense or claim arising therefrom and to any
other defense or
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claim of the obligor against Greenwood that accrues before the obligor receives
notification of the assignment and (b) any obligor is authorized to continue to
pay Greenwood until (i) the obligor receives notification, reasonably
identifying the rights assigned, that the amount due or to become due has been
assigned and that payment is to be made to the Trustee and (ii) if requested by
the obligor, the Trustee has furnished reasonable proof of the assignment.
USE OF PROCEEDS
The net proceeds from the sale of each series of the investor certificates
will be paid to Greenwood. Unless otherwise specified in the related Prospectus
Supplement, Greenwood will add the proceeds received by it to its general funds
and initially will use the proceeds to effect a reduction of short-term
borrowings.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary of certain anticipated federal income tax
consequences of the purchase, ownership and disposition of investor certificates
of a series is based on the advice of Latham & Watkins ("Tax Counsel") as
counsel to Greenwood. The summary is based on current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), currently applicable Treasury
Regulations and judicial and administrative rulings and decisions ("Current
Law"). There can be no assurance that the Internal Revenue Service (the "IRS")
will not take a contrary view, and no ruling from the IRS has been or will be
sought. Legislative, judicial or administrative changes may be forthcoming that
could alter or modify the statements and conclusions set forth herein. Any
legislative, judicial or administrative changes or interpretations may or may
not be retroactive and could affect tax consequences to investor
certificateholders of one or more series.
The summary does not purport to deal with all aspects of federal income
taxation that may affect particular investor certificateholders in light of
their individual circumstances, and, except for certain limited discussions of
particular topics, is not intended for investor certificateholders subject to
special treatment under the federal income tax laws (e.g., life insurance
companies, tax-exempt organizations, financial institutions, broker-dealers and
investors that have a functional currency other than the United States dollar or
hold their investor certificates as part of a hedge, straddle or conversion
transaction). PROSPECTIVE INVESTOR CERTIFICATEHOLDERS SHOULD CONSULT THEIR OWN
TAX ADVISORS AS TO THE FEDERAL, STATE, LOCAL, FOREIGN AND ANY OTHER TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF INVESTOR
CERTIFICATES.
The discussion assumes that an investor certificate (i) is issued in
registered form, (ii) has all payments denominated in United States dollars and
not determined by reference to the value of any other currency, and (iii) has a
term that exceeds one year. Moreover, the discussion assumes that, unless
Section 1272(a)(6) applies to the investor certificate, the interest formula for
the investor certificate meets the requirements for "qualified stated interest"
under Treasury Regulations relating to original issue discount ("OID"), and that
any OID on the investor certificate arising from any excess of the principal
amount of the investor certificate over its issue price is de minimis (i.e., is
less than 1/4% of its principal amount multiplied by the number of full years
until its maturity date). If these conditions are not satisfied, additional tax
considerations will be disclosed in the applicable Prospectus Supplement.
TAX TREATMENT OF THE INVESTOR CERTIFICATES AS INDEBTEDNESS
Unless otherwise specified in the related Prospectus Supplement, Tax
Counsel will advise Greenwood that, in their opinion, although the matter is not
free from doubt, under Current Law the investor certificates of a series will be
treated as indebtedness of Greenwood for federal income tax purposes. Such
opinion is based, in part, upon (i) the expressed intent of Greenwood to treat
the investor certificates for federal, state and local income and franchise tax
purposes as indebtedness secured by the Receivables and other assets held in the
Trust, (ii) the commitment of each investor certificateholder, by the acceptance
of an investor certificate, similarly to treat the investor certificates for
federal, state and local income and franchise tax
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purposes as indebtedness, (iii) Tax Counsel's conclusion that the federal income
tax treatment of the investor certificates should be determined based on the
economic substance of the arrangement created by the Pooling and Servicing
Agreement, the Series Supplement and the Credit Enhancement Agreement and (iv)
Tax Counsel's analysis of such economic substance. There can be no assurance,
however, that the IRS or the courts will agree with the conclusions of Tax
Counsel. In that regard, the Pooling and Servicing Agreement and the Series
Supplement of a series generally refer to the transfer of the Receivables as a
"sale," and Greenwood has informed Tax Counsel (i) that different criteria are
used in determining the non-tax accounting treatment of the transaction and (ii)
that, for regulatory and financial accounting purposes, Greenwood will treat the
transfer of the Receivables under the Pooling and Servicing Agreement and the
Series Supplement with respect to such series as a transfer of an ownership
interest in the Receivables and not as the creation of a debt obligation.
Notwithstanding the foregoing, Greenwood will treat the investor certificates as
indebtedness for federal, state and local income and franchise tax purposes and
the investor certificateholders, by acceptance of the investor certificates,
agree to treat such investor certificates of a series as indebtedness of
Greenwood for federal, state and local income and franchise tax purposes. Except
for the discussion in "-- Possible Characterization of the Investor
Certificates," the following discussion of federal income tax consequences
assumes that the investor certificates of a series will be treated as
indebtedness of Greenwood for federal income tax purposes.
UNITED STATES INVESTOR CERTIFICATEHOLDERS
The rules set forth below apply to investor certificateholders who are
"United States Persons." A "United States Person" is (i) a citizen or resident
of the United States, (ii) a corporation or partnership created or organized in
the United States or under the laws of the United States or of any state, (iii)
an estate the income of which is subject to United States federal income
taxation regardless of its source, or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust, and one or more United States persons have the authority to control all
substantial decisions of the trust (or, under certain circumstances, a trust the
income of which is subject to United States federal income taxation regardless
of its source).
Stated Interest on Investor Certificates. Subject to the discussion below,
interest paid on the investor certificates will be taxable as ordinary income
when received or accrued by investor certificateholders in accordance with their
method of accounting. Generally, interest received on the investor certificates
will constitute "investment income" for purposes of certain limitations of the
Code concerning the deductibility of investment interest expense.
Original Issue Discount. In general, the excess of the stated redemption
price at maturity of the investor certificates of a series over their issue
price will constitute OID, unless such excess is within a statutorily-defined de
minimis exception.
If the investor certificates of a series are issued with OID, investor
certificateholders generally will be required to include OID in income for each
accrual period in advance of receipt of the cash representing such OID. A holder
of a debt instrument issued with OID is required to recognize as ordinary income
the amount of OID on the debt instrument as such discount accrues, in accordance
with a constant yield method. Under Section 1272(a)(6) of the Code, special
provisions apply to debt instruments on which payments may be accelerated due to
prepayments of other obligations securing those debt instruments or, to the
extent provided in Treasury Regulations, by reason of other events. Under these
provisions, the computation of OID (and market discount, see "-- Market
Discount") on such debt instruments must be determined by taking into account
both the prepayment assumptions used in pricing the debt instrument and the
actual prepayment experience. As a result, the amount of OID on such debt
instruments that will accrue in any given accrual period may either increase or
decrease depending upon the actual prepayment rate. Because no Treasury
Regulations have been issued interpreting Section 1272(a)(6), investor
certificateholders should consult their own tax advisors regarding the impact of
the OID rules in the event the investor certificates of a series are issued with
OID.
Market Discount. Investor certificateholders should be aware that the
resale of an investor certificate may be affected by the market discount
provisions of the Code. These rules generally provide that, subject to a
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statutorily-defined de minimis exception, if an investor certificateholder
acquires an investor certificate at a market discount (i.e., at a price below
its stated redemption price at maturity or its revised issue price if it was
issued with OID) and thereafter recognizes gain upon a disposition of the
investor certificate (or disposes of it in certain non-recognition transactions
such as a gift), the lesser of such gain (or appreciation, in the case of an
applicable non-recognition transaction) or the portion of the market discount
that accrued while the investor certificate was held by such investor
certificateholder will be treated as ordinary interest income at the time of the
disposition. The market discount rules also provide that an investor
certificateholder who acquires an investor certificate at a market discount may
be required to defer a portion of any interest expense that otherwise may be
deductible on any indebtedness incurred or maintained to purchase or carry the
investor certificate until the investor certificateholder disposes of the
investor certificate in a taxable transaction.
Principal payments on the investor certificates of a series will be made
monthly during the Controlled Liquidation Period and the Amortization Period, if
any. An investor certificateholder who acquired an investor certificate at a
market discount would be required to treat as ordinary interest income the
portion of any principal payment attributable to accrued market discount on such
investor certificate.
An investor certificateholder who acquired an investor certificate at a
market discount may elect to include market discount in income as the discount
accrues, either on a ratable basis or, if elected, on a constant interest rate
basis. The current inclusion election, once made, applies to all market discount
obligations acquired on or after the first day of the first taxable year to
which the election applies, and may not be revoked without the consent of the
IRS. If an investor certificateholder elects to include market discount in
income in accordance with the preceding sentence, the foregoing rules with
respect to the recognition of ordinary income on sales, principal payments and
certain other dispositions of the investor certificates and the deferral of
interest deductions on indebtedness related to the investor certificates will
not apply.
Amortizable Bond Premium. Generally, if the price or tax basis of an
investor certificate held as a capital asset exceeds the sum of all amounts
payable on the investor certificate after the acquisition date (other than
payments of qualified stated interest), such excess may constitute amortizable
bond premium that the investor certificateholder may elect to amortize under the
constant interest rate method over the period from the investor
certificateholder's acquisition date to the investor certificate's maturity
date. Treasury regulations specifically exclude debt instruments acquired on or
after March 2, 1998 that are subject to Section 1272(a)(6) of the Code from the
amortizable bond premium rules contained in such regulations. See discussion of
Section 1272(a)(6) in "-- Original Issue Discount." Amortizable bond premium
generally will be treated as an offset to interest income on the investor
certificate, rather than as a separate interest deduction item subject to the
investment interest limitations of the Code. An investor certificateholder that
elects to amortize bond premium must generally reduce the tax basis in the
related investor certificate by the amount of bond premium used to offset
interest income. If an investor certificate purchased at a premium is redeemed
in full prior to its maturity, an investor certificateholder who has elected to
amortize bond premium should be entitled to a deduction for any remaining
unamortized bond premium in the taxable year of redemption.
Sales of Investor Certificates. In general, an investor certificateholder
will recognize gain or loss upon the sale, exchange, redemption or other taxable
disposition of an investor certificate measured by the difference between (i)
the amount of cash and the fair market value of any property received (other
than the amount attributable to, and taxable as, accrued but unpaid interest)
and (ii) the investor certificateholder's tax basis in the investor certificate
(as increased by any OID or market discount previously included in income by the
investor certificateholder and decreased by any deductions previously allowed
for amortizable bond premium and by any payments reflecting principal or OID
received with respect to such investor certificate).
Subject to the OID and market discount rules discussed above and to the
one-year holding period requirement for long-term capital gain treatment, any
such gain or loss generally will be long-term capital gain or loss, provided the
investor certificate was held as a capital asset. The maximum federal income tax
rate applicable to capital gains and ordinary income for corporations is 35%.
Moreover, capital losses generally may be used only to offset capital gains. The
maximum ordinary federal income tax rate for individuals, estates and trusts is
36% (for married individuals filing joint returns with taxable income in excess
of $155,950 ($128,100 for certain unmarried individuals)) whereas the maximum
long-term capital gains rate applicable to the sale
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of an investor certificate is 20% for such taxpayers who, at the time of such
sale, have held such investor certificate for more than 12 months. A further 10%
surtax will be imposed on ordinary income of individuals with taxable incomes in
excess of $278,450 (for married individuals filing joint returns and for certain
unmarried individuals) and estates and trusts with taxable incomes in excess of
$8,350 (thereby creating a maximum federal income tax rate to such taxpayers of
39.6%).
FOREIGN INVESTOR CERTIFICATEHOLDERS
Set forth below is a general discussion of the United States federal income
and estate tax consequences of the purchase, ownership, sale or other
disposition of an investor certificate by an investor certificateholder that,
for United States federal income tax purposes, is (i) a foreign corporation,
(ii) a non-resident alien individual, (iii) a foreign estate or trust or (iv) a
foreign partnership, as such terms are defined in the Code (a "non-U.S.
Holder"). Some non-U.S. Holders (including certain residents of certain United
States possessions or territories) may be subject to special rules not discussed
herein.
Interest (including OID, if any) paid to a non-U.S. Holder of investor
certificates will not be subject to a required withholding of United States
federal income tax, provided that (i) such interest payments are effectively
connected with the conduct of a trade or business of the non-U.S. Holder within
the United States and such non-U.S. Holder provides an appropriate statement to
such effect, or (ii)(a) the holder is not (1) a "10 percent shareholder" of
Greenwood or (2) a "controlled foreign corporation" with respect to which
Greenwood is a "related person" within the meaning of the Code and (b) the
beneficial owner (and, if relevant, a financial institution on the beneficial
owner's behalf) provides an appropriate statement, signed under penalties of
perjury, certifying that the beneficial owner of such investor certificate is
not a United States Person and providing the beneficial owner's name and
address. The statement generally must be provided in the year a payment occurs
or in either of the two preceding years. For years after 1999, Treasury
Regulations specify that the statement must be made on Form W-8 and provided
prior to payment.
A non-U.S. Holder generally will not be subject to United States federal
income tax on gain realized on the disposition of an investor certificate (other
than gain attributable to accrued interest or OID, which is addressed in the
preceding paragraph); provided that (i) the gain is not effectively connected
with the conduct of a trade or business within the United States by the non-U.S.
Holder and (ii) in the case of an individual holder, (A) the non-U.S. Holder is
not present in the United States for 183 days or more in the taxable year of the
sale, exchange or redemption or (B) (1) the non-U.S. Holder does not have a "tax
home" in the United States and (2) the gain is not attributable to an office or
other fixed place of business maintained in the United States by the non-U.S.
Holder.
If the interest or gain on an investor certificate held by a non-U.S.
Holder is effectively connected with the conduct of a trade or business within
the United States by the non-U.S. Holder, then the non-U.S. Holder (although
exempt from the withholding of tax previously discussed if the non-U.S. Holder
provides an appropriate statement) generally will be subject to United States
federal income tax on the interest (including OID, if any) or gain at regular
federal income tax rates in a similar fashion to a United States Person. See "--
United States Investor Certificateholders." In addition, if the non-U.S. Holder
is a foreign corporation, it may be subject to a branch profits tax equal to 30%
of its "effectively connected earnings and profits" within the meaning of the
Code for the taxable year, as adjusted for certain items, unless it qualifies
for a lower rate under an applicable tax treaty.
An investor certificate held by an individual who at the time of death is a
non-U.S. Holder will not be subject to United States federal estate tax as a
result of such individual's death if, immediately before death, (i) the
individual was not a "10 percent shareholder" of Greenwood and (ii) interest on
such investor certificate was not effectively connected with the conduct of a
trade or business within the United States by the individual.
THE FOREGOING DESCRIPTION OF THE POTENTIAL UNITED STATES FEDERAL INCOME AND
ESTATE TAX CONSEQUENCES TO NON-U.S. HOLDERS IS NECESSARILY INCOMPLETE. NON-U.S.
HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
APPLICATION OF THE FOREGOING MATTERS TO THEM.
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BACKUP WITHHOLDING AND INFORMATION REPORTING
Information reporting requirements apply to certain payments of principal
of and interest on (and the amount of OID, if any, accrued on) an obligation,
and to proceeds of certain sales of an obligation before maturity, to certain
nonexempt investor certificateholders who are United States Persons. Payments to
certain entities, including, but not limited to, corporations and financial
institutions, are exempt from information reporting. In addition, a backup
withholding tax also may apply with respect to such amounts if such investor
certificateholders fail to provide correct taxpayer identification numbers and
other information. The backup withholding tax rate is 31%. Greenwood, or a
paying agent or a broker, as the case may be, will be required to withhold from
any payment that is subject to backup withholding unless the investor
certificateholder has provided the required certification in the manner
prescribed in applicable Treasury Regulations.
In the case of payments of principal of, and interest on (and the amount of
OID, if any, accrued on), investor certificates by Greenwood or its paying
agents to non-U.S. Holders, Treasury Regulations provide that backup withholding
and information reporting will not apply to payments with respect to which
either requisite certification has been received or an exemption has otherwise
been established (provided that neither Greenwood nor its paying agents has
actual knowledge that the holder is a United States Person or that the
conditions of any other exemption are not in fact satisfied). Payments of the
proceeds of the sale of an investor certificate to or through a foreign office
of a United States broker or foreign brokers with certain types of relationships
to the United States, however, are subject to certain information reporting
requirements, unless the payee is an exempt recipient or such broker has
evidence in its records that the payee is not a United States Person and no
actual knowledge that such evidence is false and certain other conditions are
met. After 1999, unless exempt from information reporting, such payments may be
subject to backup withholding. Payments of the proceeds of a sale to or through
the United States office of a broker will be subject to information reporting
and backup withholding unless the payee makes appropriate certifications (and no
agent of the broker who is responsible for receiving or reviewing such statement
has actual knowledge that it is incorrect) or an exemption is otherwise
established.
Any amounts withheld under the backup withholding rules from a payment to
an investor certificateholder will be allowed as a refund or a credit against
such investor certificateholder's United States federal income tax.
Recently, the Treasury Department has promulgated final regulations
regarding the withholding and information reporting rules discussed above. In
general, the final regulations do not significantly alter the substantive
withholding and information reporting requirements but unify current
certification procedures and forms and clarify reliance standards. Special rules
apply which permit the shifting of primary responsibility for withholding to
certain financial intermediaries acting on behalf of beneficial owners. The
final regulations are generally effective for payments made after December 31,
1999, subject to certain transition rules. Non-U.S. Holders are urged to consult
their own tax advisors with respect to these final regulations.
POSSIBLE CHARACTERIZATION OF THE INVESTOR CERTIFICATES
The foregoing discussion assumes that the investor certificates of a series
will be treated as indebtedness of Greenwood for federal income tax purposes.
However, although Tax Counsel will opine to such effect with respect to each
series of investor certificates, the matter is not free from doubt, and there
can be no assurance that the IRS or the courts will agree with Tax Counsel's
opinion. If the IRS were to contend successfully that the investor certificates
of a series are not indebtedness of Greenwood for federal income tax purposes,
it could find that the arrangement created by the Pooling and Servicing
Agreement and the related Series Supplement constitutes a partnership which
could be treated as a "publicly traded partnership" taxable as a corporation.
If the investor certificates of a series were treated as interests in a
partnership, the partnership in all likelihood would be treated as a "publicly
traded partnership." If the partnership were nevertheless not taxable as a
corporation (for example, because of an exception for a "publicly traded
partnership" whose income is interest that is not derived in the conduct of a
financial business), such partnership would not be subject to federal income
tax. Rather, the investor certificateholders of such series would be required to
include in income their share of the income and deductions generated by the
assets of the Trust, as determined under
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partnership tax accounting rules. In such event, the amount, timing and
character of the income required to be recognized by an investor
certificateholder could differ materially from the amount, timing and character
thereof if the investor certificates were characterized as indebtedness of
Greenwood. It also is possible that such a partnership could be subject to tax
in certain states where the partnership is considered to be engaged in business,
and that the investor certificateholders, as partners in such a partnership,
could be taxed on their share of the partnership's income in such states.
In addition, if such a partnership is considered to be engaged in a trade
or business within the United States, the partnership would be subject to a
withholding tax on distributions to (or, at its election, income allocable to)
non-U.S. Holders, and each such non-U.S. Holder would be credited for such
non-U.S. Holder's share of the withholding tax paid by the partnership.
Moreover, the non-U.S. Holder generally would be subject to United States
federal income tax at regular federal income tax rates, and possibly a branch
profits tax (in the case of a corporate non-U.S. Holder), as previously
described. See "-- Foreign Investor Certificateholders." Further, even if the
partnership is not considered to be engaged in a trade or business within the
United States, it appears that partnership withholding will be required in the
case of any such non-U.S. Holder that is engaged in a trade or business within
the United States to which the investor certificate income is effectively
connected.
Alternatively, although there may be arguments to the contrary, it appears
that if such a partnership is not considered to be engaged in a trade or
business within the United States and if income with respect to an investor
certificate is not otherwise effectively connected with the conduct of a trade
or business within the United States by a non-U.S. Holder, the non-U.S. Holder
would be subject to United States federal income tax and withholding at a rate
of 30% (unless reduced by an applicable treaty) on such non-U.S. Holder's
distributive share of the partnership's interest income.
If the investor certificates of a series were treated as interests in a
"publicly traded partnership" taxable as a corporation, the income from the
assets of the Trust would be subject to federal income tax and tax imposed by
certain states where the entity would be considered to have operations at
corporate rates, which would reduce the amounts available for distribution to
the investor certificateholders. See "Certain State Income Tax Consequences."
Under such circumstances, the investor certificates may be treated as debt of an
entity taxable as a corporation or, alternatively, as equity of such an entity
in which latter case interest payments to investor certificateholders could be
treated as dividends and, if made to non-U.S. Holders, could be subject to
United States federal income tax and withholding at a rate of 30% (unless
reduced by an applicable tax treaty).
Finally, with respect to a series having a class of subordinated
certificates, the IRS might contend that even though the Class A certificates
are properly classified as debt obligations for federal income tax purposes, the
Class B certificates are not properly classified as such. Under this approach,
the Class B certificates might be viewed as equity interests in an entity (such
as Greenwood or a joint venture consisting of Greenwood and the Class B
certificateholders), with the Class A certificates treated as debt obligations
of such entity. If such an entity were characterized as a partnership not
taxable as a corporation, the entity would not be subject to federal income tax,
although the Class B certificateholders would be subject to the tax consequences
previously described with respect to interests in a partnership that is not
taxable as a corporation. Alternatively, if such an entity were characterized as
a "publicly traded partnership" taxable as a corporation, the tax liability on
the income of the entity might, in certain circumstances, reduce distributions
on both the Class A certificates and the Class B certificates, and the Class B
certificateholders would be subject to the tax consequences previously described
with respect to interests in a "publicly traded partnership" taxable as a
corporation. In addition, any non-U.S. Holder of a Class A certificate who is
the actual or constructive owner of 10% or more of the outstanding principal
amount of the Class B certificates may be treated as a "10 percent shareholder."
See "-- Foreign Investor Certificateholders."
Based on Tax Counsel's advice as to the likely treatment of the investor
certificates for federal income tax purposes, Greenwood and the Trust will not
attempt to cause the arrangement created by the Pooling and Servicing Agreement
and the Series Supplement with respect to a series to comply with the federal or
state income tax reporting requirements applicable to partnerships or
corporations. If such arrangement were later
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held to constitute a partnership or corporation, the manner of bringing it into
compliance with such requirements is unclear.
Prospective investor certificateholders should consult their own tax
advisors as to the risk that the investor certificates will not be treated as
indebtedness of Greenwood, and the possible tax consequences of potential
alternative treatments.
CERTAIN STATE INCOME TAX CONSEQUENCES
The following summary of certain anticipated state tax consequences with
respect to the investor certificates of a series is based on the advice of Tax
Counsel as counsel to Greenwood. The summary is based upon currently applicable
statutes, regulations and judicial and administrative rulings and decisions of
certain states. There can be no assurance that the taxing authorities of such
states will not take a contrary view, and no ruling therefrom has been or will
be sought. Legislative, judicial or administrative changes may be forthcoming
that could alter or modify the statements and conclusions set forth herein. Any
such changes or interpretations may or may not be retroactive and could affect
the tax consequences to investor certificateholders of such series. Except as
set forth below, this discussion of state tax consequences assumes that the
investor certificates of a series will be treated as indebtedness of Greenwood
for federal tax purposes.
State tax consequences to each investor certificateholder will depend upon
the provisions of the state tax laws to which the investor certificateholder is
subject. Most states modify or adjust the taxpayer's federal taxable income to
arrive at the amount of income potentially subject to state tax. Resident
individuals usually pay state tax on 100% of such state-modified income, while
corporations and other taxpayers generally pay state tax only on that portion of
state-modified income assigned to the taxing state under the state's own
apportionment and allocation rules. Because each state's tax laws vary, it is
impossible to predict the tax consequences to the investor certificateholders in
all of the state taxing jurisdictions in which they are already subject to tax.
Delaware is the location of Greenwood's headquarters, where Greenwood
originates and owns the Accounts and services the Receivables pursuant to the
Pooling and Servicing Agreement. Unless otherwise specified in the related
Prospectus Supplement, Tax Counsel will advise Greenwood with respect to a
series, that, in their opinion, although the matter is not free from doubt, the
investor certificates of such series will be treated as indebtedness of
Greenwood for purposes of the Delaware income tax. Accordingly, although the
matter is not free from doubt, if the investor certificates of a series are
treated as indebtedness of Greenwood in Delaware, investor certificateholders
not otherwise subject to taxation in Delaware will not become subject to the
Delaware income tax solely because of their ownership of the investor
certificates.
Generally, an investor certificateholder is required to pay, in states in
which such investor certificateholder already is subject to state tax,
additional state tax as a result of interest earned on such holder's investment
in investor certificates. Moreover, a state could claim that the Trust has
undertaken activities therein and is subject to taxation by that state. Were any
state to make and sustain that claim, the treatment of the investor certificates
for purposes of such state's tax laws would be determined thereunder, and there
can be no assurance that the investor certificates would be treated as
indebtedness of Greenwood for purposes of such state taxation.
If such investor certificates of a series were treated as interests in a
partnership or a corporation, the state tax consequences to the investor
certificateholders of such series could be materially different, especially in
states which may be considered to have a business connection with the
Receivables. See "Certain Federal Income Tax Consequences -- Possible
Characterization of the Investor Certificates."
THE FOREGOING DESCRIPTION OF THE POTENTIAL STATE TAX CONSEQUENCES IS
INCOMPLETE. INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE APPLICATION OF THE FOREGOING MATTERS TO THEM.
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ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on those employee benefit plans,
including Individual Retirement Accounts and Individual Retirement Annuities
(collectively "IRAs"), to which they apply ("Plans") and on those persons who
are fiduciaries with respect to such Plans. In accordance with ERISA's general
fiduciary standards, before investing in investor certificates, a Plan fiduciary
should determine whether such an investment is permitted under the governing
Plan instruments and is appropriate for the Plan in view of its overall
investment policy and the composition and diversification of its portfolio.
Other provisions of ERISA and the Code prohibit certain transactions involving
the assets of a Plan and persons who have certain specified relationships to the
Plan ("parties in interest" within the meaning of ERISA or "disqualified
persons" within the meaning of the Code). Prohibited transactions may generate
excise taxes and other liabilities; prohibited transactions involving IRAs may
result in the disqualification of the IRAs. Thus, a Plan fiduciary considering
an investment in investor certificates should also consider whether such an
investment might constitute or give rise to a prohibited transaction under ERISA
or the Code.
Certain transactions involved in the operation of the Trust might be deemed
to constitute prohibited transactions under ERISA and the Code, if assets of the
Trust were deemed to be assets of an investing Plan. ERISA and the Code do not
define "plan assets." The U.S. Department of Labor (the "DOL") has published a
regulation (the "Regulation"), which took effect March 13, 1987, concerning
whether or not a Plan's assets will be deemed to include an interest in the
underlying assets of an entity (such as the Trust) for purposes of the reporting
and disclosure and fiduciary responsibility provisions of ERISA and of the
excise tax provisions related to prohibited transactions in the Code if the Plan
acquires an "equity interest" in that entity. The Regulation only applies to the
purchase by a Plan of an "equity interest" in an entity. An equity interest is
defined in the Regulation as an interest in an entity other than an instrument
that is treated as debt under applicable local law and that has no substantial
equity features. Unless otherwise specified in the related Prospectus
Supplement, Tax Counsel will advise Greenwood that investors will be taxed as if
the investor certificates are debt of Greenwood for federal income tax purposes.
If under ERISA the investor certificates are deemed to be debt and are not
deemed to have substantial equity features, the Trust's assets would not be
treated as Plan assets solely as a result of the purchase of the investor
certificates by a Plan.
Assuming that either the investor certificates are equity interests under
applicable local law or are deemed to have substantial equity features, the
Regulation contains an exception that provides that if a Plan acquires a
"publicly-offered security," the issuer of the security is not deemed to hold
Plan assets. A publicly-offered security is a security that is (i) freely
transferable, (ii) part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another by the conclusion of the
offering and (iii) either is (A) part of a class of securities registered under
section 12(b) or 12(g) of the Securities Exchange Act of 1934, or (B) sold to
the Plan as part of an offering of securities to the public pursuant to an
effective registration statement under the Securities Act of 1933 and the class
of securities of which such security is a part is registered under the
Securities Exchange Act of 1934 within 120 days (or such later time as may be
allowed by the Securities and Exchange Commission) after the end of the fiscal
year of the issuer during which the offering of the securities to the public
occurred.
Whether the investor certificates of a series meet the criteria of
publicly-offered securities will be set forth in the related Prospectus
Supplement.
If the investor certificates were deemed to be an extension of credit for
ERISA purposes, the purchase of the investor certificates by a Plan with respect
to which Greenwood or one of its affiliates is a "party in interest" or
"disqualified person" might be considered a prohibited extension of credit under
Section 406 of ERISA and Section 4975 of the Code unless an exemption is
applicable. There are at least four prohibited transaction class exemptions
issued by the DOL that might apply, depending in part on who decided to acquire
the investor certificates for the Plan: DOL Prohibited Transaction Exemption
("PTE") 84-14 (Class Exemption for Plan Asset Transactions determined by
Independent Qualified Professional Asset Managers); PTE 91-38 (Class Exemption
for Certain Transactions Involving Bank Collective Investment Funds); PTE 90-1
(Class Exemption for Certain Transactions Involving Insurance Company Pooled
Separate Accounts); and PTE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers).
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Moreover, whether the investor certificates are debt or equity for ERISA
purposes, a possible violation of the prohibited transaction rules could occur
if the investor certificates were purchased during the offering with assets of a
Plan if Greenwood, the Trustee, any Underwriter or any of their affiliates were
a fiduciary with respect to such Plan. Under ERISA and the Code, a person is a
"fiduciary" with respect to a Plan to the extent (i) he exercises any
discretionary authority or discretionary control respecting management of such
Plan or exercises any authority or control respecting management or disposition
of its assets, (ii) he renders investment advice for a fee or other
compensation, direct or indirect, with respect to any moneys or other property
of such Plan, or has any authority or responsibility to do so or (iii) he has
any discretionary authority or discretionary responsibility in the
administration of such Plan. Accordingly, the fiduciaries of any Plan should not
purchase the investor certificates during the offering with assets of any Plan
if Greenwood, the Trustee, the Underwriters or any of their affiliates is a
fiduciary with respect to the Plan.
In light of the foregoing, fiduciaries of Plans considering the purchase of
the investor certificates should consult their own tax or other appropriate
counsel regarding the application of ERISA and the Code to their purchase of the
investor certificates.
In particular, insurance companies considering the purchase of investor
certificates should consult their own benefits counsel or other appropriate
counsel with respect to the United States Supreme Court's decision in John
Hancock Mutual Life Insurance Co. v. Harris Trust & Savings Bank, 114 S. Ct. 517
(1993) ("John Hancock"), DOL PTE 95-60 (Class Exemption for Certain Transactions
Involving Insurance Company General Accounts) and Section 401(c) of ERISA. In
John Hancock, the Supreme Court held that the assets held in an insurance
company's general account may be deemed to be "plan assets" under certain
circumstances. Subject to numerous conditions and limitations, PTE 95-60
effectively reverses this portion of the holding in John Hancock. Section 401(c)
of ERISA was added by the Small Business Job Protection Act of 1996 and requires
the Secretary of Labor to issue final regulations by December 31, 1997 which are
to provide guidance for the purpose of determining, in cases where an insurer
issues one or more policies (supported by the assets of the insurer's general
account) to or for the benefit of an employee benefit plan, which assets of such
insurer (other than assets held in a separate account) constitute "plan assets"
for the purposes of the fiduciary responsibility provisions of ERISA and Section
4975 of the Code. Such regulations shall only apply with respect to policies
which are issued by an insurer on or before December 31, 1998, to or for the
benefit of an employee benefit plan which is supported by the assets of such
insurer's general account. With respect to policies issued on or before December
31, 1998, such regulations shall take effect at the end of the 18-month period
following the date on which such regulations become final. Section 401(c) of
ERISA also provides that no person will be subject to liability under Section
4975 of the Code and the fiduciary responsibility provisions of ERISA on the
basis of a claim that the assets of an insurer (other than assets held in a
separate account) are "plan assets," for conduct occurring before the date which
is 18 months following the date such regulations become final. On December 22,
1997, the DOL issued proposed regulations under Section 401(c) of ERISA. 29 CFR
2550.401c-1.
Accordingly, investors should analyze whether John Hancock, PTE 95-60,
Section 401(c) of ERISA and any regulations issued pursuant to Section 401(c) of
ERISA may have an impact with respect to their purchase of investor
certificates.
PLAN OF DISTRIBUTION
Greenwood may sell investor certificates (i) through underwriters or
dealers; (ii) directly to one or more purchasers; or (iii) through agents. Any
such underwriters, dealers or agents in the United States may include MS & Co.,
MSIL or DWR. The related Prospectus Supplement will set forth the terms of the
offering of such investor certificates, including the name or names of any
underwriters, the purchase price of such investor certificates and the proceeds
to Greenwood from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such investor certificates may be listed. Only
underwriters so named in the related Prospectus Supplement shall be deemed to be
underwriters in connection with the investor certificates offered thereby.
MS & Co., MSIL and DWR are affiliates of Greenwood. Following the initial
distribution of a series of investor certificates, MS & Co., MSIL, DWR and other
affiliates of Greenwood may offer and sell previously
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issued investor certificates in the course of their businesses as
broker-dealers. MS & Co., MSIL, DWR and such other affiliates may act as a
principal or agent in such transactions. This Prospectus and the accompanying
Prospectus Supplement may be used by MS & Co., MSIL, DWR and such other
affiliates in connection with such transactions. Such sales, if any, will be
made at varying prices relating to market prices prevailing at the time of sale.
If underwriters are used in the sale, the investor certificates will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed price or at varying prices determined at the time of sale or at negotiated
prices. Such investor certificates may be offered to the public either through
underwriting syndicates represented by managing underwriters or by underwriters
without a syndicate. The obligations of the underwriters to purchase such
investor certificates will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all the investor certificates of the
series offered by the related Prospectus Supplement if any of such investor
certificates are purchased. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
Investor certificates may also be sold directly by the Company or through
agents designated by Greenwood from time to time. Any agent involved in the
offering and sale of the investor certificates will be named, and any
commissions payable by Greenwood to such agent will be set forth, in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, any such agent is acting solely as an agent for the period of its
appointment.
If so indicated in the related Prospectus Supplement, Greenwood will
authorize agents, underwriters or dealers to solicit offers by certain
institutional investors to purchase investor certificates providing for payment
and delivery on a future date specified in the related Prospectus Supplement.
There may be limitations on the minimum amount which may be purchased by any
such institutional investor or on the portion of the aggregate principal amount
of the particular investor certificates which may be sold pursuant to such
arrangements. Institutional investors to which such offers may be made, when
authorized, include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and such
other institutions as may be approved by Greenwood. Unless otherwise specified
in the related Prospectus Supplement, the obligations of any such purchasers
pursuant to such delayed delivery and payment arrangements will not be subject
to any conditions except (i) the purchase by an institution of the particular
investor certificates shall not at the time of delivery be prohibited under the
laws of any jurisdiction of the United States to which such institution is
subject, and (ii) if the particular investor certificates are being sold to
underwriters, Greenwood shall have sold to such underwriters the total principal
amount of such investor certificates less the principal amount thereof covered
by such arrangements. Underwriters will not have any responsibility in respect
of the validity of such arrangements or the performance of Greenwood or such
institutional investors thereunder.
Underwriters, dealers and agents that participate in the distribution of
the investor certificates may be deemed to be underwriters, and any discounts or
commissions received by them from Greenwood and any profit on the resale of the
investor certificates by them may be deemed to be underwriting discounts and
commissions, under the Securities Act of 1933. Under arrangements which may be
entered into by Greenwood, underwriters, dealers and agents that participate in
the distribution of investor certificates may be entitled to indemnification by
Greenwood against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribution with respect to payments that the
underwriters, dealers or agents may be required to make with respect thereto.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, Greenwood in the ordinary course of their respective businesses.
The investor certificates may or may not be listed on a national securities
exchange. There is no assurance that a secondary market will develop for the
investor certificates or, if it does develop, that it will continue.
The distribution of investor certificates will conform to the requirements
set forth in Rule 2720 of the National Association of Securities Dealers, Inc.
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LEGAL MATTERS
Unless otherwise specified in the related Prospectus Supplement, the
legality of the investor certificates and certain legal matters relating to the
tax consequences of the issuance of the investor certificates will be passed
upon for Greenwood by Latham & Watkins and certain matters concerning creditors'
rights will be passed upon for Greenwood by Latham & Watkins and Young Conaway
Stargatt & Taylor, LLP. Unless otherwise specified in the related Prospectus
Supplement, the legality of the investor certificates will be passed upon for
any Underwriters by Cadwalader, Wickersham & Taft.
AVAILABLE INFORMATION
Greenwood, as originator of the Trust, has filed a Registration Statement
under the Securities Act of 1933 with the Securities and Exchange Commission
(the "Commission") on behalf of the Trust with respect to the investor
certificates offered pursuant to this Prospectus and the related Prospectus
Supplement. For further information, reference is made to the Registration
Statement and amendments thereof and exhibits thereto and the reports and other
documents incorporated herein by reference as described previously under
"Incorporation of Certain Documents by Reference," which are available for
inspection without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; 7 World
Trade Center, Suite 1300, New York, New York 10048; and the Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Such
reports and other documents may also be obtained from the web site that the
Commission maintains at http://www.sec.gov. The Trust is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith, Greenwood, on behalf of the Trust, will file reports and
other information with the Commission. Copies of the Registration Statement and
amendments thereof and exhibits thereto, as well as such materials relating to
the Trust, may be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Monthly Update of Certain Information. Each month, Greenwood intends to
make available a Current Report on Form 8-K (each, a "Form 8-K") describing the
performance of the Receivables in the Accounts. A copy of the most recent
monthly report to the Investor Certificateholders will be included in each Form
8-K filed with the Securities and Exchange Commission.
Annual Update of Certain Information. Information contained in the "The
Discover Card Business" and "Composition and Historical Performance of the
Discover Card Portfolio" sections of the Prospectus Supplement and the "Risk
Factors -- Consumer Protection Laws and Regulations; Litigation," "--
Legislation," "Certain Federal Income Tax Consequences," "Certain State Income
Tax Consequences" and "ERISA Considerations" sections of the Prospectus will be
updated in each Annual Report on Form 10-K filed on behalf of the Trust with the
Securities and Exchange Commission.
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GLOSSARY OF TERMS
Investor certificates will be issued pursuant to the Pooling and Servicing
Agreement and a Series Supplement. The following Glossary of Terms does not
purport to be complete and, with respect to any series of investor certificates
issued by the Trust, is subject to, and is qualified in its entirety by
reference to, the Pooling and Servicing Agreement and the related Series
Supplement. A copy of the Pooling and Servicing Agreement is filed as an exhibit
to the Registration Statement of which this Prospectus is a part. Certain
definitions contained in this Glossary of Terms are applicable only to certain
series of investor certificates offered pursuant to the related Prospectus
Supplement and are not necessarily applicable to other series of investor
certificates that may be issued by the Trust. On written request to the Trustee
at its corporate trust office, the Trustee will provide to investor
certificateholders without charge a copy of the Pooling and Servicing Agreement
(without exhibits and schedules) and a related Series Supplement (without
exhibits). Unless the context requires otherwise, capitalized terms used in this
Prospectus and Glossary of Terms relate separately to individual series of
investor certificates issued by the Trust.
"Account" will mean (i) a Discover Card account established pursuant to a
Credit Agreement between Greenwood and any Person, receivables under which are
transferred to the Trust pursuant to the Pooling and Servicing Agreement or
pursuant to an Assignment of Additional Accounts (a "Greenwood Discover Card
Account"); (ii) a Discover Card account established pursuant to a Credit
Agreement between an Additional Seller and any Person, receivables under which
are transferred to the Trust pursuant to an Assignment of Additional Accounts;
and (iii) a credit account (that is not a Discover Card account) established
pursuant to a Credit Agreement between Greenwood or an Additional Seller and any
Person, receivables under which are transferred to the Trust pursuant to an
Assignment of Additional Accounts. No Account will be a Charged-Off Account as
of (i) the Account Selection Date, with respect to Accounts the Receivables in
which are transferred to the Trust on the Initial Closing Date or (ii) the date
an Account is selected for addition to the Trust, with respect to Accounts the
Receivables in which are transferred to the Trust pursuant to an Assignment of
Additional Accounts. The definition of an Account will include a surviving
credit account (a "Surviving Account") in the event that (i) an Account or
another credit account is combined with an Account pursuant to the Credit
Guidelines for such Account (an "Account Combination") and (ii) the surviving
Account of such Account Combination was an Account prior to such combination.
The term "Account" will be deemed to refer to an Additional Account only from
and after the Addition Date with respect thereto. The definition of Account will
not include any Account removed from the Trust after it has been reassigned to
the Holder of the Seller Certificate.
"Account Selection Date" will mean, for any Account transferred to the
Trust on the Initial Closing Date, January 22, 1993, July 14, 1993 or September
22, 1993 and, for any Additional Account, the date such account was selected to
be transferred to the Trust.
"Accumulation Period," if applicable, will mean the period, unless an
Amortization Event or, if applicable, an Early Accumulation Event has occurred
during the Revolving Period, from the Principal Commencement Date until the
earliest of (i) the payment in full of the Series Invested Amount, (ii) the
Amortization Commencement Date, (iii) if applicable, the Early Accumulation
Commencement Date and (iv) the Series Termination Date.
"Addition Date" will mean each date as of which Additional Accounts will be
included as Accounts or as of which Participation Interests will be conveyed to
the Trust.
"Additional Account Cut-Off Date" will mean, for any Additional Account,
the date specified as such in the Assignment of Additional Accounts for such
Additional Account.
"Additional Accounts" will mean credit accounts originated by Greenwood or
affiliates of Greenwood, receivables under which are added to the Trust after
the Initial Closing Date.
"Additional Funds" will have the meaning set forth in "Description of the
Investor Certificates -- Additional Funds." The initial amount of Additional
Funds, if any, will be as set forth in the related Prospectus Supplement.
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"Additional Seller" will mean an affiliate of Greenwood that is included in
the same "affiliated group" as Greenwood for United States federal income tax
purposes and that transfers Receivables in Additional Accounts to the Trust.
"Aggregate Invested Amount" will mean at any time the sum of the Series
Invested Amounts of all series of investor certificates then issued and
outstanding.
"Aggregate Investor Interest" will mean at any time the sum of the Series
Investor Interests of all series of investor certificates then issued and
outstanding.
"Aggregate Investor Percentage" will mean at any time the sum of the Series
Percentages of all series of investor certificates then issued and outstanding.
"Amortization Commencement Date" will mean the date on which an
Amortization Event is deemed to occur.
"Amortization Event" will mean, unless otherwise specified in the related
Prospectus Supplement, any event specified as such in the Pooling and Servicing
Agreement or the applicable Series Supplement. See "Description of the Investor
Certificates -- Amortization Events" in the related Prospectus Supplement.
"Amortization Period" will mean the period from, and including, the
Amortization Commencement Date to, and including, the earlier of (i) the date of
the payment in full of the Series Invested Amount and (ii) the Series
Termination Date. Unless otherwise specified in the related Prospectus
Supplement, the first Distribution Date of the Amortization Period will be the
Distribution Date in the calendar month following the Amortization Commencement
Date.
"Applicable State" will mean, with respect to any Receivable, the state in
which the chief executive office of the Seller with respect to such Receivable
is located and with respect to any Seller, the state in which the chief
executive office of such Seller is located.
"Book-Entry Certificates" will mean certificates evidencing a beneficial
interest in the investor certificates, ownership and transfers of which will be
made through book entries by a Clearing Agency; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are no
longer permitted and Definitive Certificates are to be issued to the certificate
owners, the investor certificates will no longer be "Book-Entry Certificates."
"Business Day" will mean any day other than a Saturday, a Sunday or a day
on which banking institutions in (i) New York, New York, (ii) the County of New
Castle, Delaware, (iii) the city in which the Corporate Trust Office is located,
(iv) the city in which the principal executive offices of any Additional Seller
is located or (v) the city in which the principal banking or executive offices
of any Credit Enhancement Provider is located, are authorized or obligated by
law or executive order to be closed.
"CCA Investor Interest," if applicable, shall have the meaning set forth in
the applicable Series Supplement.
"Certificate" will mean the Seller Certificate or any investor certificate
of any series of investor certificates then issued and outstanding.
"Certificate Interest" will be as specified in the related Prospectus
Supplement.
"Certificate Owner" will mean, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Certificate Principal" will mean, with respect to each class of any
series, the principal payable in respect of such class.
"Certificate Rate" will mean, with respect to any class, the certificate
rate set forth in the related Prospectus Supplement with respect to the series
to which such class belongs.
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"Certificate Register" will mean the register maintained pursuant to the
Pooling and Servicing Agreement providing for the registration of Investor
Certificates in fully registered form and transfers and exchanges thereof.
"Certificateholder" or "Holder" will mean an investor certificateholder or
a Person in whose name a Certificate is registered in the Certificate Register.
"Charged-Off Account" will mean each Account with respect to which the
Servicer has charged off the Receivables in such Account as uncollectible.
"Charged-Off Amount" will mean, with respect to any Trust Distribution
Date, the aggregate amount of Receivables in Accounts that become Charged-Off
Accounts in the related Due Period, less (i) the cumulative, uncollected amount
previously billed by the Servicers to Accounts that became Charged-Off Accounts
during the related Due Period with respect to finance charges, cash advance
fees, annual membership fees, fees for transactions that exceed the credit limit
on the Account, late payment charges and any other type of charges that the
Servicer has designated as "Finance Charge Receivables" with respect to Accounts
that are not Charged-Off Accounts and (ii) the full amount of any such
Receivables that have been repurchased by Greenwood.
"Class" will mean all the investor certificates designated by the same
letter of the alphabet, pursuant to the Series Supplement for the series.
"Class Finance Charge Collections" will be as specified in the related
Prospectus Supplement.
"Class Initial Investor Interest" will be as specified in the related
Prospectus Supplement.
"Class Invested Amount" will be as specified in the related Prospectus
Supplement.
"Class Investor Interest" will be as specified in the related Prospectus
Supplement.
"Class Monthly Servicing Fee" will mean, 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 Series Investor
Interest, in each case on the first day of the related Due Period and (ii) the
amount of the Investor Servicing Fee for the related Due Period.
"Class Percentage" will be as specified in the related Prospectus
Supplement.
"Clearing Agency" will mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934.
"Collections" will mean (i) all payments by or on behalf of an Obligor
received by a Servicer in respect of Receivables in the form of cash, checks,
wire transfers or other forms of payment in accordance with the relevant Credit
Agreement in effect from time to time and (ii) amounts treated as Collections
pursuant to the terms of the Pooling and Servicing Agreement or the applicable
Series Supplement. A Collection will be deemed to have been received at the end
of the day on the Date of Processing of such Collection.
"Collections Account" will mean the non-interest bearing segregated trust
account established and maintained by the Trustee with an office or branch of
the Trustee or a Qualified Institution for the benefit of the
certificateholders.
"Controlled Liquidation Period," if applicable, will mean, unless an
Amortization Event or, if applicable, an Early Accumulation Event has occurred
during the Revolving Period, the period from the Principal Commencement Date
until the earliest of (i) the payment in full of the Series Invested Amount,
(ii) the Amortization Commencement Date, (iii) if applicable, the Early
Accumulation Commencement Date and (iv) the Series Termination Date.
"Corporate Trust Office" will mean the principal office of the Trustee at
which at any particular time its corporate trust business will be administered,
which office currently is located at 111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601 Attention: Corporate Trust Department.
"Credit Agreement" will mean, with respect to an Account, the contract
governing such Account.
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"Credit Enhancement" will mean any credit enhancement obtained by the
Master Servicer in accordance with the applicable Series Supplement.
"Credit Enhancement Account" will mean any non-interest bearing segregated
trust account established and maintained by the Trustee with an office or branch
of the Trustee or a Qualified Institution with respect to the Credit
Enhancement.
"Credit Enhancement Agreement" will mean any Agreement among the Sellers,
the Master Servicer, the Trustee and a Credit Enhancement Provider with respect
to any Credit Enhancement.
"Credit Enhancement Provider" will mean, unless otherwise specified in the
related Prospectus Supplement, collectively, the one or more lenders that will
make a loan in order to provide the initial funds on deposit in the Credit
Enhancement Account.
"Credit Guidelines" will mean, with respect to any Account, the policies
and procedures relating to the operation of such Account and similar accounts
administered by the Servicer of such Account, including, without limitation, the
written policies and procedures and the exercise of judgment by employees of the
Servicer with respect to such accounts in accordance with such Servicer's normal
practice for determining the creditworthiness of customers holding such
accounts, the extension of credit to customers, and relating to the maintenance
of such accounts and the collection of receivables with respect to such
accounts, as such policies and procedures may be amended from time to time by
the Servicer of such accounts, and as such policies and procedures may be
implemented by any Person to whom such Servicer has delegated any of its duties.
"Cut-Off Date" will mean October 1, 1993.
"Date of Processing" with respect to any transaction will mean the date on
which such transaction is first recorded on the cardmember master file of the
accounts maintained by or on behalf of the relevant Servicer (without regard to
the effective date of such recordation).
"Deficit Accumulation Amount," if applicable, will be as specified in the
related Prospectus Supplement.
"Deficit Liquidation Amount," if applicable, will be as specified in the
related Prospectus Supplement.
"Discover Card," when used to modify the term "account," will mean that
access to such account is afforded by, among other means, a card bearing on its
face the DISCOVER service mark or, if the use of such service mark is suspended
and another service mark is substituted therefor, a card bearing such substitute
service mark.
"Distribution Date" will be as specified in the related Prospectus
Supplement.
"Due Period" will mean, with respect to any Trust Distribution Date or
Distribution Date, the calendar month next preceding the calendar month in which
such Trust Distribution Date or Distribution Date occurs.
"Early Accumulation Commencement Date," if applicable, will be as specified
in the related Prospectus Supplement.
"Early Accumulation Event," if applicable, will be as specified in the
related Prospectus Supplement.
"Early Accumulation Period," if applicable, will be as specified in the
related Prospectus Supplement.
"Eligible Receivable" will mean each Receivable: (i) which is payable in
United States dollars; (ii) which was created in compliance, in all material
respects, with all Requirements of Law applicable to the Seller and the Servicer
with respect to such Receivable, and pursuant to a Credit Agreement that
complies, in all material respects, with all Requirements of Law applicable to
such Seller and Servicer; (iii) as to which, if such Receivable was created
before the Initial Closing Date or the relevant Addition Date, as applicable,
(a) at the time of the creation of such Receivable, the Seller with respect to
such Receivable had good and marketable title thereto free and clear of all
Liens arising under or through such Seller, and (b) at the time of the
conveyance of such Receivable to the Trust, such Seller had, or the Trust will
have, good and marketable title free and clear of all Liens arising under or
through such Seller; (iv) as to which, if such Receivable was created on or
after the Initial Closing Date or the relevant Addition Date, as applicable, at
the time of the creation of such Receivable, the Trust will have good and
marketable title thereto free and clear of all Liens arising under or through
the Seller with respect to such Receivable; and (v) which constitutes an
"account" or "general intangible" under and as defined in Article 9 of the UCC
as then in effect in the Applicable State with respect to such Receivable.
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"Expected Final Payment Date" will be as specified in the related
Prospectus Supplement.
"FDIC" will mean the Federal Deposit Insurance Corporation acting through
either the Savings Association Insurance Fund or the Bank Insurance Fund.
"Final Trust Termination Date" will mean October 16, 2014.
"Finance Charge Collections" with respect to any Due Period will mean the
sum of (i) the lesser of the aggregate amount of Finance Charge Receivables for
the preceding Due Period and Collections actually received in such Due Period
and (ii) all Recovered Amounts received during such Due Period. If there is more
than one Seller, the obligation of Greenwood to deposit certain cash advance
fees and late payment fees into the Collections Account will be conditioned on
Greenwood's ability to enforce concurrent obligations against one or more other
parties to the Seller Certificate Ownership Agreement.
"Finance Charge Receivables" will mean, with respect to any Account for any
Due Period, the net amount billed by the Servicer during such Due Period as
periodic finance charges on such Account and cash advance fees, annual
membership fees, fees for transactions that exceed the credit limit on such
Account, late payment charges billed during such Due Period to such Account and
any other charges that the Servicer may designate as "Finance Charge
Receivables" from time to time (provided that the Servicer shall not designate
amounts owing for the payment of goods and services or cash advances as "Finance
Charge Receivables"), less, in the event that such Account becomes a Charged-Off
Account during such Due Period, the cumulative, uncollected amount previously
billed by the Servicer to such Account as periodic finance charges, cash advance
fees, annual membership fees, if any, fees for transactions that exceed the
credit limit on such Account, late payment charges and any other type of charges
that the Servicer has designated as "Finance Charge Receivables" with respect to
Accounts that are not Charged-Off Accounts; provided, however, that in the event
any Account that is included in the Accounts as of the Cut-Off Date is not
selected before the beginning of the Due Period preceding the Due Period related
to the first Trust Distribution Date, the Servicer may utilize a reasonable
method of estimation to determine the amount of the Finance Charge Receivables
with respect to such Account for the period beginning on the first day of such
preceding Due Period and ending on the date on which such Account is selected.
"Fixed Principal Allocation Event" will be as specified in the related
Prospectus Supplement.
"Fractional Undivided Interest" will mean the fractional undivided interest
in the Trust evidenced by an investor certificate and expressed as a portion of
the Aggregate Invested Amount.
"Governmental Authority" will mean the United States of America, any state
or other political subdivision thereof.
"Greenwood" will mean Greenwood Trust Company, a Delaware banking
corporation, and its successors and assigns.
"Group" will mean, collectively, at any time, the one or more series of
investor certificates designated as part of the same Group at that time, whether
by the Series Supplements establishing such series or as a result of the
movement of a series from one Group to another pursuant to the provisions of the
Pooling and Servicing Agreement.
"Group Collections Account" will mean the non-interest bearing segregated
trust account for Collections allocated to each Group established and maintained
by the Trustee with an office or branch of the Trustee or a Qualified
Institution for the benefit of the investor certificateholders of each series
that is a member of such Group.
"Holder of the Seller Certificate" will mean, at any specified time, the
holder or holders of the Seller Certificate, each of which, if there is more
than one holder, will be a party to the Seller Certificate Ownership Agreement,
with the respective interests granted to each of such parties pursuant to the
Seller Certificate Ownership Agreement. The initial Holder of the Seller
Certificate will be Greenwood.
"Ineligible Receivable" will mean any Receivable that was not, at the time
of its transfer, an Eligible Receivable and the transfer of which to the Trust
had a material adverse effect on the certificateholders' interest in the
Receivables as a whole that was not cured within 60 days of the earlier of (i)
actual knowledge
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of such event by the relevant Seller and (ii) receipt by such Seller of written
notice of any such event given by the Trustee.
"Initial Closing Date" will mean October 27, 1993.
"Interest Payment Dates" will be as specified in the related Prospectus
Supplement.
"Internal Revenue Code" will mean the United States Internal Revenue Code
of 1986, as amended from time to time.
"Investor Accounts" will mean, in addition to Investor Accounts established
pursuant to the Pooling and Servicing Agreement, any other segregated trust
accounts specified as Investor Accounts in any Series Supplement. See
"Description of the Investor Certificates -- Other Investor Accounts" in the
related Prospectus Supplement.
"Investor Certificateholder" will mean the Person in whose name an investor
certificate is registered in the Certificate Register.
"Investor Certificates" will mean the investor certificates offered in
connection with the related Prospectus Supplement.
"Investor Servicing Fee" will mean, with respect to each series and 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, the Series Initial Investor Interest).
"Investor Servicing Fee Percentage" will be as specified in the related
Prospectus Supplement.
"Lien" will mean any mortgage, deed of trust, pledge, hypothecation,
encumbrance, lien or other security agreement, including, without limitation,
any conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing.
"Master Servicer" will mean initially Greenwood and thereafter any Person
appointed as the successor Master Servicer as herein provided.
"Master Servicing Agreement," if applicable, will mean the agreement
entered into by Greenwood as Master Servicer and Servicer and any additional or
successor Servicer or Servicers, as such agreement may be amended or
supplemented from time to time.
"Minimum Principal Receivables Balance" will mean, on any date of
determination, an amount equal to the sum of the Series Minimum Principal
Receivables Balance for each series then outstanding.
"Moody's" will mean Moody's Investors Service Inc.
"New Issuance" will mean the issuance of an additional series of investor
certificates from the Trust.
"Obligor" will mean with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Opinion of Counsel" will mean a written opinion of counsel, who may be
counsel for or an employee of any Seller or Greenwood or any of their
affiliates.
"Participation Interests" will mean participations representing undivided
interests in a pool of assets primarily consisting of receivables in revolving
credit card accounts and collections thereon.
"Payment Date" will mean any Interest Payment Date, any Principal Payment
Date, if applicable, and any Special Payment Date.
"Permitted Investments" will mean:
(i) negotiable instruments or securities represented by instruments in
bearer or registered form which evidence: (a) 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
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credit of the United States of America; (b) time deposits in, or bankers'
acceptances issued by, any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (or any domestic branch of a foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein, the short-term
deposits or commercial paper or, in the absence of a rating on the
short-term deposits or commercial paper of such depository institution or
trust company, the long-term unsecured debt obligations of such depository
institution or trust company will have the Highest Rating; (c) commercial
paper or other short-term obligations having, at the time of the Trust's
investment or contractual commitment to invest therein, the Highest Rating;
or (d) investments in money market funds having the Highest Rating;
(ii) demand deposits in the name of the Trust or the Trustee in any
depository institution or trust company referred to in clause (i) (b)
above;
(iii) securities not represented by an instrument, which are
registered in the name of the Trustee upon books maintained for that
purpose by or on behalf of the issuer thereof and identified on books
maintained for that purpose by the Trustee as held for the benefit of the
Trust or the Certificateholders, and consisting of shares of an open end
diversified investment company which is registered under the Investment
Company Act of 1940, as amended, and which (a) invests its assets
exclusively in obligations of or guaranteed by the United States of America
or any instrumentality or agency thereof having in each instance a final
maturity date of less than one year from their date of purchase or other
Permitted Investments, (b) seeks to maintain a constant net asset value per
share and (c) has aggregate net assets of not less than $100,000,000 on the
date of purchase of such shares, and which will not result in a reduction
or withdrawal of the rating of any class of any series then outstanding as
confirmed in writing by the Rating Agencies;
(iv) a guaranteed investment contract (guaranteed as to timely
payment), the terms of which meet the criteria of the Rating Agencies and
with an entity whose credit standards meet the criteria of the Rating
Agencies necessary to preserve the rating of each class of each series then
outstanding; and
(v) repurchase agreements transacted with either
(a) an entity subject to the United States federal bankruptcy code,
provided that (1) the term of the repurchase agreement is consistent
with the requirements set forth in Section 4.02(c) of the Pooling and
Servicing Agreement with regard to the maturity of Permitted Investments
or is due on demand, (2) the Trustee or a third party acting solely as
agent for the Trustee has possession of the collateral, (3) as evidenced
by a certificate of a Servicing Officer of the Master Servicer delivered
to the Trustee, the Trustee on behalf of the Trust has a perfected first
priority security interest in the collateral, (4) the market value of
the collateral is maintained at the requisite collateral percentage of
the obligation in accordance with the standards of the Rating Agencies,
(5) the failure to maintain the requisite collateral level will obligate
the Trustee to liquidate the collateral immediately, (6) the securities
subject to the repurchase agreement are either obligations of, or fully
guaranteed as to principal and interest by, the United States of America
or an agency thereof, certificates of deposit or bankers acceptances and
(7) as evidenced by a certificate of a Servicing Officer of the Master
Servicer delivered to the Trustee, the securities subject to the
repurchase agreement are free and clear of any third party lien or
claim; or
(b) a financial institution insured by the FDIC, or any
broker-dealer with "retail customers" that is under the jurisdiction of
the Securities Investors Protection Corp. ("SIPC"), provided that (1)
the market value of the collateral is maintained at the requisite
collateral percentage of the obligation in accordance with the standards
of the Rating Agencies, (2) the Trustee or a third party acting solely
as agent for the Trustee has possession of the collateral, (3) as
evidenced by a certificate of a Servicing Officer of the Master Servicer
delivered to the Trustee, the Trustee on behalf of the Trust has a
perfected first priority security interest in the collateral, (4) as
evidenced by a certificate of a Servicing Officer of the Master Servicer
delivered to the Trustee, the collateral is free and clear of third
party liens; and, in the case of an SIPC broker, was not acquired
pursuant to a
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repurchase or reverse repurchase agreement and (5) failure to maintain
the requisite collateral percentage will obligate the Trustee to
liquidate the collateral;
provided, however, that at the time of the Trust's investment or
contractual commitment to invest in any such repurchase agreement, the
short-term deposits or commercial paper rating or, in the absence of a
rating on the short-term deposits or commercial paper of such entity or
institution, the long-term unsecured debt obligations of such entity or
institution will have a credit rating not lower than the Highest Rating.
Permitted Investments will include, without limitation, securities of
Greenwood or any of its affiliates which otherwise qualify as a Permitted
Investment under clause (i), (ii), (iii), (iv) or (v) above. For purposes
of this definition of Permitted Investments, "Highest Rating" will mean,
with respect to Moody's, P-1 or Aaa, and, with respect to Standard &
Poor's, A-1+ or AAA, or with respect to either Standard & Poor's or
Moody's, any rating category which will not cause a reduction in or
withdrawal of the rating of any class of any series then outstanding, as
confirmed in writing by the applicable Rating Agency.
"Person" will mean an individual, a partnership or a Corporation. The term
"Corporation" for the purposes of the preceding sentence only will mean a
corporation, joint stock company, business trust or other similar association.
"Pooling and Servicing Agreement" will mean that certain Pooling and
Servicing Agreement dated as of October 1, 1993, by and between Greenwood Trust
Company, as Master Servicer, Servicer and Seller, and U.S. Bank National
Association (formerly First Bank National Association, successor trustee to Bank
of America Illinois, formerly Continental Bank, National Association), as
Trustee, as such agreement may be amended or supplemented from time to time.
"Principal Collections" will mean, with respect to any Due Period, all
Collections other than Finance Charge Collections.
"Principal Commencement Date" will be as specified in the related
Prospectus Supplement.
"Principal Receivable" will mean each Receivable other than Finance Charge
Receivables.
"Qualified Institution" will mean a depository institution organized under
the laws of the United States of America or any one of the states thereof that
at all times has a short-term certificate of deposit rating of A-1 or better by
Standard & Poor's and P-1 or better by Moody's and whose deposits are insured by
the FDIC.
"Rating Agency" will mean Moody's or Standard & Poor's, and "Rating
Agencies" will mean Moody's and Standard & Poor's.
"Receivable" will mean any amounts owing by the Obligor under an Account
from time to time, including, without limitation, amounts owing for the payment
of goods and services, cash advances, finance charges and other charges, if any.
A Receivable will be deemed to have been created at the end of the day on the
Date of Processing of such Receivable. A Receivable will not include any amount
owing under a Charged-Off Account or an Account the Receivables in which have
been repurchased pursuant to the Pooling and Servicing Agreement. Reference to a
"receivable" will include any amount owing by an Obligor under a Charged-Off
Account or an Account in which the Receivables have been repurchased pursuant to
the Pooling and Servicing Agreement.
"Record Date" will mean, for any Distribution Date, the last day of the
preceding calendar month.
"Recovered Amounts" will mean all amounts received with respect to
receivables that have previously been charged-off as uncollectible, including
without limitation all proceeds from sales of such receivables by the Trust to
third parties pursuant to the Pooling and Servicing Agreement.
"Removed Accounts" will mean Accounts, the Receivables in which have been
designated for deletion and removal from the Trust.
"Required Daily Deposit" will be as specified in the related Prospectus
Supplement.
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"Requirements of Law" for any Person will mean the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any requirement of any law, rule or regulation or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System); provided,
however, that any such requirement will not be deemed a Requirement of Law if
the enforcement of such requirement would not have a material adverse effect
upon the collectibility of the Receivables taken as a whole.
"Revolving Period" will mean, with respect to each series, the period from,
and including, the Series Cut-Off Date to, but not including, the earlier to
occur of (i) the Principal Commencement Date, (ii) the Amortization Commencement
Date with respect to such series and (iii) if applicable, the Early Accumulation
Commencement Date with respect to such series.
"Seller," when used with reference to specific Receivables, will mean the
Person or Persons conveying such Receivables to the Trust.
"Seller Certificate" will mean the certificate executed by Greenwood and
authenticated by the Trustee representing a residual interest in the assets of
the Trust not represented by the investor certificates of any series.
"Seller Certificate Ownership Agreement" will mean, if applicable, the
agreement entered into by Greenwood, as Seller, and any Additional Seller, as
such agreement may be amended or supplemented from time to time.
"Seller Interest" will mean, with respect to any Trust Distribution Date or
Distribution Date, the aggregate amount of Principal Receivables in the Trust at
the end of the related Due Period minus the Aggregate Investor Interest at the
end of such day; provided, however, that the Seller Interest will in no event be
less than zero.
"Seller Percentage" will mean, on any date of determination, with respect
to any specified category, an amount equal to 100% of such category minus the
applicable Aggregate Investor Percentage.
"Seller Servicing Fee" will mean, for any Trust Distribution Date, an
amount equal to the product of (i) the product of 2.0% per annum calculated on
the basis of a 360-day year of twelve 30-day months and the amount of Principal
Receivables in the Trust as of the first day of the Due Period related to such
Trust Distribution Date (or in the case of the first Trust Distribution Date,
the amount of Principal Receivables in the Trust on the Cut-Off Date) and (ii) a
fraction the numerator of which is the amount of the Seller Interest and the
denominator of which is the greater of the amount of Principal Receivables in
the Trust and the Aggregate Investor Interest.
"Sellers" will mean Greenwood and any Additional Sellers.
"Series" will mean the series of investor certificates offered in
connection with the related Prospectus Supplement.
"Series Closing Date" will mean the day the investor certificates of the
series are initially issued.
"Series Collections Account" will be as specified in the related Prospectus
Supplement.
"Series Cut-Off Date" will be as specified in the related Prospectus
Supplement.
"Series Distribution Account" will be as specified in the related
Prospectus Supplement.
"Series Finance Charge Collections" will be as specified in the related
Prospectus Supplement.
"Series Initial Investor Interest" will be as specified in the related
Prospectus Supplement.
"Series Interest Funding Account" will be as specified in the related
Prospectus Supplement.
"Series Invested Amount" will be as specified in the related Prospectus
Supplement.
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"Series Investor Interest" will be as specified in the related Prospectus
Supplement.
"Series Minimum Principal Receivables Balance" will be as specified in the
related Prospectus Supplement.
"Series Percentage" will be as specified in the related Prospectus
Supplement.
"Series Principal Collections" will be as specified in the related
Prospectus Supplement.
"Series Supplement" will mean the applicable supplement to the Pooling and
Servicing Agreement that establishes each series of investor certificates.
"Series Termination Date" will be as specified in the related Prospectus
Supplement.
"Series Yield Collections" will be as specified in the related Prospectus
Supplement.
"Servicer" will mean initially (i) with respect to Greenwood Discover Card
Accounts, Greenwood and (ii) with respect to any other Accounts, the Person who
is designated as the Servicer with respect to such Accounts in the Assignment of
Additional Accounts relating to such Accounts; and thereafter any Person
appointed as a successor Servicer to any such Servicer. The term "Servicer,"
when used to refer to actions to be taken with respect to any Accounts, will
refer to one or more Servicers, as applicable, and to any particular Servicer
only with respect to Accounts serviced by such Servicer.
"Servicing Officer" will mean any employee of the Master Servicer or of any
Servicer, as applicable, involved in, or responsible for, the administration and
servicing of the Receivables whose name appears on a list of servicing officers
furnished to the Trustee by the Master Servicer and each Servicer, as such lists
may from time to time be amended.
"Standard & Poor's" will mean Standard & Poor's Ratings Services.
"Subordinate Series" will mean any series that is subordinated in right of
payment, in whole or in part, pursuant to the Series Supplement with respect to
such series, to one or more series.
"Trust" will mean the trust created by the Pooling and Servicing Agreement,
the corpus of which consists of the Receivables existing as of the Cut-Off Date
or thereafter created and all monies due or to become due with respect thereto,
all proceeds (as defined in Section 9-306 of the UCC as in effect in the
Applicable State with respect to each such Receivable) of the Receivables, such
funds as from time to time are deposited in the Investor Accounts and the
benefits of any Credit Enhancement with respect to any series then outstanding.
"Trust Distribution Date" will mean November 10, 1993 and the tenth day of
each calendar month thereafter, or, if such tenth day is not a Business Day, the
next succeeding Business Day.
"Trustee" will mean U.S. Bank National Association (formerly First Bank
National Association, successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), the institution executing the Pooling
and Servicing Agreement and Series Supplement as Trustee, or its successor in
interest, or any successor trustee appointed as provided in the Pooling and
Servicing Agreement.
"UCC" will mean the Uniform Commercial Code, as amended from time to time,
as in effect in any specified jurisdiction.
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ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered investor
certificates (collectively, the "Global Securities") will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of The Depository Trust Company ("DTC"), Cedel or
Euroclear. The Global Securities will be tradeable as home market instruments in
both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedel and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice.
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding investor certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of Cedel and
Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities will
be represented through financial institutions acting on their behalf as direct
and indirect Participants in DTC. As a result, Cedel and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to prior Trust issues. Investor securities
custody accounts will be credited with their holdings against payment in
same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled in same-day funds using the procedures applicable
to prior Trust issues.
Trading between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and Cedel or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a Cedel Participant or a Euroclear Participant, the purchaser will
send instructions to Cedel or Euroclear through a Cedel Participant or
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Euroclear Participant at least one business day prior to settlement. Cedel or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date, on the basis of actual days elapsed and a
360 day year. Payment will then be made by the respective Depositary to the DTC
Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the Cedel Participant's or Euroclear Participant's account.
The Global Securities credit will appear the next day (European time) and the
cash debit will be back-valued to, and the interest on the Global Securities
will accrue from, the value date (which would be the preceding day when
settlement occurred in New York). If settlement is not completed on the intended
value date (i.e., the trade fails), the Cedel or Euroclear cash debit will be
valued instead as of the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Cedel or Euroclear. Under this approach,
they may take on credit exposure to Cedel or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to pre-position
funds and allow that credit line to be drawn upon to finance the settlement.
Under this procedure, Cedel Participants or Euroclear Participants purchasing
Global Securities would incur overdraft charges for one day, assuming they
cleared the overdraft when the Global Securities were credited to their
accounts. However, interest on the Global Securities would accrue from the value
date. Therefore, in many cases the investment income on the Global Securities
earned during that one-day period may substantially reduce or offset the amount
of such overdraft charges, although this result will depend on each Cedel
Participant's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of Cedel Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between Cedel or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The seller will send instructions
to Cedel or Euroclear through a Cedel Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, Cedel or Euroclear
will instruct the respective Depositary, as appropriate, to deliver the bonds to
the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date on the basis of actual days elapsed and a
360 day year. The payment will then be reflected in the account of the Cedel
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Cedel Participant's or Euroclear Participant's account would be
back-valued to the value date (which would be the preceding day, when settlement
occurred in New York). Should the Cedel Participant or Euroclear Participant
have a line of credit with its respective clearing system and elect to be in
debit in anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that one-day
period. If settlement is not completed on the intended value date (i.e., the
trade fails), receipt of the cash proceeds in the Cedel Participant's or
Euroclear Participant's account would instead be valued as of the actual
settlement date.
Finally, day traders that use Cedel or Euroclear and that purchase Global
Securities from DTC Participants for delivery to Cedel Participants or Euroclear
Participants should note that these trades would
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automatically fail on the sale side unless affirmative action were taken. At
least three techniques should be readily available to eliminate this potential
problem:
(a) borrowing through Cedel or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedel or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant
no later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedel or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant is at
least one day prior to the value date for the sale to the Cedel Participant
or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedel or
Euroclear (or through DTC if the holder has an address outside the U.S.) will be
subject to the U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption for non-U.S. Holders (Form W-8). Beneficial owners of investor
certificates that are non-U.S. Holders can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the beneficial owner becomes a United States citizen or resident during the
period to which the statement relates, or certain other changes in circumstances
occur, such change must be communicated to the appropriate party within 30 days
thereof. Form W-8 is generally effective for three calendar years, but a new
certificate may be required to be filed by the recipient each time a payment is
made.
Exemption for non-U.S. Holders with effectively connected income (Form
4224). A non-U.S. Holder, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected With the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. Holders resident in treaty countries
(Form 1001). Non-U.S. Holders that are Certificate Owners residing in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption, or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner or
his agent.
Exemption for U.S. Holders (Form W-9). U.S. Holders can obtain a complete
exemption from the withholding tax by filing Form W-9 (Request for Taxpayer
Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, its agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency) an investor certificate.
Treasury Regulations issued on October 14, 1997, which will be applicable
to payments made after 1999 (with certain transition rules), provide for the
unification and simplification of certain current certification procedures.
Under these regulations, a Form W-8 will replace Forms 1001 and 4224 and become
the only form necessary to obtain a withholding exemption or reduction for
non-U.S. Holders. Further, pursuant to these new regulations, special rules
permit the shifting of primary responsibility for withholding to certain
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financial intermediaries acting on behalf of beneficial owners. Although a
beneficial owner will still be required to submit a Form W-8 to such an
intermediary, such intermediary generally will not be required to forward the
Form W-8 received from such beneficial owner to the withholding agent. Both U.S.
Holders and non-U.S. Holders are urged to consult their own tax advisors with
respect to these new regulations.
The term "U.S. Holder" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any state, (iii) an estate the income of which is includible in
gross income for United States tax purposes, regardless of its source, or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust, and one or more United States
persons have the authority to control all substantial decisions of the trust
(or, under certain circumstances, a trust the income of which is subject to
United States federal income taxation regardless of its source).
This summary does not deal with all aspects of U.S. federal income tax
withholding that may be relevant to U.S. or non-U.S. Holders of the Global
Securities. Investors are advised to consult their own tax advisors for specific
tax advice concerning their holding and disposing of the Global Securities.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration Fee............................................ $2,065,000
Printing and Engraving*..................................... 560,000
Trustee's Fees*............................................. 616,000
Legal Fees and Expenses*.................................... 1,050,000
Blue Sky Fees and Expenses*................................. 140,000
Accountants' Fees and Expenses*............................. 630,000
Rating Agency Fees*......................................... 3,850,000
Miscellaneous Fees*......................................... 112,000
----------
Total*................................................. $9,023,000
==========
</TABLE>
- ---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Greenwood is a Delaware banking corporation and its affiliate, Morgan
Stanley Dean Witter & Co. ("MSDW") is a Delaware corporation. Section 145 of the
General Corporation Law of the State of Delaware ("GCL") provides that a
Delaware corporation has the power to indemnify its officers and directors in
certain circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding,
provided that such director or officer had no reasonable cause to believe his or
her conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that such director or officer acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which such director or officer shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action was brought shall determine that
despite the adjudication of liability such director or officer is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) and (b) or in the defense of any claim, issue or
matter therein, he or she shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by him or her in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him or her or incurred by him or her in any such capacity or arising out of his
or her status as such whether or not the corporation would have the power to
indemnify him or her against such liabilities under Section 145.
II-1
<PAGE> 64
Article IV of Greenwood's by-laws provides that Greenwood shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding, whether civil or
criminal, and whether judicial, legislative, or administrative (other than an
action by or in the right of Greenwood) by reason of the fact that such person
is or was a director, officer or employee (or is or was serving at the request
of Greenwood as a director, officer, and/or employee of or in a similar capacity
in another corporation, partnership, joint venture, trust or other enterprise)
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such proceeding if such person acted in good faith and in a manner not clearly
opposed to any written policy of Greenwood, or which such person reasonably
believed to be in the best interests of Greenwood, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. Indemnification in connection with an action or proceeding
by or in the right of Greenwood to procure a judgment in its favor is limited to
payment of amounts paid in settlement and expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
such action or proceeding. No indemnification in connection with an action or
proceeding by or in the right of Greenwood to procure a judgment in Greenwood's
favor may be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable for negligence or misconduct in the
performance of such person's duty to Greenwood unless and only to the extent
that the court in which such action or suit is brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Article VIII of the Amended and Restated Certificate of Incorporation of
MSDW ("Certificate of Incorporation") and Section 6.07 of the Amended and
Restated By-Laws of MSDW ("By-Laws"), each as amended to date, provide for the
indemnification of directors and officers. The Certificate of Incorporation
provides that any person who is a director or officer of MSDW shall be
indemnified by MSDW to the fullest extent permitted from time to time by
applicable law. In addition, the By-Laws provide that each person who was or is
made a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
or a person of whom he or she is the legal representative is or was a director
or officer of MSDW or a director or elected officer of a corporation a majority
of the capital stock (other than directors' qualifying shares) of which is owned
directly or indirectly by MSDW (a "Subsidiary") shall be indemnified by MSDW to
the fullest extent permitted by applicable law. The right to indemnification
under the By-Laws includes the right to be paid the expenses incurred in
connection with any proceeding in advance of its final disposition upon receipt
(unless MSDW upon authorization of the Board of Directors waives said
requirement to the extent permitted by applicable law) of an undertaking by or
on behalf of such person to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by MSDW.
MSDW's By-Laws also provide that MSDW may, to the extent authorized from
time to time by its Board of Directors, provide rights to indemnification, and
rights to be paid by MSDW the expenses incurred in defending any proceeding in
advance of its final disposition, to any person who is or was an employee or
agent (other than a director or officer) of MSDW or a Subsidiary and to any
person who is or was serving at the request of MSDW or a Subsidiary as a
director, officer, partner, member, employee or agent of another corporation,
partnership, limited liability company, joint venture, trust or other enterprise
at the request of MSDW or a Subsidiary, to the same scope and effect as the
foregoing indemnification of directors and officers of MSDW.
Under the By-Laws, MSDW has the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, member, employee or
agent of MSDW or a Subsidiary, or of another corporation, partnership, limited
liability company, joint venture, trust or other enterprise, against any
expense, liability or loss whether or not MSDW or a Subsidiary would have the
power to indemnify him or her against such expense, liability or loss under the
provisions of applicable law.
MSDW has in effect insurance policies in the amount of $125 million for
general officers' and directors' liability insurance and $25 million for
fiduciary liability insurance covering all of MSDW's directors and officers in
certain instances where by law they may not be indemnified by MSDW.
II-2
<PAGE> 65
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1 Pooling and Servicing Agreement between Greenwood Trust
Company as Master Servicer, Servicer and Seller and U.S.
Bank National Association (formerly First Bank National
Association, successor trustee to Bank of America Illinois,
formerly Continental Bank, National Association), as
Trustee, dated as of October 1, 1993.
4.2 First Amendment to Pooling and Servicing Agreement, dated as
of August 15, 1994, between Greenwood Trust Company as
Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee.
4.3 Second Amendment to Pooling and Servicing Agreement, dated
as of February 29, 1996, between Greenwood Trust Company as
Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee,
incorporated by reference to Registrant's Current Report on
Form 8-K, dated April 30, 1996.
4.4 Third Amendment to Pooling and Servicing Agreement, dated as
of March 30, 1998, between Greenwood Trust Company as Master
Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee,
incorporated by reference to Registrant's Current Report on
Form 8-A, dated April 13, 1998.
4.5 Form of Series Supplement between Greenwood Trust Company as
Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee,
including form of Class A Certificate and form of Class B
Certificate.
4.6 Form of Agreement among Greenwood Trust Company, U.S. Bank
National Association (formerly First Bank National
Association, successor trustee to Bank of America Illinois,
formerly Continental Bank, National Association) as Trustee
and The Depository Trust Company, with respect to Discover
Card Master Trust I.
5.1 Opinion of Latham & Watkins.
5.2 Form of opinion of Latham & Watkins as to certain creditors'
rights matters relating to Greenwood Trust Company.
5.3 Form of opinion of Young, Conaway, Stargatt & Taylor, LLP as
to certain creditors' rights matters relating to Greenwood
Trust Company.
8.1 Opinion of Latham & Watkins as to certain federal tax
matters concerning the Investor Certificates.
23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Young, Conaway, Stargatt & Taylor, LLP.
24.1 Powers of Attorney of the directors and officers of the
Registrant.
</TABLE>
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<PAGE> 66
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes as follows:
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be a part
of this Registration Statement as of the time it was declared effective.
(d) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(e) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (e)(1)(i) and (e)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with
II-4
<PAGE> 67
or furnished to the Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-5
<PAGE> 68
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Castle, County of New Castle, State of Delaware,
on August 26, 1998.
GREENWOOD TRUST COMPANY,
as originator of the Trust
(Registrant)
By /s/ JOHN J. COANE
------------------------------------
Vice President, Chief Accounting
Officer and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
J. NATHAN HILL* President, Chief Operating Officer, Loan Officer,
Assistant Secretary and Director (Principal
Executive Officer)
JOHN J. COANE* Vice President, Chief Accounting Officer and
Treasurer (Principal Financial Officer and
Principal Accounting Officer)
RICHARD M. DEMARTINI* Director
CHRISTINE A. EDWARDS* Director
ALEXANDER C. FRANK* Director
RAYMOND A. KENNEDY* Director
JOSEPH A. YOB* Director
</TABLE>
August 26, 1998
*By /S/ JOHN J. COANE , individually and as Attorney-in-fact
------------------------
JOHN J. COANE
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<PAGE> 69
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
- ------- ----------- ----------
<C> <S> <C>
1.1 Form of Underwriting Agreement. ............................
4.1 Pooling and Servicing Agreement between Greenwood Trust
Company as Master Servicer, Servicer and Seller and U.S.
Bank National Association (formerly First Bank National
Association, successor trustee to Bank of America Illinois,
formerly Continental Bank, National Association), as
Trustee, dated as of October 1, 1993. ......................
4.2 First Amendment to Pooling and Servicing Agreement, dated as
of August 15, 1994, between Greenwood Trust Company as
Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee. .......
4.3 Second Amendment to Pooling and Servicing Agreement, dated
as of February 29, 1996, between Greenwood Trust Company as
Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee,
incorporated by reference to Registrant's Current Report on
Form 8-K, dated April 30, 1996. ............................
4.4 Third Amendment to Pooling and Servicing Agreement, dated as
of March 30, 1998, between Greenwood Trust Company as Master
Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee,
incorporated by reference to Registrant's Current Report on
Form 8-A, dated April 13, 1998. ............................
4.5 Form of Series Supplement between Greenwood Trust Company as
Master Servicer, Servicer and Seller and U.S. Bank National
Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association), as Trustee,
including form of Class A Certificate and form of Class B
Certificate. ...............................................
4.6 Form of Agreement among Greenwood Trust Company, U.S. Bank
National Association (formerly First Bank National
Association, successor trustee to Bank of America Illinois,
formerly Continental Bank, National Association), as Trustee
and The Depository Trust Company, with respect to Discover
Card Master Trust I. .......................................
5.1 Opinion of Latham & Watkins. ...............................
5.2 Form of opinion of Latham & Watkins as to certain creditors'
rights matters relating to Greenwood Trust Company. ........
5.3 Form of opinion of Young, Conaway, Stargatt & Taylor, LLP as
to certain creditors' rights matters relating to Greenwood
Trust Company. .............................................
8.1 Opinion of Latham & Watkins as to certain federal tax
matters concerning the Investor Certificates. ..............
23.1 Consent of Latham & Watkins (included in Exhibit 5.1). .....
23.2 Consent of Young, Conaway, Stargatt & Taylor, LLP. .........
24.1 Powers of Attorney of the directors and officers of the
Registrant. ................................................
</TABLE>
<PAGE> 1
EXHIBIT 1.1
DISCOVER CARD MASTER TRUST I
Credit Card Pass-Through Certificates
__________________________________
Underwriting Agreement
(Standard Terms)
_________, 199___
MORGAN STANLEY & CO. INCORPORATED
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Greenwood Trust Company ("Greenwood"), as originator of Discover Card
Master Trust I (the "Trust"), proposes, subject to the terms and conditions
stated herein, to cause to be issued and sold from time to time Credit Card
Pass-Through Certificates (the "Certificates") in one or more series (each, a
"Series"). The Certificates of each Series will consist of one or more Classes
(each, a "Class") of Certificates of such Series. Each Certificate will
evidence a fractional, undivided percentage interest or beneficial interest in
the Trust. The Certificates will be issued by the Trust pursuant to a Pooling
and Servicing Agreement, dated as of October 1, 1993, as amended, and as
supplemented by a Series Supplement relating to the specific
<PAGE> 2
Series of Certificates issued thereunder (the Pooling and Servicing Agreement,
as so supplemented, the "Pooling and Servicing Agreement"), between Greenwood
as Master Servicer, Servicer and Seller and 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"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
Each offering of each Class of each Series of Certificates to which this
Agreement applies (the "Securities") made pursuant to the Registration
Statement (as defined herein) will be made through you or through you and other
underwriters for whom you are acting as representatives or through an
underwriting syndicate managed by you. Whenever Greenwood determines to make
such an offering of Securities to which this Agreement shall apply, Greenwood
and one or more Underwriters (as defined herein) will enter into an agreement
(the "Terms Agreement") providing for the sale of the Securities to, and the
purchase and offering thereof by, (i) you, (ii) you and such other underwriters
who execute the Terms Agreement and agree thereby to become obligated to
purchase the Securities from
-2-
<PAGE> 3
Greenwood, or (iii) you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (in each
case, the "Underwriters"). Such Terms Agreement shall specify the initial
principal amount of the Securities to be issued and their terms not otherwise
specified in this Agreement, the price at which such Securities are to be
purchased by the Underwriters from Greenwood, the aggregate amount of
Securities to be purchased by you and any other Underwriter that is a party to
such Terms Agreement and the initial public offering price or the method by
which the price at which such Securities are to be sold will be determined.
The Terms Agreement ("Terms Agreement"), which shall be substantially in the
form attached hereto, may take the form of an exchange of any standard form of
written communication between or among the Underwriters and Greenwood. Each
such offering of the Securities for which a Terms Agreement is entered into
will be governed by this Agreement, as supplemented by the applicable Terms
Agreement, and this Agreement and such Terms Agreement shall inure to the
benefit of and be binding upon the Underwriters participating in the offering
of such Securities.
-3-
<PAGE> 4
1. Greenwood represents and warrants to, and agrees with you, as of the
date hereof, and to each Underwriter named in the Terms Agreement as of the
date thereof, that:
(a) A registration statement on Form S-3 (Registration Statement No.
333-16103) including a prospectus and such amendments thereto as may have been
required to the date hereof, relating to the Certificates and the offering
thereof from time to time in accordance with Rule 415 under the Securities Act
of 1933, as amended (the "Act"), in the form heretofore delivered to you has
been filed with the Securities and Exchange Commission (the "Commission")
(which may have included one or more preliminary prospectuses and prospectus
supplements (each, a "Preliminary Prospectus") meeting the requirements of Rule
430 of the Act) and such registration statement, as amended, has become
effective; such registration statement, as amended, and the prospectus and
prospectus supplement relating to the sale of the Securities offered thereby
constituting a part thereof, as from time to time amended or supplemented
(including any prospectus and prospectus supplement filed with the Commission
pursuant to Rule 424(b) of the Act) are respectively referred to herein as the
"Registration Statement," the "Basic Prospectus" and the "Prospectus
Supplement" and the
-4-
<PAGE> 5
Basic Prospectus together with the Prospectus Supplement relating to the
Securities is hereinafter referred to as the "Prospectus"; the conditions of
Rule 415 under the Act have been satisfied with respect to the Registration
Statement; and no other amendment to the Registration Statement will be filed
which shall be reasonably disapproved by you promptly after reasonable notice
thereof.
(b) There is no request by the Commission for any further amendment of the
Registration Statement or the Prospectus or for any additional information; the
Commission has not issued any stop order suspending the effectiveness of the
Registration Statement and Greenwood is not aware of any proceeding for that
purpose having been instituted or threatened; and there has been no
notification with respect to the suspension of the qualification for sale of
the Certificates for sale in any jurisdiction or any proceeding for such
purpose having been instituted or threatened.
(c) As of the date of the Terms Agreement, when the Registration Statement
became effective, when the Prospectus Supplement is first filed pursuant to
Rule 424(b) under the Act, when any other amendment to the Registration
Statement becomes effective, and when any supplement to the Prospectus
Supplement
-5-
<PAGE> 6
is filed with the Commission, and at the Time of Delivery (as defined in
Section 4), the Registration Statement and the Prospectus (i) conformed, and
any amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder and (ii) will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to
Greenwood by an Underwriter through you expressly for use therein.
(d) Upon payment therefor as provided herein and in the Terms Agreement,
the Securities will have been duly and validly authorized and (assuming their
due authentication by the Trustee) will have been duly and validly issued and
will conform in all material respects to the description thereof in the
Prospectus and will be entitled to the benefits of the Pooling and Servicing
Agreement.
(e) The issue and sale of the Securities and the compliance by Greenwood
with all of the provisions of the Securities, the
-6-
<PAGE> 7
Pooling and Servicing Agreement, this Agreement and the Terms Agreement have
been or will have been duly authorized by Greenwood by all necessary corporate
action; and will not conflict with or result in any breach which would
constitute a material default under, or, except as contemplated by the Pooling
and Servicing Agreement, result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of Greenwood or NOVUS
Credit Services Inc. ("NOVUS"), material to Greenwood and NOVUS (whether or not
consolidated) considered as a whole, pursuant to the terms of, any indenture,
loan agreement or other agreement or instrument for borrowed money to which
Greenwood or NOVUS is a party or by which Greenwood or NOVUS may be bound or to
which any of the property or assets of Greenwood or NOVUS, material to
Greenwood and NOVUS (whether or not consolidated) considered as a whole, is
subject, nor will such action result in any material violation of the
provisions of the Certificate of Incorporation or By-Laws of Greenwood or, to
the best of Greenwood's knowledge, any statute or any order, rule or regulation
applicable to Greenwood of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over Greenwood, and no
consent, approval, authorization or other order of, or filing
-7-
<PAGE> 8
with, any court or any such regulatory authority or other governmental body is
required for the issue and sale of the Securities except as may be required
under the Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and securities laws of the various states and other jurisdictions which
are applicable to the issue and sale of the Securities and except for the
filing of any financing or continuation statement required to perfect or
continue the Trust's interest in the Receivables.
(f) The Principal Receivables conveyed by Greenwood to the Trust under the
Pooling and Servicing Agreement had an aggregate outstanding balance determined
as of the date stated in the Terms Agreement of not less than the amount set
forth in the Terms Agreement; and
(g) The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the Trust is not required to be registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
2. Subject to the terms and conditions herein set forth, Greenwood agrees
to cause to be issued and sold to each of the Underwriters, and each of the
Underwriters agrees, severally
-8-
<PAGE> 9
and not jointly, to purchase from Greenwood, at the purchase price specified
in the Terms Agreement, the principal amount of Securities set forth in the
Terms Agreement.
3. (a) From time to time, after the Registration Statement becomes
effective, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
(b) Each Underwriter severally represents and agrees that it will not
offer or sell or deliver any of the Securities in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof,
and without limiting the foregoing, each Underwriter severally represents and
agrees that (i) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom;
(ii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or who is a person to whom the document may otherwise lawfully be issued or
passed on;
-9-
<PAGE> 10
(iii) if it is an authorized person under Chapter III of the Financial Services
Act 1986, it has only promoted and will only promote (as that term is defined
in Regulation 1.02 of the Financial Services (Promotion of Unregulated Schemes)
Regulations 1995) to any person in the United Kingdom the scheme described in
the Prospectus Supplement if that person is of a kind described either in
Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the
Financial Services (Promotion of Unregulated Schemes) Regulation 1995; and (iv)
it is a person of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1995.
(c) Each Underwriter, severally, represents that it will not, at any time
that such Underwriter is acting as an "underwriter" (as defined in Section
2(11) of the Act) with respect to the Securities, transfer, deposit or
otherwise convey any Securities into a trust or other type of special purpose
vehicle that issues securities or other instruments backed in whole or in part
by, or that represents interests in, such Securities without the prior written
consent of Greenwood.
4. Securities to be purchased by each Underwriter hereunder and under the
Terms Agreement shall be delivered by or on behalf of Greenwood to you for the
account of such
-10-
<PAGE> 11
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price thereof in immediately available funds. Unless otherwise
specified in the Terms Agreement, such delivery shall occur at the office of
Latham & Watkins, Chicago, Illinois or such other place as you and Greenwood
may agree upon in writing. The time and date of such delivery shall be set
forth in the Terms Agreement or at such other time and date as you and
Greenwood may agree upon in writing, such time and date being herein called the
"Time of Delivery." Unless otherwise specified in the Terms Agreement, the
Securities shall be represented by definitive certificates, registered in the
name of Cede & Co., as nominee for The Depository Trust Company. Such
definitive certificates will be made available for inspection at least
twenty-four hours prior to the Time of Delivery at the office of the Trustee,
111 East Wacker Drive, Chicago, Illinois 60601.
5. Greenwood agrees with each of the Underwriters:
(a) Immediately following the execution of each Terms Agreement, Greenwood
will prepare a Prospectus Supplement setting forth the amount of Securities
covered thereby and the terms thereof not otherwise specified in the Basic
Prospectus, the price at which such Securities are to be purchased by the
Underwriters from Greenwood, either the initial public offering
-11-
<PAGE> 12
price or the method by which the price at which such Securities are to be sold
will be determined, the selling concessions and allowances, if any, and such
other information as Greenwood deems appropriate in connection with the
offering of such Securities, and Greenwood will not make any further amendment
or any supplement to the Registration Statement or Prospectus without first
having furnished you with a copy of the proposed form thereof and given you a
reasonable opportunity to review the same; to advise you promptly after it
receives notice of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof; to
advise you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use
of the Prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of
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<PAGE> 13
such Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may reasonably request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith Greenwood shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and if at any time
the delivery of a Prospectus is required by law in connection with the offering
or sale of the Securities, and if at such time any event shall have occurred as
a result of which the Prospectus would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or, if for any other reason it shall be necessary
-13-
<PAGE> 14
during such same period to amend or supplement the Prospectus in order to
comply with the Act, to notify you and to prepare and furnish without charge to
each Underwriter and to any dealer in the Securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a supplement
to the Prospectus which will correct such statement or omission or effect such
compliance and in case any Underwriter is required to deliver a Prospectus in
connection with sales of any Securities at any time nine months or more after
the effective date of the Registration Statement, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To cause the Trust to make generally available to holders of the
Securities, in accordance with Rule 158 under the Act or otherwise, as soon as
practicable, but in any event not later than forty-five days after the end of
the fourth full fiscal quarter (ninety days in the case of the last fiscal
quarter in any fiscal year) following the fiscal quarter ending after the
effective date of the Registration Statement, an earning statement of the Trust
(which need not be audited)
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<PAGE> 15
complying with Section 11(a) of the Act and covering a period of at least
twelve consecutive months beginning after the effective date of such
Registration Statement;
(e) To pay or cause to be paid all expenses incident to the performance of
its obligations hereunder, including the cost of all qualifications of the
Securities under state securities laws (including reasonable fees of counsel to
the Underwriters in connection with such qualifications and in connection with
legal investment surveys) and the cost of printing this Agreement and any blue
sky and legal investment memoranda.
Greenwood agrees with each of the Underwriters during the period beginning
from the date of the Terms Agreement and continuing to and including the
earlier of (i) the termination of trading restrictions on the Securities, of
which termination you agree to give Greenwood prompt notice confirmed in
writing, and (ii) the Time of Delivery, not to offer, sell, contract to sell or
otherwise dispose of any securities of Greenwood or any other affiliate thereof
or any other trust for which Greenwood or any other affiliate thereof is
depositor, which represent participation interests in Discover Card receivables,
without
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<PAGE> 16
your prior written consent, which consent shall not be unreasonably withheld.
6. The obligations of the several Underwriters hereunder shall be subject,
in their discretion, to the condition that all representations and warranties
and other statements of Greenwood herein are, at and as of the Time of
Delivery, true and correct, the condition that Greenwood shall have performed
all of its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) All actions required to be taken and all filings required to be made
by Greenwood under the Act prior to the Time of Delivery for the Securities
shall have been duly taken or made; and prior to the applicable Time of
Delivery, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Commission's satisfaction.
(b) All corporate proceedings and related matters in connection with the
organization of Greenwood, the validity of the Pooling and Servicing Agreement
and the registration,
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<PAGE> 17
authorization, issue, sale and delivery of the Securities shall have been
satisfactory to counsel to the Underwriters, and such counsel shall have been
furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subdivision (b).
(c) Counsel to Greenwood (which for purposes of the opinions described in
clauses (i)-(iii) and the opinions as to the due authorization, execution and
delivery of the Pooling and Servicing Agreement and the due authorization,
execution, issuance and delivery of the Securities in clause (iv) may be
in-house counsel to Greenwood) shall have furnished to you their written
opinion, dated the Time of Delivery, in form and substance satisfactory to you
in your reasonable judgment, to the effect that:
(i) Greenwood is validly existing as a banking corporation in good
standing under the laws of the State of Delaware;
(ii) This Agreement and the Terms Agreement have been duly authorized,
executed and delivered on the part of Greenwood;
(iii) The compliance by Greenwood with all of the provisions of this
Agreement, the Terms Agreement and the Pooling
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<PAGE> 18
and Servicing Agreement will not conflict with or result in any breach which
would constitute a material default under, or, except to the extent
contemplated in the Pooling and Servicing Agreement, result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or
assets of Greenwood or NOVUS, material to Greenwood and NOVUS (whether or not
consolidated) considered as a whole, pursuant to the terms of, any indenture,
loan agreement or other agreement or instrument for borrowed money known to
such counsel to which Greenwood or NOVUS is a party or by which Greenwood or
NOVUS may be bound or to which any of the property or assets of Greenwood or
NOVUS, material to Greenwood and NOVUS (whether or not consolidated) considered
as a whole, is subject, nor will such action result in any material violation
of the provisions of the Certificate of Incorporation or the By-Laws of
Greenwood, or to the best knowledge of such counsel, any statute or any order,
rule or regulation applicable to Greenwood of any court or any Federal, State
or other regulatory authority or other governmental body having jurisdiction
over Greenwood other than the Act, the Exchange Act, the Trust Indenture Act
and the Investment Company Act and the rules and regulations under each of such
acts and other than the securities laws of the various
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<PAGE> 19
states or other jurisdictions which are applicable to the issue and sale of the
Securities and other state laws relating to the perfection of security
interests; and, to the best knowledge of such counsel, no consent, approval,
authorization or other order of, or filing with, any court or any such
regulatory authority or other governmental body is required for the issue and
sale of the Securities except as may be required under the Act, the Exchange
Act, the Trust Indenture Act and the Investment Company Act and securities laws
of the various states or other jurisdictions which are applicable to the issue
and sale of the Securities and except for the filing of any financing or
continuation statement required to perfect or continue the Trust's interest in
the Receivables;
(iv) The Pooling and Servicing Agreement has been duly authorized,
executed and delivered on the part of Greenwood and as to Greenwood is a valid
and binding instrument enforceable in accordance with its terms except as the
foregoing may be limited by insolvency, bankruptcy, reorganization, moratorium
or other laws relating to or affecting the enforcement of creditors' rights or
by general equity principles; the Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act; the Trust is not
required to be registered under
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<PAGE> 20
the Investment Company Act; and the Securities have been duly authorized and
(assuming their due authentication by the Trustee) have been duly executed,
issued and delivered and constitute valid and binding obligations of the Trust
in accordance with their terms, entitled to the benefits of the Pooling and
Servicing Agreement, except as the foregoing may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general equity principles; and
(v) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by Greenwood prior to the Time of
Delivery (other than financial, statistical and accounting data therein as to
which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and regulations
thereunder.
In rendering such opinion, counsel may rely to the extent they deem
appropriate upon certificates of officers or other executives of Greenwood and
their affiliates and of public officials as to factual matters and upon
opinions of other counsel. Such counsel shall also state that nothing has come
to their attention which has caused them to believe that the
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<PAGE> 21
Registration Statement as of its effective date or the Prospectus as of the
date thereof and as of the applicable Time of Delivery (other than financial,
statistical and accounting data therein, as to which such counsel need express
no belief) contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.
(d) At the Time of Delivery, Deloitte & Touche LLP shall have furnished to
you a letter or letters, dated the respective date of delivery thereof, in form
and substance satisfactory to you;
(e) (i) Greenwood and its affiliates (whether or not consolidated)
considered as a whole, shall not have sustained, since the date of the latest
audited financial statement previously delivered to you, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree and (ii) since the date of the Terms
Agreement there shall not have been any material change in the capital stock
accounts or long-term debt of Greenwood or any material adverse change in the
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<PAGE> 22
general affairs, financial position, shareholders' equity or results of
operations of Greenwood and its affiliates (whether or not consolidated)
considered as a whole, the effect of which in any such case described in clause
(i) or (ii), in your judgment renders it inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(f) Subsequent to the date of the Terms Agreement none of (i) the United
States shall have become engaged in the outbreak or escalation of hostilities
involving the United States or there has been a declaration by the United
States of a national emergency or a declaration of war, (ii) a banking
moratorium shall have been declared by either Federal or New York State
authorities, or (iii) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established by such Exchange, any of which events, in your judgment, renders it
inadvisable to proceed with the public offering or the delivery of the
Securities;
(g) At or prior to the Time of Delivery, the Certificates shall be
assigned the ratings by Moody's Investors Service, Inc. ("Moody's") and by
Standard & Poor's Ratings Group,
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<PAGE> 23
a division of The McGraw-Hill Companies Inc. ("Standard & Poor's") set forth in
the Terms Agreement;
(h) Greenwood shall have furnished or caused to be furnished to you at the
Time of Delivery certificates satisfactory to you as to the accuracy at and as
of such Time of Delivery of the representations and warranties of Greenwood
herein and as to the performance by Greenwood of all its obligations hereunder
to be performed at or prior to the Time of Delivery and Greenwood shall have
also furnished you similar certificates satisfactory to you as to the matters
set forth in subdivision (a) of this Section 6.
(i) The Underwriters shall be entitled to rely on the opinions of an
outside counsel acceptable to the Underwriters as special counsel to Greenwood
as delivered to Moody's and Standard & Poor's in connection with the rating of
the Securities.
7. (a) Greenwood will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or
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<PAGE> 24
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereto furnished by Greenwood, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or (in the case of the Registration Statement or the
Prospectus, or any amendment or supplement thereto) necessary to make the
statements therein not misleading or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim; provided, however, that Greenwood shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to Greenwood
by any Underwriter through you expressly for use therein; and provided,
further, that Greenwood shall not be liable to any Underwriter or any
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<PAGE> 25
person controlling such Underwriter under the indemnity agreement in this
subdivision (a) with respect to the Preliminary Prospectus or the Prospectus,
as the case may be, to the extent that any such loss, claim, damage or
liability of such Underwriter or controlling person results solely from the
fact that such Underwriter sold Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Prospectus or of the Prospectus as then amended or supplemented if
Greenwood had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold harmless Greenwood against
any losses, claims, damages or liabilities to which Greenwood may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or (in the case of the Registration Statement or the Prospectus,
or any amendment or supplement
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<PAGE> 26
thereto) necessary to make the statements therein not misleading or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any such amendment or supplement in reliance
upon and in conformity with written information furnished to Greenwood by such
Underwriter through you expressly for use therein; and will reimburse Greenwood
for any legal or other expenses reasonably incurred by Greenwood in connection
with investigating or defending any such action or claim.
(c) Within a reasonable period after receipt by an indemnified party under
subdivision (a) or (b) above of notice of the commencement of any action with
respect to which indemnification is sought under such subdivision or
contribution may be sought under subdivision (d) below, such indemnified party
shall notify the indemnifying party in writing of the commencement thereof. In
case any such action shall be brought against any indemnified party, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
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<PAGE> 27
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under subdivision (a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by Greenwood on the one
hand and the Underwriters on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of Greenwood on
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<PAGE> 28
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by Greenwood on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by Greenwood bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the
cover page of the Prospectus Supplement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by Greenwood on the one
hand and the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission of Greenwood on the one hand and the Underwriters,
directly or through you, on the other hand. With respect to any Underwriter,
such relative fault shall also be determined by reference to the extent (if
any) to which such losses, claims, damages or liabilities (or actions in
respect thereof) with
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<PAGE> 29
respect to any Preliminary Prospectus result from the fact that such
Underwriter sold the Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
Prospectus or of the Prospectus as then amended or supplemented if Greenwood
had previously furnished copies thereof to such Underwriter. Greenwood and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subdivision (d) were determined by per capita allocation among
the indemnifying parties (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subdivision
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subdivision (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subdivision (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
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<PAGE> 30
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this subdivision (d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of Greenwood under this Section 7 shall be in addition
to any liability which Greenwood may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 7 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of Greenwood and to each person, if
any, who controls Greenwood within the meaning of the Act.
8. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to
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<PAGE> 31
purchase hereunder and under the Terms Agreement, you may in your discretion
arrange for yourselves or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Securities, then Greenwood shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify Greenwood that you have so arranged for the purchase of
such Securities, or Greenwood notifies you that it has so arranged for the
purchase of such Securities, you or Greenwood shall have the right to postpone
the Time of Delivery for such Securities for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and Greenwood agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
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<PAGE> 32
such person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and Greenwood as
provided in subdivision (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then Greenwood shall have the
right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and
under the Terms Agreement and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the principal amount of
the Securities which such Underwriter agreed to purchase hereunder and under
the Terms Agreement) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and Greenwood as
provided in subdivision (a) above, the aggregate principal amount of Securities
which remains
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<PAGE> 33
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, as referred to in subdivision (b) above, or if Greenwood shall not
exercise the right described in subdivision (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or
Underwriters, then the Terms Agreement relating to the Securities shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or Greenwood, except for the expenses to be borne by Greenwood as
provided in Section 5(e) hereof and the indemnity and contribution agreements
in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
9. The respective indemnities, agreements, representations, warranties and
other statements of Greenwood and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or Greenwood
or any officer or director or controlling person of Greenwood, and shall
survive delivery of and payment for the Securities. Anything herein to the
contrary
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<PAGE> 34
notwithstanding, the indemnity agreement of Greenwood in subdivisions (a) and
(e) of Section 7 hereof, the representations and warranties in subdivisions (b)
and (c) of Section 1 hereof and any representation or warranty as to the
accuracy of the Registration Statement or the Prospectus as amended or
supplemented contained in any certificate furnished by Greenwood pursuant to
subdivision (i) of Section 6 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by Greenwood of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Act, shall not extend to the extent of any interest therein
of an Underwriter or a controlling person of an Underwriter if a director,
officer or controlling person of Greenwood when the Registration Statement
becomes effective or a person who, with his consent, is named in the
Registration Statement as being about to become a director of Greenwood, is a
controlling person of such Underwriter, except in each case to the extent that
an interest of such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as expressed in the Act.
Unless in the opinion of counsel for Greenwood the matter has been settled by
controlling precedent, Greenwood will, if a claim for such indemnification is
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asserted, submit to a court of appropriate jurisdiction the question whether
such interest is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
10. If the Terms Agreement shall be terminated pursuant to Section 8
hereof, Greenwood shall not then be under any liability to any Underwriter with
respect to the Securities subject to such Terms Agreement except as provided in
Section 5(e) and Section 7 hereof; but, if for any other reason the Securities
are not delivered by or on behalf of Greenwood as provided herein, Greenwood
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but Greenwood shall not then be
under any further liability to any Underwriter with respect to the Securities
except as provided in Section 5(e) and Section 7 hereof.
11. In all dealings hereunder, you shall act on behalf of each of the
Underwriters and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or
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<PAGE> 36
agreement on behalf of any Underwriter made or given by you, or by Morgan
Stanley & Co. Incorporated on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or sent by
registered mail to you jointly in care of Morgan Stanley & Co. Incorporated,
1585 Broadway, New York, New York 10036, Attention: Asset Finance Group and if
to Greenwood shall be sufficient in all respects if delivered or sent by
registered mail to Greenwood at 12 Read's Way, New Castle, Delaware 19720,
Attention: President.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, Greenwood and, to the extent provided in Section 7 and
Section 9 hereof, the officers and directors of Greenwood and each person who
controls Greenwood or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
13. Time shall be of the essence of this Agreement.
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<PAGE> 37
14. This Agreement shall be construed in accordance with the laws of the
State of New York. "Business day" as used herein shall mean any day when the
Commission's office in Washington, D.C. is normally open for business.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one
and the same instrument.
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<PAGE> 38
If the foregoing is in accordance with your understanding, please sign
and return two counterparts hereof and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and
Greenwood.
Very truly yours,
GREENWOOD TRUST COMPANY
By:___________________________
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By:_____________________________
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<PAGE> 39
DISCOVER CARD MASTER TRUST I
CREDIT CARD PASS-THROUGH CERTIFICATES
TERMS AGREEMENT
Dated: __________ __, 199_
To: Greenwood Trust Company, as Seller under the Pooling and Servicing
Agreement, as amended, dated as of October 1, 1993.
Re: Underwriting Agreement dated ___________ __, 199_
Title: Discover Card Master Trust I, Series 199_-_, Credit Card Pass-Through
Certificates, Class A and Class B.
Initial Principal Amount of Certificates: $____________
Series and Class Designation Schedule: Discover Card Master Trust I, Series
199_-_ $_____________ [Floating Rate] [ %] Class A Credit Card Pass-Through
Certificates
Discover Card Master Trust I, Series 199_-_ $____________ [Floating Rate] [__%]
Class B Credit Card Pass-Through Certificates
Series Cut-Off Date: __________ __, 199_
Certificate Rating: Moody's Investors Standard & Poor's
Service, Inc. Ratings Services
Class A Aaa AAA
Class B A2 A
Aggregate outstanding balance of Principal Receivables as of _________ __,
199_: $_________________.
Date of Series Supplement: ____________ __, 199_.
Certificate Rate: Class A: _____% per annum; and Class B: _____% per annum
<PAGE> 40
Terms of Sale: The purchase price for the Certificates to the Underwriters
will be __________% of the aggregate principal amount of the Class A
Certificates and _________% of the aggregate principal amount of the Class B
Certificates as of _______ __, 199_. The Underwriters will offer the
Certificates to the public at a price equal to __________% of the aggregate
principal amount of the Class A Certificates and ___________% of the aggregate
principal amount of the Class B Certificates.
Time of Delivery: 9:00 A.M., Chicago, Illinois Time, on ________ __, 199_, or
at such other time as may be agreed upon in writing.
-2-
<PAGE> 41
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 199_-_ Certificates. This Terms Agreement may
be amended only by written agreement of the parties hereto.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
As Representative of the
Underwriters named in
Schedule I hereto
By:______________________________
Accepted:
GREENWOOD TRUST COMPANY
By:_______________________
-3-
<PAGE> 1
EXHIBIT 4.1
CONFORMED COPY
__________________________________________________
GREENWOOD TRUST COMPANY
MASTER SERVICER, SERVICER AND SELLER
AND
CONTINENTAL BANK, NATIONAL ASSOCIATION
TRUSTEE
ON BEHALF OF THE CERTIFICATEHOLDERS
POOLING AND SERVICING AGREEMENT
DATED AS OF OCTOBER 1, 1993
________________________
DISCOVER CARD MASTER TRUST I
__________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS
PAGE
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<S> <C> <C>
SECTION 1.01 Definitions.................................................................. 1
SECTION 1.02 Other Definitional Provisions................................................ 15
ARTICLE II
CONVEYANCE OF RECEIVABLES; ISSUANCE OF INVESTOR CERTIFICATES
SECTION 2.01 Conveyance of Receivables.................................................... 16
SECTION 2.02 Authentication of Certificates............................................... 16
SECTION 2.03 Acceptance by the Trustee.................................................... 16
SECTION 2.04 Representations and Warranties of Greenwood.................................. 17
SECTION 2.05 Trust Portfolio Repurchase Obligations of the Sellers........................ 18
SECTION 2.06 Series Repurchase Obligations of the Sellers................................. 20
SECTION 2.07 Repurchase Obligations of the Sellers Relating to Receivables................ 21
SECTION 2.08 Intention of Parties......................................................... 22
SECTION 2.09 Covenants of the Sellers..................................................... 22
SECTION 2.10 Addition of Accounts......................................................... 23
SECTION 2.11 Removal of Accounts.......................................................... 27
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01 Acceptance of Appointment and Other Matters Relating to the Master Servicer.. 28
SECTION 3.02 Acceptance of Appointment and Other Matters Relating to Servicers............ 29
SECTION 3.03 Servicing Compensation....................................................... 30
SECTION 3.04 Representations and Warranties of Greenwood, as Master Servicer and Servicer. 31
SECTION 3.05 Representations and Warranties of Other Servicers............................ 32
SECTION 3.06 Reports and Records for the Trustee.......................................... 32
SECTION 3.07 Master Servicer's and Servicers' Annual Certificates......................... 33
SECTION 3.08 Independent Public Accountants' Annual Servicing Report...................... 33
SECTION 3.09 Tax Treatment................................................................ 34
SECTION 3.10 Notices by the Master Servicer and the Servicers............................. 34
ARTICLE IV
RIGHTS OF INVESTOR CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01 Rights of Investor Certificateholders......................................... 34
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 4.02 Establishment and Administration of Investor Accounts......................... 35
SECTION 4.03 Collections and Allocations................................................... 35
SECTION 4.04 Sellers' or Master Servicer's Failure to Make a Deposit or Payment............ 38
SECTION 4.05 Adjustments For Miscellaneous Debits and Credits and Fraudulent Charges....... 38
SECTION 4.06 Reallocation of Series Among Groups........................................... 39
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
INVESTOR CERTIFICATEHOLDERS
SECTION 5.01 Distributions................................................................. 39
SECTION 5.02 Investor Certificateholders' Monthly Statement................................ 39
SECTION 5.03 Certificateholders' Annual Tax Statement...................................... 39
ARTICLE VI
THE INVESTOR CERTIFICATES
SECTION 6.01 The Certificates.............................................................. 40
SECTION 6.02 Book-Entry Certificates....................................................... 41
SECTION 6.03 Authentication of Certificates................................................ 42
SECTION 6.04 Registration of Transfer and Exchange of Certificates......................... 43
SECTION 6.05 Mutilated, Destroyed, Lost or Stolen Certificates............................. 45
SECTION 6.06 Issuances of New Series....................................................... 45
SECTION 6.07 Persons Deemed Owners......................................................... 46
SECTION 6.08 Appointment and Duties of Paying Agent........................................ 47
SECTION 6.09 Access to List of Names and Addresses of Holders of Registered Certificate's.. 47
SECTION 6.10 Authenticating Agent.......................................................... 48
SECTION 6.11 Global Certificate; Exchange Date............................................. 49
SECTION 6.12 Meetings of Certificateholders................................................ 50
SECTION 6.13 Special Provisions for Certain Series......................................... 52
SECTION 6.14 Exchange of Investor Certificates for Seller Interest......................... 52
ARTICLE VII
OTHER MATTERS RELATING TO THE SELLERS
SECTION 7.01 Liability of Sellers.......................................................... 53
SECTION 7.02 Merger or Consolidation of, or Assumption of the Obligations of,
Greenwood, or any Additional Seller......................................... 53
SECTION 7.03 Limitation on Liability of Certain Persons.................................... 53
SECTION 7.04 Seller Indemnification of the Trust and the Trustee........................... 54
SECTION 7.05 Transfer or Conveyance of Seller Certificate.................................. 54
SECTION 7.06 Corporate Actions............................................................. 55
SECTION 7.07 Bankruptcy Against Any Additional Seller...................................... 55
</TABLE>
ii
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<TABLE>
<CAPTION>
ARTICLE VIII
OTHER MATTERS RELATING TO THE MASTER
SERVICER AND THE SERVICERS
PAGE
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<S> <C> <C>
SECTION 8.01 Master Servicer and Servicer Liability........................................ 55
SECTION 8.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Master Servicer or any Servicer........................................... 56
SECTION 8.03 Limitation on Liability of the Master Servicer and each Servicer and Others... 56
SECTION 8.04 Master Servicer or Servicer Resignation....................................... 56
SECTION 8.05 Access to Certain Documentation and Information Regarding the Receivables..... 57
SECTION 8.06 Delegation of Duties.......................................................... 57
SECTION 8.07 Examination of Records........................................................ 57
SECTION 8.08 Seller or Master Servicer to File Reports Pursuant to Securities Exchange Act. 57
ARTICLE IX
AMORTIZATION AND CERTAIN OTHER EVENTS
SECTION 9.01 Amortization Events........................................................... 58
ARTICLE X
MASTER SERVICER AND SERVICER TERMINATION EVENTS
SECTION 10.01 Master Servicer Termination Events............................................ 60
SECTION 10.02 Servicer Termination Events................................................... 61
SECTION 10.03 Trustee to Act; Appointment of Successor Master Servicer
and/or Successor Servicer................................................... 63
SECTION 10.04 Notification to Investor Certificateholders................................... 65
SECTION 10.05 Waiver of Past Breaches....................................................... 65
ARTICLE XI
THE TRUSTEE
SECTION 11.01 Duties of Trustee............................................................. 65
SECTION 11.02 Certain Matters Affecting the Trustee......................................... 67
SECTION 11.03 Trustee Not Liable for Recitals in Certificates............................... 68
SECTION 11.04 Trustee May Own Investor Certificates......................................... 68
SECTION 11.05 The Master Servicer to Pay Trustee's Fees and Expenses........................ 69
SECTION 11.06 Master Servicer and Servicer Indemnification of Trustee....................... 69
SECTION 11.07 Eligibility Requirements for Trustee.......................................... 69
SECTION 11.08 Resignation or Removal of Trustee............................................. 70
SECTION 11.09 Successor Trustee............................................................. 70
SECTION 11.10 Merger or Consolidation of Trustee............................................ 71
SECTION 11.11 Appointment of Co-Trustee or Separate Trustee................................. 71
</TABLE>
iii
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
SECTION 11.12 Tax Returns................................................................. 72
SECTION 11.13 Trustee May Enforce Claims Without Possession of Certificates............... 72
SECTION 11.14 Suits for Enforcement....................................................... 72
SECTION 11.15 Rights of Investor Certificateholders to Direct Trustee..................... 73
SECTION 11.16 Representations and Warranties of Trustee................................... 73
SECTION 11.17 Maintenance of Office or Agency............................................. 73
SECTION 11.18 Requests for Agreement...................................................... 74
ARTICLE XII
TERMINATION
SECTION 12.01 Termination of Sellers' Obligations; Termination of Trust................... 74
SECTION 12.02 Final Distribution with Respect to any Series............................... 74
SECTION 12.03 Sellers' Termination Rights................................................. 76
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Amendment................................................................... 76
SECTION 13.02 Protection of Right, Title and Interest to Trust............................ 78
SECTION 13.03 Limitations on Rights of Investor Certificateholders........................ 78
SECTION 13.04 Governing Law............................................................... 79
SECTION 13.05 Notices..................................................................... 79
SECTION 13.06 Rule 144A Information....................................................... 80
SECTION 13.07 Severability of Provisions.................................................. 80
SECTION 13.08 Assignment.................................................................. 80
SECTION 13.09 Investor Certificates Nonassessable and Fully Paid.......................... 80
SECTION 13.10 Further Assurances.......................................................... 81
SECTION 13.11 No Waiver; Cumulative Remedies.............................................. 81
SECTION 13.12 Counterparts................................................................ 81
SECTION 13.13 Third-Party Beneficiaries................................................... 81
SECTION 13.14 Actions by Investor Certificateholders...................................... 81
SECTION 13.15 Merger and Integration...................................................... 81
SECTION 13.16 Headings.................................................................... 81
</TABLE>
iv
<PAGE> 6
EXHIBITS
<TABLE>
<S> <C>
Exhibit A - Form of Assignment
Exhibit B - DISCOVER Service Mark
Exhibit C - Form of Reassignment
Exhibit D - Form of Seller Certificate
Exhibit E - Form of Initial Report
Exhibit F - Form of Master Servicer's Annual Certificate
Exhibit G - Form of Servicer's Annual Certificate
Exhibit H-1 - Form of CEDEL or Euroclear Statement
Exhibit H-2 - Form of Certificate with respect to U.S. Institutional Investors
Exhibit H-3 - Form of Certificate regarding Beneficial Ownership
Exhibit I - Form of Opinion of Counsel
</TABLE>
SCHEDULE
Schedule 1 - List of Accounts (Omitted)
v
<PAGE> 7
Tax previously paid to the Tennessee Secretary of State with the filing of
UCC-1 financing statement number 972-033947 on 5/6/97.
<PAGE> 8
POOLING AND SERVICING AGREEMENT, dated as of October 1, 1993 by and between
GREENWOOD TRUST COMPANY, a Delaware banking corporation, as Master Servicer,
Servicer and Seller and CONTINENTAL BANK, NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the United States
of America, as Trustee.
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:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. Unless, with respect to a particular Series, a
word or phrase is otherwise defined in the applicable Series Supplement, the
following words and phrases shall have the following meanings:
"Account" shall mean (i) a Discover Card account established pursuant to a
Credit Agreement between Greenwood and any Person, receivables under which are
transferred to the Trust pursuant to this Agreement or pursuant to an Assignment
of Additional Accounts (a "Greenwood Discover Card Account"); (ii) a Discover
Card account established pursuant to a Credit Agreement between an Additional
Seller and any Person, receivables under which are transferred to the Trust
pursuant to an Assignment of Additional Accounts; and (iii) a credit account
(which is not a Discover Card account) established pursuant to a Credit
Agreement between Greenwood or an Additional Seller and any Person, receivables
under which are transferred to the Trust pursuant to an Assignment of Additional
Accounts. No Account shall be a Charged-Off Account as of (i) the Account
Selection Date, with respect to Accounts the Receivables of which are
transferred to the Trust on the Initial Closing Date or (ii) the date an Account
is selected for addition to the Trust, with respect to Accounts the Receivables
under which are transferred to the Trust pursuant to an Assignment of Additional
Accounts. Each Account shall be identified by account number on Schedule 1
hereto. The definition of an Account shall include a surviving credit account
(a "Surviving Account") in the event that (i) an Account or another credit
account is combined with an Account pursuant to the Credit Guidelines for such
Account (an "Account Combination") and (ii) the Surviving Account of such
Account Combination was an Account prior to such combination. The term "Account"
shall be deemed to refer to an Additional Account only from and after the
Addition Date with respect thereto. The definition of Account shall not include
any Account removed from the Trust pursuant to Section 2.11 hereof after it has
been reassigned to the Holder of the Seller Certificate.
"Account Combination" shall have the meaning set forth in the definition of
"Account."
"Account Selection Date" shall mean, for any Account transferred to the
Trust on the Initial Closing Date, January 22, 1993, July 14, 1993 or September
22, 1993.
"Addition Date" shall mean each date as of which Additional Accounts are
included as Accounts or Participation Interests are conveyed to the Trust
pursuant to Section 2.10.
"Additional Account Cut-Off Date" shall mean, for any Additional Account,
the date specified as such in the Assignment of Additional Accounts for such
Additional Account.
<PAGE> 9
"Additional Accounts" shall have the meaning set forth in Section 2.10.
"Additional Funds" shall have the meaning set forth in Section 4.03(e).
The amount of Additional Funds shall initially be zero.
"Additional Seller" shall mean an affiliate of Greenwood that is included
in the same "affiliated group" as Greenwood for United States federal tax
purposes and that transfers Receivables in Additional Accounts to the Trust
pursuant to Section 2.10(d).
"Adjustment" shall have the meaning set forth in Section 4.05.
"Aggregate Initial Investor Interest" shall mean at any time the sum of
the Series Initial Investor Interests of all Series of Investor Certificates
then issued and outstanding.
"Aggregate Invested Amount" shall mean at any time the sum of the Series
Invested Amounts of all Series of Investor Certificates then issued and
outstanding.
"Aggregate Investor Interest" shall mean at any time the sum of the Series
Investor Interests of all Series of Investor Certificates then issued and
outstanding.
"Aggregate Investor Percentage" shall mean at any time the sum of the
applicable Series Percentages of all Series of Investor Certificates then
issued and outstanding.
"Agreement" shall mean this Pooling and Servicing Agreement and all
amendments hereof and Series Supplements hereto, including, with respect to any
Series or Class, the related Series Supplement.
"Amortization Event" with respect to any Series shall mean any
Amortization Event specified in Section 9.01 hereof or in the applicable Series
Supplement.
"Applicable State" shall mean, with respect to any Receivable, the state
in which the chief executive office of the Seller with respect to such
Receivable is located and with respect to any Seller, the state in which the
chief executive office of such Seller is located.
"Applicants" shall have the meaning set forth in Section 6.09.
"Assignment" shall mean any and all documents necessary to assign an
interest in Additional Accounts, including an assignment substantially in the
form of Exhibit A hereto.
"Authorized Newspaper" shall mean any newspaper or newspapers of general
circulation in London, England printed in the English language (and, with
respect to any Class or Series, if and so long as the Investor Certificates of
such Class or Series are listed on the Luxembourg Stock Exchange and such
exchange shall so require, in Luxembourg, printed in any language satisfying
the requirements of such exchange) and customarily published on each business
day at such place, whether or not published on Saturdays, Sundays or holidays.
2
<PAGE> 10
"Bearer Certificate" shall have the meaning specified in Section 6.01.
"Book-Entry Certificates" with respect to any Series shall mean
certificates evidencing a beneficial interest in the Investor Certificates of
such Series, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 6.02; provided, that after
the occurrence of a condition whereupon book-entry registration and transfer
are no longer permitted and Definitive Certificates are to be issued to the
Certificate Owners of such Series, such Certificates shall no longer be
"Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in (v) New York, New York, (w) the County of New
Castle, Delaware, (x) the city in which the Corporate Trust Office is located,
(y) the city in which the principal executive offices of any Additional Seller
is located or (z) the city in which the principal banking or executive offices
of any Credit Enhancement Provider is located are authorized or obligated by
law or executive order to be closed.
"CEDEL" shall mean Centrale de Livraison de Valeurs Mobilieres S.A.
"Certificate" shall mean the Seller Certificate or any Investor
Certificate of any Series of Investor Certificates then issued and outstanding.
"Certificate Interest" with respect to any Class of any Series shall have
the meaning specified in the applicable Series Supplement.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency).
"Certificate Principal" with respect to any Class of any Series shall have
the meaning specified in the applicable Series Supplement.
"Certificate Rate" with respect to any Class of any Series shall have the
meaning specified in the applicable Series Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.04, providing for the registration of Registered Certificates and
transfers and exchanges thereof.
"Certificateholder" or "Holder" shall mean an Investor Certificateholder
or a Person in whose name a Certificate is registered in the Certificate
Register.
"Charged-Off Account" shall mean each Account with respect to which the
Servicer has charged-off the Receivables in such Account as uncollectible.
"Charged-Off Amount" shall mean, with respect to any Trust Distribution
Date, the aggregate amount of Receivables in Accounts that become Charged-Off
Accounts in the related Due Period, less (i) the cumulative, uncollected amount
previously billed by the Servicers to Accounts that became Charged-Off Accounts
during the related Due Period with respect to finance charges, cash
3
<PAGE> 11
advance fees, annual membership fees and late payment charges and (ii) the full
amount of any such Receivables that have been repurchased under Section
2.07(b).
"Class" shall mean with respect to any Series, all the Investor
Certificates of such Series that are designated by the same letter of the
alphabet, pursuant to the Series Supplement for such Series. Any Series of
Investor Certificates may contain one or more Classes of Investor Certificates,
as set forth in the relevant Series Supplement.
"Class Finance Charge Collections" with respect to any Class of any Series
shall have the meaning specified in the applicable Series Supplement.
"Class Invested Amount" with respect to any Class of any Series shall have
the meaning specified in the applicable Series Supplement.
"Class Investor Charged-Off Amount" with respect to any Class of any
Series shall have the meaning specified in the applicable Series Supplement.
"Class Investor Interest" with respect to any Class of any Series shall
have the meaning specified in the applicable Series Supplement.
"Class Percentage" with respect to any Class of any Series shall have the
meaning specified in the applicable Series Supplement.
"Class Principal Collections" with respect to any Class of any Series
shall have the meaning specified in the applicable Series Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Collections" shall mean (i) all payments by or on behalf of an Obligor
received by a Servicer in respect of Receivables in the form of cash, checks,
wire transfers or other forms of payment in accordance with the relevant Credit
Agreement in effect from time to time and (ii) amounts treated as Collections
pursuant to Sections 2.07(b), 2.09(c), 3.01(c) and 4.05(b) of this Agreement
and any amounts treated as Collections pursuant to the terms of any Series
Supplement. A Collection processed on an Account in excess of the aggregate
amount of Receivables in such Account shall be credited to such Account or
refunded to the Obligor by the Servicer in accordance with its normal practice
pursuant to Section 4.05(a). A Collection shall be deemed to have been
received at the end of the day on the Date of Processing of such Collection.
"Collections Account" shall have the meaning specified in Section 4.02(a).
"Common Depositary" with respect to any Series, if applicable, shall mean
the Person specified in the applicable Series Supplement, in its capacity as
common depositary for the respective accounts of CEDEL and Euroclear.
4
<PAGE> 12
"Corporate Trust Office" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 231 South LaSalle Street, Chicago, Illinois 60697 Attention:
Corporate Trust Department.
"Coupon" shall have the meaning set forth in Section 6.01.
"Credit Agreement" shall mean, with respect to an Account, the contract
governing such Account.
"Credit Enhancement" with respect to any Series shall have the meaning
specified in the applicable Series Supplement.
"Credit Enhancement Provider" with respect to any Series shall have the
meaning specified in the applicable Series Supplement.
"Credit Guidelines" shall mean, with respect to any Account, the policies
and procedures relating to the operation of such Account and similar accounts
administered by the Servicer of such Account, including, without limitation,
the written policies and procedures and the exercise of judgment by employees
of the Servicer with respect to such accounts in accordance with such
Servicer's normal practice for determining the creditworthiness of customers
holding such accounts, the extension of credit to customers, and relating to
the maintenance of such accounts and the collection of receivables with respect
to such accounts, as such policies and procedures may be amended from time to
time by the Servicer of such accounts, as such policies and procedures may be
implemented by any Person to whom such Servicer has delegated any of its duties
pursuant to Section 8.06.
"Cut-Off Date" shall mean October 1, 1993.
"Date of Processing" with respect to any transaction shall mean the date
on which such transaction is first recorded on the cardmember master file of
the accounts maintained by or on behalf of the relevant Servicer (without
regard to the effective date of such recordation).
"Deficit Accumulation Amount" with respect to any Series, if applicable,
shall have the meaning specified in the Series Supplement for such Series.
"Deficit Liquidation Amount" with respect to any Series, if applicable,
shall have the meaning specified in the Series Supplement for such Series.
"Definitive Certificates" shall have the meaning specified in Section
6.02.
"Definitive Euro-Certificates" shall have the meaning specified in Section
6.11.
"Depository Agreement" with respect to any Series, if applicable, shall
mean the agreement, dated the Series Closing Date for such Series, among the
Sellers, the Trustee and the initial Clearing Agency providing for the delivery
and transfer of Book-Entry Certificates for such Series.
5
<PAGE> 13
"Discover Card," when used to modify the term "account," shall mean that
access to such account is afforded by, among other means, a card bearing on its
face the DISCOVER service mark (a copy of which is attached hereto as Exhibit B
or, if the use of such service mark is suspended and another service mark is
substituted therefor, a card bearing such substitute service mark).
"Distribution Date" with respect to any Series shall have the meaning
specified in the Series Supplement for such Series.
"Due Period" shall mean, with respect to any Trust Distribution Date or
Distribution Date, the calendar month next preceding the calendar month in
which such Trust Distribution Date or Distribution Date occurs.
"Eligible Receivable" shall mean each Receivable:
(a) which is payable in United States dollars;
(b) which was created in compliance, in all material respects, with
all Requirements of Law applicable to the Seller and the Servicer with
respect to such Receivable, and pursuant to a Credit Agreement that
complies, in all material respects, with all Requirements of Law
applicable to such Seller and Servicer;
(c) as to which, if such Receivable was created before the Initial
Closing Date or the relevant Addition Date, as applicable, (i) at the
time of the creation of such Receivable, the Seller with respect to such
Receivable had good and marketable title thereto free and clear of all
Liens arising under or through such Seller, and (ii) at the time of the
conveyance of such Receivable to the Trust, such Seller had, or the Trust
will have, good and marketable title thereto free and clear of all Liens
arising under or through such Seller;
(d) as to which, if such Receivable was created on or after the
Initial Closing Date or the relevant Addition Date, as applicable, at the
time of the creation of such Receivable, the Trust will have good and
marketable title thereto free and clear of all Liens arising under or
through the Seller with respect to such Receivable; and
(e) which constitutes an "account" or "general intangible" under and
as defined in Article 9 of the UCC as then in effect in the Applicable
State with respect to such Receivable.
"Euroclear" shall mean Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.
"Exchange Date," with respect to any Series or Class, the Investor
Certificates of which are represented upon initial issuance by a Global
Certificate, shall mean the first day following the expiration of 40 days after
the later of (i) the Series Closing Date or (ii) the first date on which such
Investor Certificates are offered to persons other than any underwriter, dealer
or other person who participates, pursuant to a contractual arrangement, in the
distribution of such Investor Certificates, as determined by the Manager.
"FDIC" shall mean the Federal Deposit Insurance Corporation acting through
either the Savings Association Insurance Fund or the Bank Insurance Fund.
6
<PAGE> 14
"Final Trust Termination Date" shall mean October 16, 2014.
"Finance Charge Collections" with respect to any Due Period shall mean the
sum of (a) the lesser of the aggregate amount of Finance Charge Receivables for
the preceding Due Period or Collections actually received in such Due Period
and (b) all Recovered Amounts received during such Due Period.
"Finance Charge Receivables" with respect to any Account for any Due
Period shall mean the net amount billed by the Servicer during such Due Period
as finance charges on such Account and cash advance fees, annual membership
fees and late payment charges billed during such Due Period to such Account,
less, in the event that such Account becomes a Charged-Off Account during such
Due Period, the cumulative, uncollected amount previously billed by the
Servicer to such Account as finance charges, cash advance fees, annual
membership fees, if any, and late payment charges; provided, however, that in
the event any Account that is included in the Accounts as of the Cut-Off Date
is not selected before the beginning of the Due Period preceding the Due Period
related to the first Trust Distribution Date, the Servicer may utilize a
reasonable method of estimation to determine the amount of the Finance Charge
Receivables with respect to such Account for the period beginning on the first
day of such preceding Due Period and ending on the date on which such Account
is selected.
"Fixed Principal Allocation Event" with respect to any Series shall have
the meaning specified in the Series Supplement for such Series.
"Fractional Undivided Interest" shall mean the fractional undivided
interest in the Trust evidenced by an Investor Certificate expressed as a
portion of the Aggregate Invested Amount.
"Global Certificate" shall have the meaning specified in Section 6.11.
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof.
"Greenwood" shall mean Greenwood Trust Company and its successors and
assigns.
"Greenwood Discover Card Account" shall have the meaning set forth in the
definition of "Account."
"Group" shall mean, collectively, at any time, the one or more Series of
Investor Certificates designated as part of the same Group at such time,
whether by the Series Supplements establishing such Series or pursuant to
Section 4.06. The Trustee shall designate a related Group Collections Account
pursuant to Section 4.02(a) for each Group so established.
"Group Collections Account" shall have the meaning specified in Section
4.02(a).
"Holder of the Seller Certificate" shall mean, at any specified time, the
holder or holders of the Seller Certificate, each of which, if there is more
than one such holder, shall be a party to the Seller Certificate Ownership
Agreement, with the respective interests granted to each of such
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<PAGE> 15
parties pursuant to the Seller Certificate Ownership Agreement. The initial
Holder of the Seller Certificate shall be Greenwood.
"Ineligible Receivable" shall have the meaning specified in Section
2.07(b).
"Initial Closing Date" shall mean October 27, 1993.
"Interest Payment Date" with respect to any Series shall mean the dates
specified as such in the applicable Series Supplement.
"Internal Revenue Code" shall mean the United States Internal Revenue Code
of 1986, as amended from time to time.
"Investor Accounts" shall mean the Collections Account, the Group
Collections Accounts and any other segregated trust accounts specified as
Investor Accounts in any Series Supplement.
"Investor Certificateholder" shall mean the Person in whose name a
Registered Certificate is registered in the Certificate Register or the bearer
of any Bearer Certificate (or a Global Certificate, as the case may be) or
Coupon.
"Investor Certificates" shall mean any one of the certificates (including
Bearer Certificates, Registered Certificates or any Global Certificate, as
applicable) executed by Greenwood on behalf of the Holder of the Seller
Certificate and authenticated by or on behalf of the Trustee, other than the
Seller Certificate.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
encumbrance, lien or other security agreement, including, without limitation,
any conditional sale or other title retention agreement, and any financing
lease having substantially the same economic effect as any of the foregoing.
"Manager" shall mean the lead manager, manager or co-manager or Person
performing a similar function with respect to an offering of Definitive
Euro-Certificates.
"Master Servicer" shall mean initially Greenwood and thereafter any Person
appointed as the successor Master Servicer as herein provided.
"Master Servicer Termination Event" shall have the meaning set forth in
Section 10.01.
"Master Servicing Agreement" shall mean, if applicable, the agreement
entered into by Greenwood, as Master Servicer and Servicer, and any additional
or successor Servicer or Servicers pursuant to Section 3.02(d) hereof, as such
agreement may be amended or supplemented from time to time.
"Minimum Principal Receivables Balance" shall mean, on any date of
determination, an amount equal to the sum of the Series Minimum Principal
Receivables Balances for each Series then outstanding.
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"Monthly Servicing Fee" shall have the meaning set forth in Section 3.03.
"Moody's" shall mean Moody's Investors Service Inc.
"New Issuance" shall have the meaning set forth in Section 6.06.
"Obligations" shall have the meaning specified in Section 2.08.
"Obligor" shall mean with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any
guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by a Vice
President (or an officer holding an office with equivalent or more senior
responsibilities or, in the case of each Master Servicer or any Servicer, a
Servicing Officer and, in the case of each Seller, any executive of such Seller
designated in writing by a Vice President of such Seller for this purpose) of
any Seller, the Master Servicer or any Servicer or any Successor Master
Servicer or Successor Servicer, as the case may be, and delivered to the
Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
counsel for or an employee of any Seller or Greenwood or any of their
affiliates.
"Participation Interests" shall have the meaning specified in Section
2.10(a).
"Paying Agent" shall mean any paying agent appointed pursuant to Section
6.08 and shall initially be the Corporate Trust Office of the Trustee.
"Payment Date" shall mean any Interest Payment Date, any Principal Payment
Date, if applicable, and any Special Payment Date.
"Permitted Investments" shall mean
(a) negotiable instruments or securities represented by instruments in
bearer or registered form which evidence: (i) 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; (ii) time deposits in, or
bankers' acceptances issued by, any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (or any domestic branch of a foreign bank) and subject to supervision
and examination by federal or state banking or depository institution
authorities; provided, however, that at the time of the Trust's investment or
contractual commitment to invest therein, the short-term deposits or commercial
paper or, in the absence of a rating on the short-term deposits or commercial
paper of such depository institution or trust company, the long-term unsecured
debt obligations of such depository institution or trust company shall have the
Highest Rating; (iii) commercial paper or other short-term obligations having,
at the time of the Trust's investment or contractual commitment to invest
therein, the Highest Rating; or (iv) investments in money market funds having
the Highest Rating;
(b) demand deposits in the name of the Trust or the Trustee in any
depository institution or trust company referred to in clause (a) (ii) above;
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(c) securities not represented by an instrument, which are registered in
the name of the Trustee upon books maintained for that purpose by or on behalf
of the issuer thereof and identified on books maintained for that purpose by
the Trustee as held for the benefit of the Trust or the Certificateholders, and
consisting of shares of an open end diversified investment company which is
registered under the Investment Company Act of 1940, as amended, and which (i)
invests its assets exclusively in obligations of or guaranteed by the United
States of America or any instrumentality or agency thereof having in each
instance a final maturity date of less than one year from their date of
purchase or other Permitted Investments, (ii) seeks to maintain a constant net
asset value per share and (iii) has aggregate net assets of not less than
$100,000,000 on the date of purchase of such shares, and which will not result
in a reduction or withdrawal of the rating of any Class of any Series then
outstanding as confirmed in writing by the Rating Agencies;
(d) a guaranteed investment contract (guaranteed as to timely payment),
the terms of which meet the criteria of the Rating Agencies and with an entity
whose credit standards meet the criteria of the Rating Agencies necessary to
preserve the rating of each Class of each Series then outstanding; and
(e) repurchase agreements transacted with either
(i) an entity subject to the United States federal bankruptcy
code, provided that (A) the term of the repurchase agreement is
consistent with the requirements set forth in Section 4.02(c) with
regard to the maturity of Permitted Investments or is due on demand,
(B) the Trustee or a third party acting solely as agent for the Trustee
has possession of the collateral, (C) as evidenced by a certificate of
a Servicing Officer of the Master Servicer delivered to the Trustee,
the Trustee on behalf of the Trust has a perfected first priority
security interest in the collateral, (D) the market value of the
collateral is maintained at the requisite collateral percentage of the
obligation in accordance with the standards of the Rating Agencies, (E)
the failure to maintain the requisite collateral level will obligate
the Trustee to liquidate the collateral immediately, (F) the securities
subject to the repurchase agreement are either obligations of, or fully
guaranteed as to principal and interest by, the United States of
America or an agency thereof, certificates of deposit or bankers
acceptances and (G) as evidenced by a certificate of a Servicing
Officer of the Master Servicer delivered to the Trustee, the securities
subject to the repurchase agreement are free and clear of any third
party lien or claim; or
(ii) a financial institution insured by the FDIC, or any
broker-dealer with "retail customers" that is under the jurisdiction of
the Securities Investors Protection Corp. ("SIPC"), provided that (A)
the market value of the collateral is maintained at the requisite
collateral percentage of the obligation in accordance with the
standards of the Rating Agencies, (B) the Trustee or a third party
acting solely as agent for the Trustee has possession of the
collateral, (C) as evidenced by a certificate of a Servicing Officer of
the Master Servicer delivered to the Trustee, the Trustee on behalf of
the Trust has a perfected first priority security interest in the
collateral, (D) as evidenced by a certificate of a Servicing Officer of
the Master Servicer delivered to the Trustee, the collateral is free
and clear of third party liens; and, in the case of an SIPC broker, was
not acquired pursuant to a repurchase or reverse repurchase agreement
and
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(E) failure to maintain the requisite collateral percentage will
obligate the Trustee to liquidate the collateral;
provided, however, that at the time of the Trust's investment or contractual
commitment to invest in any such repurchase agreement, the short-term deposits
or commercial paper rating or, in the absence of a rating on the short-term
deposits or commercial paper of such entity or institution, the long-term
unsecured debt obligations of such entity or institution shall have a credit
rating not lower than the Highest Rating. Permitted Investments shall include,
without limitation, securities of Greenwood or any of its affiliates which
otherwise qualify as a Permitted Investment under clause (a), (b), (c), (d) or
(e) above. For purposes of this definition of Permitted Investments, "Highest
Rating" shall mean, with respect to Moody's, P-1 or Aaa, and, with respect to
Standard & Poor's, A-1 + or AAA, or with respect to either Standard & Poor's or
Moody's, any rating category which will not cause a reduction in or withdrawal
of the rating of any Class of any Series then outstanding, as confirmed in
writing by the applicable Rating Agency.
"Person" shall mean an individual, a partnership or a Corporation. The
term "Corporation" for the purposes of the preceding sentence only shall mean a
corporation, joint stock company, business trust or other similar association.
"Principal Collections" shall mean, with respect to any Due Period, all
Collections other than Finance Charge Collections.
"Principal Payment Date" with respect to any Series shall mean, if
applicable, the dates specified as such in the applicable Series Supplement.
"Principal Receivable" shall mean each Receivable other than Finance
Charge Receivables. Any Principal Receivables that the relevant Seller is
unable to convey to the Trust as provided in Section 2.09(c) shall not be
included in calculating the aggregate amount of Principal Receivables.
"Qualified Institution" shall mean a depository institution organized
under the laws of the United States of America or any one of the states thereof
which at all times has a short-term certificate of deposit rating of A-1/P-1 or
better by both Rating Agencies and whose deposits are insured by the FDIC.
"Rating Agency" shall mean Moody's or Standard & Poor's, and "Rating
Agencies" shall mean Moody's and Standard & Poor's.
"Reassignment" shall mean any and all documents necessary to reassign an
interest in specified Accounts, including a reassignment substantially in the
form of Exhibit C hereto.
"Receivable" shall mean any amount owing by the Obligor under an Account
from time to time, including, without limitation, amounts owing for the payment
of goods and services, cash advances, finance charges and other charges, if
any. A Receivable shall be deemed to have been created at the end of the day on
the Date of Processing of such Receivable. A Receivable shall not include any
amount owing under a Charged-Off Account or an Account in which the Receivables
have been repurchased pursuant to Section 2.07(b).
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"Receivable Repurchase Event" shall have the meaning specified in Section
2.07(a).
"Record Date" for any Distribution Date shall mean the last day of the
preceding calendar month.
"Recovered Amounts" shall mean all amounts received with respect to
Receivables that have previously been charged-off as uncollectible.
"Registered Certificateholder" shall mean the Holder of a Registered
Certificate.
"Registered Certificate" shall have the meaning specified in Section 6.01.
"Regulatory Requirements" shall have the meaning set forth in Section
7.05.
"Removal Date" shall mean the date on which certain designated Removed
Accounts will be reassigned by the Trustee to Greenwood on behalf of the Holder
of the Seller Certificate.
"Removal Notice Date" shall mean a date on or prior to the fifth Business
Day prior to a Removal Date.
"Removed Accounts" shall have the meaning set forth in Section 2.11.
"Required Daily Deposit" with respect to each Servicer with respect to any
day for any Series then outstanding shall have the meaning set forth in the
applicable Series Supplement.
"Requirements of Law" for any Person shall mean the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any requirement of any law, rule or regulation or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System);
provided, however, that any such requirement shall not be deemed a Requirement
of Law if the enforcement of such requirement would not have a material adverse
effect upon the collectibility of the Receivables taken as a whole.
"Responsible Officer" shall mean the Chairman or any Vice Chairman of the
Board of Directors or Trustees of the Trustee, the Chairman or Vice Chairman of
the Executive or Standing Committee of the Board of Directors or Trustees of
the Trustee, the President, any Executive Vice President, Senior Vice
President, Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant or Deputy
Cashier, any Trust Officer or Assistant Trust Officer, the Controller and any
Assistant Controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Schedule 1" shall mean the computer file, hard copy or microfiche list
delivered to the Trustee pursuant to Section 2.01(b) hereof (as such computer
file, hard copy or microfiche list may be amended from time to time) which
shall contain a true and complete list of all Accounts conveyed to the Trust
identified by account number and shall identify the originator of each Account
and the
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amount of Finance Charge Receivables and Principal Receivables in such Account
as of the Cut-Off Date or the Additional Account Cut-Off Date, as applicable.
"Seller," when used with reference to specific Receivables, shall mean the
Person or Persons conveying such Receivables to the Trust.
"Seller Certificate" shall mean the certificate executed by Greenwood on
behalf of the Holder of the Seller Certificate and authenticated by the
Trustee, substantially in the form of Exhibit D hereto.
"Seller Certificate Ownership Agreement" shall mean, if applicable, the
agreement entered into by Greenwood, as Seller, and any Additional Seller, as
such agreement may be amended or supplemented from time to time.
"Seller Interest" shall mean, with respect to any Trust Distribution Date
or Distribution Date, the aggregate amount of Principal Receivables in the
Trust at the end of the related Due Period minus the Aggregate Investor
Interest at the end of such day; provided, however, that, except for purposes
of determining whether Greenwood on behalf of the Holder of the Seller
Certificate shall make a deposit pursuant to the fourth sentence of Section
2.07(b), the Seller Interest shall in no event be less than zero.
"Seller Percentage" shall mean, on any date of determination, with respect
to any specified category, an amount equal to 100% of such category minus the
applicable Aggregate Investor Percentage.
"Seller Servicing Fee" shall have the meaning set forth in Section 3.03.
"Sellers" shall mean Greenwood and any Additional Sellers.
"Series" shall mean any of the Series of Investor Certificates created
pursuant to Section 6.06.
"Series Closing Date" with respect to any Series shall mean the day the
Investor Certificates of such Series are initially issued, including the day
the Global Certificate is issued, if applicable.
"Series Cut-Off Date" with respect to any Series of Investor Certificates
shall mean the last day of the Due Period occurring in the month specified in
the applicable Series Supplement.
"Series Distribution Account" with respect to any Series shall have the
meaning specified in the applicable Series Supplement.
"Series Finance Charge Collections" with respect to any Series for any
specified period of time shall have the meaning set forth in the applicable
Series Supplement.
"Series Initial Investor Interest" with respect to any Series shall mean
the amount specified as the Series Initial Investor Interest in the applicable
Series Supplement.
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"Series Interest Funding Account" with respect to any Series shall have
the meaning specified in the applicable Series Supplement.
"Series Invested Amount" with respect to any Series, with respect to any
Distribution Date with respect to such Series, shall have the meaning set forth
in the applicable Series Supplement.
"Series Investor Interest" with respect to any Series, with respect to any
Distribution Date with respect to such Series, shall have the meaning set forth
in the applicable Series Supplement.
"Series Minimum Principal Receivables Balance" with respect to any Series
shall have the meaning specified in the applicable Series Supplement.
"Series Percentage" with respect to any Series shall have the meaning
specified in the applicable Series Supplement.
"Series Principal Collections" with respect to any Series for any
specified period of time shall have the meaning set forth in the applicable
Series Supplement.
"Series Principal Funding Account" with respect to any Series shall have
the meaning specified in the applicable Series Supplement.
"Series Repurchase Event" shall have the meaning specified in Section
2.06(a).
"Series Supplement" shall mean a supplement to this Agreement complying
with the terms of Section 6.06.
"Series Termination Date" with respect to any Series shall mean the date
specified as such in the applicable Series Supplement.
"Series Termination Proceeds" shall have the meaning set forth in Section
12.02(c).
"Servicer" shall mean initially (i) with respect to Greenwood Discover
Card Accounts, Greenwood and (ii) with respect to any other Accounts, the
Person who is designated as the Servicer with respect to such Accounts in the
Assignment of Additional Accounts relating to such Accounts; and thereafter any
Person appointed as a Successor Servicer to any such Servicer, as provided in
Section 10.03. The term "Servicer" when used in this Agreement or any Series
Supplement to refer to actions to be taken with respect to any Accounts, shall
refer to one or more Servicers, as applicable, and to any particular Servicer
only with respect to Accounts serviced by such Servicer.
"Servicer Termination Event" shall have the meaning specified in Section
10.02.
"Servicing Officer" shall mean any employee of the Master Servicer or of
any Servicer, as applicable, involved in, or responsible for, the
administration and servicing of the Receivables whose name appears on a list of
servicing officers furnished to the Trustee by the Master Servicer and each
Servicer, as such lists may from time to time be amended.
"Special Payment Date" with respect to any Series shall have the meaning
specified in the applicable Series Supplement.
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"Standard & Poor's" shall mean Standard & Poor's Corporation.
"Successor Master Servicer" shall have the meaning specified in Section
10.03.
"Successor Servicer" shall have the meaning specified in Section 10.03.
"Termination Notice" shall have the meaning specified in Sections 10.01
and 10.02.
"Transfer Agent" shall have the meaning specified in Section 6.04(a) and
initially shall be the Trustee and any co-transfer agent chosen by the Transfer
Agent and acceptable to the Trustee and the Sellers, including, if and so long
as any Class of any Series is listed on the Luxembourg Stock Exchange and such
exchange shall so require, a co-transfer agent in Luxembourg. Any reference in
this Agreement or a Series Supplement to the Transfer Agent shall include any
co-transfer agent unless the context requires otherwise.
"Trust" shall mean the trust created by this Agreement, the corpus of
which shall consist of the Receivables existing as of the Cut-Off Date or
thereafter created and all monies due or to become due with respect thereto,
all proceeds (as defined in Section 9-306 of the UCC as in effect in the
Applicable State with respect to each such Receivable) of the Receivables, such
funds as from time to time are deposited in the Investor Accounts and the
benefits of any Credit Enhancement with respect to any Series then outstanding.
"Trustee" shall mean the institution executing this Agreement as Trustee,
or its successor in interest, or any successor trustee appointed as herein
provided.
"Trust Distribution Date" shall mean November 10, 1993 and the tenth day
of each calendar month thereafter, or, if such tenth day is not a Business Day,
the next succeeding Business Day.
"Trust Portfolio Repurchase Event" shall have the meaning specified in
Section 2.05(a).
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
SECTION 1.02 Other Definitional Provisions
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.01, and accounting terms partly defined in Section 1.01 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles in effect on the date hereof. To the extent
that the definitions of accounting terms herein are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained herein shall control.
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ARTICLE II
CONVEYANCE OF RECEIVABLES; ISSUANCE OF INVESTOR CERTIFICATES
SECTION 2.01 Conveyance of Receivables.
(a) Effective on the Initial Closing Date, Greenwood hereby sells,
transfers, assigns and otherwise conveys to the Trust for the benefit of the
Certificateholders, without recourse, all right, title and interest of
Greenwood in and to the Receivables existing as of the Cut-Off Date and
thereafter created (which become the property of the Trust on a daily basis as
they arise), all monies due or to become due with respect thereto, and all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables. Greenwood intends such sale, transfer,
assignment and conveyance to be an absolute transfer of such property.
However, because, and only because, of the possibility that such sale,
transfer, assignment or conveyance may be deemed to be a pledge of such
property, Greenwood does hereby grant to the Trust, for the benefit of the
Certificateholders, a security interest in such property.
(b) In connection with such sale, Greenwood further agrees, at its own
expense, on or prior to the Initial Closing Date to (i) indicate in its
computer files that Receivables created in connection with the Accounts have
been sold to the Trust pursuant to this Agreement for the benefit of the
Certificateholders by identifying the Accounts in its computer files with a
"41" or "42" in field captioned "CHD-Portfolio - No. ___" and (ii) deliver
Schedule 1 to the Trustee.
SECTION 2.02 Authentication of Certificates. The Trustee shall, as of
the Initial Closing Date, cause a Seller Certificate evidencing the entire
ownership of the Trust to be duly authenticated and delivered to or upon the
order of Greenwood pursuant to Section 6.03; provided, however, that such Seller
Certificate need not evidence the entire ownership of the Trust if one or more
Series is issued as of the Initial Closing Date.
SECTION 2.03 Acceptance by the Trustee.
(a) The Trustee hereby undertakes to perform its obligations as set forth
herein. Subject to Section 4.03(b), the Trustee on behalf of the Trust, with
the consent of Greenwood on behalf of the Holder of the Seller Certificate,
hereby agrees to allow (without further action by the Trustee) each Servicer to
use all Collections in respect of the Receivables serviced by such Servicer
until the funds are transferred to, or at the direction of, the Master Servicer
for disbursement in accordance with the terms of Article IV hereof. The
Trustee hereby acknowledges its acceptance on behalf of the Trust of all right,
title and interest previously held by Greenwood in and to the Receivables
conveyed by Greenwood pursuant to Section 2.01 hereof existing as of the
Cut-Off Date and thereafter created, and declares that it shall maintain such
right, title and interest, upon the trust herein set forth, for the benefit of
all Certificateholders. The Trustee further acknowledges that, on or prior to
the Initial Closing Date, Greenwood delivered to the Trustee Schedule 1 hereto
pursuant to Section 2.01 hereof.
(b) The obligation of the Trustee to accept the Receivables shall be
subject to the condition that Greenwood record and file, at its own expense,
one or more financing statements, with respect to the Receivables then existing
and thereafter created, for the sale of "accounts" as defined in Section 9-106
of the UCC as in effect in the State of Delaware meeting the requirements of
Delaware
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law in such manner as is necessary to perfect the sale and assignment of such
Receivables to the Trust, and to deliver a file-stamped copy of such financing
statement or other evidence of such filing to the Trustee on or prior to the
Initial Closing Date.
(c) The Trustee hereby agrees not to disclose to any Person any
information contained in Schedule 1 or delivered to the Trustee by any Seller
pursuant to Sections 2.01 or 2.10, except (i) as is required in connection with
the performance of its duties hereunder; (ii) as is required in connection with
enforcing the rights of the Certificateholders or to a Successor Master
Servicer appointed pursuant to Section 10.03 or (iii) as is required to comply
with Requirements of Law or any court order applicable to the Trustee. The
Trustee shall, through the Sellers as provided in Section 2.09(a), make all
necessary disclosures in order to comply with the UCC as in effect in any
Applicable State. The Trustee agrees to protect and maintain the security and
confidentiality of such information, and, in connection therewith, shall allow
the Sellers to inspect the Trustee's security and confidentiality arrangements
from time to time during normal business hours. The Trustee shall provide the
Sellers with written notice five days prior to any disclosure pursuant to this
Section 2.03(c), unless such disclosure is required sooner by law or by any
court order applicable to the Trustee.
(d) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Certificateholders or the
Trust other than as contemplated in this Agreement.
SECTION 2.04 Representations and Warranties of Greenwood. Greenwood
hereby represents and warrants to the Trust, in the case of subsections (a),
(b), (f) and (g) below, as of the date of this Agreement and the Initial Closing
Date, and, in the case of subsections (c), (d) and (e) below, as of the dates
specified therein, that:
(a) Organization, etc. Greenwood has been duly incorporated and is
validly existing as a Delaware banking corporation, and has full corporate
power and authority to execute and deliver this Agreement and each Assignment
of Receivables to be delivered by it and to perform the terms and provisions
hereof and thereof.
(b) Due Authorization. The execution, delivery and performance of this
Agreement by Greenwood have been, and each Assignment of Receivables to be
delivered by it at the time of delivery will 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,
and 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 that 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 Agreement and any
Assignment of Receivables delivered by Greenwood on such Initial Closing Date
are the valid, binding and enforceable obligations 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.
(c) Accuracy of Information. All information heretofore furnished by
Greenwood in writing to the Trustee for purposes of or in connection with this
Agreement or any transaction
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contemplated hereby is, and all such information hereafter furnished by
Greenwood in writing to the Trustee will be, true and accurate in every material
respect or based on reasonable estimates on the date as of which such
information is stated or certified.
(d) Transfer of Receivables. As of the Initial Closing Date, each
Receivable conveyed by Greenwood to the Trust then existing on such date is an
Eligible Receivable, except that Greenwood makes no representation or warranty
with respect to the existence of any statutory or other non-consensual Liens
with respect to the Receivables. In the case of Additional Accounts, as of any
applicable Addition Date, each Receivable conveyed by Greenwood to the Trust
then existing under such Additional Accounts is an Eligible Receivable, except
that Greenwood makes no representation or warranty with respect to the
existence of any statutory or other non-consensual Liens with respect to the
Receivables.
(e) Creation of Receivables. As of the date of the creation of any
Receivable transferred to the Trust by Greenwood subsequent to the Cut-Off
Date, such Receivable is an Eligible Receivable, except that Greenwood makes no
representation or warranty with respect to the existence of any statutory or
other non-consensual Liens with respect to the Receivables.
(f) Selection of Accounts. The Accounts were not selected on any basis
indicative of creditworthiness, except that charged-off accounts were not
included.
(g) Adverse Proceedings. To the best knowledge of Greenwood, there are no
proceedings or investigations pending against Greenwood before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over Greenwood (A) asserting the invalidity
of this Agreement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (C) seeking any determination or
ruling which in Greenwood's judgment would materially and adversely affect the
performance by Greenwood of its obligations under this Agreement or the
validity or enforceability of this Agreement.
The representations and warranties set forth in this Section 2.04 shall
survive the transfer and assignment to the Trust of the Receivables transferred
to the Trust by Greenwood.
SECTION 2.05 Trust Portfolio Repurchase Obligations of the Sellers.
(a) Trust Portfolio Repurchase Events. If as of the Initial Closing Date
or, with respect to any Additional Accounts, as of any date on which there is
an assignment of such Additional Accounts:
(i) this Agreement or the appropriate Assignment, as the case may
be, does not constitute a legal, valid and binding obligation of each
Seller enforceable against each Seller in accordance with its terms,
except as such enforceability may be limited by insolvency, bankruptcy,
reorganization or other laws relating to the enforcement of creditors'
rights or by general equity principles; or
(ii) this Agreement or the appropriate Assignment, as the case may
be, constitutes a sale of the Receivables existing as of the Cut-Off Date
(or the Additional Account Cut-Off Date, as applicable) and thereafter
created, and of all proceeds (as defined in the UCC as in effect in the
Applicable State with respect to such Receivables) of such Receivables,
but does
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not constitute a valid transfer and assignment to the Trust of all right,
title and interest of each Seller in and to such property, or such
property will not be owned by the Trust free and clear of any Lien of any
Person claiming through or under any Seller; or
(iii) this Agreement or the appropriate Assignment, as the case may
be, does not constitute a sale of such property, and it further does not
constitute a grant of a security interest (as defined in the UCC as in
effect in the Applicable State with respect to any Receivable) in such
property to the Trust which is enforceable with respect to existing
Receivables and the proceeds thereof upon execution and delivery of the
Agreement or Assignment, and which will be enforceable with respect to
such Receivables hereafter or thereafter created and the proceeds thereof
upon such creation; or
(iv) this Agreement or the appropriate Assignment, as the case may
be, constitutes the grant of a security interest to the Trust in such
property, upon the filing of the financing statements described in
Section 2.03(b) or the appropriate Assignment, as the case may be, and in
the case of the Receivables hereafter created and proceeds thereof, upon
such creation, and the Trust does not then have a first priority
perfected security interest in such property except for statutory or
other non-consensual liens; or
(v) any Seller or a Person claiming through or under any Seller has
any claim to or interest in any of the Investor Accounts, other than (A)
the interest of the Certificateholders and (B) if the Agreement or
appropriate Assignment, as the case may be, constitutes the grant of a
security interest in such property, the interest of any Seller in such
property as a debtor for purposes of the UCC as in effect in the
Applicable State with respect to any Receivable; or
(vi) any of the representations and warranties set forth in Section
2.04(a), (b) or (c) (or, in the case of any Additional Sellers, the
corresponding representations and warranties of any such Additional
Seller contained in the applicable Assignment) are not true and correct
and such breach is not cured within 60 days of the earlier of (A) actual
knowledge of such breach by the relevant Seller or (B) receipt by such
Seller and the Master Servicer of written notice of such breach by either
the Trustee or the Holders of Investor Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Aggregate
Invested Amount (and to the Trustee if given by the Investor
Certificateholders)
then a Trust Portfolio Repurchase Event shall have occurred. The Trustee shall
have no duty to conduct any affirmative investigation for purposes of this
Section 2.05(a).
(b) Repurchase of Trust Portfolio. If at any time a Trust Portfolio
Repurchase Event shall have occurred and be continuing, either the Trustee or
the Holders of Investor Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Aggregate Invested Amount, by notice then
given in writing to the Sellers and the Master Servicer (and to the Trustee if
given by the Investor Certificateholders), may direct Greenwood on behalf of
the Holder of the Seller Certificate to purchase an amount of Principal
Receivables (as specified below) within 60 days of such notice, or within such
longer period as may be specified in such notice, and Greenwood on behalf of
the Holder of the Seller Certificate shall be obligated to purchase such
Receivables with respect to each Series then outstanding on or before the
Distribution Date with respect to each such Series occurring within such period
subject to the provisions of Section 2.08, on the terms and conditions set
forth below; provided, however, that no such purchase shall be required to be
made if, at any time during
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such period, such Trust Portfolio Repurchase Event shall not adversely affect in
any material respect the interests of the Investor Certificateholders as a
whole. In such case, (i) Greenwood on behalf of the Holder of the Seller
Certificate shall deposit into each Series Distribution Account for each Series
then outstanding on or before the Distribution Date with respect to such Series
an amount equal to the purchase price for such Series, as set forth in the next
sentence, and (ii) the Trustee shall, except in the case of a Trust Portfolio
Repurchase Event caused by an Assignment of Additional Accounts, pay the amount
on deposit in each Series Principal Funding Account with respect to Series
Principal Collections to the Series Distribution Account with respect to each
such Series on such Distribution Date, and the total amount deposited into the
Series Distribution Account pursuant to clauses (i) and (ii) shall be
distributed to the Investor Certificateholders pursuant to Section 12.02.
The purchase price with respect to each Series will be equal to (i) the
Series Investor Interest on the Distribution Date with respect to such Series
immediately preceding the date such deposit is made (after giving effect to any
distributions made on such Distribution Date) plus (ii) all accrued but unpaid
Certificate Interest on the outstanding amount of Investor Certificates of such
Series to be so purchased through the date set for such purchase; provided,
however, that if an assignment of Additional Accounts results in a Trust
Portfolio Repurchase Event, only the Receivables of such Additional Accounts
shall be repurchased at a price with respect to each Series equal to the product
of (i) the Series Percentage with respect to Principal Receivables for the next
following Distribution Date with respect to such Series and (ii) the amount of
Receivables attributable to the Additional Accounts, and such purchase price
shall be applied as Collections in respect of such Receivables in accordance
with each applicable Series Supplement and deposited in the Group Collections
Account relating to each Series. Payment of the purchase price and the amounts
on deposit in the Collections Account with respect to the preceding Due Period
shall be considered a prepayment in full of such Receivables. On each
Distribution Date on which such amount is scheduled to be deposited, the
Receivables to be so purchased and all the monies due or to become due with
respect thereto and all proceeds of such Receivables (including, if applicable,
all amounts on deposit in the Series Interest Funding Account for each Series)
shall be released to Greenwood on behalf of the Holder of the Seller
Certificate, and the Trustee shall execute and deliver such instruments of
transfer or assignment including, without limitation, any document necessary to
release the Trust's security interest in such Receivables and to release any
filing evidencing or perfecting such security interest, in each case without
recourse, representation or warranty (except for the warranty that since the
date of transfer by any Seller under this Agreement the Trustee has not sold,
transferred or encumbered any such Receivables or interest therein), as shall be
reasonably requested by Greenwood on behalf of the Holder of the Seller
Certificate to vest in Greenwood on behalf of the Holder of the Seller
Certificate, or its designee or assignee, all right, title and interest of the
Trust in and to such Receivables, all monies due or to become due with respect
thereto and all proceeds of such Receivables.
SECTION 2.06 Series Repurchase Obligations of the Sellers.
(a) Series Repurchase Event. If, as of the Series Closing Date with
respect to any Series, the Series Supplement for such Series does not constitute
a legal, valid and binding obligation of each Seller enforceable against each
Seller in accordance with its terms, except as such enforceability may be
limited by insolvency, bankruptcy, reorganization or other laws relating to the
enforcement of creditors' rights or by general equity principles, then a Series
Repurchase Event shall have occurred. The Trustee shall have no duty to conduct
any affirmative investigation for purposes of this Section 2.06(a).
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(b) Repurchase of Series. If at any time a Series Repurchase Event shall
have occurred and be continuing, either the Trustee or the Holders of Investor
Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Series Invested Amount with respect to such Series, by notice
then given in writing to the Sellers and the Master Servicer (and to the
Trustee if given by the Investor Certificateholders of such Series), may direct
Greenwood on behalf of the Holder of the Seller Certificate to purchase the
Investor Certificates of such Series within 60 days of such notice, or within
such longer period as may be specified in such notice, and Greenwood on behalf
of the Holder of the Seller Certificate shall be obligated to purchase such
Investor Certificates on a Distribution Date with respect to such Series
occurring within such period, subject to the provisions of Section 2.08, on the
terms and conditions set forth below; provided, however, that no such purchase
shall be required to be made if, at any time during such period, such Series
Repurchase Event shall not adversely affect in any material respect the
interests of the Investor Certificateholders of such Series as a whole. In
such case, on such Distribution Date, (i) Greenwood on behalf of the Holder of
the Seller Certificate shall deposit into the Series Distribution Account an
amount equal to the sum of (x) the Series Investor Interest on the Distribution
Date with respect to such Series immediately preceding the date such deposit is
made (after giving effect to any distributions made on such Distribution Date)
and (y) all accrued but unpaid Certificate Interest on the outstanding amount
of Investor Certificates to be so purchased through the date set for such
purchase, and (ii) the Trustee shall pay the amount on deposit in the Series
Principal Funding Account with respect to such Series to the Series
Distribution Account with respect to such Series, and the total amount
deposited into the Series Distribution Account pursuant to clauses (i) and (ii)
shall be distributed to the Investor Certificateholders of such Series pursuant
to Section 12.02.
SECTION 2.07 Repurchase Obligations of the Sellers Relating to
Receivables.
(a) Receivable Repurchase Events. In the event that each Receivable that
is transferred to the Trust is not, as of the time of such transfer, an
Eligible Receivable and such event has a material adverse effect on the
Certificateholders' interest in the Receivables as a whole and is not cured
within 60 days of the earlier of (i) actual knowledge of such event by the
relevant Seller or (ii) receipt by such Seller of written notice of any such
event given by the Trustee, then a Receivable Repurchase Event shall have
occurred. Upon receipt of actual knowledge of any such event, such Seller
shall deliver a written notice to such effect to the Rating Agencies and the
Trustee. The determination of materiality pursuant to this Section 2.07(a)
shall be made by an officer of the Master Servicer in his sole reasonable
judgment. The Trustee shall have no duty to conduct any affirmative
investigation as to the eligibility of any Receivable for purposes of this
Section 2.07(a).
(b) Purchase of Ineligible Receivables. If at any time a Receivable
Repurchase Event shall have occurred and be continuing, Greenwood on behalf of
the Holder of the Seller Certificate shall purchase all the Receivables in each
Account in which there is any Receivable as to which such event relates (an
"Ineligible Receivable"), subject to the provisions of Section 2.08, on the
terms and conditions set forth below. Greenwood on behalf of the Holder of the
Seller Certificate shall purchase all the Receivables in each Account with an
Ineligible Receivable on the Trust Distribution Date related to the then
current Due Period by directing the Master Servicer to deduct the amount of
such Receivables which are Principal Receivables from the aggregate amount of
Principal Receivables in the Trust. On and after the date of such repurchase,
Receivables so purchased shall not be included in the calculation of any Series
Percentage, the Seller Percentage or the Seller Interest. In the event that
such an exclusion of Receivables from the calculation of the Seller Interest
would cause such Seller Interest to be a negative number on the date of
purchase of such Receivables, Greenwood on behalf of
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the Holder of the Seller Certificate shall make a deposit in the Collections
Account in immediately available funds in an amount equal to the amount by which
the Seller Interest would be reduced below zero. Such deposit shall be
considered a payment in full of such Receivables and shall be applied as
Collections in respect of such Receivables in accordance with Section 4.03. Upon
each such purchase of Receivables by Greenwood on behalf of the Holder of the
Seller Certificate, the Trust shall automatically and without further action be
deemed to sell, transfer, assign and otherwise convey to Greenwood on behalf of
the Holder of the Seller Certificate without recourse, representation or
warranty (except for the warranty that since the date of transfer by any Seller
under this Agreement the Trustee has not sold, transferred or encumbered any
such Receivable or interest therein), all the right, title and interest of the
Trust in and to such Receivables, all monies due or to become due with respect
thereto, all proceeds thereof and all Receivables thereafter created in such
Account. The Trustee shall execute such documents and instruments of transfer
or assignment including, without limitation, any document necessary to release
the Trust's security interest in such Receivables and to release any filings
evidencing or perfecting such security interest and take such other actions as
shall reasonably be requested by Greenwood on behalf of the Holder of the Seller
Certificate to effect the conveyance of such Receivables pursuant to this
section. The obligation of Greenwood on behalf of the Holder of the Seller
Certificate to purchase any Ineligible Receivables, and to make the deposits, if
any, required to be made to the Collections Account as provided in this Section
2.07(b), shall constitute the sole remedy respecting the event giving rise to
such obligation available to the Certificateholders (or the Trustee on behalf of
the Certificateholders).
SECTION 2.08 Intention of Parties. In the event that the covenants and
obligations of Greenwood under Sections 2.05, 2.06 and 2.07, or the obligation
of Greenwood on behalf of the Holder of the Seller Certificate to deposit
certain late payment charges and cash advance fees with respect to the Accounts
into the Collections Account or to pay servicing fees to the Master Servicer
pursuant to Section 3.03 or the applicable provisions of any Series Supplements
(collectively, the "Obligations") are at any time the subject of concurrent
Obligations of one or more other parties to the Seller Certificate Ownership
Agreement, it is the intention of the parties to this Agreement that such
obligations of Greenwood shall be conditioned on Greenwood's ability to enforce
such concurrent Obligations against such other parties.
SECTION 2.09 Covenants of the Sellers. The Sellers hereby covenant that:
(a) Security Interests. Except for the conveyances hereunder, no Seller
will sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Receivable transferred to the
Trust by such Seller, whether existing as of the Cut-Off Date or thereafter
created, or any interest therein, and each Seller shall defend the right,
title, and interest of the Trust in, to and under such Receivables, whether now
existing or hereafter created, against all claims of third parties claiming
through or under such Seller. Each Seller shall, if so requested by the
Trustee, as agent for the Sellers, provide information to third parties (which
information may be provided by the Sellers directly or through the Trustee)
concerning the Accounts and the Receivables sufficient to comply with the UCC
as in effect in the Applicable State.
(b) Credit Agreements. Each Seller shall cause the respective Servicer,
as its agent, to service and administer the Accounts, the Receivables under
which have been transferred to the Trust by such Seller, and which are serviced
by such Servicer, in a particular state or similar jurisdiction in accordance
with policies identical to those used in servicing and administering other of
such Seller's credit card accounts in such jurisdiction. The terms and
provisions of a Credit
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Agreement may be changed in any respect (including, without limitation, the
calculation of the amount, or the timing, of charge-offs) only if such change is
made applicable to such Seller's entire portfolio of accounts of that general
type, obligors of which are resident in a particular affected state or similar
jurisdiction, and not only to such Accounts.
(c) Account Allocations. In the event that any Seller is unable for any
reason to transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of any governmental
agency having regulatory authority over any Seller or any court of competent
jurisdiction ordering that any Seller not convey any additional Principal
Receivables to the Trust) then, in any such event, such Seller agrees to
allocate and pay to the Trust, after the date of such inability, all Collections
with respect to Receivables that would have been Principal Receivables but for
the inability to transfer such Receivables (up to an aggregate amount equal to
the amount of Principal Receivables in the Trust on such date with respect to
Principal Receivables transferred to the Trust by such Seller); and such Seller
agrees to have such amounts applied as Collections in accordance with Section
4.03. If such Seller is unable pursuant to any Requirement of Law to allocate
payments on the Accounts as described above, such Seller agrees that it shall,
in any such event, allocate after such date payments on each Account with
respect to the principal balance of such Account first to the oldest principal
balance of such Account and to have such payments applied as Collections in
accordance with Section 4.03. The parties hereto agree that Finance Charge
Receivables, whenever created, accrued in respect of Principal Receivables that
have been conveyed to the Trust by any Seller shall continue to be a part of the
Trust notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust, and Collections with respect thereto shall continue to
be allocated and paid in accordance with Section 4.03.
(d) Receivables Not to be Evidenced by Promissory Notes. No Seller will
take any action to cause any Receivable to be evidenced by any instrument (as
defined in the UCC as in effect in the Applicable State with respect to such
Seller) except in connection with its enforcement or collection of an Account.
(e) Notice to Trustee. Promptly upon receipt of notice by any officer of
any Seller that any liens (other than those contemplated by this Agreement or
any Assignment) have been placed on the Receivables, such Seller shall notify
the Trustee in writing of such liens.
SECTION 2.10 Addition of Accounts.
(a) Required Additions. (i) In the event that the amount of Principal
Receivables in the Trust at the end of any Due Period is less than the Minimum
Principal Receivables Balance, Greenwood on behalf of the Holder of the Seller
Certificate shall designate, effective no later than the commencement of the
following Due Period, additional credit accounts ("Additional Accounts") to be
included as Accounts, which may be credit accounts originated by Greenwood or
affiliates of Greenwood, whether or not such accounts are Discover Card
accounts, in each case subject to the conditions set forth in Section 2.10(b),
(c) or (d), as applicable, in a sufficient amount such that, after giving effect
to such addition, the amount of Principal Receivables in the Trust is at least
equal to the Minimum Principal Receivables Balance.
(ii) In lieu of, or in addition to, designating Additional Accounts
pursuant to paragraph (i) above, Greenwood on behalf of the Holder of the
Seller Certificate may, subject to the applicable conditions set forth in
Section 2.10(e), convey to the Trust participations representing undivided
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interests in a pool of assets primarily consisting of receivables in revolving
credit card accounts and collections thereon ("Participation Interests"). The
addition of Participation Interests to the Trust pursuant to this Section 2.10
shall be effected by an amendment to this Agreement, dated the applicable
Addition Date, pursuant to Section 13.01(a).
(b) Discretionary Additions. Greenwood on behalf of the Holder of the
Seller Certificate may, in its sole discretion, designate from time to time
Additional Accounts to be included as Accounts, subject to the conditions set
forth in this Section 2.10(b). Such accounts shall be Greenwood Discover Card
accounts or any other type of revolving credit card account previously included
in the Trust, unless the initial Assignment of Additional Accounts with respect
to such other type of Account expressly provides that such type of Account shall
not be eligible for designation pursuant to this Section 2.10(b). Greenwood on
behalf of the Holder of the Seller Certificate may designate such Additional
Accounts pursuant to this Section 2.10(b) only if the following conditions are
satisfied:
(i) the Seller or Sellers with respect to such Additional Accounts
shall have delivered to the Trustee a written assignment (including an
acceptance by the Trustee on behalf of the Trust for the benefit of the
Certificateholders) in substantially the form of Exhibit A and a computer
file, hard copy or microfiche list containing a true and complete list of
all such Additional Accounts identified by account number, which computer
file, hard copy or microfiche list shall be deemed to be an amendment to
Schedule 1 hereto as of the date of such Assignment;
(ii) the Servicer with respect to such Additional Accounts shall
have delivered to Greenwood on behalf of the Holder of the Seller
Certificate and to the Trustee a certificate of a Servicing Officer
confirming that the Additional Accounts were not selected on the basis of
any selection criteria believed by such Servicer to be materially adverse
to the interests of the Holders of any Class of any Series then
outstanding or any Credit Enhancement Provider;
(iii) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered to the Trustee and the Rating Agencies an Opinion or
Opinions of Counsel concerning the perfection of the Trust's security
interest in the Receivables in such Additional Accounts, and concerning
insolvency and related matters with respect to such Receivables;
(iv) any limitations to the right of the Sellers to designate
Additional Accounts pursuant to this Section 2.10(b) provided to
Greenwood on behalf of the Holder of the Seller Certificate in writing by
the Rating Agencies shall have been complied with; and
(v) unless each Rating Agency otherwise consents, as of the last day
of any calendar year, the number of Accounts designated as Additional
Accounts pursuant to this Section 2.10(b) with respect to such calendar
year or the amount of Principal Receivables in such Accounts, as
applicable, as of the Addition Date with respect to each such Additional
Account, shall not exceed a number equal to 20% of the number of Accounts
or the amount of Principal Receivables in the Trust, as applicable, in
each case as of the first day of such calendar year, (or, in the case of
1993, as of the Initial Closing Date); and, as of the last day of any
three calendar month period, the number of Accounts designated as
Additional Accounts pursuant to this Section 2.10(b) with respect to such
three month period or the amount of Principal Receivables in such
Accounts, as applicable, as of the Addition Date with respect to
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each such Additional Account, shall not exceed a number equal to 15% of
the number of Accounts or the amount of Principal Receivables in the
Trust, as applicable, in each case as of the first day of such three month
period (or, in the case of the first three month period, as of the Initial
Closing Date).
Greenwood on behalf of the Holder of the Seller Certificate shall promptly
notify the Rating Agencies of the designation of any Additional Accounts
pursuant to this Section 2.10(b).
(c) Conditions to the Designation of Discover Card Accounts Originated by
Greenwood as Additional Accounts. In addition to discretionary designations of
Additional Accounts as described in Section 2.10(b), Greenwood on behalf of the
Holder of the Seller Certificate also shall be permitted to designate Discover
Card accounts originated by Greenwood as "Additional Accounts" if, on or prior
to the Addition Date, the following conditions are satisfied:
(i) the Seller or Sellers with respect to such Additional Accounts
shall have delivered to the Trustee a written assignment (including an
acceptance by the Trustee on behalf of the Trust for the benefit of the
Certificateholders) in substantially the form of Exhibit A and a computer
file, hard copy or microfiche list containing a true and complete list of
all such Additional Accounts identified by account number, which computer
file, hard copy or microfiche list shall be deemed to be an amendment to
Schedule 1 hereto as of the date of such Assignment;
(ii) the Servicer with respect to such Additional Accounts shall have
delivered a certificate of a Servicing Officer confirming that the
Additional Accounts were not selected on the basis of any selection
criteria believed by such Servicer to be materially adverse to the
interests of the Holders of any Class of any Series then outstanding or any
Credit Enhancement Provider;
(iii) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered to the Trustee an Opinion or Opinions of Counsel
concerning the perfection of the Trust's security interest in the
Receivables in such Additional Accounts, and concerning insolvency and
related matters with respect to such Receivables, that will not cause the
rating of any Class of any Series then outstanding to be withdrawn or
lowered by either Rating Agency; and
(iv) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered notice of such proposed assignment of Additional
Accounts to the Rating Agencies and Standard & Poor's (and, in the event
that the proposed assignment of Additional Accounts is not required
pursuant to Section 2.10(a), Moody's) shall have advised Greenwood on
behalf of the Holder of the Seller Certificate that such assignment of
Additional Accounts would not cause the rating of any Class of any Series
then outstanding to be lowered or withdrawn.
(d) Conditions to Designation of Additional Accounts, other than Discover
Card Accounts Originated by Greenwood. In addition to designations of
Additional Accounts as described in Sections 2.10(b) and 2.10(c), subject to the
conditions set forth below, Greenwood on behalf of the Holder of the Seller
Certificate shall be permitted to designate as Additional Accounts (x) credit
accounts originated by Greenwood which are not Discover Card accounts and/or (y)
credit accounts originated
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by an affiliate of Greenwood (an "Additional Seller"), which may or may not be
Discover Card accounts. Greenwood on behalf of the Holder of the Seller
Certificate shall be permitted to designate such accounts as Additional Accounts
if, on or prior to the Addition Date, the following conditions are satisfied:
(i) the Seller or Sellers with respect to such Additional
Accounts shall have delivered to the Trustee a written assignment
(including an acceptance by the Trustee on behalf of the Trust for
the benefit of the Certificateholders) in substantially the form
of Exhibit A and a computer file, hard copy or microfiche list
containing a true and complete list of all such Additional
Accounts, identified by originator and account number, which
computer file, hard copy or microfiche list shall be deemed to be
an amendment to Schedule 1 hereto as of the date of such
Assignment;
(ii) the Servicer with respect to such Additional Accounts
shall have delivered a certificate of a Servicing Officer
confirming that such Additional Accounts were not selected on the
basis of any selection criteria believed by such Servicer to be
materially adverse to the interests of the Holders of any Class of
any Series then outstanding or any Credit Enhancement Provider;
(iii) Greenwood on behalf of the Holder of the Seller
Certificate shall have delivered to the Trustee an Opinion or
Opinions of Counsel concerning the perfection of the Trust's
security interest in the Receivables in such Additional Accounts,
and concerning insolvency and related matters with respect to such
Receivables, that will not cause the rating of any Class of any
Series then outstanding to be withdrawn or lowered by either
Rating Agency; and
(iv) Greenwood on behalf of the Holder of the Seller
Certificate shall have delivered notice of such proposed
assignment of Additional Accounts to the Rating Agencies and the
Rating Agencies shall have advised Greenwood on behalf of the
Holder of the Seller Certificate that such assignment of
Additional Accounts would not cause the rating of any Class of any
Series then outstanding to be lowered or withdrawn.
(e) Conditions to Designation of Participation Interests. In addition to
designations of Additional Accounts as described in Sections 2.10(b), 2.10(c)
and 2.10(d), subject to the conditions set forth below, Greenwood on behalf of
the Holder of the Seller Certificate shall be permitted to convey to the Trust
Participation Interests. Greenwood on behalf of the Holder of the Seller
Certificate shall be permitted to convey such Participation Interests to the
Trust if, on or prior to the Addition Date, the following conditions are
satisfied:
(i) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered a certificate stating that Greenwood on behalf of
the Holder of the Seller Certificate reasonably believes that the
addition of the Participation Interests will not be materially adverse to
the interests of the Holders of any Class of any Series then outstanding
or any Credit Enhancement Provider;
(ii) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered to the Trustee an Opinion or Opinions of Counsel
concerning the perfection of the
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Trust's security interest in the Participation Interests and concerning
insolvency and related matters with respect to such Participation
Interests, that will not cause the rating of any Class of any Series then
outstanding to be withdrawn or lowered by either Rating Agency; and
(iii) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered notice of such proposed conveyance of Participation
Interests to the Rating Agencies and the Rating Agencies shall have
advised Greenwood on behalf of the Holder of the Seller Certificate that
such conveyance of Participation Interests would not cause the rating of
any Class of any Series then outstanding to be lowered or withdrawn.
(f) Calculation of Finance Charge Receivables. The Servicer with respect
to any Additional Accounts shall prepare a reasonable estimate of the amount of
Finance Charge Receivables billed in such Additional Accounts in the Due Period
in which such Receivables are first included in the Trust, which estimate shall
be deemed to be the amount of Finance Charge Receivables billed in such
Additional Accounts in such Due Period, absent manifest error. Such Servicer
shall provide to the Trustee, upon request, a certificate of a Servicing Officer
setting forth in reasonable detail its calculation of such estimate.
SECTION 2.11 Removal of Accounts.
(a) Optional Removals. From time to time, Greenwood on behalf of the
Holder of the Seller Certificate may, but shall not be obligated to, designate
Accounts for deletion and removal from the Trust ("Removed Accounts"), such
deletion and removal to be effective as of the last day of any Due Period (the
"Removal Date"), subject to the notice requirement and other conditions set
forth below. On or before the fifth Business Day prior to the Removal Date
(the "Removal Notice Date"), Greenwood on behalf of the Holder of the Seller
Certificate shall give the Trustee, the Master Servicer and any Credit
Enhancement Provider written notice that the Receivables from such Removed
Accounts are to be reassigned by the Trustee to Greenwood on behalf of the
Holder of the Seller Certificate effective as of the Removal Date.
(b) Conditions to the Designation of Removed Accounts. Greenwood on
behalf of the Holder of the Seller Certificate shall be permitted to designate
and require reassignment to the Holder of the Seller Certificate of the
Receivables from Removed Accounts only upon satisfaction of the following
conditions:
(i) As of the Removal Date, the aggregate amount of Principal
Receivables in the Trust, less the aggregate amount of Principal
Receivables in such Removed Accounts, shall not be less than the Minimum
Principal Receivables Balance;
(ii) The removal of the Removed Accounts on any Removal Date shall
not, in the reasonable belief of Greenwood cause either (A) an
Amortization Event to occur or (B) the Deficit Accumulation Amount or
Deficit Liquidation Amount, as applicable, with respect to any Series
then outstanding on any Distribution Date to be greater than zero;
(iii) On or prior to the fifth Business Day following the Removal
Date, the Seller or Sellers with respect to such Removed Accounts shall
have delivered to the Trustee (A) for execution a written assignment
substantially in the form of Exhibit C hereto, which shall include a
warranty of the Trustee that since the date of transfer by such Seller or
Sellers under
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this Agreement the Trustee has not sold, transferred or encumbered any
such Receivable or interest therein and (B) a computer file, microfiche
list or hard copy containing a true and complete list of all such Removed
Accounts identified by originator and account number and containing the
amount of Principal Receivables in such Removed Accounts as of the Removal
Date, which computer file or microfiche list shall as of the Removal Date
modify and amend Schedule 1 hereto by deleting therefrom information with
respect to any Removed Account and be made a part of this Agreement;
(iv) Greenwood on behalf of the Holder of the Seller Certificate
shall represent and warrant that no selection procedures believed by
Greenwood to be materially adverse to the interests of the Holders of any
Class of any Series then outstanding, or any Credit Enhancement Provider,
were utilized in selecting the Removed Accounts;
(v) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered notice of such proposed reassignment to the Rating
Agencies and the Rating Agencies shall have advised Greenwood that such
reassignment would not cause the rating of any Class of any Series then
outstanding to be lowered or withdrawn; and
(vi) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered to the Trustee an Officer's Certificate confirming
the items set forth in (i), (ii), (iv) and (v) above. The Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall execute and
deliver the reassignment to Greenwood on behalf of the Holder of the Seller
Certificate, and the Receivables from the Removed Accounts shall no longer
constitute a part of the Trust.
(c) Calculation of Finance Charge Receivables. The Servicer with respect
to any Removed Accounts shall prepare a reasonable estimate of the amount of
Finance Charge Receivables billed in such Removed Accounts in the Due Period in
which such Receivables are removed from the Trust, which estimate shall be
deemed to be the amount of Finance Charge Receivables billed in such Removed
Accounts in such Due Period, absent manifest error. Such Servicer shall
provide the Trustee, upon request, a certificate of a Servicing Officer setting
forth in reasonable detail its calculation of such estimate.
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ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01 Acceptance of Appointment and Other Matters Relating to the
Master Servicer.
(a) In connection with and in consideration for the conveyance of the
Receivables to the Trust by the Sellers, and the issuance of the Seller
Certificate to the Sellers, Greenwood on behalf of the Holder of the Seller
Certificate and the Trustee agree to cause Greenwood to act as Master Servicer
under this Agreement and Greenwood agrees to act as Master Servicer under this
Agreement.
(b) Subject to Section 10.01, the Master Servicer is hereby authorized and
empowered (i) unless such power and authority is revoked by the Trustee, to
instruct the Trustee to make withdrawals and payments from the Investor
Accounts in accordance with the instructions set forth in this Agreement and in
the Series Supplements, (ii) to make drawings on any Credit Enhancement as set
forth in the Series Supplements, (iii) to make any filings or registrations
with, and seek any consents or authorizations from, the Securities and Exchange
Commission and any securities authority of any jurisdiction on behalf of the
Trust as may be necessary or advisable to comply with the securities or
reporting requirements laws of the United States or any state or other
jurisdiction and (iv) to take any other action and exercise any other power
permitted to be taken or exercised by the Master Servicer pursuant to the terms
of this Agreement or any Series Supplement. The Trustee agrees that it shall
promptly follow the written instructions of the Master Servicer to withdraw
funds from the Investor Accounts and make drawings under any Credit Enhancement
as required by this Agreement or any applicable Series Supplement. The Trustee
shall furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate under the laws of any jurisdiction with
authority over the Receivables to enable the Master Servicer to carry out its
servicing and administrative duties hereunder.
(c) In the event that any Seller is unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this Agreement
(including, without limitation, by reason of the application of the provisions
of Section 9.01 or any governmental agency having regulatory authority over any
Seller or any court of competent jurisdiction ordering that any Seller not
convey any additional Principal Receivables to the Trust) then, in any such
event, the Master Servicer agrees to allocate, after the date of such
inability, all Collections with respect to Principal Receivables, and all
amounts that would have constituted Collections with respect to Receivables
that would have been Principal Receivables but for such Seller's inability to
transfer such Receivables (up to an aggregate amount equal to the amount of the
Principal Receivables in the Trust as of such date that were transferred to the
Trust by such Seller) in accordance with Section 2.09(c) and to apply such
amounts as Collections in accordance with Section 4.03; provided, however, that
if the Master Servicer is unable pursuant to any Requirement of Law or
otherwise to allocate payments on the Accounts as described above, the Master
Servicer agrees that it shall, in any such event, after such date allocate
payments on the Accounts with respect to the principal balance of such Accounts
first to the oldest principal balance of such Accounts.
(d) The Master Servicer agrees that upon a request by the Sellers or the
Trustee it will use its best efforts to obtain and maintain the listing of the
Investor Certificates of any Class of any
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Series on any specified securities exchange. If any such request is made, the
Master Servicer shall give notice to the Sellers and the Trustee of the date on
which such Investor Certificates are approved for such listing and within three
Business Days following receipt of notice by the Master Servicer of any actual,
proposed or contemplated delisting of such Investor Certificates by any such
securities exchange. The Trustee or the Master Servicer, each in its sole
discretion, may terminate any listing on any such securities exchange at any
time subject to the notice requirements set forth in the preceding sentence.
SECTION 3.02 Acceptance of Appointment and Other Matters Relating to
Servicers.
(a) In connection with and in consideration for the conveyance of the
Receivables to the Trust by the Sellers, and the issuance of the Seller
Certificate to the Sellers, Greenwood on behalf of the Holder of the Seller
Certificate and the Trustee agree to cause (i) Greenwood to act as Servicer with
respect to Greenwood Discover Card Accounts under this Agreement and Greenwood
agrees to act as such Servicer under this Agreement and (ii) Greenwood or an
affiliate of Greenwood to act as Servicer with respect to each type of account,
other than Greenwood Discover Card Accounts, which are designated as Additional
Accounts pursuant to Section 2.10 and Greenwood or such affiliate of Greenwood
shall agree to act as such Servicer under this Agreement, pursuant to the
Assignment of Additional Accounts with respect to such Accounts.
(b) Each Servicer is hereby authorized in the name and on behalf of the
Trustee and the Holder of the Seller Certificate, and agrees, to service and
administer the Receivables with respect to which it is acting as Servicer, and
collect payments due under such Receivables in accordance with its customary and
usual servicing procedures for servicing credit receivables comparable to the
Receivables and in accordance with its Credit Guidelines, and acting alone or
through any party designated by it pursuant to Section 8.06, shall do any and
all things in connection with such servicing and administration that it may deem
necessary or desirable. Without limiting the generality of the foregoing and
subject to Section 10.02, each Servicer is hereby authorized and empowered (i)
to execute and deliver, on behalf of the Trust for the benefit of the
Certificateholders but in its own name, without reference to the fact that it is
acting for the Trust, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge, and all other comparable
instruments, with respect to the Receivables with respect to which it is acting
as Servicer, and (ii) after the delinquency of any such Receivable and to the
extent permitted under and in compliance with applicable law and regulations, to
commence collection proceedings with respect to such Receivables. The Trustee
shall furnish each Servicer with any powers of attorney and other documents
necessary or appropriate under the laws of any jurisdiction with authority over
the Receivables to enable such Servicer to carry out its servicing and
administrative duties hereunder.
(c) No Servicer shall under any circumstances be obligated to use separate
servicing procedures, offices, employees or accounts for servicing Accounts from
the procedures, offices, employees and accounts used by such Servicer in
connection with servicing its other accounts.
(d) Until such time as an additional Servicer shall be appointed in
conjunction with the addition to the Trust of Additional Accounts that are not
Greenwood Discover Card Accounts, Greenwood shall act as Master Servicer and as
the sole Servicer hereunder. Upon the appointment of any Servicer in addition
to Greenwood (or any Successor Master Servicer, as applicable), Greenwood (or
such Successor Master Servicer, as applicable) and any such additional Servicer
shall enter into a
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Master Servicing Agreement, which agreement shall set forth the respective
rights and duties of the Master Servicer and each Servicer.
SECTION 3.03 Servicing Compensation.
(a) Monthly Servicing Fee. As compensation for its servicing activities
hereunder and reimbursement for its expenses, the Master Servicer shall be
entitled to receive a monthly servicing fee in respect of any Due Period (or
portion thereof) prior to the termination of the Trust pursuant to Section 12.01
(the "Monthly Servicing Fee"), payable in arrears on each Trust Distribution
Date with respect to the Seller Servicing Fee (as defined below) and payable in
accordance with the terms of the applicable Series Supplement with respect to
the share of the Monthly Servicing Fee allocable to each Series then
outstanding. The Monthly Servicing Fee shall in no event be less than an amount
equal to the product of (A) 2.0% per annum calculated on the basis of a 360-day
year of twelve 30-day months and (B) the amount of Principal Receivables in the
Trust as of the first day of the Due Period related to such Trust Distribution
Date (or in the case of the first Trust Distribution Date, the amount of
Principal Receivables in the Trust on the Cut-Off Date). The share of each
Monthly Servicing Fee allocable to each Series on each Distribution Date with
respect to each such Series shall be set forth in the Series Supplement with
respect to each Series, and shall be paid to the Master Servicer in accordance
with the terms of the applicable Series Supplement by the Person or Persons
specified in the applicable Series Supplement. The share of each Monthly
Servicing Fee allocable to the Holder of the Seller Certificate (the "Seller
Servicing Fee") on any Trust Distribution Date shall be equal to the product of
(A) the product of (x) 2.0% per annum calculated on the basis of a 360-day year
of twelve 30-day months and (y) and the amount of Principal Receivables in the
Trust as of the first day of the Due Period related to such Trust Distribution
Date (or in the case of the first Trust Distribution Date, the amount of
Principal Receivables in the Trust on the Cut-Off Date) and (B) a fraction the
numerator of which shall be the amount of the Seller Interest and the
denominator of which shall be the greater of (x) the amount of Principal
Receivables in the Trust and (y) the Aggregate Investor Interest, and shall be
paid to the Master Servicer by Greenwood on behalf of the Holder of the Seller
Certificate on or before each Trust Distribution Date. In no event shall the
Trustee or the Investor Certificateholders be liable for the Seller Servicing
Fee. The Master Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.05, the reasonable fees and disbursements of independent
accountants, the fees of each Servicer other than Greenwood (which shall be set
forth in the Master Servicing Agreement) and all other expenses incurred by the
Master Servicer in connection with its activities hereunder, and including all
other fees and expenses of the Trust not expressly stated herein or in any
Series Supplement to be for the account of the Certificateholders; provided,
that in no event shall the Master Servicer (or any Servicer) be liable for any
federal, state or local income or franchise tax, or any interest or penalties
with respect thereto, assessed on the Trust, the Trustee or the
Certificateholders. The Master Servicer shall be required to pay such expenses
for its own account, and shall not be entitled to any payment therefor other
than the Monthly Servicing Fee.
(b) Use of Collections. Subject to Section 4.03(b), the Trustee on behalf
of the Trust, with the consent of Greenwood on behalf of the Holder of the
Seller Certificate, hereby agrees to allow (without further action by the
Trustee) each Servicer to use Collections in respect of Receivables collected by
such Servicer until such Collections are to be disbursed by the Master Servicer
in accordance with the terms of Article IV hereof or the terms of any applicable
Series Supplement.
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SECTION 3.04 Representations and Warranties of Greenwood, as Master
Servicer and Servicer. Greenwood, as Master Servicer and Servicer, hereby
represents and warrants to the Trust as of the date of this Agreement and the
Initial Closing Date that:
(a) Organization, etc. Greenwood has been duly incorporated and is
validly existing as a Delaware banking corporation, and has full corporate
power and authority to execute and deliver this Agreement and to perform the
terms and provisions hereof.
(b) Due Authorization. The execution, delivery and performance of this
Agreement by Greenwood, as Master Servicer and 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
Greenwood, and 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 that is material to it
or its subsidiaries (whether or not consolidated) taken as a whole, or to
Greenwood's knowledge, any law or governmental regulation or court decree
applicable to it or such material property, and this Agreement 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.
(c) Accuracy of Information. All information heretofore furnished by
Greenwood, as Master Servicer and Servicer, in writing to the Trustee for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by
Greenwood in writing to the Trustee will be, true and accurate in every
material respect or based on reasonable estimates on the date as of which such
information is stated or certified.
SECTION 3.05 Representations and Warranties of Other Servicers. Each
Servicer, other than Greenwood, shall represent and warrant to the Trust as of
the date of the Assignment of Additional Accounts with respect to such Servicer
that:
(a) Organization, etc. Such Servicer has been duly incorporated and is
validly existing as a banking, industrial loan or other similar corporation, or
as a trust company, savings and loan association, savings bank or other similar
entity in its state of incorporation or as a national banking association,
savings and loan association or savings bank organized and existing under the
laws of the United States of America, and has full corporate power and
authority to execute and deliver the Assignment of Additional Accounts and this
Agreement and to perform the terms and provisions thereof and hereof.
(b) Due Authorization. The execution, delivery and performance of the
Assignment of Additional Accounts and this Agreement 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, and do not or 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 that is
material to it or its subsidiaries (whether or not consolidated) taken as a
whole, or to such Servicer's knowledge, any law or governmental regulation or
court decree applicable to it or such material property, and the Assignment of
Additional Accounts and this Agreement are the
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valid, binding and enforceable obligations of such Servicer, except as may be
limited by receivership, insolvency, reorganization, moratorium or other laws
relating to the enforcement of creditors' rights generally or by general equity
principles.
(c) Accuracy of Information. All information furnished by such Servicer in
writing to the Trustee for purposes of or in connection with the Assignment of
Additional Accounts or this Agreement or any transaction contemplated thereby or
hereby is, and all such information hereafter furnished by such Servicer in
writing to the Trustee will be, true and accurate in every material respect or
based on reasonable estimates on the date as of which such information is stated
or certified.
SECTION 3.06 Reports and Records for the Trustee.
(a) Initial Report. On the Initial Closing Date, the Master Servicer
shall prepare and deliver to Greenwood as Seller and the Trustee an Officer's
Certificate substantially in the form of Exhibit E hereto setting forth (i) the
aggregate amount of Principal Receivables as of the Cut-Off Date and (ii) the
aggregate amount of Finance Charge Receivables billed during the Due Period
next preceding the month in which the Cut-Off Date occurs, which amount may be
based partially or entirely on the reasonable estimate of the Master Servicer.
(b) Servicer's Monthly Certificates. On the seventh Business Day of the
month in which each Trust Distribution Date occurs, the Master Servicer shall
forward to Greenwood on behalf of the Holder of the Seller Certificate, the
Trustee, the Paying Agent and any other Person specified in the Series
Supplement for any then outstanding Series, a certificate substantially in the
form specified in the applicable Series Supplement. Each Servicer shall
provide the Master Servicer with such information as the Master Servicer may
reasonably request to allow the Master Servicer to prepare such certificates.
SECTION 3.07 Master Servicer's and Servicers' Annual Certificates.
(a) Master Servicer's Annual Certificate. The Master Servicer will deliver
to the Trustee, Greenwood on behalf of the Holder of the Seller Certificate and
the Rating Agencies, on or about April 15 of each calendar year, beginning in
April, 1994, an Officer's Certificate substantially in the form of Exhibit F
hereto stating that (a) in the course of the performance by the signer of his
duties as an officer of the Master Servicer he would normally obtain knowledge
of any Master Servicer Termination Event, and (b) whether or not he has obtained
knowledge of any such Master Servicer Termination Event during the preceding
calendar year, and, if so, specifying each such Master Servicer Termination
Event of which the signer has knowledge and the nature thereof. A copy of such
certificate may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
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(b) Servicers' Annual Certificates. Each Servicer will deliver to the
Trustee, Greenwood on behalf of the Holder of the Seller Certificate and the
Rating Agencies, on or about April 15 or each calendar year, beginning in April,
1994 with respect to Greenwood as Servicer, and, for any other Servicer,
beginning in the calendar year following the calendar year in which Receivables
in Accounts serviced by such Servicer are first added to the Trust, an Officer's
Certificate substantially in the form of Exhibit G hereto stating that (a) in
the course of the performance by the signer of his duties as an officer of such
Servicer he would normally obtain knowledge of any Servicer Termination Event,
and (b) whether or not he has obtained knowledge of any such Servicer
Termination Event during the preceding calendar year, and, if so, specifying
each such Servicer Termination Event of which the signer has knowledge and the
nature thereof. A copy of any such certificate may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
SECTION 3.08 Independent Public Accountants' Annual Servicing Report.
(a) On or about April 15 of each calendar year, beginning in April, 1994,
the Master Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Master Servicer,
any Servicer or any Seller) to furnish a report to the Trustee, the Master
Servicer, each Servicer and the Rating Agencies to the effect that such firm is
of the opinion that the system of internal accounting controls in effect on the
date of such statement relating to the servicing procedures performed by the
Master Servicer and each Servicer under this Agreement, taken as a whole, was
sufficient for the prevention and detection of errors and irregularities which
would be material to the assets of the Trust and that nothing has come to their
attention that would cause them to believe that such servicing has not been
conducted in compliance with Sections 3.03, 4.03, 4.04, 4.05 and 8.07 of this
Agreement and the provisions relating to servicing or the allocation and payment
of Collections in any Series Supplements, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in such
report. A copy of such report may be obtained by any Investor Certificateholder
by a request in writing to the Trustee addressed to the Corporate Trust Office.
(b) On or about April 15 of each calendar year, beginning in April, 1994,
the Master Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Master Servicer,
any Servicer or any Seller) to furnish a report to the Trustee, the Master
Servicer, each Servicer and the Rating Agencies, to the effect that they have
compared the mathematical calculations of each amount set forth in the monthly
certificates forwarded by the Master Servicer pursuant to the applicable Series
Supplements during the preceding calendar year with the computer reports of the
Master Servicer and each Servicer and such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such report. A
copy of such report may be obtained by any Investor Certificateholder by a
request in writing to the Trustee addressed to the Corporate Trust Office.
SECTION 3.09 Tax Treatment. It is the intent of the Sellers and the
Investor Certificateholders that, for United States federal, state and local
income and franchise tax purposes only, the Investor Certificates will be
treated as evidence of indebtedness of the Sellers and the Sellers and each
Investor Certificateholder, by the acceptance of its Certificate, agree to treat
the Investor
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Certificates for United States 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.
SECTION 3.10 Notices by the Master Servicer and the Servicers. In the
event that Greenwood is no longer acting as Master Servicer or Servicer, or any
other Servicer shall cease to act as a Servicer, any Successor Master Servicer
or Successor Servicer, as applicable, appointed pursuant to Section 10.03 shall
deliver or make available to Greenwood on behalf of the Holder of the Seller
Certificate each certificate and report required to be prepared, forwarded or
delivered thereafter pursuant to this Agreement.
ARTICLE IV
RIGHTS OF INVESTOR CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01 Rights of Investor Certificateholders. Each Investor
Certificate shall represent 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 herein and in the Series Supplements to be
deposited in Investor Accounts or paid to the Investor Certificateholders and,
with respect to any particular Series, any additional rights set forth in the
applicable Series Supplement; provided, however, that the aggregate interest
represented by all Investor Certificates outstanding at any one time in the
assets of the Trust shall not exceed an amount equal to the Aggregate Invested
Amount plus all accrued but unpaid Certificate Interest and any interest
thereon. The Seller Certificate shall represent 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 herein and in the Series Supplements
to be paid to the Holder of the Seller Certificate.
SECTION 4.02 Establishment and Administration of Investor Accounts.
(a) Establishment of the Collections Account and the Group Collections
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, one non-interest bearing segregated trust account designated the
"Collections Account" and one additional non-interest bearing segregated trust
account for each Group (each, a "Group Collections Account"), in each case
marked to indicate clearly that the funds deposited therein are held for the
benefit of the Certificateholders. Subject to subsection (c) below, the Trust
shall possess all right, title and interest in all funds on deposit from time
to time in the Collections Account and each Group Collections Account and in
all proceeds thereof. Pursuant to authority granted to it pursuant to Section
3.01(b), the Master Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Collections Account and the Group
Collections Accounts 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 Collections Account and the Group
Collections Accounts.
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(b) Establishment of Other Investor Accounts. The Trustee shall, from time
to time, establish additional Investor Accounts as provided in applicable Series
Supplements.
(c) Administration of the Investor Accounts. Unless otherwise specified in
a relevant Series Supplement, any funds on deposit in any Investor Account for
more than one Business Day shall at all times be invested in Permitted
Investments at the written direction of the Master Servicer or its agent,
subject to the restrictions set forth below. The Trustee shall maintain, or
cause to be maintained, for the benefit of the Certificateholders possession of
the negotiable instruments or securities evidencing the Permitted Investments
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of sale or maturity. Any Permitted Investment with a
stated maturity shall mature on or prior to the Distribution Date applicable to
the Investor Account for which the Permitted Investments are held related to the
earliest Due Period in which Collections invested in such Permitted Investments
were received 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 Investor Certificateholders on such Distribution Date. For purposes of
the preceding sentence, withdrawals from the Collections Account pursuant to
Section 4.03(c) shall be deemed to be made from Collections in the order in
which such Collections were deposited into the Collections Account.
On each applicable Distribution Date, all interest and earnings (less
investment expenses) on funds on deposit in any Investor Account (other than any
Series Principal Funding Accounts), if any, shall be deposited by the Trustee in
a separate deposit account in the name of the Holder of the Seller Certificate,
which account shall not constitute a part of the Trust, or such interest and
earnings shall otherwise be turned over by the Trustee to the Holder of the
Seller Certificate not less frequently than monthly. For purposes of
determining the availability of funds or the balances in such Investor Accounts
for any reason under this Agreement or any Series Supplement, all investment
earnings on such funds shall be deemed not to be available or on deposit.
SECTION 4.03 Collections and Allocations
(a) Collections. The Master Servicer shall apply all Collections received
during each Due Period as described in this Section 4.03 and any applicable
Series Supplements.
(b) Daily Collections. If, at any time, either (i) with respect to any
Accounts, the then current Servicer with respect to such Accounts does not have
a short-term debt rating of at least A-1 by Standard & Poor's and P-1 by Moody's
(if the then current Servicer is the original Servicer with respect to such
Accounts or an affiliate of the original Servicer) or a short-term debt rating
of at least A-1+ by Standard & Poor's and P-1 by Moody's (if the then current
Servicer with respect to such Accounts is not the original Servicer or an
affiliate of the original Servicer) or (ii) the conditions specified in clause
(i) or pursuant to this clause (ii) are superseded by any conditions
subsequently agreed to in writing by Greenwood on behalf of the Holder of the
Seller Certificate and either Rating Agency, and any of such subsequently agreed
to conditions occurs; then, as promptly as possible after each Date of
Processing with respect to the Receivables serviced by the applicable Servicer
occurring on and after such event, but in no event later than two Business Days
following such Date of Processing, such Servicer shall pay to, or at the
direction of, the Master Servicer, for deposit into the Collections Account,
from the Collections received by such Servicer on or after the date of such
event and recorded on such Date of Processing, an amount equal to the sum of the
Required Daily Deposits with respect to such Servicer for each Series then
outstanding with respect to such Date of Processing; provided, that if the first
such deposit occurs following a period during which such Servicer has been
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using Collections in accordance with Section 3.03(b), then, on the sixth
Business Day following the event giving rise to the making of Required Daily
Deposits by such Servicer, in addition to the Required Daily Deposits for that
day, such Servicer shall pay to, or at the direction of, the Master Servicer,
the amount that would have been on deposit in the Collections Account with
respect to such Servicer had such Servicer been making the Required Daily
Deposits since the beginning of the Due Period, less any amounts previously so
paid or deposited. Amounts made available to any Servicer pursuant to Section
3.03 shall be repayable upon the occurrence of the conditions in this Section
4.03(b) in the manner and to the extent set forth herein.
(c) Deposits with Respect to Each Distribution Date.
(i) On or before each Distribution Date, the Master Servicer shall
deposit into the Collections Account that portion of Collections with
respect to the related Due Period that are to be allocated on such
Distribution Date and that have not previously been deposited into the
Collections Account.
(ii) On or before each Distribution Date, the Master Servicer shall
direct the Trustee in writing to withdraw from the Collections Account
and pay to Greenwood on behalf of the Holder of the Seller Certificate an
amount equal to that portion of the sum of (x) the total amount of
Finance Charge Collections for the related Due Period less the sum of the
amount of Series Finance Charge Collections for each Series then
outstanding for the related Due Period and (y) the total amount of
Principal Collections for the related Due Period less the sum of the
amount of Series Principal Collections for each Series then outstanding
for the related Due Period, that is to be allocated to the Holder of the
Seller Certificate on such Distribution Date.
(iii) On or before each Distribution Date, after giving effect to
the payments made pursuant to clause (ii) above with respect to such
Distribution Date, the Master Servicer shall direct the Trustee in
writing to withdraw from the Collections Account and pay to each Group
Collections Account an amount equal to the sum of (x) the sum of the
Series Finance Charge Collections for each Series that is a member of
such Group and (y) the sum of the Series Principal Collections for each
Series that is a member of such Group.
(iv) Amounts on deposit in each Group Collections Account shall be
distributed on or before each Distribution Date with respect to each such
Group in accordance with the terms of the Series Supplements for each
Series then outstanding.
(d) Aggregate and Net Payments. All payments made pursuant to this
Agreement or any Series Supplement on or before any Trust Distribution Date or
Distribution Date on which Greenwood is the Master Servicer, between the Master
Servicer or the Holder of the Seller Certificate and the Investor Accounts, may
be aggregated for such Trust Distribution Date or 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 each applicable account in
satisfaction of all payments of the Holder of the Seller Certificate and the
Master Servicer pursuant to this Agreement and all Series Supplements for
Series then outstanding, to the extent that all payment obligations of the
Master Servicer and of the Holder of the Seller Certificate to each applicable
account on such Trust Distribution Date or Distribution Date exceed all payment
obligations of each such account to the Master Servicer and the Holder of the
Seller Certificate on such Trust Distribution Date or Distribution Date. Any
amounts payable on a given Trust Distribution Date to the Holder of the Seller
Certificate pursuant to Section
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4.03(c)(ii) hereof, or on a Distribution Date to the Master Servicer with
respect to Monthly Servicing Fees pursuant to the provisions of any Series
Supplement then outstanding, shall be deemed to have been paid if, and to the
extent, Greenwood (as Servicer) already is in possession of such amounts on such
Distribution Date (or was in possession of such amounts for more than two
Business Days during the related Due Period) as a result of its permitted use of
Collections during the prior Due Period pursuant to Section 3.03(b) and in
accordance with the definition of "Required Daily Deposit" (as defined in the
relevant Series Supplement), except to the extent Greenwood has deposited such
amounts into the Collections Account.
Notwithstanding the other provisions of this Section 4.03 and the
applicable provisions of any Series Supplement then outstanding, the allocations
of Collections pursuant to Section 4.03(c) and the applicable provisions of any
Series Supplements then outstanding shall be deemed to be made on the date on
which the Master Servicer delivers the Servicer's Monthly Statement and the
information required to be included in the Investor Certificateholders' Monthly
Statement with respect to each Series then outstanding to the Trustee. The
Trustee is hereby authorized, upon receipt of the Servicer's Monthly Statement
and the information required to be included in the Investor Certificateholders'
Monthly Statement with respect to each Series then outstanding, together with
written instructions from the Master Servicer, to immediately transfer to
Greenwood on behalf of the Holder of the Seller Certificate or the Master
Servicer, as applicable, any funds in any Investor Account that would otherwise
be paid to Greenwood on behalf of the Holder of the Seller Certificate or the
Master Servicer, as applicable, on the Trust Distribution Date or any
Distribution Date related to such Due Period.
(e) Additional Funds. Greenwood on behalf of the Holder of the Seller
Certificate may, from time to time, elect to add certain funds to the Trust (any
such funds, "Additional Funds") by delivering a written notice of such election
to the Trustee, the Master Servicer and the Rating Agencies, which notice shall
specify the method of calculating the amount of such funds to be added to the
Trust as of any Distribution Date and the source of such funds. No such election
shall become effective until Standard & Poor's has advised the Master Servicer
and Greenwood on behalf of the Holder of the Seller Certificate that such
election would not cause the rating of any Class of any Series then outstanding
to be lowered or withdrawn. During any time that Additional Funds are being
added to the Trust, with respect to each Series then outstanding, on or before
each Distribution Date with respect to each such Series, the Master Servicer
shall cause an amount equal to the product of (i) a fraction the numerator of
which shall be the Series Investor Interest and the denominator of which shall
be the Aggregate Investor Interest and (ii) the amount of Additional Funds for
the preceding Due Period, to be deposited into the Series Collections Account
for each such Series. Such amounts shall then be allocated in accordance with
the provisions of the applicable Series Supplement.
SECTION 4.04 Sellers' or Master Servicer's Failure to Make a Deposit or
Payment.
(a) If the Master Servicer or any Seller fails to make, or give
instructions to make, any payment or deposit (other than as required by Section
2.05(b), 2.06(b) or 2.07(b) or in connection with Section 12.02) required to be
made or given by the Master Servicer or such Seller, respectively, at the time
specified in this Agreement (including applicable grace periods), the Trustee
shall make such payment or deposit from the applicable Investor Account without
instruction from the Master Servicer or such Seller (or, to the extent that
sufficient funds are not available in the applicable Investor Account to make
such payment and the relevant Series Supplement provides for Credit Enhancement
for such purpose, shall make a drawing from the available Credit Enhancement,
if any); provided, that the Trustee shall be required to make such payment,
deposit or draw only to the extent it
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has sufficient information to allow it to determine the amount thereof, which
information the Trustee shall be deemed to have with respect to the amount of
Certificate Interest payable on each Distribution Date. The Master Servicer
shall, upon request of the Trustee, promptly provide the Trustee with all
information necessary to allow the Trustee to make such a payment, deposit or
draw. Such funds or the proceeds of such drawing shall be applied by the Trustee
in the same manner in which such payment or deposit should have been made by
such Seller or the Master Servicer, as the case may be.
(b) If a drawing from a Credit Enhancement is made pursuant to this
Section 4.04 in lieu of a deposit or payment from the applicable Investor
Account, the Master Servicer or the Sellers, as the case may be, shall, as
promptly as practicable and from the appropriate source, make the required
payment, deposit or transfer or give the Trustee instructions to transfer the
required payment or deposit in respect of which such drawing was made to
reinstate the Credit Enhancement, as set forth in any applicable Series
Supplement.
SECTION 4.05 Adjustments For Miscellaneous Debits and Credits and
Fraudulent Charges.
(a) With respect to any Receivable to which any adjustment without payment
by or on behalf of an Obligor has been made (an "Adjustment") including, but
not limited to, any Receivable that (1) was created as a result of a fraudulent
or counterfeit charge, (2) the Servicer with respect to such Receivable
otherwise adjusts, increases, reduces, modifies or cancels in accordance with
the applicable Credit Guidelines without receiving cash or other payment
therefor by the Obligor with respect to such Receivable, (3) was created in
respect of merchandise returned by the Obligor thereunder, or (4) was created
or cancelled through an Account Combination, Greenwood on behalf of the Holder
of the Seller Certificate shall increase or reduce, as the case may be, the
aggregate amount of Receivables.
(b) In the event that the exclusion of the amount of an Adjustment from
the calculation of the Seller Interest would cause the Seller Interest to be an
amount less than zero, Greenwood on behalf of the Holder of the Seller
Certificate shall, no later than the Business Day following the last day of the
Due Period during which such Adjustment is made, make a deposit into the
Collections Account in immediately available funds in an amount equal to the
amount by which such Adjustment causes the Seller Interest to be less than
zero. Such deposit shall be applied as a Collection in accordance with Section
4.03.
SECTION 4.06 Reallocation of Series Among Groups. The Master Servicer may
elect, at any time, by written notice to the Trustee and to Greenwood on behalf
of the Holder of the Seller Certificate, and subject to the conditions set forth
below, to move any Series from the Group of which it is then a member to any
other Group, including without limitation to a new Group established at such
time of which the Series to be moved is the only Series. Any such election by
the Master Servicer shall become effective on the day specified in the notice of
such election.
The Master Servicer may make such election only if the following
conditions are satisfied: (i) a Series may only be moved from one Group to
another Group if the Series in both Groups have the same Distribution Date;
(ii) the Master Servicer shall have delivered to the Trustee a certificate to
the effect that the Master Servicer reasonably believes that the movement of
the applicable Series 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
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then outstanding; and (iii) the Rating Agencies shall have advised the Master
Servicer and Greenwood on behalf of the Holder of the Seller Certificate that
the movement of the applicable Series would not cause the rating of any Class of
any Series then outstanding to be lowered or withdrawn.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR CERTIFICATEHOLDERS
SECTION 5.01 Distributions. On each Payment Date, with respect to each
Series then outstanding, the Paying Agent shall distribute to each Investor
Certificateholder of record on the close of business of the preceding Record
Date, in accordance with the certificate delivered by the Master Servicer to the
Trustee pursuant to the applicable Series Supplement (other than as provided in
Section 2.05 or in Section 2.06 or Section 12.02 hereof respecting a final
distribution) such Certificateholder's share of amounts on deposit in the
applicable Series Distribution Account, Series Principal Funding Account and/or
Series Interest Funding Account, pursuant to the applicable Series Supplement,
by check mailed to each Certificateholder (unless otherwise provided in the
applicable Series Supplement), except that with respect to Investor Certificates
registered in the name of CEDE & Co., the nominee registration for The
Depository Trust Company, such distribution shall be made in immediately
available funds by wire transfer to such account as CEDE & Co. shall direct in
writing. If such wire transfer cannot be made for any reason, payment shall be
made by check.
SECTION 5.02 Investor Certificateholders' Monthly Statement. On each
Distribution Date, the Paying Agent shall forward to each Certificateholder of
each Series then outstanding to which such Distribution Date is applicable, a
statement substantially in the form specified in the applicable Series
Supplement prepared by the Master Servicer and executed by the Trustee. The
Paying Agent shall also forward a copy of each such statement to the Rating
Agencies.
SECTION 5.03 Certificateholders' Annual Tax Statement. On or before
January 31 of each calendar year, beginning with calendar year 1994, the
Transfer Agent shall furnish to the Master Servicer and Paying Agent a list of
each Person who at any time during the preceding calendar year was an Investor
Certificateholder and received any payment thereon and the dates such Person
held an Investor Certificate. The Paying Agent shall furnish to each such
Investor Certificateholder a statement prepared by the Master Servicer setting
forth, with respect to the Series of which such Investor Certificate is a part,
(i) the total amount paid in respect of each Class of such Series, (ii) the
amount of such payments allocable to Certificate Principal with respect to each
Class of such Series and (iii) the amount of such payments allocable to
Certificate Interest with respect to each Class of such Series, in each case
stated on the basis of an original principal amount of $1,000 per Investor
Certificate, aggregated for such calendar year or the applicable portion thereof
during which such Person was an Investor Certificateholder, together with such
other customary information as the Trustee or the Master Servicer deems
necessary or desirable to enable the Investor Certificateholders to prepare
their tax returns. Such obligation of the Paying Agent shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Master Servicer on behalf of the Trustee pursuant to any
requirements of the Internal Revenue Code.
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ARTICLE VI
THE INVESTOR CERTIFICATES
SECTION 6.01 The Certificates.
(a) The Investor Certificates of any Series or Class may be issued,
subject to applicable laws and regulations, in bearer form ("Bearer
Certificates") with attached interest coupons and a special coupon
(collectively, the "Coupons"), or in fully registered form ("Registered
Certificates") and shall be substantially in the form of the exhibits with
respect thereto attached to the applicable Series Supplement. The Seller
Certificate will be issued in registered form and shall, upon issue, be
executed and delivered by Greenwood as Seller to the Trustee for authentication
and redelivery as provided in Sections 2.02 and 6.03. Except as otherwise
provided in any Series Supplement or in Section 6.11, Bearer Certificates shall
be issued in denominations of $5,000, $50,000 and $100,000 and Registered
Certificates shall be issued in minimum denominations of $1,000 Fractional
Undivided Interests and in integral multiples of $1,000 in excess thereof. If
specified in any Series Supplement, the Investor Certificates of any Series or
Class shall be issued upon initial issuance as a single certificate evidencing
the Series Initial Investor Interest or Class Initial Investor Interest, as
applicable, as described in Section 6.11. The Seller Certificate shall be a
single certificate and shall represent the entire Seller Interest. The
Certificates shall be executed on behalf of the Trust by Greenwood on behalf of
the Holder of the Seller Certificate by any of its Chairman of the Board of
Directors, its President or one of its Vice Presidents. The signature of any
of these officers on the Certificates may be manual or facsimile.
(b) Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of Greenwood shall not become invalid,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.
(c) No Certificate shall be entitled to any benefit under this Agreement
(or any Series Supplement), or be valid or obligatory for any purpose unless
there appears on such Certificate a certificate of authentication substantially
in the form attached to Exhibit D hereto (in the case of the Seller
Certificate) or attached to the appropriate exhibits to a Series Supplement, as
applicable, executed by the Trustee by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Agreement and the relevant Series Supplement.
Bearer Certificates shall be dated the Series Closing Date. All Registered
Certificates and the Seller Certificate shall be dated the date of their
authentication.
SECTION 6.02 Book-Entry Certificates
(a) Unless otherwise provided in the applicable Series Supplement, the
Investor Certificates, upon original issuance, shall be issued in fully
registered form, in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on the behalf of, the
Sellers. The Investor Certificates shall initially be registered in the
Certificate Register in the name of CEDE & Co., the nominee of the initial
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Investor Certificates,
except as provided in
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Section 6.02(c). Unless and until definitive, fully registered Investor
Certificates ("Definitive Certificates") have been issued to the beneficial
owners of the Investor Certificates pursuant to Section 6.02(c):
(i) the provisions of this Section 6.02(a) shall be in full force
and effect;
(ii) any Seller, the Master Servicer and the Trustee may deal with
the Clearing Agency and the Clearing Agency Participants for all purposes
(including the making of distributions on the Investor Certificates) as
the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.02(a)
conflict with any other provisions of this Agreement, the provisions of
this Section 6.02(a) shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 6.02(c), the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal
and interest on the Investor Certificates to such Clearing Agency
Participants.
For purposes of any provision of this Agreement or any applicable Series
Supplement requiring or permitting actions with the consent of, or at the
direction of, Investor Certificateholders evidencing a specified percentage of
the Class Invested Amount of any Class, such direction or consent may be given
by Certificate Owners (acting through the Clearing Agency and the Clearing
Agency Participants).
(b) Whenever notice or other communication is required to be given to
Investor Certificateholders of any Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners pursuant to Section 6.02(c),
the Trustee shall give all such notices and communications specified herein to
be given to such Investor Certificateholders to the Clearing Agency.
(c) If, with respect to any Series the Investor Certificates of which are
originally issued in the form of Book-Entry Certificates:
(i) (A) the Master Servicer advises the Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities under the Depository Agreement, and (B) the Trustee or
the Master Servicer is unable to locate a qualified successor,
(ii) the Master Servicer, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system with respect to
such Series through the Clearing Agency, or
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(iii) after the occurrence of a Master Servicer Termination Event,
Certificate Owners representing beneficial interests aggregating not less
than 51% of the Invested Amount of any Class of such Series advise the
Trustee and the Clearing Agency through the Clearing Agency Participants
in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of the Certificate
Owners of such Class,
then the Trustee shall notify all Certificate Owners of each Class of such
Series upon the occurrence of an event described in clauses (i) and (ii) above
or all Certificate Owners of the applicable Class upon the occurrence of the
event described in clause (iii) above, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners of such Class of such Series requesting the same. Upon
surrender to the Trustee of the applicable Investor Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates for the
applicable Class. Neither any Seller nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Clearing Agency with respect to the applicable Class of the
applicable Series of Investor Certificates shall be deemed to be imposed upon
and performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
SECTION 6.03 Authentication of Certificates. On or about the Initial
Closing Date, the Trustee shall authenticate and deliver the Seller Certificate
to the Holder of the Seller Certificate. The Trustee also shall authenticate
and deliver, upon the order of Greenwood on behalf of the Holder of the Seller
Certificate, the Investor Certificates of each Series, if any, to be issued as
of the Initial Closing Date. From time to time after the Initial Closing Date,
pursuant to Section 6.06 hereof and the terms of the applicable Series
Supplement, the Trustee shall authenticate and deliver the Investor Certificates
of additional Series (with the designation provided in the applicable Series
Supplement), upon the order of Greenwood on behalf of the Holder of the Seller
Certificate, to the persons designated in such Series Supplement. If specified
in the related Series Supplement, the Trustee shall authenticate and deliver
outside the United States a Global Certificate representing the Series Initial
Investor Interest for such Series or the Class Initial Investor Interest for a
specified Class of such Series. The Investor Certificates of each Series shall
be duly authenticated by or on behalf of the Trustee as provided herein and in
the applicable Series Supplement, in authorized denominations equal to (in the
aggregate) the Series Initial Investor Interest of each Series. At any time,
the Investor Certificates outstanding at such time, together with the Seller
Certificate, shall evidence the entire ownership of the Trust.
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SECTION 6.04 Registration of Transfer and Exchange of Certificates.
(a) (i) Greenwood on behalf of the Holder of the Seller Certificate
shall keep or cause to be kept by a transfer agent ("Transfer Agent") a
register for the Registered Certificates issued pursuant to this Agreement
and the Series Supplements for all Series then outstanding (the
"Certificate Register") at any office or agency of the Sellers to be
maintained in accordance with the provisions of Section 6.04(c) in which,
subject to such reasonable regulations as it may prescribe, the Sellers
shall provide for the registration and transfer of Registered Certificates.
The Certificate Register shall be in written form or capable of being
converted into written form within a reasonable time. Unless otherwise
specifically designated by Greenwood on behalf of the Holder of the Seller
Certificate in a written notice to the Trustee, the Certificate Register
shall be maintained at the Corporate Trust Office.
(ii) Investor Certificates of certain Classes of certain Series may
be ineligible for purchase by 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)(l) of the Code, and not excepted
under Section 4975(g) (a "Plan"). No transfer of such an Investor
Certificate shall be made nor shall any interest therein be transferred to
a Plan. Each Holder of such a Certificate, by its acceptance thereof,
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 the
provisions of 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
that is using assets to purchase such Certificates that constitute plan
assets by reason of a plan's investment in such entity. The Series
Supplement with respect to each Series shall set forth which Class or
Classes of such Series, if any, shall be subject to the restrictions set
forth in this Section 6.04(a)(ii).
(iii) Upon surrender for registration of transfer of any Registered
Certificate at any office or agency to be maintained in accordance with the
provisions of Section 6.04(c), Greenwood on behalf of the Holder of the
Seller Certificate shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or
more Registered Certificates of the same Class and Series, of a like
Fractional Undivided Interest and bearing a number not contemporaneously
outstanding.
(iv) At the option of a Holder of a Registered Certificate, such
Holder's Registered Certificates may be exchanged for other Registered
Certificates of the same Class and Series, of a like Fractional Undivided
Interest and bearing a number not contemporaneously outstanding upon
surrender of the Registered Certificates to be exchanged at any such office
or agency. Whenever any Registered Certificates are so surrendered for
exchange, Greenwood on behalf of the Holder of the Seller Certificate shall
execute, and the Trustee shall authenticate and deliver the Registered
Certificates which the Holder making the exchange is entitled to receive.
Registered Certificates, including Registered Certificates received in
exchange for Bearer Certificates, may not be exchanged for Bearer
Certificates.
(v) At the option of the Holder of a Bearer Certificate, subject to
applicable laws and regulations, Bearer Certificates may be exchanged for
other Bearer Certificates, in denominations smaller than those of the
Bearer Certificates being exchanged, or for Registered Certificates, in
either case of the same Class and Series, of a like Fractional Undivided
Interest and bearing a number not contemporaneously outstanding, upon
surrender of the Bearer
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Certificates to be exchanged at an office or agency of the Transfer Agent
located outside the United States. Each Bearer Certificate surrendered
pursuant to this Section shall have attached thereto all unmatured
Coupons; provided that any Bearer Certificate so surrendered after the
close of business on the Record Date preceding the relevant Payment Date
need not have attached the Coupon relating to such Payment Date (as
specified in the applicable Series Supplement).
(vi) The preceding provisions of this Section notwithstanding, the
Transfer Agent shall not be required to register the transfer of or
exchange any Certificate for a period of 15 days preceding any Payment
Date with respect to the Certificate.
(vii) Every Registered Certificate presented or surrendered for
registration of transfer or for exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to
the Sellers and the Trustee duly executed, by the Certificateholder
thereof or his attorney duly authorized in writing.
(viii) No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of Certificates.
(ix) All Investor Certificates (together with any Coupons)
surrendered for registration of transfer and exchange or for payment
shall be canceled and disposed of in a manner satisfactory to the
Trustee. The Trustee shall cancel and destroy any Global Certificate
upon its exchange in full for Definitive Euro-Certificates and shall
deliver a certificate of destruction to the Sellers. Such certificate
shall also state that a certificate or certificates of CEDEL or Euroclear
to the effect referred to in Section 6.11 was received with respect to
each portion of the Global Certificate exchanged for Definitive
Euro-Certificates.
(x) Greenwood on behalf of the Holder of the Seller Certificate
shall execute and deliver to the Trustee Bearer Certificates and
Registered Certificates in such amounts and at such times as are
necessary to enable the Trustee to fulfill its responsibilities under
this Agreement, each Series Supplement and the Certificates.
(b) It is the understanding of the parties to this Agreement that
Greenwood has particular expertise in performing the functions given by this
Agreement to the Master Servicer and that the Investor Certificateholders will
be purchasing the Investor Certificates relying on Greenwood exercising such
expertise in performing such functions. Except as provided in Sections 8.04
and 8.06, the Master Servicer is not permitted to resign and the parties
understand that the Master Servicer's performance of its functions and the
quality of the Receivables will best be ensured if Greenwood, together with any
Additional Sellers, retains the Seller Certificate. Accordingly (subject to
the condition that Greenwood shall at all times retain sole control over its
properties and except as provided in Section 7.02), the Seller Certificate
shall not be transferred, assigned, exchanged, or otherwise conveyed except as
provided in Section 7.05.
(c) The Sellers will maintain at their expense in the Borough of
Manhattan, The City of New York, and, if and so long as any Class of any Series
is listed on the Luxembourg Stock Exchange and such exchange shall so require,
in Luxembourg, an office or offices or agency or
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agencies where Investor Certificates may be surrendered for registration of
transfer or exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the United States).
SECTION 6.05 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate (together, in the case of a Bearer
Certificate, with all unmatured Coupons appertaining thereto) is surrendered to
the Trustee, Greenwood on behalf of the Holder of the Seller Certificate shall
execute and the Trustee shall authenticate and deliver (in the case of a Bearer
Certificate, outside the United States) in exchange therefor a Certificate of
the same Class and Series, of a like Fractional Undivided Interest and bearing
a number not contemporaneously outstanding.
(b) If there shall be delivered to Greenwood on behalf of the Holder of
the Seller Certificate and the Trustee (i) evidence to their satisfaction of
the destruction, loss or theft of any Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to Greenwood on behalf
of the Holder of the Seller Certificate or the Trustee that such Certificate
has been acquired by a bona fide purchaser, Greenwood on behalf of the Holder
of the Seller Certificate shall execute and, upon its request, the Trustee
shall authenticate and deliver (in the case of a Bearer Certificate, outside
the United States), in lieu of any such destroyed, lost or stolen Certificate,
a Certificate of the same Class and Series, of a like Fractional Undivided
Interest and bearing a number not contemporaneously outstanding.
(c) Upon the issuance of any Certificate pursuant to this Section, the
Sellers may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses, including counsel fees, of the Sellers and the Trustee, and any
Paying Agent or Transfer Agent connected therewith, and in addition a further
sum not exceeding two dollars for each Certificate so issued in substitution.
(d) Every Certificate and Coupon issued pursuant to this Section in lieu
of any destroyed, lost or stolen Certificate or Coupon shall constitute an
original additional contractual obligation of the Trust, whether or not the
destroyed, lost or stolen Certificate or Coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement and the applicable Series Supplement equally and proportionately with
any and all other Certificates or Coupons of the same Class and Series duly
issued hereunder.
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SECTION 6.06 Issuances of New Series.
(a) The Sellers may direct the Trustee to issue, from time to time, one or
more Series subject to the conditions described below (each such issuance, a
"New Issuance"). The Sellers may effect a New Issuance by notifying the
Trustee, in writing, at least three days in advance of the date upon which the
New Issuance is to occur. Any notice of the New Issuance shall state the
designation of any Series to be issued on the date of the New Issuance and, with
respect to each such Series: (i) its Series Initial Investor Interest, (ii) the
Certificate Rate of each Class or Subclass, if applicable, of such Series; (iii)
its Payment Dates and the date from which interest shall accrue; (iv) its Series
Termination Date and (v) any other terms that the Sellers set forth in such
notice of a New Issuance. On the date of the New Issuance, the Trustee shall
authenticate and deliver any such Series only upon satisfaction of the following
conditions: (a) Greenwood on behalf of the Holder of the Seller Certificate
shall have delivered to the Trustee a Series Supplement executed by the Sellers,
the Master Servicer, the Servicers and the Trustee that specifies the terms of
such Series, including, without limitation, the Series Initial Investor
Interest, the Certificate Rate for each Class of such Series, the terms for the
allocation of Collections available to such New Issuance and the assignment of
such Series to a Group and such other terms the Sellers may deem appropriate,
(b) the Sellers shall have delivered to the Trustee written confirmation from
the Rating Agencies that the New Issuance will not result in the reduction or
withdrawal of the ratings of any Class of any Series then outstanding rated by
each Rating Agency, (iii) the Sellers shall have delivered to the Trustee and
the Rating Agencies (A) with respect to each New Issuance, an opinion of counsel
dated as of the date of such New Issuance to the effect that, although not free
from doubt, the Investor Certificates of such New Issuance will be treated as
indebtedness of the Sellers for federal income and state (for any state where a
Servicer conducts substantial servicing activities with respect to Accounts
serviced by such Servicer) income or franchise tax purposes and (B) with respect
to each New Issuance other than the New Issuance related to the first Series
issued by the Trust, an opinion of counsel dated as of the date of such New
Issuance to the effect that such New Issuance will not adversely affect the
conclusion set forth in any prior opinion of counsel delivered pursuant to this
clause (iii) as to the treatment of the Investor Certificates of any such prior
Series as indebtedness of the Sellers or as to the treatment of the Trust as a
mere security device and (iv) Greenwood on behalf of the Holder of the Seller
Certificate shall not be required to designate Additional Accounts or convey
Participation Interests to the Trust pursuant to Section 2.10(a) as a result of
such New Issuance. The Series Supplement with respect to any New Issuance may
modify or amend the terms of this Agreement, provided, that such modifications
or amendments shall apply solely with respect to such Series. Upon satisfaction
of such conditions, the Trustee shall issue, as provided in Section 6.06(d),
such Series of Investor Certificates dated as of the date of the New Issuance.
(b) The Sellers may direct the Trustee to issue one or more Series which
is subordinate in right of payment, in whole or in part, to one or more other
Series, whether or not any such Series are issued contemporaneously. The
manner and extent to which any Series shall be subordinated to any other Series
shall be set forth in the Series Supplement for the subordinated Series.
(c) The Sellers may designate that one or more Groups be subordinate in
right of payment, in whole or in part, to one or more other Groups, whether or
not the Series in any such subordinate Group are issued contemporaneously with
the Series in any non-subordinate Group. The manner and extent to which any
Group shall be subordinated to any other Group shall be set forth in the Series
Supplements for each Series which is a member of such subordinate Group.
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(d) Upon any New Issuance, Greenwood on behalf of the Holder of the Seller
Certificate shall execute and deliver to the Trustee, and the Trustee shall
authenticate pursuant to Section 6.03, one or more Series of Investor
Certificates. The Investor Certificates of any such Series shall be
substantially in the form specified in the applicable Series Supplement and
shall each bear, upon its face, the designation for such Series.
SECTION 6.07 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer or exchange, the Trustee, the Paying
Agent, the Transfer Agent and any agent of any of them may (a) treat the person
in whose name any Registered Certificate is registered as the owner of such
Registered Certificate for the purpose of receiving distributions pursuant to
Section 5.01 and for all other purposes whatsoever and (b) treat the bearer of a
Bearer Certificate or Coupon as the owner of such Bearer Certificate or Coupon
for the purpose of receiving distributions pursuant to Section 5.01 and for all
other purposes whatsoever; and, in either case, neither the Trustee, the Paying
Agent, the Transfer Agent nor any agent of any of them shall be affected by any
notice to the contrary.
SECTION 6.08 Appointment and Duties of Paying Agent
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the Series Distribution Accounts, the Series Interest
Funding Accounts and the Series Principal Funding Accounts pursuant to Section
5.01 and the relevant provisions of the applicable Series Supplement. Any
Paying Agent shall have the revocable power to withdraw funds from the Series
Distribution Accounts, the Series Interest Funding Accounts and the Series
Principal Funding Accounts for the purpose of making the distributions referred
to above. The Trustee may revoke such power and remove the Paying Agent if the
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Agreement or any Series Supplement
in any material respect. The Paying Agent shall initially be the Trustee and
any co-paying agent or paying agencies chosen by the Paying Agent and acceptable
to the Trustee and the Sellers, including, if and for so long as any Class of
any Series is represented by Bearer Certificates or is listed on the Luxembourg
Stock Exchange and such exchange so requires, a co-paying agent or paying agency
in Luxembourg or another city in western Europe. The Trustee shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Sellers and upon
the appointment of a successor to act as Paying Agent. For so long as the
Trustee shall act as Paying Agent, the provisions of Sections 11.01, 11.02 and
11.03 shall apply to the Trustee in its role as Paying Agent.
(b) The Trustee shall cause any Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for payment to the Investor Certificateholders in trust for the benefit of
the Investor Certificateholders entitled thereto until such sums shall be paid
to such Investor Certificateholders.
SECTION 6.09 Access to List of Names and Addresses of Holders of
Registered Certificates. The Trustee will furnish or cause to be furnished by
the Transfer Agent to the Master Servicer or the Paying Agent, within five
Business Days after receipt by the Trustee of a request therefor from the Master
Servicer or the Paying Agent, respectively, in writing, a list in such form as
the Master Servicer or the Paying Agent may reasonably require, of the names and
addresses of the Holders of Registered Certificates of any Class or Series as of
the most recent Record Date for payment of distributions to such Holders of
Registered Certificates. If three or more Holders of Registered Certificates of
any Class of any Series (the "Applicants") representing Fractional Undivided
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Interests aggregating not less than 5% of the Series Invested Amount of any
Series apply in writing to the Trustee, and such application states that the
Applicants desire to communicate with other Holders of Registered Certificates
of such Class of such Series, or such Series, with respect to their rights under
this Agreement, the relevant Series Supplement or the Investor Certificates and
is accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent to afford such Applicants access during normal business hours to the most
recent list of Holders of Registered Certificates of such Class of such Series,
or such Series, held by the Trustee, within five Business Days after the receipt
of such application. Such list shall be as of a date no more than 45 days prior
to the date of receipt of such Applicants' request. Every Holder of a
Registered Certificate, by receiving and holding such Certificate, agrees with
the Trustee that neither the Trustee, the Transfer Agent, nor any of their
respective agents shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of such Certificateholders
hereunder, regardless of the source from which such information was derived.
SECTION 6.10 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with respect
to one or more Series which shall be authorized to act on behalf of the Trustee
in authenticating the Certificates of such Series in connection with the
issuance, delivery, registration of transfer, exchange or repayment of such
Certificates. Wherever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be acceptable to the Sellers.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Sellers. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Sellers. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an authenticating agent shall cease to be acceptable to the Trustee or the
Sellers, the Trustee promptly may appoint a successor authenticating agent.
Any successor authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to the
Trustee and the Sellers.
(d) The Trustee agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section 6.10, and the
Trustee shall be entitled to be reimbursed and the Master Servicer shall
reimburse the Trustee for such payments, subject to the provisions of Section
11.05.
(e) The provisions of Sections 11.01, 11.02 and 11.03 shall be applicable
to any authenticating agent.
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(f) Pursuant to an appointment made under this Section 6.10, the
Certificates of an applicable Series may have endorsed thereon, in lieu of the
Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
"This is one of the Certificates described in the Pooling and
Servicing Agreement and Series Supplement.
_______________________________________
_______________________________________
as Authenticating Agent for the Trustee,
By:____________________________________
Authorized Officer"
SECTION 6.11 Global Certificate; Exchange Date
(a) If specified in the related Series Supplement for any Series or Class,
the Investor Certificates of such Series or Class, as applicable, will initially
be issued as a single temporary global certificate (the "Global Certificate") in
bearer form, without Coupons, in the denomination of the Series Initial Investor
Interest or the Class Initial Investor Interest, as applicable, and
substantially in the form set forth in the exhibit with respect thereto attached
to the related Series Supplement. The Global Certificate will be authenticated
by the Trustee upon the same conditions, in substantially the same manner and
with the same effect as the Definitive Certificates. The Global Certificate may
be exchanged as described below for Bearer Certificates or Registered
Certificates in definitive form (the "Definitive Euro-Certificates").
(b) The Manager shall advise the Trustee, the Sellers, the Common
Depositary, CEDEL and Euroclear of the Exchange Date. Not later than the
Exchange Date, Greenwood on behalf of the Holder of the Seller Certificate will
execute and deliver to the Trustee or its designated agent, in either case,
outside the United States, definitive Bearer Certificates in an aggregate
principal amount equal to the Series Initial Investor Interest or the Class
Initial Investor Interest, as applicable, less, in either case, the aggregate
principal amount of the Global Certificate expected to be issued to United
States institutional investors, as described below. All Bearer Certificates so
issued and delivered will have Coupons attached. The Global Certificate may be
exchanged for Definitive Euro-Certificates only on or after the Exchange Date. A
United States institutional investor may exchange the portion of the Global
Certificate beneficially owned by it only for an equal aggregate principal
amount of Registered Certificates bearing the applicable legend set forth in the
form of Registered Certificate attached to the related Series Supplement and
having a minimum denomination of $500,000. The Sellers may waive the $500,000
minimum denomination requirement if they so elect. Upon any demand for exchange
for Definitive Euro-Certificates in accordance with this paragraph, the Sellers
shall cause the Trustee to authenticate and deliver the Definitive
Euro-Certificates to the Holder (x) outside the United States, in the case of
Bearer Certificates, and (y) according to the instructions of the Holder, in the
case of Registered Certificates, but in either case only upon presentation to
the Trustee of a written statement substantially in the form of Exhibit H-1 with
respect to the Global Certificate or portion thereof being exchanged signed by
CEDEL or Euroclear and dated on or after the Exchange Date, to the effect that
it has received in writing or by tested telex a certification substantially in
the
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form of (i) in the case of beneficial ownership of the Global Certificate or a
portion thereof being exchanged by a United States institutional investor
pursuant to the second preceding sentence, the certificate in the form of
Exhibit H-2 signed by the Manager which sold the relevant Certificates or (ii)
in all other cases, the certificate in the form of Exhibit H-3, the certificate
referred to in this clause (ii) being dated on or after the 15th day before the
Exchange Date. Upon receipt of such certification, the Trustee shall cause the
Global Certificate to be endorsed in accordance with paragraph (d) below. Any
exchange as provided in this Section shall be made free of charge to the holders
and the beneficial owners of the Global Certificate and to the beneficial owners
of the Definitive Euro-Certificates issued in exchange, except that a person
receiving Definitive Euro-Certificates must bear the cost of insurance, postage,
transportation and the like in the event that such person does not receive such
Definitive Euro-Certificates in person at the offices of CEDEL or Euroclear.
(c) The delivery to the Trustee by CEDEL or Euroclear of any written
statement referred to above may be relied upon by the Sellers and the Trustee as
conclusive evidence that a corresponding certification or certifications has or
have been delivered to CEDEL or Euroclear, as applicable, pursuant to the terms
of this Agreement. The Trustee, CEDEL and Euro-clear, as the case may be, shall
retain each certificate delivered pursuant to Section 6.11 for a period of four
calendar years following the year in which such certificate is received.
(d) Upon any such exchange of all or a portion of the Global Certificate
for a Definitive Euro-Certificate or Certificates, such Global Certificate shall
be endorsed by or on behalf of the Trustee to reflect the reduction of its
principal amount by an amount equal to the aggregate principal amount of such
Definitive Euro-Certificate or Certificates. Until so exchanged in full, such
Global Certificate shall in all respects be entitled to the same benefits under
this Agreement as Definitive Euro-Certificates authenticated and delivered
hereunder except that the beneficial owners of such Global Certificate shall not
be entitled to receive payments of interest on the Certificates until they have
exchanged their beneficial interests in such Global Certificate for Definitive
Euro-Certificates.
SECTION 6.12 Meetings of Certificateholders. (a) If, with respect to any
Series then outstanding, any Bearer Certificates are issued and outstanding with
respect to any Class of such Series, the Master Servicer or the Trustee may at
any time call a meeting of Investor Certificateholders of any such Series or
Class or of all such Series, to be held at such time and at such place as the
Master Servicer or the Trustee, as the case may be, shall determine for the
purpose of approving a modification of or amendment to, or obtaining a waiver of
any covenant or condition set forth in, this Agreement, any applicable Series
Supplement or the Investor Certificates or of taking any other action permitted
to be taken by Investor Certificateholders hereunder or under any Series
Supplement. Notice of any meeting of Investor Certificateholders, setting forth
the time and place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given in accordance with Section 13.05, the
first mailing and publication to be not less than 20 nor more than 180 days
prior to the date fixed for the meeting. To be entitled to vote at any meeting
of Investor Certificateholders a person shall be (i) a Holder of one or more
Bearer Certificates of the applicable Series or Class, as described in Section
6.12(d), or (ii) the Holder of or a person appointed by an instrument in writing
as proxy by the Holder of one or more Registered Certificates. The only persons
who shall be entitled to be present or to speak at any meeting of Investor
Certificateholders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of the Sellers, the Master Servicer and
the Trustee and their respective counsel.
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(b) At a meeting of Investor Certificateholders, persons entitled to vote
Investor Certificates evidencing a majority of the Series Invested Amount or the
Class Invested Amount, as applicable, of the applicable Series or Class or the
sum of the Series Invested Amounts for all applicable Series, as the case may
be, shall constitute a quorum. For purposes of determining whether a quorum is
present, the applicable Class Invested Amount and Series Invested Amount shall
be calculated without taking into account the Class Investor Interest
represented by any Investor Certificates beneficially owned by any Seller or any
affiliate of any Seller. No business shall be transacted in the absence of a
quorum, unless a quorum is present when the meeting is called to order. In the
absence of a quorum at any such meeting, the meeting may be adjourned for a
period of not less than 10 days; in the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further adjourned
for lack of a quorum, the persons entitled to vote Investor Certificates
evidencing at least 25% of the Series Invested Amount or the Class Invested
Amount, as applicable, of the applicable Series or Class or the sum of the
Series Invested Amounts for all applicable Series, as the case may be, shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided above except that such notice must be given not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage of the Series Invested Amount or the Class Invested Amount, as
applicable, or of the sum of the Series Invested Amounts for all applicable
Series, as the case may be, which shall constitute a quorum.
(c) Any Holder of a Registered Certificate who has executed an instrument
in writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that
such Holder of a Registered Certificate shall be considered as present or
voting only with respect to the matters covered by such instrument in writing.
Subject to the provisions of Section 13.01(b), any resolution passed or
decision taken at any meeting of Certificateholders duly held in accordance
with this Section shall be binding on all Investor Certificateholders of the
applicable Class or Series, whether or not present or represented at the
meeting.
(d) The holding of Bearer Certificates for purposes of this Section 6.11
shall be proved by the production of such Bearer Certificates or by a
certificate, satisfactory to the Master Servicer, executed by any bank, trust
company or recognized securities dealer, wherever situated, satisfactory to the
Master Servicer. Each such certificate shall be dated and shall state that on
the date thereof a Bearer Certificate bearing a specified serial number was
deposited with or exhibited to such bank, trust company or recognized
securities dealer by the person named in such certificate. Any such
certificate may be issued in respect of one or more Bearer Certificates
specified therein. The holding by the person named in any such certificate of
any Bearer Certificate specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a later date
issued in respect of the same Bearer Certificate shall be produced, (ii) the
Bearer Certificate specified in such certificate shall be produced by some
other person or (iii) the Bearer Certificate specified in such certificate
shall have ceased to be outstanding. The holding of Registered Certificates
shall be proved by the Certificate Register. The appointment of any proxy with
respect to a Registered Certificate shall be proved by having the signature of
the person executing the proxy guaranteed by any bank, trust company or
recognized securities dealer satisfactory to the Master Servicer.
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(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of persons entitled to vote evidencing a majority of the Series Invested
Amount or the Class Invested Amount, as applicable, of the applicable Series or
Class or the sum of the Series Invested Amounts for all applicable outstanding
Series, as the case may be, represented at the meeting. No vote shall be cast
or counted at any meeting in respect of any Investor Certificate challenged as
not outstanding and ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote except as an Investor
Certificateholder or proxy. Any meeting of Investor Certificateholders duly
called at which a quorum is present may be adjourned from time to time, and the
meeting may be held as so adjourned without further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The record shall be
signed and verified by the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Master Servicer and the other to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 6.13 Special Provisions for Certain Series. Except with respect
to the provisions of Sections 6.03, 6.04(b) and 6.06 and provisions relating
specifically to the Seller Certificate, the foregoing provisions of this Article
VI may be modified with respect to any Series to the extent provided in the
applicable Series Supplement.
SECTION 6.14 Exchange of Investor Certificates for Seller Interest. In
the event that any Seller becomes a Certificate Owner or an Investor
Certificateholder (in the event that Definitive Certificates are issued pursuant
to Section 6.02), Greenwood on behalf of the Holder of the Seller Certificate
may cancel such Investor Certificates on a Distribution Date with respect to
such Investor Certificates by providing notice to the Trustee of such
cancellation; provided, however, that no Investor Certificates, except Class A
Certificates, may be cancelled unless Greenwood on behalf of the Holder of the
Seller Certificate shall have been advised by the Rating Agencies that such
cancellation would not cause the rating of any Class of any Series then
outstanding to be lowered or withdrawn. Such cancellation shall be deemed to
occur after giving effect to all allocations and payments pursuant to Article IV
hereof and the applicable provisions of the Series Supplements for each Series
then outstanding as of such Distribution Date and the related Trust Distribution
Date. Simultaneously with such cancellation, the Class Investor Interest of the
applicable Class and the Series Investor Interest of the Series under which such
Investor Certificates were issued shall be reduced, and the Seller Interest
shall be increased, by the aggregate Class Investor Interest represented by such
cancelled Investor Certificates, in each case as of the end of the related Due
Period. Such reduction in the Class Investor Interest will not result in any
change in any numerator for purposes of determining any Class
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Percentage with respect to such Class if a Fixed Principal Allocation Event with
respect to such Series has previously occurred. Greenwood on behalf of the
Holder of the Seller Certificate shall promptly notify the Rating Agencies of
any exchange of Investor Certificates for Seller Interest pursuant to this
Section 6.14.
ARTICLE VII
OTHER MATTERS RELATING TO THE SELLERS
SECTION 7.01 Liability of Sellers. Each Seller shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by such Seller in such capacity herein.
SECTION 7.02 Merger or Consolidation of, or Assumption of the Obligations
of, Greenwood, or any Additional Seller.
(a) Nothing in this Agreement shall prevent any consolidation or merger of
Greenwood or any Additional Seller with or into any other corporation, or any
consolidation or merger of any other corporation with or into Greenwood or any
such Additional Seller, or any sale or transfer of all or substantially all of
the property and assets of Greenwood or any such Additional Seller to any other
corporation lawfully entitled to acquire the same; provided, however, that
(i) if Greenwood or such Additional Seller, as applicable, is not
the surviving entity, such successor corporation shall be organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall be a banking corporation or other
entity that is not subject to the bankruptcy laws of the United States of
America, provided that such entity shall not be an insurance company; or
(ii) Greenwood or such Additional Seller, as applicable, shall have
been advised by the Rating Agency that the rating of any Investor
Certificates of any Class of any Series then outstanding would not be
lowered or withdrawn as a result of such transaction; and
provided, further, that, so long as Certificates are outstanding hereunder,
Greenwood or such Additional Seller, as applicable, covenants and agrees that
any such consolidation, merger, sale or transfer shall be upon the condition
that the due and punctual performance and observance of all the terms, covenants
and conditions of this Agreement to be kept or performed by Greenwood or such
Additional Seller, as applicable, shall, by an agreement supplemental hereto,
executed and delivered to the Trustee, be assumed by the corporation (if other
than Greenwood or such Additional Seller, as applicable) formed by or resulting
from any such consolidation or merger, or which shall have received the transfer
of all or substantially all of the property and assets of Greenwood, just as
fully and effectually as if such successor corporation had been the original
party of the first part hereto; and in the event of any such sale or transfer
Greenwood or such Additional Seller, as applicable, may be dissolved, wound up
and liquidated at any time thereafter.
(b) The obligations of Greenwood or any Additional Seller hereunder shall
not be assignable, nor shall any Person succeed to the obligations of Greenwood
or any Additional Seller hereunder, except in each case in accordance with the
provisions of the foregoing subsection (a).
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(c) Greenwood or such Additional Seller, as applicable, shall notify the
Rating Agencies on or before the date of any consolidation, merger or transfer
of all or substantially all of its property and assets pursuant to subsection
(a) of this Section 7.02.
SECTION 7.03 Limitation on Liability of Certain Persons. No recourse
under or upon any obligation or covenant of this Agreement or any Series
Supplement, or of any Certificate, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer
or director, as such, past, present or future, of any Seller or of any successor
corporation, either directly or through such Seller, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Agreement and any
Series Supplement and the obligations incurred hereunder and thereunder are
solely corporate obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by the incorporators, stockholders,
officers or directors, as such, of any Seller or of any successor corporation to
such Seller, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or covenants contained in
this Agreement, any Series Supplement or in any of the Certificates or implied
therefrom; and that any and all such personal liability, either at common law or
in equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, stockholder, officer or director, as
such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Agreement or any Series Supplement or in any of the Certificates or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Agreement and any Series Supplement and
the issuance of such Certificates. Any Seller and any director or officer or
employee or agent of any Seller may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder.
SECTION 7.04 Seller Indemnification of the Trust and the Trustee.
Greenwood on behalf of the Holder of the Seller Certificate shall indemnify and
hold harmless the Trust and the Trustee from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts, omissions
or alleged acts or omissions arising out of activities of the Sellers with
respect to the Trust, the Trust or the Trustee pursuant to this Agreement or any
Series Supplement, including but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that Greenwood on behalf of the Holder of the Seller
Certificate shall not indemnify the Trustee if such acts, omissions or alleged
acts or omissions constitute fraud, negligence, breach of fiduciary duty or
misconduct by the Trustee; and provided, further, that Greenwood on behalf of
the Holder of the Seller Certificate shall not indemnify the Trust or the
Investor Certificateholders for any liabilities, costs or expenses of the Trust
with respect to any action taken by the Trustee at the request of the Investor
Certificateholders; and provided, further, that Greenwood on behalf of the
Holder of the Seller Certificate shall not indemnify the Trust or the Investor
Certificateholders with respect to any federal, state or local income or
franchise taxes (or any interest or penalties with respect thereto) required to
be paid by the Trust or the Investor Certificateholders in connection herewith
to any taxing authority, which taxes shall be the sole obligation of the Trust
or the Investor Certificateholders. Any such indemnification shall only be from
assets of the Sellers, shall be subordinate to the security interest of the
Trust in the Receivables and shall not constitute a claim against any Seller in
excess of the lesser of (i) such Seller's assets available to pay such claim or
(ii) the amount of such claim multiplied by a fraction the numerator of which is
the aggregate amount of Principal Receivables in the Trust which were originated
by such Seller and the denominator of which
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is the aggregate amount of Principal Receivables in the Trust. The obligations
under this Section shall survive the termination of the Trust and the
resignation or removal of the Trustee.
SECTION 7.05 Transfer or Conveyance of Seller Certificate. It is the
understanding of the parties that the Seller Certificate will be issued
initially to Greenwood, and that any Additional Sellers will enter into the
Seller Certificate Ownership Agreement with Greenwood and, thereafter, hold the
Seller Certificate, together with Greenwood, as tenants-in-common. Except with
respect to any such transfer of a portion of their interest in the Seller
Certificate to any Additional Seller pursuant to the terms of this Agreement, or
the transfer of all or part of any Seller's interest in the Seller Certificate
to an affiliate of Greenwood that is included in the same "affiliated group" as
Greenwood for United States federal income tax purposes, no Seller may transfer,
assign, sell or otherwise convey, pledge or hypothecate or otherwise grant a
security interest in (each, for purposes of this Section 7.05, a "transfer") any
portion of the Seller Interest represented by the Seller Certificate; provided,
however, that a Seller may transfer a portion of the Seller Interest so long as
the agreements and other documentation relating thereto are consistent with, and
subject to, the terms hereof and do not require any action prohibited or
prohibit any action required on the part of the Master Servicer, the Sellers or
the Trustee by the terms of this Agreement or any Series Supplement, or as
necessary to protect the interests of the Investor Certificateholders; and,
provided that such Seller shall have been advised by the Rating Agencies that
such transfer would not cause the ratings of any Class of any Series then
outstanding to be lowered or withdrawn. Notwithstanding the foregoing, such
advice shall not be required if the principal objective of such conveyance or
transfer is compliance with Regulatory Requirements, provided that Greenwood
shall notify the Rating Agencies of such conveyance or transfer. For purposes
of the foregoing sentence, Regulatory Requirements shall mean Requirements of
Law applicable to any Seller or any of its affiliates as a result of the
affiliation of any Seller or any of its affiliates with a depository institution
or applicable to any Seller or any of its affiliates as a depository
institution, including, without limitation, any condition under such
Requirements of Law that must be satisfied in order for any affiliate of any
Seller to avoid being treated as a bank holding company (or any similar
designation under the Bank Holding Company Act of 1956, as said act may be
amended from time to time) under the Bank Holding Company Act of 1956, as
amended, notwithstanding such affiliation, or to avoid limitations under said
act upon the activities in which affiliates of any Seller may engage.
SECTION 7.06 Corporate Actions. So long as any Investor Certificates are
outstanding, each Seller's board of directors will hold appropriate meetings or
will take appropriate action by written consent in accordance with applicable
state law to authorize all of such Seller's corporate actions.
SECTION 7.07 Bankruptcy Against Any Additional Seller. Each of the Master
Servicer, each Servicer, each Seller, the Trustee and the Paying Agent hereby
covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all Series of Investor Certificates, it will not
institute against, or join with any other Person in instituting against, any
Additional Seller that is subject to the bankruptcy laws of the United States of
America, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law.
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ARTICLE VIII
OTHER MATTERS RELATING TO THE MASTER
SERVICER AND THE SERVICERS
SECTION 8.01 Master Servicer and Servicer Liability. The Master Servicer
and each Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Master Servicer or such Servicer
in such capacity herein.
SECTION 8.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Master Servicer or any Servicer. Nothing in this Agreement shall
prevent any consolidation or merger of the Master Servicer or any Servicer with
or into any other corporation, or any consolidation or merger of any other
corporation with or into the Master Servicer or any Servicer, or any sale or
transfer of all or substantially all of the property and assets of the Master
Servicer or any Servicer to any other corporation lawfully entitled to acquire
the same; provided, however, that, so long as Certificates are outstanding
hereunder, the Master Servicer and each Servicer covenants and agrees that any
such consolidation, merger, sale or transfer shall be upon the condition that
the due and punctual performance and observance of all the terms, covenants and
conditions of this Agreement to be kept or performed by the Master Servicer or
such Servicer, as applicable, shall, by an agreement supplemental hereto,
executed and delivered to the Trustee, be assumed by the corporation (if other
than the Master Servicer or such Servicer) formed by or resulting from any such
consolidation or merger, or which shall have received the transfer of all or
substantially all of the property and assets of the Master Servicer or such
Servicer, just as fully and effectually as if such successor corporation had
been the original party of the first part hereto; and in the event of any such
sale or transfer the predecessor Master Servicer or such predecessor Servicer
may be dissolved, wound up and liquidated at any time thereafter. The Master
Servicer shall notify Moody's of any consolidation, merger or transfer of all or
substantially all of its property or assets or of the property or assets of any
Servicer pursuant to this Section 8.02.
SECTION 8.03 Limitation on Liability of the Master Servicer and each
Servicer and Others. No recourse under or upon any obligation or covenant of
this Agreement or any Series Supplement, or of any Certificate, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Master Servicer or any Servicer or of any successor corporation,
either directly or through the Master Servicer or any Servicer, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Agreement and any Series Supplement and the obligations incurred hereunder are
solely corporate obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by the incorporators, shareholders,
officers or directors, as such, of the Master Servicer or any Servicer or of any
successor corporation, or any of them, because of the creation of any
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Agreement or any Series Supplement or
in any of the Certificates or implied therefrom; and that any and all such
personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations
or covenants contained in this Agreement or any Series Supplement or in any of
the Certificates or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Agreement
and any Series Supplement and the issue of such
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Certificates. The Master Servicer and each Servicer and any director or officer
or employee or agent of the Master Servicer and each Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. Neither the Master
Servicer nor any Servicer shall be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties to service the
Receivables in accordance with this Agreement or any Series Supplement which in
its reasonable opinion may involve it in any expense or liability.
SECTION 8.04 Master Servicer or Servicer Resignation. Neither the Master
Servicer nor any Servicer shall resign from the obligations and duties hereby
imposed on it except upon determination that (i) the performance of its duties
hereunder is no longer permissible under applicable law and (ii) there is no
reasonable action which the Master Servicer or such Servicer could take to make
the performance of its duties hereunder permissible under applicable law. Any
such determination permitting the resignation of the Master Servicer or such
Servicer shall be evidenced as to clause (i) above by an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a Successor Master Servicer or Successor
Servicer, as applicable, shall have assumed the responsibilities and obligations
of the Master Servicer or such Servicer in accordance with Section 10.03 hereof.
SECTION 8.05 Access to Certain Documentation and Information Regarding the
Receivables. The Master Servicer and each Servicer shall provide to the Trustee
access to its documentation regarding the Accounts and the Receivables in such
cases where the Trustee is required in connection with the enforcement of the
rights of the Investor Certificateholders, or by applicable statutes or
regulations, to review such documentation, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to the Master Servicer's or the Servicer's normal security and
confidentiality procedures and (iv) at offices designated by the Master Servicer
or the Servicer, as applicable. Nothing in this Section 8.05 shall derogate
from the obligation of the Sellers, the Trustee, the Master Servicer and each
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors. The failure of the Master Servicer or the Servicer, as
applicable, to provide access as provided in this Section 8.05 as a result of
such obligation shall not constitute a breach of this Section 8.05.
SECTION 8.06 Delegation of Duties. In the ordinary course of business,
the Master Servicer and each Servicer may at any time delegate any of its duties
hereunder to any Person who agrees to conduct such duties in accordance with the
applicable Credit Guidelines. Such delegation shall not relieve the Master
Servicer or any Servicer of its liabilities and responsibilities with respect to
such duties, and shall not constitute a resignation within the meaning of
Section 8.04 hereof. Greenwood shall provide the Rating Agencies and the
Trustee with written notice prior to the delegation of any of its duties as
Master Servicer or Servicer to any Person other than Greenwood or its affiliates
or their respective successors and assigns. The Master Servicer shall provide
the Rating Agencies with written notice prior to the delegation by any other
Servicer of any of the duties of such Servicer to any other Person, other than
such Servicer's affiliates or their respective successors and assigns.
SECTION 8.07 Examination of Records. Each Servicer shall clearly and
unambiguously identify each Account with respect to which it is the Servicer
(including any Additional Account designated pursuant to Section 2.10) in its
computer records to reflect that the Receivables arising in such Account have
been conveyed to the Trust pursuant to this Agreement or an Assignment.
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Each Servicer shall, prior to the sale or transfer to a third party of any
receivable held in its custody, examine its computer and other records to
determine that such receivable is not a Receivable.
SECTION 8.08 Seller or Master Servicer to File Reports Pursuant to
Securities Exchange Act. Each Seller and the Master Servicer are hereby
authorized by the Trustee to file on behalf of the Trust all reports required to
be filed with the Securities and Exchange Commission or any exchange or
association of securities dealers pursuant to the Securities Exchange Act of
1934, as amended, or any rules or regulations thereunder. The Trustee shall not
be obligated to file on behalf of the Trust any such reports described in the
preceding sentence.
ARTICLE IX
AMORTIZATION AND CERTAIN OTHER EVENTS
SECTION 9.01 Amortization Events. If any one of the following events
shall occur with respect to any Series of Investor Certificates:
(a) failure on the part of any Seller (i) to make any payment or deposit
required by the terms of this Agreement or a related Series Supplement on or
before the date occurring five Business Days after the date such payment or
deposit is required to be made herein or (ii) duly to observe or perform in any
material respect any other material covenants or agreements of such Seller set
forth in this Agreement or a Series Supplement, which continues unremedied for
a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to such Seller by the
Trustee, or to such Seller and the Trustee by the Investor Certificateholders
evidencing Fractional Undivided Interests aggregating not less than 25% of the
Class Invested Amount of any Class of any Series materially adversely affected
thereby;
(b) any representation or warranty made by any Seller in this Agreement or
a Series Supplement or any information contained in Schedule 1 hereto shall
prove to have been incorrect in any material respect when made or when
delivered, which representation, warranty or Schedule 1 continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the applicable Seller by the Trustee, or to such Seller and
the Trustee by the Holders of Investor Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Class Invested Amount
of any Class of any Series materially adversely affected thereby;
(c) any Additional Seller that is subject to the bankruptcy laws of the
United States of America shall file a petition commencing a voluntary case
under any chapter of the federal bankruptcy laws; any such Additional Seller
shall file a petition or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable federal law, or
shall consent to the filing of any such petition, answer, or consent; or any
such Additional Seller shall appoint, or consent to the appointment of, a
custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any substantial part
of its property; or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due;
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(d) Greenwood, or any Additional Seller that is not subject to the
bankruptcy laws of the United States of America, shall consent to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against Greenwood or any such Additional
Seller; or Greenwood or any such Additional Seller shall admit in writing its
inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations;
(e) any order for relief against any Additional Seller that is subject to
the bankruptcy laws of the United States of America shall have been entered by
a court having jurisdiction in the premises under any chapter of the federal
bankruptcy laws, and such order shall have continued undischarged or unstayed
for a period of 120 days; or a decree or order by a court having jurisdiction
in the premises shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of any such
Additional Seller under any other similar applicable federal law, and such
decree or order shall have continued undischarged or unstayed for a period of
120 days; or a decree or order of a court having jurisdiction in the premises
for the appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator, or other similar official in bankruptcy or insolvency of any such
Additional Seller, or of any substantial part of the property of any such
Additional Seller, or for the winding up or liquidation of its affairs, shall
have been entered, and such decree or order shall have remained in force
undischarged or unstayed for a period of 120 days;
(f) Greenwood as Seller shall become unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this Agreement
and such inability shall continue for five Business Days;
(g) any Seller other than Greenwood shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement and such inability shall continue for five Business Days;
(h) the Trust shall become an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(i) any Master Servicer Termination Event or any Servicer Termination
Event shall occur;
(j) the amount of Principal Receivables in the Trust at the end of any Due
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 on behalf of the Holder of the Seller
Certificate in at least the amount of such deficiency by the tenth day of the
calendar month of the following due Period (for purposes of this clause (i) the
amount of Receivables in Additional Accounts shall be determined as of the last
day of the Due Period preceding the assignment of such Receivables to the
Trust); or
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(k) any other event specified as an Amortization Event in the Series
Supplement for such Series shall occur;
then
(w) in the case of any event described in subparagraph (a), (b), (g) or
(i), after any applicable grace period set forth in such subparagraphs, either
the Trustee or the Holders of Investor Certificates of any Class materially
adversely affected thereby evidencing Fractional Undivided Interests
aggregating not less than 51% of the Class Invested Amount of such Class by
notice then given in writing to Greenwood on behalf of the Holder of the Seller
Certificate and the Master Servicer (and to the Trustee if given by the
Investor Certificateholders) may declare that an amortization event (an
"Amortization Event") has occurred with respect to such Series as of the date
of such notice;
(x) in the case of any event described in subparagraphs (c), (d), (e),
(f), (h) or (j) an Amortization Event shall occur immediately upon the
occurrence of such event; and
(y) in the case of any event described in subparagraph (k), an
Amortization Event shall occur with respect to such Series pursuant to the
terms of such Series Supplement.
If an Amortization Event described in subparagraphs (c), (d), (e), (f), (h) or
(j) shall occur, this Section 9.01 constitutes written notice by the Trustee
and not less than 51% of the Class Invested Amount of each Class of each Series
then outstanding to the Master Servicer and 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 subparagraphs (c), (d), (e),
(f), (h) or (j). Greenwood on behalf of the Holder of the Seller Certificate
(or the Master Servicer with respect to an Amortization Event that relates to
the Master Servicer or any Servicer) shall give prompt notice to the Rating
Agencies of the occurrence of any Amortization Event.
ARTICLE X
MASTER SERVICER AND SERVICER TERMINATION EVENTS
SECTION 10.01 Master Servicer Termination Events. If any one of the
following events (a "Master Servicer Termination Event") shall occur and be
continuing:
(a) any failure by the Master Servicer to make any payment, transfer or
deposit or to give instructions to the Trustee to make any withdrawal on or
before the date occurring five Business Days after the date such payment,
transfer or deposit or instruction is required to be made or given as the case
may be, under the terms of this Agreement, any Series Supplement or the Master
Servicing Agreement;
(b) failure on the part of the Master Servicer duly to observe or perform
in any respect any other covenants or material agreements of the Master
Servicer set forth in this Agreement, any Series Supplement or the Master
Servicing Agreement, which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, or to
the Master Servicer and the Trustee by the
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Holders of Investor Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Class Invested Amount of any Class of any
Series materially adversely affected thereby; or
(c) any representation, warranty or certification made by the Master
Servicer in this Agreement, any Series Supplement, the Master Servicing
Agreement or in any certificate delivered pursuant to this Agreement, any
Series Supplement or the Master Servicing Agreement shall prove to have been
incorrect when made, which has a material adverse effect on the rights of the
Certificateholders of any Class of any Series and which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Trustee, or to the Master
Servicer and the Trustee by the Holders of Investor Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Class
Invested Amount of any Class of any Series materially adversely affected
thereby; or
(d) the Master Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of 120
days; or the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
then, in the event of any such Master Servicer Termination Event, so long as
the Master Servicer Termination Event shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Class Invested Amount
of any Class materially adversely affected thereby, by notice then given in
writing to the Master Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Master Servicer under this Agreement and any Series
Supplements then outstanding. After receipt by the Master Servicer of such
Termination Notice, and on the date that a Successor Master Servicer shall have
been appointed by the Trustee pursuant to Section 10.03, all authority and
power of the Master Servicer under this Agreement shall pass to and be vested
in a Successor Master Servicer; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, all documents and other instruments
upon the failure of the Master Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Master Servicer agrees to cooperate with the Trustee and such Successor Master
Servicer in effecting the termination of the responsibilities and rights of the
Master Servicer to conduct servicing hereunder, including, without limitation,
the transfer to such Successor Master Servicer of all authority of the Master
Servicer to service the Receivables provided for under this Agreement,
including, without limitation, all authority over all Collections which shall
on the date of transfer be held by the Master Servicer for deposit, or which
have been deposited by the Master Servicer in any Investor Account, or which
shall thereafter be received with respect to the Receivables, and in assisting
the Successor Master Servicer. The terminated Master Servicer shall promptly
make available its electronic records
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relating to the Receivables to the Successor Master Servicer in such electronic
form as the Successor Master Servicer may reasonably request and shall promptly
make available to the Successor Master Servicer all other records,
correspondence and documents necessary for the continued servicing of the
Receivables in the manner and at such times as the Successor Master Servicer
shall reasonably request. To the extent that compliance with this Section
10.01 shall require the terminated Master Servicer to disclose to the Successor
Master Servicer information of any kind which the Master Servicer reasonably
deems to be confidential, the Successor Master Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Master Servicer shall deem necessary to protect its interests.
SECTION 10.02 Servicer Termination Events. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing with
respect to any Servicer:
(a) any failure by any Servicer to make any payment, transfer or deposit
on or before the date occurring five Business Days after the date such payment,
transfer or deposit is required to be made under the terms of this Agreement,
any Series Supplement or the Master Servicing Agreement; or
(b) failure on the part of any Servicer duly to observe or perform in any
respect any covenants or material agreements of such Servicer set forth in this
Agreement, any Series Supplement or the Master Servicing Agreement, which
continues unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to such Servicer by the Trustee, or to such Servicer and the Trustee by
the Holders of Investor Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Class Invested Amount of any Class of any
Series materially adversely affected thereby; or
(c) any representation, warranty or certification made by any Servicer in
this Agreement, any Series Supplement, the Master Servicing Agreement or in any
certificate delivered pursuant to this Agreement, any Series Supplement or the
Master Servicing Agreement shall prove to have been incorrect when made, which
has a material adverse effect on the rights of the Certificateholders of any
Class of any Series and which continues to be incorrect in any material respect
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to such Servicer by
the Trustee, or to such Servicer and the Trustee by the Holders of Investor
Certificates evidencing Fractional Undivided Interests aggregating not less
than 25% of the Class Invested Amount of any Class of any Series materially
adversely affected thereby; or
(d) any Servicer that is not subject to the bankruptcy laws of the United
States of America shall consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to such Servicer or of or
relating to all or substantially all of its property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or the winding-up or liquidation of its affairs, shall
have been entered against any Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 120 days; or any
Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of any applicable insolvency
or reorganization
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statute, make any assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or
(e) any Servicer that is subject to the bankruptcy laws of the United
States of America shall file a petition commencing a voluntary case under any
chapter of the federal bankruptcy laws; or any such Servicer shall file a
petition or answer or consent seeking reorganization, arrangement, adjustment
or composition under any other similar applicable federal law, or shall consent
to the filing of any such petition, answer or consent; or any such Servicer
shall appoint, or consent to the appointment of, a custodian, receiver,
liquidator, trustee, assignee, sequestrator or other similar official in
bankruptcy or insolvency of it or of any substantial part of its property; or
shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due; or
(f) any order for relief against any Servicer that is subject to the
bankruptcy laws of the United States of America shall have been entered by a
court having jurisdiction in the premises under any chapter of the federal
bankruptcy laws, and such order shall have continued undischarged or unstayed
for a period of 120 days; or a decree or order by a court having jurisdiction
in the premises shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of any such
Servicer under any other similar applicable federal law, and such decree or
order shall have continued undischarged or unstayed for a period of 120 days;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator, or other similar official in bankruptcy or insolvency of any such
Servicer, or of any substantial part of the property of any such Servicer, or
for the winding up or liquidation of its affairs, shall have been entered, and
such decree or order shall have remained in force undischarged or unstayed for
a period of 120 days;
then, in the event of any Servicer Termination Event, so long as the Servicer
Termination Event shall not have been remedied, either the Trustee, or the
Holders of Investor Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Class Invested Amount of any Class
materially adversely affected thereby, by notice then given in writing to the
Master Servicer and to the Servicer to which any such Servicer Termination
Event relates (and to the Trustee if given by the Investor Certificateholders)
(a "Termination Notice"), may terminate all of the rights and obligations of
such Servicer under this Agreement, any Series Supplements then outstanding and
the Master Servicing Agreement. After receipt by such Servicer of such
Termination Notice, and on the date that a Successor Servicer shall have been
appointed by the Trustee pursuant to Section 10.03 with respect to such
Servicer, all authority and power of such Servicer under this Agreement, any
Series Supplements then outstanding and the Master Servicing Agreement shall
pass to and be vested in such Successor Servicer; and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
such Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of such Servicer to execute or deliver such
documents or instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer of servicing
rights. Such Servicer agrees to cooperate with the Trustee and such Successor
Servicer in effecting the termination of the responsibilities and rights of
such Servicer to conduct servicing hereunder, including, without limitation,
the transfer to such Successor Servicer of all authority of such Servicer to
service such Servicer's Receivables provided for under this Agreement,
including, without limitation, all authority over all collections which shall
thereafter be received with respect to such Receivables, and in assisting the
Successor Servicer. The terminated Servicer shall promptly make available its
electronic records relating to the Receivables to the Successor Servicer in
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such electronic form as the Successor Servicer may reasonably request and shall
promptly make available to the Successor Servicer all other records,
correspondence and documents necessary for the continued servicing of the
Receivables in the manner and at such times as the Successor Servicer shall
reasonably request. To the extent that compliance with this Section 10.02
shall require the terminated Servicer to disclose to the Successor Servicer
information of any kind which such Servicer reasonably deems to be
confidential, such Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as such Servicer shall deem
necessary to protect its interest.
SECTION 10.03 Trustee to Act; Appointment of Successor Master Servicer
and/or Successor Servicer.
(a) On and after the receipt by the Master Servicer or any Servicer of a
Termination Notice pursuant to Section 10.01 or 10.02, the Master Servicer or
such Servicer, as applicable, shall continue to perform all servicing functions
performed by it under this Agreement until the date specified in the
Termination Notice or otherwise specified by the Trustee in writing or, if no
such date is specified in such Termination Notice, or otherwise specified by
the Trustee, until a date mutually agreed upon by Master Servicer or such
Servicer, as applicable, and the Trustee. The Trustee shall as promptly as
possible appoint a successor master servicer or servicer, as applicable, (the
"Successor Master Servicer" or "Successor Servicer," as applicable) and such
Successor Master Servicer or Successor Servicer shall accept its appointment by
a written assumption in a form acceptable to the Trustee. In the event that a
Successor Master Servicer or Successor Servicer has not been appointed or has
not accepted its appointment at the time when the Master Servicer or such
Servicer, as applicable, ceases to act as such, the Trustee without further
action shall automatically be appointed the Successor Master Servicer or
Successor Servicer, as applicable. Notwithstanding the above, the Trustee
shall, if it is legally unable so to act, petition a court of competent
jurisdiction to appoint any bank or other corporation having a net worth of not
less than $100,000,000 and whose regular business includes the servicing of
credit card receivables as the Successor Master Servicer or Successor Servicer,
as applicable, hereunder.
(b) Upon its appointment, the Successor Master Servicer or Successor
Servicer, as applicable, shall be the successor in all respects to the
terminated Master Servicer or Servicer, as applicable, with respect to
servicing functions under this Agreement and shall be subject to all the
responsibilities, duties, liabilities and protections relating thereto placed
on or provided to the Master Servicer or Servicer by the terms and provisions
hereof and the Successor Master Servicer or Successor Servicer, as applicable,
shall be deemed to have made the representations and warranties set forth in
Section 3.05 hereof, and all references in this Agreement to the Master
Servicer or such Servicer, as applicable, shall be deemed to refer to the
Successor Master Servicer or Successor Servicer, as applicable, except, if
agreed upon by Greenwood and any Successor Master Servicer or Successor
Servicer, for the references in Section 11.05, which shall continue to refer to
Greenwood; provided, however, that Greenwood shall not pay or reimburse the
Trustee pursuant to Section 11.05 for any expense, disbursement or advance of
the Trustee related to or arising as a result of the negligence or bad faith of
the Successor Master Servicer or Successor Servicer. Any Successor Master
Servicer or Successor Servicer, as applicable, shall expressly be authorized,
subject to Section 8.06, to delegate any of its duties hereunder to Greenwood
on and after the date of any transfer of servicing pursuant to this Section
10.03.
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(c) Upon its appointment, any Successor Master Servicer or Successor
Servicer shall enter into the Master Servicing Agreement, and the former Master
Servicer or Servicer, as applicable, shall cease to be a party to the Master
Servicing Agreement.
(d) In connection with the appointment of a Successor Master Servicer, the
Trustee may make such arrangements for the compensation of any Successor Master
Servicer out of Collections as it and such Successor Master Servicer shall
agree; provided, however, that no such compensation shall be in excess of the
Monthly Servicing Fee set forth in Section 3.03. The Holder of the Seller
Certificate agrees that if the Master Servicer or any Servicer is terminated
hereunder, it will, at the request of the Trustee or any Successor Master
Servicer or Successor Servicer, deposit a portion of the Finance Charge
Collections that it is entitled to receive pursuant to Section 4.03(c)(ii) to
pay its share of the compensation of such Successor Master Servicer or
Successor Servicer.
(e) All authority and power granted to any Successor Master Servicer or
Successor Servicer under this Agreement shall automatically cease and terminate
upon termination of the Trust pursuant to Section 12.01, and shall pass to and
be vested in the Holder of the Seller Certificate and, without limitation,
Greenwood on behalf of the Holder of the Seller Certificate is hereby
authorized and empowered to execute and deliver, on behalf of any Successor
Master Servicer or Successor Servicer, as attorney-in-fact or otherwise, all
documents and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer of
servicing rights. Any Successor Master Servicer or Successor Servicer agrees
to cooperate with the Holder of the Seller Certificate in effecting the
termination of the responsibilities and rights of such Successor Master
Servicer or Successor Servicer to conduct servicing on the Receivables. Any
Successor Master Servicer or Successor Servicer shall transfer its electronic
records relating to the Receivables to Greenwood on behalf of the Holder of the
Seller Certificate in such electronic form as Greenwood may reasonably request
and shall transfer all other records, correspondence and documents to Greenwood
on behalf of the Holder of the Seller Certificate in the manner and at such
times as Greenwood shall reasonably request. To the extent that compliance
with this Section 10.03 shall require any Successor Master Servicer or
Successor Servicer to disclose to any Seller information of any kind which such
Successor Master Servicer or Successor Servicer deems to be confidential, such
Seller shall be required to enter into such customary licensing and
confidentiality agreements as such Successor Master Servicer or Successor
Servicer shall deem necessary to protect its interests.
SECTION 10.04 Notification to Investor Certificateholders. Upon the
occurrence of any Master Servicer Termination Event or any Servicer Termination
Event, the Master Servicer or Servicer, as applicable, shall give prompt written
notice thereof to the Trustee and the Trustee shall give notice to the Investor
Certificateholders. Upon any termination or appointment of a Successor Master
Servicer or a Successor Servicer pursuant to this Article X, the Trustee shall
give prompt written notice thereof to the Rating Agencies and to the Investor
Certificateholders.
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SECTION 10.05 Waiver of Past Breaches. The Holders of Investor
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Class Invested Amount of any Class of any Series affected by any
default by the Master Servicer, any Servicer or the Sellers may, on behalf of
all Holders of Certificates of such affected Class, waive the effect of any
Master Servicer Termination Event or Servicer Termination Event or breach by any
Seller in the performance of its obligations hereunder and its consequences,
except a failure to make any required deposits or payments in accordance with
Section 4.03 or the applicable Series Supplement and except any Amortization
Event arising under Sections 9.01(c), (d) or (e). Upon any such waiver of a
past breach, such breach shall cease to exist with respect to such Class of such
Series, and any breach arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement with respect to such Class of such Series.
No such waiver shall extend to any subsequent or other breach or impair any
right consequent thereon except to the extent expressly so waived.
ARTICLE XI
THE TRUSTEE
SECTION 11.01 Duties of Trustee
(a) The Trustee, prior to the occurrence of any Master Servicer
Termination Event or any Servicer Termination Event of which it has knowledge
and after the curing of all Master Servicer Termination Events and all Servicer
Termination Events that may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement or any
Series Supplement. If any Master Servicer Termination Event or any Servicer
Termination Event of which the Trustee has knowledge has occurred (which has
not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Agreement or any Series Supplement, and use the
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement or any Series Supplement, shall examine them to
determine whether they conform to the requirements of this Agreement or such
Series Supplement. The Trustee shall give prompt written notice to the
Certificateholders of any lack of conformity of any such instrument to the
applicable requirements of this Agreement or any Series Supplement discovered
by the Trustee that would entitle a specified percentage of the
Certificateholders of any Class of any Series to take any action pursuant to
this Agreement or any Series Supplement.
(c) Subject to Section 11.01(a) no provision of this Agreement or any
Series Supplement shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own
misconduct; provided, however, that:
(i) The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
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(ii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Fractional Undivided Interests aggregating not less than 51%
of the Class Invested Amount of any Class of any Series materially
adversely affected thereby relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iii) The Trustee shall not be charged with knowledge of any Master
Servicer Termination Event referred to in Section 10.01(d) or any
Servicer Termination Event referred to in Section 10.02(c) or with
knowledge of any Amortization Event described in Sections 9.01(b), (c),
(d), (e), (f), (g), (i) or (j) (but only, in the case of Section 9.01(i),
if such Amortization Event relates to either a Master Servicer
Termination Event described in Section 10.01(d) or a Servicer Termination
Event described in Section 10.02(c)) unless a Responsible Officer of the
Trustee obtains actual knowledge of such failure or the Trustee receives
written notice of such failure from the Master Servicer, any Servicer or
any Holders of Investor Certificates evidencing Fractional Undivided
Interests aggregating not less than 10% of the Class Invested Amount of
any Class of any Series materially adversely affected thereby; and
(iv) The Trustee shall not be liable for any loss attributable to
the investment of funds in any Permitted Investment pursuant to this
Agreement or any Series Supplement nor shall the Trustee be liable for
the default or misconduct of the Master Servicer with regard to its
obligations in respect of funds on deposit in any Series Principal
Funding Account (as set forth in each applicable Series Supplement). In
no event shall the Trustee be liable for the payment of interest on any
funds in its possession, except as expressly provided in this Agreement.
(d) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement or any Series Supplement
shall in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Master Servicer or any
Servicer under this Agreement or any Series Supplement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer or any Servicer
in accordance with the terms of this Agreement or any Series Supplement.
(e) Except for actions expressly authorized by this Agreement or any
Series Supplement, the Trustee shall take no action reasonably likely to impair
the interests of the Trust in any Receivable existing as of the Cut-Off Date or
thereafter created or to impair the value of any Receivable now existing or
hereafter created.
(f) Except as provided in Section 2.10 or an applicable Series Supplement,
the Trustee shall have no power to vary the corpus of the Trust including,
without limitation, the power to (i) accept any substitute obligation for a
Receivable initially assigned to the Trust under Section 2.01 or 2.10 hereof,
(ii) add any other investment, obligation or security to the Trust, or (iii)
withdraw from
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the Trust any Receivables, except for a withdrawal permitted under Sections
2.05(b), 2.07(b), 2.11, 12.01 or 12.02.
(g) In the event that the Paying Agent or the Transfer Agent shall fail to
perform any obligation, duty or agreement in the manner or on the day required
to be performed by the Paying Agent or the Transfer Agent, as the case may be,
under this Agreement, the Trustee shall be obligated promptly to perform such
obligation, duty or agreement in the manner so required.
(h) If any Seller has agreed to transfer any of its credit receivables
(other than the Receivables) to another Person, upon the written request of
such Seller, the Trustee will enter into such agreements with the transferee of
such receivables as are necessary and desirable to separately identify the
rights of the Trust and such other Person in such Seller's receivables;
provided, however, that the Trustee shall not be required to enter into any
agreement which could adversely affect the interests of the Certificateholders;
and provided, further, that such Seller shall provide the Rating Agencies with
notice of any written agreement entered into pursuant to this Section 11.01(h).
(i) Any action, suit or proceeding brought in respect of one or more
particular Class or Series shall have no effect on the Trustee's rights, duties
and obligations hereunder with respect to any Classes or Series not the subject
of such action, suit or proceeding.
SECTION 11.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.01:
(a) The Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accord with, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented to it pursuant to this Agreement by the proper party or parties;
(b) The Trustee may consult with counsel and any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement or any Series Supplement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement or any Series Supplement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; provided, however, that nothing contained herein shall
relieve the Trustee of the obligations, upon the occurrence of any Master
Servicer Termination Event or any Servicer Termination Event (which has not
been cured), to exercise such of the rights and powers vested in it by this
Agreement or any Series Supplement, and to use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(d) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement
or any Series Supplement;
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(e) The Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by Holders of Investor
Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Class Invested Amount of any Class of any Series which could be
materially adversely affected if the Trustee does not make such investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed with due care by it hereunder; and
(g) Except as may be required by Section 11.01(a) hereof, the Trustee
shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for the purpose
of establishing the presence or absence of defects, the compliance by the
Sellers with their respective representations and warranties or for any other
purpose.
SECTION 11.03 Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.16, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Series Supplement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivable or related document.
The Trustee shall not be accountable for the use or application by the Sellers
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Holder of the Seller Certificate in
respect of the Receivables or any deficiency in amounts deposited in any
Investor Accounts by the Master Servicer.
SECTION 11.04 Trustee May Own Investor Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights with respect to such Investor Certificates as
it would have if it were not the Trustee.
SECTION 11.05 The Master Servicer to Pay Trustee's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to receive, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Master Servicer will pay or
reimburse the Trustee (without reimbursement from any Investor Account or
otherwise) upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement or any Series Supplement (including the reasonable
fees and expenses of its agents and counsel) except any such expense,
disbursement or advance as may arise from its negligence or bad faith and except
as provided in the following sentence. If the Trustee is appointed Successor
Master Servicer or Successor Servicer pursuant to Section 10.03, the provision
of this Section 11.05 shall not apply to expenses, disbursements and advances
made or incurred by the Trustee in its capacity as Successor Master Servicer or
Successor Servicer, as applicable, and the compensation of the Trustee as
Successor Master Servicer or Successor Servicer shall be determined in
accordance with Section 10.03 or the relevant provisions of the Master Servicing
Agreement, as applicable. The
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Master Servicer's obligations under this Section shall survive the termination
of the Trust and the resignation or removal of the Trustee.
SECTION 11.06 Master Servicer and Servicer Indemnification of Trustee.
The Master Servicer and each Servicer shall indemnify and hold harmless the
Trustee from and against any loss, liability, expense, damage or injury
(including but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other costs or other expenses incurred in connection with
the defense of any actual or threatened action, proceeding or claim) that may be
imposed on, incurred by or asserted at any time against the Trustee (whether or
not indemnified against by other parties) arising out of any acts or omissions
of the Master Servicer or such Servicer, as applicable, hereunder including,
without limitation, acts or omissions of the Master Servicer or such Servicer
relating to the administration of the Trust, the servicing and administration of
the Receivables, the collection of payments due under the Receivables, the
preparation of reports and other information with respect to the Receivables or
the Trust, the execution and delivery of any documents relating to the
Receivables or the Trust, and the registration or filing of any document with
the Securities and Exchange Commission, the Internal Revenue Service or any
other securities or tax authority of any jurisdiction with respect to the
Receivables or the Trust; provided, however, that neither the Master Servicer
nor any Servicer shall indemnify the Trustee to the extent any such loss,
liability, expense, damage or injury results from fraud, negligence, breach of
fiduciary duty or misconduct by the Trustee or from action taken by the Trustee
at the request of the Investor Certificateholders. The Master Servicer's and
each Servicer's obligations under this Section shall survive the termination of
the Trust and the resignation or removal of the Trustee.
SECTION 11.07 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be a bank or trust company in good standing, organized and
doing business under the laws of the United States of America or any state
thereof authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and a long-term debt rating
from Moody's of at least Baa3 and subject to supervision or examination by
federal or state banking authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 11.07, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 11.07, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 11.08.
SECTION 11.08 Resignation or Removal of Trustee.
(a) The Trustee may, upon the giving of written notice to the Sellers and
the Master Servicer and the appointment of a successor trustee, resign and be
discharged from the trust hereby created. Upon receiving such notice of
resignation, the Master Servicer shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.07 hereof and shall fail to resign after
written request therefor by the Sellers,
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or if at any time the Trustee shall be legally unable to act, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Master Servicer may remove the Trustee
and promptly appoint a successor trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.08 shall
not become effective until acceptance of appointment by the successor trustee
as provided in Section 11.09 hereof. The Master Servicer shall provide written
notice to the Rating Agencies of any resignation or removal of the Trustee and
the appointment of any successor trustee.
SECTION 11.09 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.08 hereof
shall execute, acknowledge and deliver to the Sellers and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder and under any Series Supplement, with like effect as if
originally named as Trustee herein. The predecessor Trustee shall deliver to
the successor trustee all documents and statements held by it hereunder; and
the Sellers and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor trustee all such rights,
power, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.09 unless at the time of such acceptance (i) such successor trustee
shall be eligible under the provisions of Section 11.07 hereof and (ii) such
successor trustee shall have a long-term debt rating of Baa3 (or a rating
comparable thereto) or higher from Moody's; provided that, in the case of a
bank or trust company which is the principal subsidiary in a holding company
system, the rating referred to above shall be the rating of the bank or trust
company in such system.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section 11.09, such successor trustee shall notify all Certificateholders
of such succession hereunder.
SECTION 11.10 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section
11.07 hereof, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Trustee shall promptly notify Moody's of the occurrence of
any such event.
SECTION 11.11 Appointment of Co-Trustee or Separate Trustee.
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(a) Notwithstanding any other provisions of this Agreement or any Series
Supplement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 11.11, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 11.07 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 11.09 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any applicable law of any jurisdiction in
which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer or any Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) No trustee hereunder shall be liable by reason of any act or
omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Section 11.11. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement and any Series Supplement, specifically including
every provision of this Agreement or any Series Supplement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Master Servicer and the Rating Agencies.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement or any Series Supplement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of
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its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.12 Tax Returns. In the event the Trust shall be required to
file tax returns, the Master Servicer shall cause a firm of nationally
recognized independent public accountants to prepare any tax returns required to
be filed by the Trust and shall remit such returns to the Trustee for signature
at least five days before such returns are due to be filed. The Master Servicer
shall also prepare or shall cause to be prepared all tax information required by
law to be distributed to Certificateholders and shall deliver such information
to the Trustee at least five days prior to the date it is required by law to be
distributed to Certificateholders. The Trustee, upon request, will furnish the
Master Servicer with all such information known to the Trustee as may be
reasonably required in connection with the preparation of all tax returns of the
Trust, and shall, upon request, execute such returns. In no event shall the
Trustee or the Master Servicer be liable for any liabilities, costs or expenses
of the Trust or the Investor Certificateholders arising under any tax law,
including, without limitation, federal, state, local or foreign income or excise
taxes or any other tax imposed on or measured by income (or any interest or
penalty with respect thereto or arising from a failure to comply therewith).
SECTION 11.13 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Series Supplement or the Certificates may be prosecuted and enforced by the
Trustee without the possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been obtained.
SECTION 11.14 Suits for Enforcement.
(a) If a Master Servicer Termination Event or any Servicer Termination
Event with respect to any Servicer shall occur and be continuing, the Trustee,
in its discretion may, subject to the provisions of Sections 10.01 and 10.02,
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement or any Series Supplement by a suit,
action or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or any
Series Supplement or in aid of the execution of any power granted in this
Agreement or any Series Supplement or for the enforcement of any other, legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Certificateholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Certificates or the rights of any Certificateholder thereof or to authorize
the Trustee to vote in respect of the claim of any Certificateholder in any
such proceeding.
SECTION 11.15 Rights of Investor Certificateholders to Direct Trustee.
Holders of Investor Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Class Invested Amount of any Class of any
Series affected by the conduct of any proceeding or the
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exercise of any right conferred by the Trustee shall have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Trustee; provided, however, that, subject to Section 11.01,
the Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, determines that the action so directed may
not lawfully be taken, or if the Trustee in good faith shall, by a Responsible
Officer or Responsible Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Certificateholders not parties to such direction;
and provided, further, that nothing in this Agreement or any Series Supplement
shall impair the right of the Trustee to take any action deemed proper by the
Trustee and which is not inconsistent with such direction by the
Certificateholders.
SECTION 11.16 Representations and Warranties of Trustee. The Trustee
represents and warrants and any successor trustee shall represent and warrant
that:
(a) The Trustee is organized, existing and in good standing under the
laws of the United States of America;
(b) The Trustee has full power, authority and right to execute, deliver
and perform this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement; and
(c) This Agreement has been duly executed and delivered by the Trustee.
SECTION 11.17 Maintenance of Office or Agency. The Holder of the Seller
Certificate will maintain at its expense (a) in the Borough of Manhattan, The
City of New York and in Chicago, Illinois in the case of Registered Certificates
and (b) in the case of Bearer Certificates, in London, if and for so long as any
Bearer Certificates are outstanding, and in Luxembourg, if and for so long as
any Bearer Certificates are outstanding and are listed on the Luxembourg Stock
Exchange, and such exchange shall so require, an office or offices or agency or
agencies where notices and demands to or upon the Trustee in respect of the
Certificates, this Agreement and any Series Supplement may be served. The
Holder of the Seller Certificate initially appoints the Corporate Trust Office
of the Trustee as the office for such purposes in Chicago, Illinois and the
Trustee's agent in New York, Mellon Securities Transfer Services, Inc., 120
Broadway, 33rd Floor, New York, New York 10271, as their agent for such purposes
in New York. The Trustee will give prompt written notice to the Master Servicer
and each Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 11.18 Requests for Agreement. A copy of the Agreement or any
Series Supplement may be obtained by any Investor Certificateholder by a request
in writing to the Trustee addressed to the Corporate Trust Office and will be
provided at the expense of the Master Servicer.
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ARTICLE XII
TERMINATION
SECTION 12.01 Termination of Sellers' Obligations; Termination of Trust.
(a) The respective obligations and responsibilities of the Sellers, the
Master Servicer, each Servicer and the Trustee created hereby shall terminate
(other than the obligation of the Trustee to make payments to
Certificateholders as hereafter set forth), except with respect to the duties
described in Sections 7.04, 11.06 and Section 12.02(b), upon the Final Trust
Termination Date or, if earlier, at the option of the Sellers, on the day after
the Distribution Date on which funds shall have been deposited in the Series
Distribution Accounts sufficient to pay in full the Aggregate Investor Interest
plus accrued and unpaid Certificate Interest at the applicable Certificate
Rates on all Series then outstanding.
(b) If as of the Distribution Date with respect to each Series then
outstanding in the month immediately preceding the month in which the Final
Trust Termination Date occurs the Aggregate Investor Interest would be greater
than zero (after giving effect to all transfers, withdrawals and deposits to
occur on such date pursuant to applicable Series Supplements), all the
Receivables shall be sold and the proceeds therefor paid to the Trust on or
prior to the last Distribution Date with respect to each Series then
outstanding before the Final Trust Termination Date by an institution
acceptable to the Trustee and the Master Servicer that is either (i) a
nationally recognized investment bank, (ii) a nationally recognized commercial
bank or (iii) any other institution whose regular business includes the sale of
receivables or trust certificates similar to the Investor Certificates. The
proceeds of such sale shall be treated as Collections on the Receivables and
shall be allocated among outstanding Series and deposited in accordance with
Section 4.03 and the applicable Series Supplements; provided, however, that any
such proceeds received after the end of the Due Period related to the last
Distribution Date before the Final Trust Termination Date shall nevertheless be
deemed to have been received during such Due Period. During such period ending
on such Distribution Date, the Master Servicer and the Servicers shall continue
to process Collections on the Receivables and deposit such Collections in
accordance with the provisions of Section 4.03.
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SECTION 12.02 Final Distribution with Respect to any Series.
(a) Written notice of the termination of any Series, specifying the
Distribution Date upon which the Investor Certificateholders of such Series may
surrender their Certificates for payment of the final distribution and
cancellation, shall be given (subject to at least two days' prior notice from
the Master Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series not later than the 10th day of the month of
such final distribution specifying (i) the Distribution Date (which shall be
the Distribution Date upon which the deposit is made pursuant to Section
2.05(b), 12.01(b) or 12.02(a)) upon which final payment for such Investor
Certificates will be made upon presentation and surrender of such Investor
Certificates at the office or offices therein designated (which in the case of
Bearer Certificates shall be outside the United States), (ii) the amount of any
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Investor Certificates at the office or offices therein
specified. The Master Servicer's notice to the Trustee in accordance with the
preceding sentence shall be accompanied by an Officer's Certificate setting
forth the information specified in Sections 3.07(a) and 3.07(b) covering the
period during the then current calendar year through the date of such notice.
The Trustee shall give such notice to the Transfer Agent, the Paying Agent and
Moody's at the time such notice is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to Section
12.01(a) or the occurrence of the Series Termination Date with respect to any
Series pursuant to Section 12.02(a) and the applicable Series Supplement, all
funds then on deposit in the Series Distribution Account shall continue to be
held in trust for the benefit of the Certificateholders of such Series and the
Paying Agent or the Trustee shall pay such funds to such Certificateholders
upon surrender of their Certificates. In the event that all of the Investor
Certificateholders of such Series shall not surrender their Certificates for
cancellation within six months after the date specified in the above-mentioned
written notice, the Trustee shall give a second written notice to the remaining
Investor Certificateholders of such Series to surrender their Certificates for
cancellation and receive the final distribution with respect thereto (which
surrender and payment, in the case of Bearer Certificates, shall be outside the
United States). If within one year after the second notice all the Investor
Certificates of such Series shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Investor Certificateholders of such
Series concerning surrender of their Certificates, and the cost thereof shall
be paid out of the funds in the Series Distribution Account held for the
benefit of such Investor Certificateholders.
(c) If as of the Distribution Date in the month immediately preceding the
month in which a Series Termination Date occurs, the Series Investor Interest
with respect to such Series is greater than zero (after giving effect to all
transfers to occur on such date), Receivables (or interests therein) in an
amount sufficient to yield proceeds equal to the Series Investor Interest plus
any accrued and unpaid Certificate Interest and with respect to such Series and
any amounts owing to the Credit Enhancement Provider with respect to such
Series pursuant to the Series Supplement for such Series, if applicable, on
such Series Termination Date (after giving effect to such transfers,
withdrawals and deposits) shall be sold by an institution acceptable to the
Trustee and the Master Servicer that is either (i) a nationally recognized
investment bank, (ii) a nationally recognized commercial bank or (iii) any
other institution whose regular business includes the sale of receivables or of
trust certificates similar to the Investor Certificates; provided, however,
that in no event shall the amount of Receivables sold hereunder with respect to
any Series exceed the product of (A) the aggregate amount of Receivables in the
Trust and (B) a fraction the numerator of which is the Series Investor Interest
of such Series and
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the denominator of which is the Aggregate Investor Interest, in each case, on
such Distribution Date in the month immediately preceding the month in which
such Series Termination Date occurs; and provided, further, the Receivables
selected to be sold hereunder shall not be materially different from the
Receivables remaining in the Trust as of such Distribution Date. The proceeds
(the "Series Termination Proceeds") therefrom shall be paid to the Trust by
such institution and immediately deposited into the Series Distribution Account
with respect to such Series and paid to the Investor Certificateholders of such
Series and to the Credit Enhancement Provider or otherwise, if applicable,
pursuant to the terms of the Series Supplement, on the Distribution Date with
respect to such Series immediately following such deposit. Such payment shall
be deemed to be a final distribution with respect to such Series.
SECTION 12.03 Sellers' Termination Rights. Upon the termination of the
Sellers' obligations and responsibilities with respect to the Trust pursuant to
Section 12.01 and the surrender of the Seller Certificate, the Trustee shall
sell, assign, and convey to Greenwood on behalf of the Holder of the Seller
Certificate (without recourse, representation or warranty except for the
warranty that since the date of transfer by any Seller under this Agreement the
Trustee has not sold, transferred or encumbered any such Receivables or interest
therein) all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, and all proceeds thereof except, if
applicable, for amounts held by the Trustee pursuant to Section 12.02(b). The
Trustee shall execute and deliver such instruments of transfer and assignment
including, without limitation, any document necessary to release the Trust's
security interest in such Receivables and to release any filing evidencing or
perfecting such security interest, in each case without recourse, as shall be
reasonably requested by the Holder of the Seller Certificate to vest in the
Holder of the Seller Certificate all right, title and interest which the Trust
had in the Receivables.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Amendment.
(a) This Agreement and any Series Supplement may be amended from time to
time by the Master Servicer, the Sellers, the Trustee and the Servicers,
without the consent of any of the Certificateholders, for one or more of the
following purposes:
(i) to add to the covenants and agreements of this Agreement or any
Series Supplement for the benefit of the Investor Certificateholders of
all or any Classes of all or any Series (and if such covenants and
agreements are for the benefit of less than all Classes of all Series,
stating that such covenants and agreements are expressly being included
solely for the benefit of such Class of such Series), or to surrender any
right or power herein reserved to or conferred upon the Sellers, the
Master Servicer or any Servicer; provided, however, that such action
shall not adversely affect in any material respect the interests of the
Holders of any Class of any Series then outstanding;
(ii) to add provisions to or change or eliminate any of the
provisions of this Agreement or any Series Supplement, provided that any
such addition, change or elimination
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shall not adversely affect in any material respect the interests of the
Holders of any Class of any Series then outstanding;
(iii) to add provisions to or change any of the provisions of this
Agreement or any Series Supplement for the purpose of accommodating the
addition of Participation Interests to the Trust pursuant to Section
2.10; or
(iv) to cure any ambiguity or to correct or supplement any
defective or inconsistent provision contained in this Agreement, any
Series Supplement or in any amendment to this Agreement or any Series
Supplement.
The Trustee is hereby authorized to join with the Sellers, the Master
Servicer and the Servicers in the execution of any amendment authorized or
permitted by the terms of this Agreement, and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into any such amendment which affects the
Trustee's rights, duties or immunities under this Agreement or otherwise. A
copy of each amendment adopted pursuant to this Section 13.01(a) shall be sent
to the Rating Agencies.
(b) This Agreement and any Series Supplement may also be amended from time
to time by the Master Servicer, the Sellers, the Trustee and the Servicers with
the consent of the Holders of Investor Certificates evidencing Fractional
Undivided Interests aggregating not less than 66-2/3% of the Class Invested
Amount of each Class adversely affected or, with respect to any Class the
Investor Certificates of which are, in whole or in part, represented by Bearer
Certificates, by vote of persons entitled to vote Fractional Undivided
Interests evidencing not less than 66-2/3% of the Class Invested Amount with
respect to such Class represented and voting at a meeting of the Investor
Certificateholders of such Class at which a quorum is present, as described in
Section 6.12, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or any Series
Supplement or of modifying in any manner the rights of the Investor
Certificateholders of any Class then outstanding; provided, however, that the
Trustee shall have been advised by the Rating Agencies that such amendment will
not result in the downgrading or withdrawal of the rating assigned to any Class
of any Series then outstanding by each Rating Agency and provided, further that
no such amendment shall materially and adversely affect the interests of the
Investor Certificateholders of any Class then outstanding by reducing in any
manner the amount of, or delaying the timing of, distributions which are
required to be made on any Investor Certificate of any Class without the
consent of the affected Investor Certificateholders or reducing the aforesaid
percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder of each affected Class. For purposes of
calculating whether a 66-2/3% consent has been achieved pursuant to this
Section 13.01(b), the applicable Class Invested Amount or Series Invested
Amount shall be calculated without taking into account the Class Investor
Interest represented by any Investor Certificates beneficially owned by any
Seller or any affiliate of any Seller, and no Seller or affiliate of a Seller
shall be entitled to vote on any amendment pursuant to this Section 13.01(b).
The Trustee shall give prompt notice to the Rating Agencies of the solicitation
of any consents for the purpose of amending this Agreement or any Series
Supplement pursuant to this Section 13.01(b).
(c) Promptly after the execution of any such amendment or consent pursuant
to Section 13.01(b), the Trustee shall notify the Investor Certificateholders
of the substance of such amendment. No notice will be given to the Investor
Certificateholders with regard to any amendment made pursuant to Section
13.01(a).
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(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Notwithstanding the foregoing provisions of this Section 13.01, none
of (i) the execution and delivery of any Series Supplement pursuant to Section
6.06, (ii) the addition of Receivables to the Trust pursuant to Section 2.10,
(iii) the removal of Receivables from the Trust pursuant to Section 2.11, (iv)
the addition or removal of any Seller or Servicer in connection with an
addition to or removal from the Trust of Receivables, or (v) the replacement of
any Servicer, Master Servicer or Trustee pursuant to the terms hereof, shall
constitute an amendment for purposes of this Section 13.01.
(f) For purposes of Sections 2.05, 2.06, 2.07 and 13.01(a) of this
Agreement, any material adverse effect on any Credit Enhancement Provider of
any Series shall be deemed to constitute a material adverse effect on the
interests of the Investor Certificateholders of such Series.
SECTION 13.02 Protection of Right, Title and Interest to Trust.
(a) The Master Servicer shall cause all financing statements and
continuation statements and any other necessary documents covering the
Certificateholders and the Trustee's right, title and interest to the
Receivables to be promptly filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the
Trustee hereunder to all property comprising the Trust. The Master Servicer
shall deliver to the Trustee file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The Sellers shall
cooperate fully with the Master Servicer in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this Section 13.02(a). The Trustee shall not bear
responsibility for filing status.
(b) Within fifteen days after any Seller makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC as in effect in
the Applicable State with respect to such Seller, such Seller shall give the
Trustee notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof.
(c) Each of the Sellers, the Master Servicer and each Servicer will give
the Trustee prompt written notice of any relocation of any office from which it
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement and shall file any such financing statements or amendments
as may be necessary to continue the perfection of the Trust's security interest
in the Receivables and the proceeds thereof. Each of the Sellers, the Master
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Servicer and each Servicer will at all times maintain its principal executive
office within the United States of America.
(d) The Master Servicer will deliver to the Trustee on or before April 30
of each year beginning in April, 1994 an opinion of counsel containing
substantially the provisions set forth in Exhibit I hereto. A copy of such
opinion of counsel shall also be sent to the Rating Agencies.
SECTION 13.03 Limitations on Rights of Investor Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement, any Series or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding-up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except with respect
to the Investor Certificateholders as provided in Section 13.01 hereof) or in
any manner otherwise control the operation and management of the Trust, or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute
the Certificateholders from time to time as partners or members of an
association; nor, except as required by law, shall any Certificateholder be
under any liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provisions
of this Agreement or any Series Supplement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Series Supplement, unless such Certificateholder previously shall have
given to the Trustee, and unless the Holders of Investor Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Class Invested Amount of any Class of any Series which may be materially
adversely affected but for the institution of such action or proceeding shall
have made, written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
or any Series Supplement to affect, disturb or prejudice the rights of the
Certificateholders of any other of the Certificates, or to obtain or seek to
obtain priority over or preference to any other such Certificateholder, or to
enforce any right under this Agreement or any Series Supplement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 13.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 13.04 GOVERNING LAW. EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED HEREIN, THIS AGREEMENT AND THE CERTIFICATES 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
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OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.05 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, or by
overnight courier, or telecopied, to (a) in the case of Greenwood as Seller,
Master Servicer or Servicer, 12 Read's Way, New Castle, Delaware 19720,
Attention: Secretary, telecopy (302) 323-7393, (b) in the case of the Trustee,
the Corporate Trust Office, telecopy 312-828-6528, and (c) in the case of any
other Seller or any other Servicer, at such address as such party shall
designate in the Assignment of Additional Accounts with respect to such Seller
or Servicer; or, as to each party, at such other address as shall be designated
by such party in a written notice to each other party. Unless otherwise
specified in the relevant Series Supplement, any notice required or permitted to
be mailed to a Holder of a Registered Certificate shall be given by first class
mail, postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
such Certificateholder receives such notice.
No Notice shall be required to be mailed to a Holder of Bearer
Certificates or Coupons but shall be given as provided below. If and so long
as any Series or Class is listed on the Luxembourg Stock Exchange and such
exchange shall so require, any notice to Holders of Bearer Certificates shall
be published in an Authorized Newspaper within the time period prescribed in
this Agreement or the relevant Series Supplement and, in the case of any Series
or Class with respect to which any Bearer Certificates are outstanding, any
notice required or permitted to be given to Investor Certificateholders of such
Series or Class shall be published in an Authorized Newspaper within the time
period prescribed in this Agreement or the relevant Series Supplement.
SECTION 13.06 Rule 144A Information. For so long as any of the Investor
Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act of 1933, as amended, each of
the Sellers, the Trustee, the Master Servicer, each Servicer and any Credit
Enhancement Provider agree to cooperate with each other to provide to any
Investor Certificateholders of such Series or Class and to any prospective
purchaser of Certificates designated by such an Investor Certificateholder, upon
the request of such Investor Certificateholder or prospective purchaser, any
information required to be provided to such holder or prospective purchaser to
satisfy the condition set forth in Rule 144A(d)(4) under the Securities Act of
1933, as amended.
SECTION 13.07 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or of any Series
Supplement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement or of such Series
Supplement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of such Series Supplement or of the
Certificates or rights of the Certificateholders thereof.
SECTION 13.08 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 8.02 and 8.04, this Agreement,
including any Series Supplement, may not be assigned by the Master Servicer or
any Servicer without the prior consent of Holders of Investor Certificates
evidencing Fractional Undivided Interests aggregating not less than
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51% of the Class Invested Amount of each Class of each Series of Investor
Certificates on a Class-by-Class basis.
SECTION 13.09 Investor Certificates Nonassessable and Fully Paid. It is
the intention of the parties to this Agreement that, to the extent permitted by
law, the Certificateholders shall not be personally liable for obligations of
the Trust, that the Fractional Undivided Interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and that Certificates upon authentication thereof by
the Trustee pursuant to Sections 2.02 and 6.03 and payment therefor at time of
issuance are and shall be deemed fully paid.
SECTION 13.10 Further Assurances. The Sellers, the Master Servicer and
each Servicer agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested by
the Trustee more fully to effect the purposes of this Agreement, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.
SECTION 13.11 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges therein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 13.12 Counterparts. This Agreement and any Series Supplement may
be executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
SECTION 13.13 Third-Party Beneficiaries. This Agreement and any Series
Supplement will inure to the benefit of and be binding upon the parties hereto
and thereto, any Credit Enhancement Providers, the Certificateholders and their
respective successors and permitted assigns. Except as otherwise provided in
this Section 13.13, no other person will have any right or obligation hereunder.
SECTION 13.14 Actions by Investor Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand or instruction given by Investor Certificateholders,
such action, notice or instruction may be taken or given by any Investor
Certificateholder of any Class of any Series, unless such provision requires a
specific percentage of Investor Certificateholders of a certain Class of a
certain Series of all Classes of all Series.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind such Certificateholder and every
subsequent holder of such Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or omitted to be done by the Trustee or the Master Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
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SECTION 13.15 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement, together with the Series Supplements executed
pursuant to this Agreement from time to time, set forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement, together with
such Series Supplements. This Agreement and the Series Supplements may not be
modified, amended, waived or supplemented except as provided herein or therein.
SECTION 13.16 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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IN WITNESS WHEREOF, Greenwood as Seller, Master Servicer and Servicer and
the Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
GREENWOOD TRUST COMPANY,
as Seller, Master Servicer and Servicer
By: /s/ JOHN J. ROSKO
-----------------------------------
Name: John J. Rosko
-------------------------------
Title: Vice President and Treasurer
------------------------------
CONTINENTAL BANK, NATIONAL
ASSOCIATION,
as Trustee
By: /s/ GREG JORDAN
---------------------------------
Name: Greg Jordan
-------------------------------
Title: Vice President
------------------------------
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<PAGE> 93
EXHIBIT A
FORM OF ASSIGNMENT OF ADDITIONAL ACCOUNTS
ASSIGNMENT NO. ___ OF ADDITIONAL ACCOUNTS, dated as of _________________,
____, by [name of Seller] (the "Seller") to Continental Bank, National
Association (the "Trustee") pursuant to the Pooling and Servicing Agreement
referred to below.
WITNESSETH:
WHEREAS, Greenwood Trust Company, a Delaware banking corporation
("Greenwood") and the Trustee are parties to the Pooling and Servicing
Agreement, dated as of October 1, 1993 (hereinafter as such agreement may have
been, or may from time to time be, amended, supplemented or otherwise modified,
the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Seller
wishes to designate Additional Accounts of the Seller to be included as
Accounts and to convey the Receivables of such Additional Accounts, now
existing and hereafter created, to the Trustee as part of the corpus of the
Trust (as each such term is defined in the Pooling and Servicing Agreement);
and
WHEREAS, the Trustee is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW THEREFORE, the Seller and the Trustee hereby agree as follows:
1. Defined Terms. All capitalized terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, _____.
"Additional Account Cut-Off Date" shall mean, with respect to the
Additional Accounts designated hereby, ______________, _____.
2. Designation of Additional Accounts. The Seller does hereby deliver
herewith a computer file, hard copy or microfiche list containing a true and
complete list of each credit account which as of the Addition Date shall be
deemed to be an Additional Account, such accounts being identified by account
number. Such list is marked as Schedule 1 to this Assignment and is hereby
incorporated into and made a part of this Assignment and Schedule 1 attached to
the Pooling and Servicing Agreement.
3. Conveyance of Receivables. (a) The Seller hereby sells, transfers,
assigns and otherwise conveys to the Trust for the benefit of the
Certificateholders, without recourse on and after the Additional Account
Cut-Off Date, all right, title and interest of the Seller in and to the
Receivables then existing and thereafter created in the Additional Accounts
designated hereby, all monies due or to
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become due with respect thereto, and all proceeds (as defined in Section 9-306
of the UCC as in effect in the State of Delaware) of such Receivables. In the
event such sale, transfer, assignment, or conveyance is deemed to create a
security interest in such property, the Seller does hereby grant to the Trust a
security interest therein and this Assignment shall constitute a security
agreement under applicable law.
(b) To the extent necessary to perfect the sale and assignment to the
Trust of the Receivables now existing and hereafter created in the Additional
Accounts designated hereby, the Seller agrees to record and file, at its own
expense, a financing statement with respect to such Receivables (which may be a
single financing statement with respect to all such Receivables) for the sale of
accounts or general intangibles as defined in Section 9-106 of the UCC as in
effect in the Applicable State meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary to perfect the sale
and assignment of such Receivables to the Trust, and to deliver a file stamped
copy of such financing statement or other evidence of such filing (which may,
for purposes of this Section 3, consist of telephone confirmation of such
filing) to the Trustee on or prior to the date of this Assignment.
(c) In connection with such sale, the Seller further agrees, at its own
expense, on or prior to the date of this Assignment to indicate, or to cause to
be indicated, in the computer files of the Servicer with respect to the
Additional Accounts designated hereby, that Receivables created in connection
with the Additional Accounts designated hereby have been sold to the Trustee
pursuant to this Assignment for the benefit of the Certificateholders.
4. Acceptance by Trustee. Subject to the satisfaction of the conditions
set forth in Section 6, the Trustee hereby acknowledges its acceptance on behalf
of the Trust of all right, title and interest previously held by the Seller in
and to the Receivables now existing and hereafter created in the Additional
Accounts designated hereby, and declares that it shall maintain such right,
title and interest, upon the trust herein set forth, for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Assignment, the Seller
delivered to the Trustee the computer file, hard copy or microfiche list
described in Section 2 of this Assignment.
5. Representations and Warranties of Seller. The Seller represents and
warrants that the Additional Accounts were not selected on the basis of any
selection criteria believed by the Seller to be materially adverse to the
interests of the Holders of any Class of any Series outstanding on the date
hereof or any Credit Enhancement Provider.
6. Conditions Precedent. The acceptance of the Trustee set forth in
Section 4 and the amendment of the Pooling and Servicing Agreement set forth in
Section 7 is subject to the conditions that (a) the Seller shall have delivered
to the Trustee a certificate of a Vice President or more senior officer,
certifying that all requirements set forth in Section 2.10 of the Pooling and
Servicing Agreement for designating Additional Accounts and conveying the
Principal Receivables of such Accounts, whether now existing or hereafter
created, to the Trust have been satisfied, (b) if the Seller is not Greenwood,
such Seller shall have entered into an amendment to, and become a party to, the
Pooling and Servicing Agreement, the Seller Certificate Ownership Agreement and
each Series Supplement outstanding on the date hereof, together with each other
party to each such agreement or supplement and (c) if the Servicer with respect
to the Additional Accounts is not Greenwood, such Servicer shall have entered
into an amendment to, and become a party to, the Pooling and Servicing Agreement
and each Series Supplement outstanding on the date hereof, together with each
other party
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to such agreement or supplement, and such Servicer shall have entered into a
Master Servicing Agreement, or an amendment thereto, with Greenwood and each
other Servicer, if any.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended by providing that all references to the
"Pooling and Servicing Agreement," "this Agreement" and "herein" shall be deemed
from and after the Addition Date to be a dual reference to the Pooling and
Servicing Agreement as supplemented by this Assignment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants and
conditions of the Pooling and Servicing Agreement shall remain unamended and the
Pooling and Servicing Agreement shall continue to be, and shall remain, in full
force and effect in accordance with its terms and except as expressly provided
herein, this Assignment of Additional Accounts shall not constitute or be deemed
to constitute a waiver of compliance with or consent to noncompliance with any
term or provision of the Pooling and Servicing Agreement.
8. Counterparts. This Assignment may be executed in any number of
counterparts all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Additional Accounts to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
[NAME OF SELLER],
as Seller
By:_________________________________
Title:
CONTINENTAL BANK, NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Title:
Acknowledged:
GREENWOOD TRUST COMPANY,
as Master Servicer
By: __________________________________
Title:
[NAME OF SERVICER],
as Servicer with respect to
the Additional Accounts
By: ___________________________________
Title:
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<PAGE> 97
EXHIBIT B
DISCOVER SERVICE MARK
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<PAGE> 98
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES
Reassignment No. _____ of Receivables, dated as of __________ __, _____,
by and between [NAME OF SELLER] (the "Seller"), and CONTINENTAL BANK, NATIONAL
ASSOCIATION (the "Trustee"), pursuant to the Pooling and Servicing Agreement
referred to below.
W I T N E S E T H:
WHEREAS, the Seller and the Trustee are parties to the Pooling and
Servicing Agreement, dated as of October 1, 1993 (hereinafter as such agreement
may have been, or may from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Seller
wishes to remove all Receivables from certain designated Accounts of the Seller
(the "Removed Accounts") and to cause the Trustee to reconvey the Receivables
of such Removed Accounts, whether now existing or hereafter created, from the
Trust to the Holder of the Seller Certificate (as each such term is defined in
the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts subject to the terms and conditions
hereof;
NOW, THEREFORE, the Seller and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meaning when used herein,
unless otherwise defined herein.
"Removal Date" shall mean, with respect to the Removed Accounts designated
hereby, _______________, _____.
"Removal Notice Date" shall mean, with respect to the Removed Accounts
designated hereby, ___________________, (which shall be a date on or prior to
the fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Seller shall deliver to the
Trustee, not later than five Business Days after the Removal Date, a computer
file, hard copy or microfiche list containing a true and complete list of each
Account which as of the Removal Date shall be deemed to be a Removed Account,
such Accounts being identified by account number and containing the amount of
Principal Receivables in such Removed Accounts as of the Removal Date. Such
list shall be marked as Schedule 1 to this Reassignment as of the Removal Date
and shall be incorporated into and made a part of this Reassignment and shall
amend Schedule 1 attached to the Pooling and Servicing Agreement.
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3. Conveyance of Receivables.
(a) The Trustee does hereby transfer, assign, set-over and otherwise
convey to the Holder of the Seller Certificate, without recourse on and after
the Removal Date, all right, title and interest of the Trust in and to the
Receivables now existing and hereafter created in the Removed Accounts
designated hereby, all monies due or to become due with respect thereto
(including all Finance Charge Receivables), all proceeds (as defined in Section
9-306 of the UCC as in effect in the Applicable State) of such Receivables and
Insurance Proceeds relating thereto.
(b) In connection with such transfer, the Trustee agrees to execute and
deliver to the Holder of the Seller Certificate on or prior to the date of this
Reassignment, all documents necessary to effect the transfer of the Receivables
now and hereafter existing in the Removed Accounts, including but not limited
to a termination statement with respect to such Receivables (which may be a
single termination statement with respect to all such Receivables) evidencing
the release by the Trust of its lien on the Receivables in the Removed
Accounts, and meeting the requirements of applicable state law, in such manner
and such jurisdictions as are necessary to remove such lien.
4. Acceptance by Trustee. The Trustee hereby acknowledges that, prior to
or simultaneously with the execution and delivery of this Reassignment, the
Seller delivered to the Trustee the computer file, hard copy or microfiche list
described in Section 2 of this Reassignment.
5. Representations and Warranties of the Seller. This Reassignment
constitutes a legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, except as the foregoing may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general or the rights of creditors of national banking
associations, state banking corporations or similar financial institutions and
except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
6. Representations and Warranties of the Trustee. Since the date of
transfer by the Seller under the Pooling and Servicing Agreement, the Trustee
has not sold, transferred or encumbered any Receivable in any Removed Account
or any interest therein.
7. Conditions Precedent. The amendment of the Pooling and Servicing
Agreement set forth in Section 8 hereof is subject to the satisfaction, on or
prior to the Removal Date, of the following conditions precedent:
(a) the Seller shall have delivered to the Trustee an Officers'
Certificate certifying that (i) as of the Removal Date, all requirements set
forth in Section 2.11 of the Pooling and Servicing Agreement for designating
Removed Accounts and reconveying the Receivables of such Removed Accounts,
whether now existing or hereafter created, have been satisfied, and (ii) the
representations and warranties made by the Seller in Section 5 hereof are true
and correct as of the Removal Date; and
(b) the Seller shall have delivered to the Trustee a computer file, hard
copy or microfiche list containing a true and complete list of all Removed
Accounts identified by account number and containing the amount of Principal
Receivables in such Removed Accounts as of the Removal Date.
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The Trustee may conclusively rely on such Officers' Certificate, shall have no
duty to make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
8. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended to provide that all references therein to
the "Pooling and Servicing Agreement," "this Agreement" and "herein" shall be
deemed from and after the Removal Date to be a dual reference to the Pooling
and Servicing Agreement as supplemented by this Reassignment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and effect
in accordance with its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with or a consent
to non-compliance with any term or provision of the Pooling and Servicing
Agreement.
9. Counterparts. This Reassignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
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<PAGE> 101
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
[NAME OF SELLER],
as Seller
By:________________________________
Title:
CONTINENTAL BANK, NATIONAL ASSOCIATION,
as Trustee
By:________________________________
Title:
Acknowledged:
GREENWOOD TRUST COMPANY,
as Master Servicer
By: ____________________________
Title:
[NAME OF SERVICER],
as Servicer with respect to
the Removed Accounts
By: ____________________________
Title:
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<PAGE> 102
EXHIBIT D
FORM OF SELLER CERTIFICATE
NO. 1
DISCOVER CARD MASTER TRUST I
PASS-THROUGH CERTIFICATE
(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.)
THE SECURITIES REPRESENTED BY THIS SELLER CERTIFICATE HAVE NOT BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
SOLD UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED AND THE SATISFACTION OF CERTAIN
OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT.
This certifies that Greenwood Trust Company, a Delaware banking
corporation ("Greenwood"), which in its capacity as the registered holder of
this Seller Certificate is hereinafter referred to as the "Holder", is the
registered owner of a Fractional Undivided Interest in Discover Card Master
Trust I (the "Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") existing as of the Initial Cut-Off Date or
thereafter created under certain open end credit card accounts for specified
Persons (the "Accounts") originated by 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 (the "Pooling and Servicing Agreement") by and between
Continental Bank, National Association, a national banking association
organized and existing under the laws of the United States of America, as
trustee (the "Trustee") and Greenwood as Master Servicer, Servicer and Seller,
a summary of certain of the pertinent provisions of which is set forth herein
below, 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, and all other assets and
interests constituting the Trust.
To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement, as
amended from time to time, the Holder by virtue of the acceptance hereof
assents and by which the Holder is bound.
This Certificate is not permitted to be transferred, assigned, exchanged
or otherwise conveyed except as expressly permitted in the Pooling and
Servicing Agreement.
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<PAGE> 103
This Certificate is the Seller Certificate (the "Seller Certificate"),
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, including any series
supplements thereto which may be in effect from time to time, to be paid to the
Holder of the Seller Certificate. In addition to this Seller Certificate,
Investor Certificates, each of which will represent a Fractional Undivided
Interest in the Trust, will be issued to investors from time to time pursuant
to the Pooling and Servicing Agreement and one or more series supplements
thereto. The Seller Interest on any date of determination will be an amount
equal to the aggregate amount of Principal Receivables at the end of the day
immediately prior to such day of determination minus the Aggregate Investor
Interest with respect to such Receivables at the end of such day.
This Certificate does not represent an obligation of, or an interest in,
Greenwood, any Additional Seller or any Servicer. This 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, including any series supplements thereto.
Subject to certain conditions in the Pooling and Servicing Agreement, if
the principal of all Investor Certificates then outstanding has not been paid
in full prior to the Final Trust Termination Date, the obligations created by
the Pooling and Servicing Agreement and the Trust created thereby shall
terminate on the Final Trust Termination Date.
Upon the termination of the Trust pursuant to Section 12.01 of the Pooling
and Servicing Agreement and the surrender of this Seller Certificate, the
Trustee shall sell, assign and convey to the Holder (without recourse,
representation or warranty except for the warranty that since the date of
transfer by the Seller under the Pooling and Servicing Agreement the Trustee
has not sold, transferred or encumbered any such Receivable or interest
therein) all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, and all proceeds thereof. The Trustee
shall execute and deliver such instruments of transfer and assignment, in each
case without recourse, as shall be reasonably requested by the Holder to vest
in the Holder all right, title and interest which the Trustee had in the
Receivables.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
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<PAGE> 104
IN WITNESS WHEREOF, Greenwood has caused this Certificate to be duly
executed.
GREENWOOD TRUST COMPANY
By:____________________________________
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is the Seller Certificate referred to in the within mentioned Pooling
and Servicing Agreement.
CONTINENTAL BANK, NATIONAL ASSOCIATION
as Trustee
By:_____________________________________
Authorized Officer
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EXHIBIT E
FORM OF INITIAL REPORT
DISCOVER CARD MASTER TRUST I
__________________
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 (the "Pooling and Servicing Agreement")
by and between Greenwood as Master Servicer, Servicer and Seller and
Continental Bank, National Association, as Trustee, hereby certifies as
follows:
1. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and to deliver this Officer's
Certificate to the Trustee and the Sellers.
3. Greenwood is Master Servicer under the Pooling and Servicing
Agreement.
4. The aggregate amount of Principal Receivables as of the Cut-Off
Date was $__________.
5. The aggregate amount of Finance Charge Receivables billed
during the month prior to the month in which the Cut-Off Date
occurred was $__________.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of ____________, 1993.
GREENWOOD TRUST COMPANY,
as Master Servicer
By:________________________________
Title:
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<PAGE> 106
EXHIBIT F
FORM OF MASTER SERVICER'S ANNUAL CERTIFICATE
DISCOVER CARD MASTER TRUST I
____________________
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 by and between Greenwood and Continental
Bank, National Association, as Trustee hereby certifies that:
1. Greenwood is Master Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. During the calendar year ended December 31, ____ in the course of my
duties as an officer of the Master Servicer, I would normally obtain knowledge
of any Master Servicer Termination Event.
4. To the best of my knowledge, no Master Servicer Termination Event has
occurred.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of _______________, ____.
By: _________________________________
Name: _______________________________
Title: ______________________________
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<PAGE> 107
EXHIBIT G
FORM OF SERVICER'S ANNUAL CERTIFICATE
DISCOVER CARD MASTER TRUST I
____________________
CREDIT CARD
PASS-THROUGH CERTIFICATES
____________________
The undersigned, a duly authorized representative of [NAME OF SERVICER]
("[Name]") as a Servicer pursuant to the Pooling and Servicing Agreement dated
as of October 1, 1993 by and among [Name], Greenwood Trust Company and
Continental Bank, National Association, as Trustee hereby certifies that:
1. [Name] is a Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. During the calendar year ended December 31, ____ in the course of my
duties as an officer of [Name], I would normally obtain knowledge of any
Servicer Termination Event relating to [Name].
4. To the best of my knowledge, no such Servicer Termination Event has
occurred.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of _______________, ____.
By: ___________________________________
Name: _________________________________
Title: ________________________________
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<PAGE> 108
EXHIBIT H-1
FORM OF CEDEL OR EUROCLEAR STATEMENT
U.S. $________________
Discover Card Master Trust I
Series _____ - _____
__% Credit Account Pass-Through Certificates
This is to certify that, with respect to U.S. $___________ aggregate
principal amount of the above-captioned issue (the "Investor Certificates"), we
have received a writing or tested telex or certification or certifications,
dated not earlier than 15 days prior to [the Exchange Date], from each of the
persons appearing on our records as being entitled to a portion of such
aggregate principal amount of the Investor Certificates, substantially in the
form attached hereto. Accordingly, we hereby certify that on this date:
(a) The obligation is owned by a person that is not a U.S. person,
as such term is defined in Rule 902(o) under the United States Securities
Act of 1933, as amended; and
(b) the obligation is owned by (1) a person that is not a United
States person; (2) a United States person as described in U.S. Treas.
Reg. Section 1.163-5(c)(2)(i)(D)(6) (and accordingly the financial
institution described in such regulation provides the certificate
described therein); or (3) a financial institution described in U.S.
Treas. Reg. Section 1.165-12(c)(1)(v) for purposes of resale during the
restricted period, and such financial institution certifies in addition
that it has not acquired the obligation for purposes of resale directly
or indirectly to a United States person or to a person within the United
States or its possessions.
A certificate described in subsection (b)(1) or (b)(2) of the preceding
sentence may not be given with respect to an Investor Certificate that is owned
by a financial institution for purposes of resale during the restricted period.
Terms used in the foregoing subsection (b) have the meanings given to them by
the U.S. Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
We further certify that we have been directed to request U.S. $_______ in
aggregate principal amount in U.S. $________ denominations, U.S. $________ in
aggregate principal amount in U.S. $__________ denominations and U.S.
$__________ in aggregate principal amount in U.S. $__________ denominations
We understand that if we have failed to make the direction in the preceding
sentence, such Definitive Euro-Certificates will be issued in denominations of
U.S. $_________ to the extent possible.
This is further to certify that, with respect to U.S. $_______ aggregate
principal amount of the above-captioned issue, we have received a writing or
tested telex or certificate or certification from [name of Manager], copies of
which are attached hereto.
Accordingly, we direct that U.S. $__________ aggregate principal amount of
the above-captioned Investor Certificates be issued in registered form in
accordance with the directions set forth on the attached certificates from
[name of Manager].
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<PAGE> 109
We understand that this certificate is required in connection with certain
securities and tax laws of the United States of America. If an administrative
or legal proceeding or official inquiry is commenced or threatened in
connection with which this certificate is or would be relevant, we irrevocably
authorize you to produce this certificate or a copy thereof to any interested
party in such proceeding.
The foregoing reflects any telexed advice received subsequent to the date
of any writing, telex, certification or certifications referred to stating that
the statements contained in such certification or certifications are no longer
correct.
*Dated: (Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euro-clear
System)
(or)
(Centrale de Livraison de Valeurs Mobilieres
S.A.)
By:__________________________________________
____________________
* To be dated as of the date of delivery of the definitive Bearer Investor
Certificates and/or Registered Certificates, as applicable, and, in any event,
no earlier than the Exchange Date.
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EXHIBIT H-2
FORM OF CERTIFICATE WITH RESPECT TO U.S. INSTITUTIONAL INVESTORS
U.S. $________________
Discover Card Master Trust I
Series _____ - _____
__% Credit Account Pass-Through Certificates
In connection with the initial issuance and placement of the
above-captioned Investor Certificates, an institutional investor in the United
States is purchasing U.S. $______________ aggregate principal amount of such
Investor Certificates held in our account at [Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euro-clear System] [Centrale de
Livraison de Valeurs Mobilieres S.A.] on behalf of such investor.
We reasonably believe that such institutional investor is a "qualified
institutional buyer" as such term is defined under Rule 144A of the Securities
Act of 1933, as amended.
We understand that this certificate is required in connection with certain
securities laws of the United States of America. If an administrative or legal
proceeding or official inquiry is commenced or threatened in connection with
which this certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such
proceeding.
On behalf of such institutional investor, we direct that U.S.
$_____________ in aggregate principal amount of the above-captioned Investor
Certificates be issued in registered form to [delivery instructions].
*Dated: __________________________________________
[signature]
____________________
H-2-1
<PAGE> 111
* To be dated as of the date of delivery of the Definitive Euro-Certificates in
registered form, and, in any event, no earlier than the Exchange Date.
H-2-2
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EXHIBIT H-3
FORM OF CERTIFICATE REGARDING BENEFICIAL OWNERSHIP
U.S. $________________
Discover Card Master Trust I
Series _____ - _____
__% Credit Account Pass-Through Certificates
This is to certify that as of the date hereof and except as provided in
the fourth paragraph hereof, none of the above-captioned Investor Certificates
credited to you for our account are beneficially owned by a U.S. person. For
purposes of the foregoing, the undersigned understands that the term "U.S.
person" shall have the meaning set forth in Rule 902(o) under the United States
Securities Act of 1933, as amended.
In addition, we hereby certify that as of the date hereof and except as
provided in the fourth paragraph hereof, the above-captioned Investor
Certificates credited to you for our account are:
(1) owned by a person that is not a United States person;
(2) owned by a United States person as described in U.S. Treas.
Reg. Section 1.163-5(c)(2)(i)(D)(6) (and accordingly the financial
institution described in such regulation provides the certificate
described therein); or
(3) owned by a financial institution described in U.S. Treas. Reg.
Section 1.165-12(c)(1)(v) for purposes of resale during the restricted
period, and such financial institution certifies in addition that it has
not acquired the obligation for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
A certificate described in clause (1) or (2) of the preceding sentence may
not be given with respect to an Investor Certificate that is owned by a
financial institution for purposes of resale during the restricted period.
Terms used in this paragraph have the meanings given to them by the U.S.
Internal Revenue Code of 1986, as amended, and the regulations thereunder.
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on or prior to [the Exchange Date] as to
any of the above-captioned Investor Certificates then appearing in your books
as being credited to our account.
This certificate excepts and does not relate to U.S. $____________
principal amount as to which we are not yet able to certify and as to which we
understand exchange and delivery of Definitive Euro-Certificates cannot be made
until we are able so to certify.
We understand that this certificate is required in connection with certain
securities and tax laws of the United States of America. If an administrative
or legal proceeding or official inquiry is commenced or threatened in
connection with which this certificate is or would be relevant, we
H-3-1
<PAGE> 113
irrevocably authorize you to produce this certificate or a copy thereof to any
interested party in such proceeding.
We direct that U.S. $________________ in aggregate principal amount of the
above-captioned Investor Certificates be issued in U.S. $_______________
denominations, U.S. $________________ in aggregate principal amount of the
Investor Certificates be issued in U.S. $_______________ denominations and U.S.
$__________ in aggregate principal amount of the Investor Certificates be
issued in U.S. $__________ denominations. We understand that if we have failed
to make the direction in the preceding sentence, such Definitive
Euro-Certificates will be issued in denominations of U.S. $__________ to the
extent possible.
____________________________________________
[signature]
*Dated:
____________________
*To be dated on or after the 15th day before the Exchange Date.
H-3-2
<PAGE> 114
EXHIBIT I
PROVISIONS TO BE INCLUDED IN ANNUAL OPINION OF COUNSEL
The opinion set forth below, which is to be delivered pursuant to Section
13.02(d) of the Pooling and Servicing Agreement, may be subject to certain
customary qualifications, assumptions and limitations.
With the filing of financing statements covering the Receivables in the
offices of the Secretaries of State of the State of _________________ and the
State of _______________, the interest of the Trustee in the Receivables has
been duly perfected. No other action is required to continue such perfection
prior to the six month period preceding the fifth anniversary of the filing of
such financing statements.
I-1
<PAGE> 1
EXHIBIT 4.2
================================================================================
GREENWOOD TRUST COMPANY
Master Servicer, Servicer and Seller
and
CONTINENTAL BANK
Trustee
on behalf of the Certificateholders
FIRST AMENDMENT TO THE
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1993
_______________________
DISCOVER CARD MASTER TRUST I
================================================================================
Dated as of
August 15, 1994
<PAGE> 2
THIS FIRST AMENDMENT TO THE POOLING AND SERVICING AGREEMENT (the
"Amendment"), dated as of August 15, 1994, is entered into by and between
GREENWOOD TRUST COMPANY, a Delaware banking corporation, as Master Servicer,
Servicer and Seller ("Greenwood") and CONTINENTAL BANK, an Illinois banking
corporation, as Trustee.
WHEREAS Greenwood and the Trustee have entered into the POOLING AND
SERVICING AGREEMENT (the "Agreement") dated as of October 1, 1993 relating to
Discover Card Master Trust I; and
WHEREAS pursuant to subsection 13.01(a) of the Agreement, Greenwood and
the Trustee desire to amend Sections 2.10, 6.06 and 8.04 thereof in a manner
that shall not adversely affect in any material respect the interests of the
Holders of any Class of any Series then outstanding.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, each party agrees as follows for the benefit of
the other parties and for the benefit of the Certificateholders:
1. Definitions. Unless otherwise specified, capitalized terms used in
this Amendment shall have the same meanings ascribed to them in the Agreement.
2. Amendment to the Agreement. Effective as of the date hereof:
(a) The introductory clause of Article II, Subsection
2.10(c) ("Conditions to the Designation of Discover Card
Accounts Originated by Greenwood as Additional Accounts") of
the Agreement, preceding sub-clause (i), is deleted and
replaced with the following:
"In addition to discretionary designations of Additional
Accounts as described in Section 2.10(b), Greenwood on behalf
of the Holder of the Seller Certificate also shall be
permitted to designate Discover Card accounts originated by
Greenwood as "Additional Accounts" if the following
conditions are satisfied on or prior to the Addition Date
(except with respect to Section 2.10(c)(i), which shall be
satisfied on or prior
<PAGE> 3
to the fifth Business Day following the Addition Date):"
(b) The introductory clause of Article II, Subsection
2.10(d) ("Conditions to Designation of Additional Accounts,
other than Discover Card Accounts Originated by Greenwood") of
the Agreement, preceding sub-clause (i), is deleted and
replaced with the following:
"In addition to designations of Additional Accounts as
described in Sections 2.10(b) and 2.10(c), subject to the
conditions set forth below, Greenwood on behalf of the Holder
of the Seller Certificate shall be permitted to designate as
Additional Accounts (x) credit accounts originated by
Greenwood which are not Discover Card accounts and/or (y)
credit accounts originated by an affiliate of Greenwood (an
"Additional Seller"), which may or may not be Discover Card
accounts. Greenwood on behalf of the Holder of the Seller
Certificate shall be permitted to designate such accounts as
Additional Accounts if the following conditions are satisfied
on or prior to the Addition Date (except with respect to
Section 2.10(d)(i), which shall be satisfied on or prior to
the fifth Business Day following the Addition Date):"
(c) Clause (iii) of the fourth sentence of Article
VI, Subsection 6.06(a) of the Agreement shall be renumbered as
clause (c); the cross-reference to clause (iii) in such clause
shall be renumbered as clause (c); and clause (iv) in such
sentence shall be renumbered as clause (d).
(d) Newly numbered clause (c)(A) of the fourth
sentence of Article VI, Subsection 6.06(a) of the Agreement is
deleted in its entirety and replaced with the following:
"(A) with respect to each New Issuance, an opinion of counsel
dated as of the date of such New Issuance to the effect that,
although not free
2
<PAGE> 4
from doubt, the Investor Certificates of such New Issuance
will be treated as indebtedness of the Sellers for federal
income and Delaware (and any other state where substantial
servicing activities are conducted by an Additional Seller
with respect to Accounts serviced by such Additional Seller,
or by Greenwood if there is a substantial change from
Greenwood's present servicing activity, if any, in such
state) state income or franchise tax purposes and"
(e) The following is inserted after the first sentence of Article
VIII, Section 8.04 ("Master Servicer or Servicer Resignation")
of the Agreement:
"For purposes of the foregoing sentence, applicable law shall
include, without limitation, any condition that relates to
the activities of the Master Servicer under any Requirements
of Law and that, in the Master Servicer's reasonable
judgment, must be satisfied in order for any affiliate of the
Master Servicer not otherwise treated as a bank holding
company (or any similar designation under the Bank Holding
Company Act of 1956, as said act may be amended from time to
time) to avoid being treated as a bank holding company under
the Bank Holding Company Act of 1956, as amended, or to avoid
limitations under said act upon the activities in which the
Master Servicer or any affiliate of the Master Servicer may
engage."
3. Effect Upon the Agreement. Except as specifically set forth herein,
the Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
4. Counterparts. This Amendment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, Greenwood and the Trustee have caused this Amendment
to be duly executed by their respective officers as of the day and year first
above written.
3
<PAGE> 5
GREENWOOD TRUST COMPANY, as Master
Servicer, Servicer and Seller
By: /s/ John J. Rosko
------------------------------
CONTINENTAL BANK, as Trustee
By: /s/ Greg Jordan
-------------------------------
4
<PAGE> 1
EXHIBIT 4.5
DISCOVER CARD MASTER TRUST I
SERIES 199 - 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 (formerly 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 199 - CERTIFICATES.
SERIES TERM SHEET
<TABLE>
<S> <C>
Date of Series Term Sheet , 199 .
Group One.
Series Initial Investor Interest $.
Class Initial Investor Interest of each Class Class A - $ .
of Investor Certificates Class B - $ .
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 .
Class B Expected Final Payment Date The Distribution Date in .
</TABLE>
1
<PAGE> 2
<TABLE>
<S> <C>
Type of Structure Bullet Maturity.
Certificate Rates Class A - [ % per annum, calculated on
the basis of a 360-day year of twelve
30-day months.] [LIBOR plus % per
annum, calculated on the basis of the
actual number of days elapsed and a 360-day
year.]
Class B - [ % per annum, calculated on
the basis of a 360-day year of twelve
30-day months.] [LIBOR plus % per
annum, calculated on the basis of the
actual number of days elapsed and a 360-day
year.]
Monthly Amortization Rate Not applicable.
Prepayment Calculation Table Not applicable.
Prepayment Determination Date Not applicable.
Foreign Currency Certificate Rates Class A - Not applicable.
Class B - Not applicable.
Class Cap Rate Not applicable.
Class Maximum Rate Not applicable.
Class Interest Rate Swap Class A - Not applicable.
Class B - Not applicable.
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
Interest Rate Swap Counterparty Not applicable.
Class Currency Swap Class A - Not applicable.
Class B - Not applicable.
Currency Swap Counterparty Not applicable.
Currency Swap Downgrade Trigger Not applicable.
Minimum Investor Certificate Ratings Class A - Not applicable.
Class B - Not applicable.
Currency Swap Dollar Escrow Account Not applicable.
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.
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
Initial Exchange Date Not applicable.
Second Exchange Date Not applicable.
LIBOR Determination Date [Not applicable.] [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 26.
Series Cut-Off Date , 199 .
Series Closing Date , 199 .
Date from which Interest for First Interest
Payment Date Shall Accrue Series Closing Date.
Distribution Dates , 199 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 and (or,
if such day is not a Business Day, the next
succeeding Business Day), commencing in
199 , and with respect to the Class B
Certificates, on the Class B Expected Final
Payment Date (or monthly under certain
circumstances).
Statement Dates Each Distribution Date, commencing in
199 .
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C>
Principal Payment Date Not applicable.
Interest Calculation Dates Not applicable.
Accumulation Commencement Date Not applicable.
Accumulation Period Unless an Amortization Event shall have
occurred prior thereto, the period
commencing on the Principal Commencement
Date and ending on the earliest to occur of
(x) the payment in full of the Series
Invested Amount, (y) the Amortization
Commencement Date, and (z) the Series
Termination Date.
Accumulation Amount (a) Through the Class A Expected Final
Payment Date, the greater of (i) $
and (ii) if the Master Servicer elects to
delay commencement of the Accumulation
Period in accordance with Section 24, the
Class A Initial Investor Interest divided
by the number of Distribution Dates from
the commencement of the Accumulation Period
through and including the Class A Expected
Final Payment Date, and (b) thereafter, $
.
Principal Commencement Date The first day of the Due Period related to
the Distribution Date (or such
later Distribution Date as the Master
Servicer may elect in accordance with
Section 24).
Revolving Period From the Series Cut-Off Date to but
excluding the earlier to occur of (i) the
Principal Commencement Date, and (ii) the
Amortization Commencement Date.
Controlled Liquidation Period Not applicable.
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
Early Accumulation Period Not applicable.
Type of Credit Enhancement Cash collateral account.
Stated Shared Credit Enhancement Amount There shall be no Shared Credit Enhancement.
State Class B Credit Enhancement Amount $ .
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.
</TABLE>
6
<PAGE> 7
<TABLE>
<S> <C>
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)$ and (ii) (x) if a
Supplemental Credit Enhancement Event has not
occurred, an amount equal to % 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 % 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)$ and (ii) an amount equal to % of
the Series Investor Interest as of the last day
of the related Due Period; provided, however,
that if an Amortization Event with respect to the
Series established hereby occurs, the Maximum
Class B Credit Enhancement Amount for each
Distribution Date thereafter shall equal the
Maximum Class B Credit Enhancement Amount for
the Distribution Date immediately preceding the
occurrence of the Amortization Event; and
provided, further, that if a Credit Enhancement
Drawing has been made, until such time as the
Available Class B Credit Enhancement Amount has
been reinstated in an amount at least equal to
the amount of such Credit Enhancement Drawing,
the Maximum Class B Credit Enhancement Amount
shall be the Maximum Class B Credit Enhancement
Amount as of the date of such Credit
Enhancement Drawing.
Total Maximum Credit Enhancement Amount On any Distribution Date, the Maximum Class
B Credit Enhancement Amount for such
Distribution Date.
Additional Credit Support Amount The lesser of (x) (i) $ prior to
the occurrence of a Supplemental Credit
Enhancement Event or (ii) $
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
</TABLE>
7
<PAGE> 8
<TABLE>
<S> <C>
(immediately before giving effect to the
Alternative Credit Support Election).
Supplemental Credit Enhancement Amount The lesser of (x) (i) $ prior to
the occurrence of an Alternative Credit
Support Election or (ii) zero following the
occurrence of an Alternative Credit Support
Election and (y) the difference between the
Maximum Class B Credit Enhancement Amount
(after giving effect to the occurrence of a
Supplemental Credit Enhancement Event) and
the Available Class B Credit Enhancement
Amount (immediately before giving effect to
the occurrence of a Supplemental Credit
Enhancement Event).
Initial Subordinated Amount $ .
Additional Subordinated Amount $ .
Supplemental Subordinated Amount Zero.
Series Buffer Amount Zero.
Group Buffer Amount Zero.
Investor Servicing Fee Percentage 2.0% per annum calculated on the basis of a
360-day year of twelve 30-day months.
Supplemental Servicing Fee Percentage Zero.
Amount of Additional Funds Initially, zero.
</TABLE>
8
<PAGE> 9
<TABLE>
<S> <C>
Eligible for Reallocations to and from Other
Series in Group Yes.
Series Termination Date The first Business Day following the
Distribution Date in .
Estimated Investment Shortfall On any date of determination, the positive
difference, if any, between (i) the
Certificate Rate for the Class for whose
benefit the amounts on deposit in the
Series Principal Funding Account are held
as of such date of determination and (ii)
the weighted average yield (expressed as a
Money Market Yield) on the investments in
the Series Principal Funding Account as of
such date of determination.
Estimated Yield On any date of determination, the Portfolio
Yield for the immediately preceding Due
Period less 2.00%.
Classes, if any, subject to Regulation S
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, substantially in the form of
Exhibit A-1.
</TABLE>
9
<PAGE> 10
<TABLE>
<S> <C>
Class B Certificate Each certificate executed by the Sellers
and authenticated by or on behalf of the
Trustee, substantially in the form of
Exhibit 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.
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>
10
<PAGE> 11
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
------------------------------------------
John J. Coane
Vice President, Director of Accounting
and Treasurer
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
------------------------------------------
Patricia Trlak
Vice President
<PAGE> 12
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 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.
"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
<PAGE> 13
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 (x) 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, and (y) increased pursuant to the provisions
of Section 9 to take into account the application of amounts on deposit in the
Group Finance Charge Collections Reallocation Account (i) to reduce the Class B
Required Amount Shortfall, (ii) to reduce the Class B Cumulative Investor
Charged-Off Amount and (iii) to increase the Available Class B Credit
Enhancement 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.
2
<PAGE> 14
Upon the occurrence of a Supplemental Credit Enhancement Event, the Available
Subordinated Amount will be increased by the Supplemental Subordinated Amount.
In addition, on the first Distribution Date following an Effective Alternative
Credit Support Election, the Available Subordinated Amount shall be increased
by the Additional Subordinated Amount. In no event, however, shall the
Available Subordinated Amount exceed (i) through the last Distribution Date
preceding an Effective Alternative Credit Support Election, the Initial
Subordinated Amount plus the Supplemental Subordinated Amount and (ii)
thereafter, the sum of the Initial Subordinated Amount, the Supplemental
Subordinated Amount and the Additional Subordinated Amount.
"Calculation Period," if applicable, shall have the meaning specified in
the applicable interest rate cap agreement.
"Cedel" shall mean Cedel Bank, societe anonyme.
"Certificate Interest" shall mean, for any Class for any Interest Payment
Date, the product of (a) the Class Invested Amount for such Class for such
Interest Payment Date and (b) a fraction the numerator of which is (1) with
respect to each Class that has no Subclasses, the Certificate Rate for such
Class or (2) with respect to each Class that has two or more Subclasses, the
Class Weighted Average Certificate Rate, and the denominator of which is (x) if
the relevant Certificate Rate is to be 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.
3
<PAGE> 15
"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> 16
"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 Accumulation Period or
the Early Accumulation Period, as applicable, exceed the amount that
5
<PAGE> 17
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
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
6
<PAGE> 18
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 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)
7
<PAGE> 19
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.
"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
8
<PAGE> 20
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 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
9
<PAGE> 21
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 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
10
<PAGE> 22
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 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.
11
<PAGE> 23
"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.
"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
12
<PAGE> 24
Amounts for each Distribution Date of the Interest Accrual Period and (b) if
applicable, the product of (x) the amount of principal deposited into the
Currency Swap Dollar Escrow Account and (y) the Currency Swap Exchange Rate (if
such failure constitutes a default under the terms of the Class Currency Swap).
"Credit Enhancement" shall mean any credit enhancement obtained by the
Master Servicer in accordance with Section 11.
"Credit Enhancement Account," if applicable, shall have the meaning set
forth in Section 8.
"Credit Enhancement Agreement" shall mean the Agreement among the Sellers,
the Master Servicer, the Trustee and the Credit Enhancement Provider with
respect to the Credit Enhancement.
"Credit Enhancement Drawing" shall mean any drawing made under the Credit
Enhancement.
"Credit Enhancement Fee" shall mean, on any Distribution Date, the sum of
all fees and interest payable to the Credit Enhancement Provider or the Trustee
as administrator of the Credit Enhancement for the related Due Period pursuant
to the Credit Enhancement Agreement.
"Credit Enhancement Provider" shall have the meaning set forth in the
Series Term Sheet.
"Currency Swap Counterparty," if any, shall have the meaning set forth in
the Series Term Sheet.
"Currency Swap Dollar Escrow Account," if any, shall have the meaning set
forth in Section 8 and shall be maintained at the Escrow Agent specified in the
Series Term Sheet.
"Currency Swap Downgrade Trigger," if any, shall have the meaning set
forth in the Series Term Sheet.
"Currency Swap Exchange Rate," if applicable, shall mean the fixed Foreign
Currency-to-Dollar exchange rate specified in the Class Currency Swap.
"Currency Swap Termination," if applicable, shall mean the termination of
the Class Currency Swap (without the replacement thereof by a Replacement Class
Currency Swap or a Qualified Substitute Class Currency Swap Arrangement) prior
to the payment in full of the Class Foreign Currency Invested Amount.
"Deficit Accumulation Amount" shall mean, with respect to the first
Distribution Date of the Accumulation Period, zero, and with respect to any
other Distribution Date of the Accumulation Period, the amount, if any, by
which the amount deposited into the Series Principal Funding Account on the
preceding Distribution Date is less than the Controlled Accumulation Amount for
such preceding Distribution Date.
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<PAGE> 25
"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.
"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
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<PAGE> 26
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, 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.
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<PAGE> 27
"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 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
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<PAGE> 28
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) 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.
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<PAGE> 29
"LIBOR," if applicable, shall mean, with respect to any LIBOR
Determination Date, the rate for deposits in United States dollars with a
duration comparable to the relevant Interest Accrual Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such day. If such rate
does not appear on Telerate Page 3750, the rate will be determined by the
Trustee on the basis of the rates at which deposits in United States dollars
are offered by major banks in the London interbank market, selected by the
Trustee, at approximately 11:00 a.m., London time, on such day to prime banks
in the London interbank market with a duration comparable to the relevant
Interest Accrual Period commencing on that day. The Trustee will request the
principal London office of at least four banks to provide a quotation of its
rate. If at least two such quotations are provided, the rate will be the
arithmetic mean of the quotations. If fewer than two quotations are provided
as requested, the rate for that day will be the arithmetic mean of the rates
quoted by four major banks in New York City, selected by the Trustee, at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks with a duration comparable to the
relevant Interest Accrual Period commencing on that day.
"LIBOR Business Day," if applicable, shall mean a day other than a
Saturday or a Sunday on which banking institutions in the City of London,
England and in New York, New York are not required or authorized by law to be
closed.
"LIBOR Determination Date," if applicable, shall have the meaning set
forth in the Series Term Sheet.
"Liquidation Amount," if applicable, shall have the meaning set forth in
the Series Term Sheet.
"Maximum Class B Credit Enhancement Amount" shall have the meaning set
forth in the Series Term Sheet.
"Maximum Shared Credit Enhancement Amount," if applicable, shall have the
meaning set forth in the Series Term Sheet.
"Money Market Yield" shall mean a yield (expressed as a percentage rounded
to the nearest one-hundredth of a percent, with five hundred one-thousandths of
a percent rounded upwards) calculated in accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the related Interest Accrual Period.
"Monthly Amortization Rate," if applicable, shall have the meaning set
forth in the Series Term Sheet.
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<PAGE> 30
"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.
"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.
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<PAGE> 31
"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 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
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<PAGE> 32
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.
"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
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<PAGE> 33
(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 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
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<PAGE> 34
multiplied, in each case, by a fraction the numerator of which shall be the
aggregate amount of Principal Receivables in the Trust that are serviced by
such Servicer and the denominator of which shall be the aggregate amount of
Principal Receivables in the Trust; provided, however, that if any Servicer is
unable to make the calculations set forth above on any day, the Required Daily
Deposit for such Servicer for such day shall be equal to all the Collections
received by such Servicer on such day.
Notwithstanding the foregoing, (i) upon the occurrence of any circumstance
described in Section 10.02(d), (e) or (f) of the Pooling and Servicing
Agreement with respect to any Servicer, the Required Daily Deposit for any
Series then outstanding shall equal the amount described in paragraph (b) above
for such Servicer and (ii) a Servicer may use Collections received by it for
its own account prior to the applicable Distribution Date as permitted by
Sections 3.03(b) and 4.03(b) of the Pooling and Servicing Agreement.
"Revolving Period" shall have the meaning set forth in the Series Term
Sheet.
"Series Additional Funds," if applicable, shall mean, for any Distribution
Date, the Additional Funds deposited into the Series Collections Account for
the Series established hereby on such Distribution Date.
"Series Additional Investor Funds," if applicable, shall mean, for any
Distribution Date, the Series Additional Funds, if any, that are not applied to
payment of the Supplemental Servicing Fee pursuant to Section 14.
"Series Available Principal Amount" shall mean, for any Distribution Date,
if a Group Principal Allocation Event has occurred, for each Series that is a
member of the same Group as the Series established hereby (including the Series
established hereby) that is in its Controlled Liquidation Period or
Accumulation Period, as applicable, an amount calculated as follows: For each
such Series, seriatim, beginning with the Series with the largest Series
Investor Interest for such Distribution Date (and if more than one Series has
the same Series Investor Interest on such Distribution Date, beginning with
whichever of such Series has the longest time remaining in its Controlled
Liquidation Period or Accumulation Period, as applicable (assuming that no
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.
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<PAGE> 35
"Series Collections Account" shall have the meaning specified in Section
8.
"Series Cut-Off Date" shall mean the date designated as such in the Series
Term Sheet.
"Series Distribution Account" shall have the meaning specified in Section
8.
"Series Excess Servicing" shall mean, as of any Distribution Date, the sum
of the amounts of Class Excess Servicing for each Class of the Series
established hereby, as such amount is modified pursuant to Section 9.
"Series Excess Spread" shall mean, for any Distribution Date, an amount
equal to (a) the sum of Series Finance Charge Collections, Series Yield
Collections, Series Additional Investor Funds and any Class Investment Income
for any Class of the Series established hereby minus (b) the sum of (i) with
respect to each Class, the product of (A) the Class Invested Amount for such
Class for such Distribution Date and (B) a fraction, the numerator of which is
the Certificate Rate for that Class, and the denominator of which is (x) if the
relevant Certificate Rate is to be calculated on the basis of the actual number
of days elapsed and a 360-day year, (A) if each Interest Payment Date is also a
Distribution Date, 360 divided by the actual number of days from and including
the immediately preceding Distribution Date (or in the case of the first
Distribution Date, from and including the Series Closing Date) to but excluding
the current Distribution Date or (B) if each Interest Payment Date is not also a
Distribution Date, 360 divided by the actual number of days from and including
the immediately preceding Interest Calculation Date (or, in the case of the
first Distribution Date, from and including the Series Closing Date) to but
excluding the Interest Calculation Date following the current Distribution Date
or (y) if the relevant Certificate Rate is to be calculated on the basis of a
360-day year of twelve 30-day months, twelve (or in the case of the first
Distribution Date, 360 divided by the number of days from and including the
Series Closing Date to but excluding the current Distribution Date (if each
Interest Payment Date is also a Distribution Date) or the Interest Calculation
Date following the current Distribution Date (if each Interest Payment Date is
not also a Distribution Date), assuming 30-day months), (ii) the Investor
Servicing Fee, (iii) the product of the Series Percentage with respect to the
Charged-Off Amount and the Charged-Off Amount, and (iv) the Credit Enhancement
Fee, in each case for such Distribution Date.
"Series Finance Charge Collections" shall mean, with respect to any day or
any Distribution Date or Trust Distribution Date, as applicable, the sum of the
amount of Class Finance Charge Collections for each Class for such day or for
the related Due Period, as applicable.
"Series Initial Investor Interest" shall mean the aggregate face amount of
Investor Certificates initially authenticated and delivered pursuant to Section
7, as specified in the Series Term Sheet.
"Series Interest Funding Account" shall have the meaning specified in
Section 8.
"Series Invested Amount" with respect to any Distribution Date, shall mean
the sum of the Class Invested Amounts for each Class of the Series established
hereby on such Distribution Date.
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<PAGE> 36
"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.
"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.
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<PAGE> 37
"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.
"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).
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"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.
"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
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the Interest Accrual Period (or any other amounts required to be deposited
pursuant to the Series Supplement).
"United States" or "U.S." shall mean the United States of America, its
territories and possessions, any State of the United States and the District of
Columbia.
SECTION 2. Subordination
(a) Subordination of Certain Classes. If there is a Subordinate Class
with respect to Class A, the Holders of each Class B Investor Certificate, by
their acceptance of such Investor Certificate, hereby subordinate, for the
benefit of the Holders of Class A Investor Certificates, to the extent and in
the manner set forth in Section 9, all of such Investor Certificateholders'
right, title and interest in and to future distributions due on such Holders'
Investor Certificates, but only to the extent of the Available Subordinated
Amount.
(b) No Subordination of Series. The Investor Certificates of the Series
established hereby shall not be subordinated in right of payment to any other
Series, whether currently outstanding or to be issued in the future. One or
more other Series, however, may be subordinated in right of payment to the
Series established hereby, although the Sellers shall have no obligation to
issue such a Subordinate Series. If any Subordinate Series is issued, such
Subordinate Series shall be subordinate in right of payment to the Series
established hereby only to the extent set forth in the Series Supplement with
respect to such Subordinate Series.
SECTION 3. Representations and Warranties of the Sellers . The
representations and warranties of the Sellers contained in Section 2.04 of the
Pooling and Servicing Agreement and the corresponding sections of any
Assignment are true on and as of the date hereof and/or the date set forth in
the Pooling and Servicing Agreement, as applicable. Each Seller also
represents and warrants to the Trust as of the date hereof that the execution,
delivery and performance of this Series Supplement by such Seller have been
duly authorized by all necessary corporate action, do not require any approval
or consent of any governmental agency or authority, do not and will not
conflict with any material provision of the Certificate of Incorporation or
By-Laws of such Seller, do not and will not conflict with, or result in a
breach which would constitute a material default under, any agreement for
borrowed money binding upon or applicable to it or such of its property which
is material to it, or, to the best of such Seller's knowledge, any law or
governmental regulation or court decree applicable to it or such material
property, and this Series Supplement is the valid, binding and enforceable
obligation of such Seller, except as the same may be limited by receivership,
insolvency, reorganization, moratorium or other laws relating to the
enforcement of creditors' rights generally or by general equity principles.
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
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conflict with any material provision of the Certificate of Incorporation or
By-Laws of Greenwood, do not and will not conflict with, or result in a breach
which would constitute a material default under, any agreement for borrowed
money binding upon or applicable to it or such of its property which is material
to it, or, to the best of Greenwood's knowledge, any law or governmental
regulation or court decree applicable to it or such material property, and this
Series Supplement is the valid, binding and enforceable obligation of Greenwood,
except as the same may be limited by receivership, insolvency, reorganization,
moratorium or other laws relating to the enforcement of creditors' rights
generally or by general equity principles.
SECTION 5. Representations and Warranties of Other Servicers. The
representations and warranties of each Servicer (other than Greenwood), if any,
contained in Section 3.05 of the Pooling and Servicing Agreement are true and
correct on and as of the date hereof. Each such Servicer also represents and
warrants to the Trust as of the date hereof that the execution, delivery and
performance of this Series Supplement by such Servicer have been duly
authorized by all necessary corporate action, do not require any approval or
consent of any governmental agency or authority, do not and will not conflict
with any material provision of the Certificate of Incorporation or By-Laws of
such Servicer, do not and will not conflict with, or result in a breach which
would constitute a material default under, any agreement for borrowed money
binding upon or applicable to it or such of its property which is material to
it, or, to the best of such Servicer's knowledge, any law or governmental
regulation or court decree applicable to it or such material property, and this
Series Supplement is the valid, binding and enforceable obligation of such
Servicer, except as the same may be limited by receivership, insolvency,
reorganization, moratorium or other laws relating to the enforcement of
creditors' rights generally or by general equity principles.
SECTION 6. Representations and Warranties of the Trustee. The
representations and warranties of the Trustee contained in Section 11.16 of the
Pooling and Servicing Agreement are true on and as of the date hereof. The
Trustee also represents and warrants as of the date hereof that the Trustee has
full power, authority and right to execute, deliver and perform this Series
Supplement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Series Supplement, and this Series
Supplement has been duly executed and delivered by the Trustee.
SECTION 7. 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
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Account" and the "Series Principal Collections Account") bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders. The Trust shall possess all right, title and interest in
all funds on deposit in the Series Distribution Account, the Series Collections
Account and the Series Principal Collections Account; provided, however, that
all interest and earnings (less investment expenses) on funds on deposit in any
such account shall be paid to the Holder of the Seller Certificate in accordance
with Section 4.02(c) of the Pooling and Servicing Agreement. Pursuant to
authority granted to it pursuant to Section 3.01(b) of the Pooling and Servicing
Agreement, the Master Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Series Distribution Account, the Series
Collections Account and the Series Principal Collections Account for the purpose
of carrying out the duties of the Master Servicer hereunder. The Master Servicer
at all times shall maintain accurate records reflecting each transaction in the
Series Distribution Account, the Series Collections Account and the Series
Principal Collections Account. The Paying Agent also shall have the revocable
authority to make withdrawals from the Series Distribution Account.
(b) Reallocation Accounts. The Trustee, for the benefit of the
Certificateholders, shall cause to be established and maintained in the name of
the Trust, with the corporate trust department of an office or branch of either
the Trustee or a Qualified Institution, two non-interest bearing segregated
trust accounts for the Group of which the Series established hereby is a member
(the "Group Finance Charge Collections Reallocation Account" and the "Group
Principal Collections Reallocation Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders. The Trust shall possess all right, title and interest in
all funds on deposit from time to time in the Group Finance Charge Collections
Reallocation Account and the Group Principal Collections Reallocation Account
and in all proceeds thereof. Pursuant to authority granted to it pursuant to
Section 3.01(b) of the Pooling and Servicing Agreement, the Master Servicer
shall have the revocable power to instruct the Trustee to withdraw funds from
the Group Finance Charge Collections Reallocation Account and the Group
Principal Collections Reallocation Account for the purpose of carrying out the
duties of the Master Servicer hereunder. The Master Servicer at all times
shall maintain accurate records reflecting each transaction in the Group
Finance Charge Collections Reallocation Account and in the Group Principal
Collections Reallocation Account.
(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
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Account. The Paying Agent also shall have the revocable authority to make
withdrawals from the Series Principal Funding Account.
Funds on deposit in the Series Principal Funding Account shall be invested
in Permitted Investments by the Trustee (or, at the direction of the Trustee, by
the Master Servicer on behalf of the Trustee) at the direction of Greenwood on
behalf of the Holder of the Seller Certificate, as set forth below. Any
Permitted Investment with a stated maturity shall mature on or prior to the
following Distribution Date. On or before the occurrence of the first
Distribution Date with respect to the Accumulation Period or Controlled
Liquidation Period, as applicable (and on or before any subsequent Distribution
Date in which the notice previously given is no longer correct or valid), the
Master Servicer shall notify the Trustee of the amount of Series Principal
Collections to be deposited into the Series Principal Funding Account on such
Distribution Date, and Greenwood on behalf of the Holder of the Seller
Certificate shall direct the Trustee in writing to invest the funds that will be
on deposit in the Series Principal Funding Account on such Distribution Date
(including any funds previously invested in Permitted Investments that will be
available for reinvestment on such Distribution Date) in Permitted Investments.
Greenwood's notice to the Trustee shall specifically identify each such
Permitted Investment (including its principal amount and maturity). In addition,
Greenwood on behalf of the Holder of the Seller Certificate shall from time to
time provide written notice to the Trustee directing the Trustee to reinvest
funds representing principal, interest or other investment income received by it
with respect to such Permitted Investments (whether upon maturity or otherwise)
in additional Permitted Investments. In the event that Greenwood on behalf of
the Holder of the Seller Certificate fails to direct the Trustee to invest or
reinvest any funds that are deposited in the Series Principal Funding Account or
that are received by it with respect to Permitted Investments by 2:00 p.m. on
the date such funds are available for investment, the Trustee shall use
reasonable efforts to invest such funds overnight in securities represented by
instruments in bearer or registered form which evidence obligations issued or
fully guaranteed, as to timely payment, by the United States of America or any
instrumentality or agency thereof when such obligations are backed by the full
faith and credit of the United States of America until such time as the Trustee
receives the required notice from Greenwood; provided, however, that the Trustee
shall have no liability for the failure to invest such funds if the Trustee has
employed reasonable efforts to make such investment.
(d) The Series Interest Funding Account. The Trustee, for the benefit of
the Certificateholders, shall establish and maintain or cause to be established
and maintained in the name of the Trust, in the corporate trust department of
an office or branch of either the Trustee or a Qualified Institution, a
non-interest bearing segregated trust account (the "Series Interest Funding
Account") bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders. The Trust shall
possess all right, title and interest in all funds on deposit from time to time
in the Series Interest Funding Account and in all proceeds thereof. 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
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maintain accurate records reflecting each transaction in the Series
Interest Funding Account. The Paying Agent shall also have the revocable
authority to make withdrawals from the Series Interest Funding Account.
(e) The Credit Enhancement Account. If the Credit Enhancement is Funded
Credit Enhancement, the Master Servicer, for the benefit of the
Certificateholders and the Credit Enhancement Provider, shall establish and
maintain or cause to be established and maintained in the name of the Trust,
with the corporate trust department of an office or branch of either the Trustee
or a Qualified Institution, a non-interest bearing segregated trust account (the
"Credit Enhancement Account") bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Certificateholders and
the Credit Enhancement Provider. The Trust shall possess all right, title and
interest in all funds on deposit from time to time in the Credit Enhancement
Account and in all proceeds thereof. The Credit Enhancement Account shall be
under the sole dominion and control of the Trustee as the administrator of the
Credit Enhancement for the benefit of the Certificateholders and the Credit
Enhancement Provider; provided, however, the Master Servicer may make Credit
Enhancement Drawings pursuant to, and for the purposes set forth in, Section 9.
The interest of the Credit Enhancement Provider in the Credit Enhancement
Account shall be subordinated to the interests of the Certificateholders to the
extent provided herein and in the Credit Enhancement Agreement. The Trustee, at
the direction of the Master Servicer, shall (i) on the Series Closing Date,
deposit into the Credit Enhancement Account an amount equal to the sum of the
Stated Shared Credit Enhancement Amount and the Stated Class B Credit
Enhancement Amount (such amounts to be funded by the Credit Enhancement Provider
pursuant to the Credit Enhancement Agreement) and (ii) make withdrawals from,
and deposits to, the Credit Enhancement Account from time to time in the amounts
and for the purposes set forth in this Series Supplement. The Credit Enhancement
Provider shall not be entitled to reimbursement from the assets of the Trust for
any withdrawals from the Credit Enhancement Account except as specifically
provided in this Series Supplement. The Master Servicer at all times shall
maintain accurate records reflecting each transaction in the Credit Enhancement
Account.
Funds on deposit in the Credit Enhancement Account shall be invested in
Permitted Investments by the Trustee as administrator of the Credit Enhancement
at the direction of the Master Servicer, as set forth below. Any Permitted
Investment with a stated maturity shall mature on or prior to the following
Distribution Date or such longer period as will not result in the lowering or
withdrawal of the rating of any Class of any Series then outstanding by the
Rating Agencies and any funds received with respect to the maturity of a
Permitted Investment shall be available in sufficient time to allow for any
payments to be made to the Investor Certificateholders on such Distribution
Date. The Master Servicer's notice to the Trustee shall specifically identify
each such Permitted Investment (including its principal amount and maturity).
In addition, the Master Servicer shall from time to time provide written notice
to the Trustee directing the Trustee to reinvest funds representing principal,
interest or other investment income received by it with respect to such
Permitted Investments (whether upon maturity or otherwise) in additional
Permitted Investments. In the event that the Master Servicer fails to direct
the Trustee to invest or reinvest any funds that are deposited in the Credit
Enhancement Account or that are received by it with respect to Permitted
Investments by 2:00 p.m. on the date such funds are available for investment,
the Trustee shall use reasonable efforts to invest such
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funds overnight in securities represented by instruments in bearer or registered
form which evidence obligations issued or fully guaranteed, as to timely
payment, by the United States of America or any instrumentality or agency
thereof when such obligations are backed by the full faith and credit of the
United States of America until such time as the Trustee receives the required
notice from the Master Servicer; provided, however, that the Trustee shall have
no liability for the failure to invest such funds if the Trustee has employed
reasonable efforts to make such investment.
On each Distribution Date, all interest and earnings (net of losses and
investment expenses) accrued since the preceding Distribution Date on funds on
deposit in the Credit Enhancement Account shall be paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. For purposes of determining
the availability of funds or the balances in the Credit Enhancement Account,
all investment earnings on such funds shall be deemed not to be available or on
deposit. If, on any Distribution Date, after giving effect to all other
deposits to and withdrawals from the Credit Enhancement Account as of such
Distribution Date, the amount on deposit in the Credit Enhancement Account is
greater than the Total Maximum Credit Enhancement Amount, then the excess of
the amount on deposit over the Total Maximum Credit Enhancement Amount shall be
withdrawn from the Credit Enhancement Account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement.
Upon the earliest to occur of (i) the termination of the Trust, (ii) the
Series Termination Date and (iii) the day on which the Class Invested Amount
for each Class of the Series established hereby is paid in full, and after
payment of all amounts to be paid on such day from the Credit Enhancement
Account to or for the benefit of Investor Certificateholders of the Series
established hereby, all amounts remaining on deposit in the Credit Enhancement
Account shall be withdrawn from such account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement.
(f) The Class Foreign Currency Distribution Account. In the event that
any Class is subject to a Class Currency Swap, the Trustee, for the benefit of
the Certificateholders of such Class, shall cause to be established and
maintained in the name of the Paying Agent, an account outside the United
States (the "Class Foreign Currency Distribution Account") bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders of such Class. Pursuant to the authority
granted to it pursuant to Section 3.01(b) of the Pooling and Servicing
Agreement, the Master Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Class Foreign Currency Distribution Account
for the purpose of carrying out the duties of the Master Servicer hereunder.
The Trust shall possess all right, title and interest in all funds on deposit
from time to time in the Class Foreign Currency Distribution Account and in all
proceeds thereof and each Paying Agent with respect to such Class (as specified
in the Series Term Sheet) shall have the revocable authority to make
withdrawals from the Class Foreign Currency Distribution Account.
Notwithstanding Section 6.08(b) of the Pooling and Servicing Agreement, the
Class Foreign Currency
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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 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
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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.
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.
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(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
(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.
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(6) If there is a Subordinate Class with respect to Class A, an amount
equal to the least of
(x) the Class A Required Amount Shortfall,
(y) the Available Subordinated Amount, and
(z) Class B Available Collections
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The Class B Subordinated Payment shall be
increased by, and the Class A Required Amount Shortfall, the Available
Subordinated Amount and Class B Available Collections shall be decreased by,
the amount of such deposit.
(7) If there is a Subordinate Class with respect to Class A, an amount
equal to the least of
(x) the Class A Cumulative Investor Charged-Off Amount,
(y) the Available Subordinated Amount, and
(z) Class B Available Collections
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class B Subordinated Payment shall
be increased by, and the Class A 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
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(y) funds, if any, available to pay such Class B Required
Amount Shortfall from funds initially allocated to any
Subordinate Series
shall be deposited into the Series Distribution Account. The Class B Required
Amount Shortfall shall be reduced by the amount of such deposit.
(10) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) funds, if any, available to pay such Class B Cumulative
Investor Charged-Off Amount from funds initially allocated
to any Subordinate Series
shall be deposited into the Series Principal Collections Account. The Class B
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
(11) If there is a Subordinate Class with respect to Class A, an amount
equal to the least of
(x) the Class A Required Amount Shortfall,
(y) the Available Subordinated Amount, and
(z) Series Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The Class A Required Amount Shortfall, the
Available Subordinated Amount and the amount of Series Excess Servicing shall
be reduced by the amount of such deposit.
(12) If there is a Subordinate Class with respect to Class A, an amount
equal to the least of
(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
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(x) the Class A Cumulative Investor Charged-Off Amount,
(y) the Available Subordinated Amount, and
(z) the Class B Investor Interest.
The Class A Cumulative Investor Charged-Off Amount, the Available Subordinated
Amount and the Class B Investor Interest shall each be reduced by such least
amount, and the Class B Cumulative Investor Charged-Off Amount shall be
increased by such amount.
(13) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account. The Class B Required Amount Shortfall and the
amount of Series Excess Servicing shall be reduced by the amount of such
deposit.
(14) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and deposited into the
Series Principal Collections Account. The Class B Cumulative Investor
Charged-Off Amount and the amount of Series Excess Servicing shall be reduced
by the amount of such deposit.
(15) 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
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equals the Maximum Class B Credit Enhancement Amount. The Total Available Credit
Enhancement Amount shall be increased by, and the amount of Series Excess
Servicing shall be decreased by, the amount of such deposit.
(16) If there is Shared Credit Enhancement, and if the Class A Required
Amount Shortfall is greater than zero, the Master Servicer, on the related
Drawing Date, shall make a Credit Enhancement Drawing in an amount equal to the
lesser of
(x) the Class A Required Amount Shortfall and
(y) the Available Shared Credit Enhancement
Amount
and such amount shall be deposited into the Series Distribution Account. The
Class A Required Amount Shortfall and the Available Shared Credit Enhancement
Amount shall be reduced by the amount of such deposit.
(17) If there is Shared Credit Enhancement, and if the Class A Cumulative
Investor Charged-Off Amount is greater than zero, the Master Servicer, on the
related Drawing Date, shall make a Credit Enhancement Drawing in an amount
equal to the lesser of
(x) the Class A Cumulative Investor
Charged-Off Amount and
(y) the Available Shared Credit Enhancement
Amount
and such amount shall be deposited into the Series Principal Collections
Account. The Class A Cumulative Investor Charged-Off Amount and the Available
Shared Credit Enhancement Amount shall be reduced by the amount of such
deposit.
(18) If there is Shared Credit Enhancement, and if there is a Subordinate
Class with respect to Class A, and if the Class B Required Amount Shortfall is
greater than zero, the Master Servicer, on the related Drawing Date, shall make
a Credit Enhancement Drawing in an amount equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) the Available Shared Credit Enhancement Amount
and such amount shall be deposited into the Series Distribution Account. The
Class B Required Amount Shortfall and the Available Shared Credit Enhancement
Amount shall be reduced by the amount of such deposit.
(19) If there is Shared Credit Enhancement, and if there is a Subordinate
Class with respect to Class A, and if the Class B Cumulative Investor
Charged-Off Amount is greater than zero, the 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
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(y) the Available Shared Credit Enhancement Amount
and such amount shall be deposited into the Series Principal Collections
Account. The Class B Cumulative Investor Charged-Off Amount and the Available
Shared Credit Enhancement Amount shall be reduced by the amount of such
deposit.
(20) If there is Subordinate Class with respect to Class A, and if the
Class B Required Amount Shortfall is greater than zero, the Master Servicer, on
the related Drawing Date, shall make a Credit Enhancement Drawing in an amount
equal to the lesser of
(x) the Class B Required Amount Shortfall and
(y) the Available Class B Credit Enhancement Amount
and such amount shall be deposited into the Series Distribution Account. The
Class B Required Amount Shortfall and the Available Class B Credit Enhancement
Amount shall be reduced by the amount of such deposit.
(21) If there is a Subordinate Class with respect to Class A, and if the
Class B Cumulative Investor Charged-Off Amount is greater than zero, the Master
Servicer, on the related Drawing Date, shall make a Credit Enhancement Drawing
in an amount equal to the lesser of
(x) the Class B Cumulative Investor Charged-Off Amount and
(y) the Available Class B Credit Enhancement Amount
and such amount shall be deposited into the Series Principal Collections
Account. The Class B Cumulative Investor Charged-Off Amount and the Available
Class B Credit Enhancement Amount shall be reduced by the amount of such
deposit.
(22) An amount equal to the lesser of
(x) the Credit Enhancement Fee and
(y) Series Excess Servicing
shall be withdrawn from the Series Collections Account and paid to the Trustee
as the administrator of the Credit Enhancement for application in accordance
with the provisions of the Credit Enhancement Agreement. The amount of Series
Excess Servicing shall be reduced by the amount of such payment.
(23) 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.
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(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
(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. The Available
Subordinated Amount shall be increased by the amount of any such deposit that
reduces the Class B Required Amount Shortfall.
(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
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<PAGE> 54
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. The Available Subordinated Amount shall be increased by the amount of
any such deposit that reduces the Class B Cumulative Investor Charged-Off
Amount.
(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):
(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.
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(B) If there is a Subordinate Class with respect to Class A, an amount
equal to the lesser of
(x) the amount by which the Available Class B Credit
Enhancement Amount is less than the Maximum Class B Credit
Enhancement Amount and
(y) the product of
(1) a fraction, the numerator of which is the amount by
which the Available Class B Credit Enhancement Amount
is less than the Maximum Class B Credit Enhancement
Amount and the denominator of which is the sum of,
for each Series in the Group of which the Series
established hereby is a member, the amount by which
the Available Class B Credit Enhancement Amount for
such Series is less than the Maximum Class B Credit
Enhancement Amount for such Series (after giving
effect to provisions in the applicable Series
Supplements substantially similar to the clauses
preceding this clause (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. Each of the Available Class B Credit Enhancement Amount and the
Available Subordinated Amount shall be increased by the amount of such deposit.
(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.
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(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
(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
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<PAGE> 57
(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
(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
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Income, if any, on deposit in the Series Principal Funding Account from the
Series Principal Funding Account and pay such amount to the Holder of the Seller
Certificate.
(2) On each Distribution Date, after giving effect to payments made
pursuant to Section 9 and the calculation of Investor Losses and adjustment of
the Class Investor Interest and Class Invested Amount with respect to each
Class pursuant to Section 13, the Master Servicer shall direct the Trustee in
writing to withdraw and cause the Paying Agent to pay funds from the applicable
Investor Account to or for the benefit of each Class of Investor
Certificateholders, seriatim, with respect to each Class, beginning with Class
A, until such payments have been made with respect to each Class, as set forth
below:
(A) First, an amount equal to the lesser of
(x) the Class Modified Required Amount and
(y) the amount 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
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Series Interest Funding Account with respect to each Class or Subclass since the
preceding Interest Payment Date. Such amount shall be paid, or converted into
Foreign Currency, as follows:
(a) With respect to any Class or Subclass that is not subject to a
Class Currency Swap, the Master Servicer shall cause the Paying
Agent to pay such amount on each Interest Payment Date to the
Investor Certificateholders of such Class or Subclass in
accordance with Section 5.01 of the Pooling and Servicing
Agreement;
(b) With respect to any Class or Subclass that is subject to a Class
Currency Swap, assuming no Currency Swap Termination has
occurred, the Master Servicer shall direct the Trustee in writing
to deposit such amount into the Currency Swap Dollar Escrow
Account; and
(c) With respect to any Class or Subclass that is subject to a Class
Currency Swap, and following a Currency Swap Termination, the
Master Servicer shall direct the Trustee in writing to convert
such amount into Foreign Currency at the then prevailing spot
exchange rate in New York; provided, however, that the Trustee
shall not convert any dollars into Foreign Currency in excess of
the amount of dollars that, when so converted, would equal the
sum of the Class Foreign Currency Modified Required Amounts for
each Distribution Date of the Interest Accrual Period relating to
such Interest Payment Date. The positive difference, if any,
between (i) the sum of the Class Foreign Currency Modified
Required Amounts for each Distribution Date of the Interest
Accrual Period and (ii) the amount of Foreign Currency so
obtained, shall be the "Class Foreign Currency Interest
Shortfall."
Any amounts withdrawn from the Series Interest Funding Account pursuant to this
clause (4) and not paid or converted into Foreign Currency shall be redeposited
into the Series Interest Funding Account and shall be deemed, on the next
Interest Payment Date, to be amounts deposited since the preceding Interest
Payment Date.
(5) The Master Servicer shall direct the Trustee in writing to withdraw
from the Class Currency Swap Termination Account and convert into Foreign
Currency at the then prevailing spot exchange rate in New York the lesser of
(x) the amount of dollars that, when converted into Foreign
Currency, will equal the Class Foreign Currency Interest
Shortfall and
(y) the amount on deposit in the Class Currency Swap
Termination Account.
(6) On each Foreign Business Day immediately preceding each Interest
Payment Date with respect to any Class or Subclass that is subject to a Class
Currency Swap, the Master Servicer shall direct the Trustee in writing (i) to
deposit into the Class Foreign Currency
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Distribution Account all amounts received from the Currency Swap Counterparty
with respect to the sum of the Class Foreign Currency Modified Required Amounts
for each Distribution Date of the Interest Accrual Period relating to such
Interest Payment Date, (ii) to deposit into the Class Foreign Currency
Distribution Account all Foreign Currency obtained by the Trustee by converting
dollars pursuant to Sections 10(a)(4) and 10(a)(5) (x) on deposit in the Series
Interest Funding Account and (y) on deposit in the Class Currency Swap
Termination Account (up to the amount necessary to obtain the Class Foreign
Currency Interest Shortfall) into Foreign Currency at the then prevailing spot
exchange rate in New York and (iii) to cause the Paying Agent to pay such amount
to the Investor Certificateholders of such Class in accordance with subsection
(c) of this Section 10.
(7) On each 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
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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
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
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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.
(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
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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 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
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the Class Expected Final Payment Date or the Class Final Maturity Date, if
applicable), the Master Servicer shall direct the Trustee in writing to withdraw
the amount on deposit in the Series Principal Funding Account with respect to
each Class; provided that (i) such amount shall be no greater than the Class
Invested Amount and (ii) funds, if any, remaining on deposit in the Series
Principal Funding Account after the payment in full of the Class Invested Amount
with respect to each Class shall be withdrawn and paid to the Holder of the
Seller Certificate. Such amount shall be paid or converted into Foreign Currency
as follows:
(a) With respect to any Class or Subclass that is not subject to a Class
Currency Swap, the Master Servicer shall cause the Paying Agent to pay
such amount to the Investor Certificateholders of such Class or
Subclass in accordance with Section 5.01 of the Pooling and Servicing
Agreement;
(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
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Section 9 and this Section 10 may be paid prior to such Distribution Date
pursuant to Section 4.03(d) of the Pooling and Servicing Agreement.
(c) Payments to Holders of Investor Certificates in Bearer Form. On each
Payment Date, with respect to any outstanding Class of Investor Certificates
issued in bearer form and denominated in a Foreign Currency, the principal and
interest on the Bearer Certificates will be payable in Foreign Currency only
against surrender of the Bearer Certificates or Coupons, as the case may be,
and subject to applicable laws and regulations at the offices of any Paying
Agent outside the United States. Payments of principal and interest on the
Bearer Certificates will be made by Foreign Currency check or Foreign Currency
bank draft drawn on a bank account which, at the Paying Agent's discretion,
shall be in Frankfurt or London, or by transfer in same day funds to a Foreign
Currency account maintained by the payee, subject in each case to all
applicable laws and regulations. To the extent necessary under the tax laws of
the United States, or any official application or interpretation of the tax
laws of the United States or its possessions, no such bank draft shall be
mailed by any of the Paying Agents to any address in the United States or its
possessions and no transfer of funds shall be made to an account maintained by
the payee in the United States or its possessions. Payments of principal and
interest on the Permanent Global Certificate, if any, will be made in
immediately available funds by wire transfer to such account as the Foreign
Depository with 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
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Credit Enhancement and the respective Credit Enhancement Agreement may be
terminated by the Trustee without penalty if (x) the Master Servicer elects to
obtain a successor Credit Enhancement and such successor Credit Enhancement does
not cause the ratings of the Investor Certificates of the Series established
hereby to be withdrawn or lowered by either of the Rating Agencies from the
respective ratings of such Investor Certificates immediately prior to such
election or (y) if the Credit Enhancement is not Funded Credit Enhancement, the
Credit Enhancement Provider ceases to be a Qualified Credit Enhancement
Provider.
(b) Successor Credit Enhancement.
(i) If the Credit Enhancement is not Funded Credit Enhancement and
if, at any time, the provider of such Credit Enhancement ceases to be a
Qualified Credit Enhancement Provider, the Master Servicer shall obtain a
successor Credit Enhancement within 30 days or such longer period as will
not result in the lowering or withdrawal of the rating of any Class of any
Series then outstanding by the Rating Agencies (a) which, if such
successor Credit Enhancement is not to be Funded Credit Enhancement, will
be issued by a Qualified Credit Enhancement Provider and (b) with respect
to which the representations set forth in Section 11(a) will be satisfied;
provided, however, that the Master Servicer shall not be required to
continue efforts to obtain a successor Credit Enhancement if the then
existing Credit Enhancement Provider again becomes a Qualified Credit
Enhancement Provider and remains such; and, provided, further, that unless
otherwise agreed to by the Rating Agencies, the Credit Enhancement and
Credit Enhancement Agreement will not be terminated and no successor
Credit Enhancement Provider shall be selected if the successor Credit
Enhancement, the successor Credit Enhancement Agreement, or the selection
of such successor Credit Enhancement Provider would cause the ratings of
the Investor Certificates of the Series established hereby to be withdrawn
or lowered by either Rating Agency from the respective ratings of such
Investor 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.
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(c) Supplemental Credit Enhancement Event. Upon the occurrence of a
Supplemental Credit Enhancement Event, Greenwood as Servicer shall, within 60
days of notice from Standard & Poor's of the withdrawal or downgrade (or such
longer period as may be agreed to by Standard & Poor's), arrange for the
payment of the Supplemental Credit Enhancement Amount, if any, by a Person
other than Greenwood (or from Series Excess Servicing) to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. Both the form and the provider
of the Supplemental Credit Enhancement Amount, if any, shall be determined at
the time it is to be paid; provided, that the Master Servicer shall have
received confirmation from Standard & Poor's that the arrangements with respect
to the Supplemental Credit Enhancement Amount, if any, will not result in the
rating of the Investor Certificates of the Series established hereby being
withdrawn or lowered. In addition to the foregoing, the Master Servicer shall
notify Moody's of the occurrence of a Supplemental Credit Enhancement Event as
soon as practicable after such occurrence, and shall notify Moody's in advance
of its implementation of the form and provider of the Supplemental Credit
Enhancement Amount, if any.
SECTION 12. Alternative Credit Support Election.
(a) The Sellers may elect to effect a change in the calculation of the
Class Percentage with respect to Finance Charge Collections during the 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
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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 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
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entitled to receive a monthly servicing fee with respect to the Series
established hereby in respect of any Due Period (or portion thereof) prior to
the earlier of the date on which the Series Investor Interest is reduced to zero
and the Series Termination Date. Such monthly servicing fees shall be composed
of the Class Monthly Servicing Fees and the Supplemental Servicing Fees, if any.
The Class Monthly Servicing Fees shall be paid to the Master Servicer on behalf
of each Class on each Distribution Date pursuant to Section 10. The Supplemental
Servicing Fee, if any, shall be paid to the Master Servicer on or before each
Distribution Date from the Series Additional Funds for such Distribution Date.
In no event shall the Trustee or the Investor Certificateholders be liable for
the Supplemental Servicing Fee.
SECTION 15. Class Interest Rate Caps.
(a) In the event that the Master Servicer has obtained a Class Interest
Rate Cap in favor of the Trustee for the benefit of a Class or Subclass that
does not have a fixed or maximum Certificate Rate, the Master Servicer hereby
represents that such Class Interest Rate Cap provides that (i) the Trust shall
not be required to make any payments thereunder and (ii) the Trust shall be
entitled to receive payments (determined in accordance with the Class Interest
Rate Cap) from the Interest Rate Cap Provider on an Interest Payment Date if
LIBOR or the Commercial Paper Rate, as applicable, for the related Calculation
Period exceeds the Class Cap Rate for the applicable Class or Subclass. Any
Class Interest Rate Cap Payment shall be deposited into the Series Interest
Funding Account.
(b) In the event that the commercial paper or certificate of deposit
rating of the Interest Rate Cap Provider is withdrawn or reduced below the
ratings specified in the Series Term Sheet (or, in either case, such lower
rating as the applicable Rating Agency shall allow), then within 30 days after
receiving notice of such decline in the creditworthiness of the Interest Rate
Cap Provider as determined by either Rating Agency, either (x) the Interest
Rate Cap Provider, with the prior confirmation of the Rating Agencies that such
arrangement will not result in the reduction or withdrawal of the rating of any
Investor Certificates of the Series established hereby, will enter into an
arrangement the purpose of which shall be to assure performance by the Interest
Rate Cap Provider of its obligations under the Class Interest Rate Caps; or (y)
the Master Servicer shall at its option either (i) with the prior confirmation
of the Rating Agencies that such action will not result in a reduction or
withdrawal of the rating of any Investor Certificates of the Series established
hereby, cause the Interest Rate Cap Provider to pledge securities in the manner
provided by applicable law, which shall be held by the Trustee or its agent
free and clear of the Lien of any third party, in a manner conferring on the
Trustee a perfected first Lien in such securities securing the Interest Rate
Cap Provider's performance of its obligations under the Class Interest Rate
Caps, or (ii) provided that Replacement Class Interest Rate Caps or Qualified
Substitute Cap Arrangements meeting the requirements of Section 15(c) have been
obtained, direct the Trustee (A) to provide written notice to the Interest Rate
Cap Provider of its intention to terminate the Class Interest Rate Caps within
such 30-day period and (B) to terminate the Class Interest Rate Caps within
such 30-day period, to request the payment to it of all amounts due to the
Trust under the Class Interest Rate Caps through the termination date and to
deposit any such amounts so received, on the day of receipt, to the Series
Interest Funding Account, or (iii) establish any other arrangement (including
an arrangement or arrangements in addition to or in substitution for any prior
arrangement made in accordance with
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the provisions of this Section 15(b)) satisfactory to the Rating Agencies such
that the Rating Agencies will not reduce or withdraw the rating of any Investor
Certificates of the Series established hereby (a "Qualified Substitute Cap
Arrangement"); provided, however, that in the event at any time any 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
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to determine from the Interest Rate Swap Counterparty the reasons therefore and
whether such 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 the termination of the then current Class Currency
Swap and its replacement with such
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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, 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
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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) cause the withdrawal or reduction of the then
current ratings on any Class of any other Series then outstanding;
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(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
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 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
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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 MasterServicer 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.
(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
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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 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.
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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 199 -
% 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 (formerly 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,
<PAGE> 80
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 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 , 199 (the "Series Supplement"), by and between
the Trustee and Greenwood or any amendment thereto, or become vested or
obligatory for any purpose until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under the Pooling and Servicing
Agreement.
A-1-2
<PAGE> 81
IN WITNESS WHEREOF, Greenwood has caused this Class A Certificate to be
duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:
--------------------------------------------
A-1-3
<PAGE> 82
[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 199 - % 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 199 - 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 199 -
% 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 $ . 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-1-4
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During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each and with respect to interest accrued during the preceding
Interest Accrual Period, commencing in , 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 is scheduled to be paid in a single payment on the Distribution
Date in (the "Class A Expected Final Payment Date"), but may be paid sooner
or later and in installments if an Amortization Event occurs. During the
Amortization Period, if any, Certificate Interest and Certificate Principal
collected by the Master Servicer will be distributed to the Class 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 (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 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
A-1-5
<PAGE> 84
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-1-6
<PAGE> 85
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Class A Certificates referred to in the within
mentioned Pooling and Servicing Agreement and Series Supplement.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
--------------------------------------------
Authorized Officer
A-1-7
<PAGE> 86
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 199 -
% 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> 87
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 (formerly 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 , 199 (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 B Certificate to be
duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:
--------------------------------------------
A-2-3
<PAGE> 89
[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 199 - % 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 199 - 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 199 -
% 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 $ .
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> 90
Trustee, on behalf of the Trust, to issue one or more new Series of investor
certificates, which will represent Fractional Undivided Interests in the Trust.
During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each July and January with respect to interest accrued during the
preceding Interest Accrual Period, commencing in , or if such 15th day is
not a Business Day, on the next succeeding Business Day, and on the Class B
Expected Final Payment Date (each, 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 (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 (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> 91
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> 92
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> 93
[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> 94
Exhibit B
Form of Investor Certificateholders' Monthly Statement
Discover Card Master Trust I
Series 199 - Monthly Statement
Trust Distribution Date: ________ __, ____ Due Period Ending: ________ __, ___
Pursuant to the Series Supplement dated as of 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 (formerly First Bank
National Association, successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association) as Trustee, as amended, the Trustee is
required to prepare certain information each month regarding current
distributions to Certificateholders and the performance of the Trust. The
information for the Due Period and the Trust Distribution Date listed above is
set forth below.
1. Payments for the benefit of Series Investors this Due Period (per $1,000 of
Class Initial Investor Interest)
<TABLE>
<CAPTION>
Total Interest Principal
<S> <C> <C> <C>
Series 199 -
Class A $____________ $____________ $____________
Class B $____________ $____________ $____________
</TABLE>
2. Principal Receivables at the end of the Due Period
<TABLE>
<S> <C>
(a) Aggregate Investor Interest $____________
Seller Interest $____________
TOTAL MASTER TRUST $____________
(b) Group One Investor Interest $____________
(c) Group Two Investor Interest $____________
(d) Series 199 - Series Investor Interest $____________
(e) Class A Investor Interest $____________
Class B Investor Interest $____________
</TABLE>
3. Allocation of Receivables Collected During the Due Period
<TABLE>
<CAPTION>
Finance Charge Principal Yield Additional
Collections Collections Collections Funds
<S> <C> <C> <C> <C>
(a) Allocation of Collections between
Investors and Seller
Aggregate Investor Allocation $____________ $___________ N/A N/A
Seller Allocation $____________ $___________ N/A N/A
(b) Group One Allocation $____________ $___________ N/A N/A
(c) Group Two Allocation $____________ $___________ N/A N/A
(d) Series 199 - Allocations $____________ $___________ N/A N/A
(e) Class A Allocations $____________ $___________ N/A N/A
Class B Allocations $____________ $___________ N/A N/A
</TABLE>
B-2
<PAGE> 95
4. Information Concerning the Series Principal Funding Accounts ("SPFA")
<TABLE>
<CAPTION>
Deposits into the SPFAs Deficit Amount
This Due Period This Due Period Total Deposits Investment Income
<S> <C> <C> <C> <C>
Series 199 - $________ $______ $________ $_________
</TABLE>
5. Information Concerning Amount of Controlled Liquidation Payments
<TABLE>
<CAPTION>
Amount Paid This Deficit Amount This Total Payments
Due Period Due Period Through The Due
Period
<S> <C> <C> <C>
Series 199 -
Class A N/A N/A N/A
Class B N/A 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 199 - $_________ $________
</TABLE>
7. Pool Factors
<TABLE>
<CAPTION>
This Due Period
<S> <C>
Class A $_________
Class B $_________
</TABLE>
8. Investor Charged-Off Amount
<TABLE>
<CAPTION>
This Due Period Cumulative Investor
Charged-Off Amount
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 199 - $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
9. Investor Losses This Due Period
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 199 - $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
B-3
<PAGE> 96
10. Reimbursement of Investor Losses This Due Period
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 199 - $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
11. Aggregate Amount of Unreimbursed Investor Losses
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 199 - $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
12. Investor Monthly Servicing Fee Payable This Due Period
<TABLE>
<CAPTION>
<S> <C>
(a) Group One $_________
(b) Group Two $_________
(c) Series 199 - $_________
(d) Class A $_________
Class B $_________
</TABLE>
13. Class Available Subordinated Amount at the end of the Due Period
<TABLE>
<CAPTION>
as a percentage of
Total Class A Invested Amount
<S> <C> <C>
Series 199 - , Class B $____________ ________ %
</TABLE>
14. Total Available Credit Enhancement Amounts
<TABLE>
<S> <C> <C>
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 $__________
</TABLE>
B-4
<PAGE> 97
15. Delinquency Summary
<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> 98
Exhibit C
Form of Master Servicer's Monthly Certificate
Discover Card Master Trust I
Series 199 -
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 (the "Series
Supplement") by and between Greenwood and U.S. Bank National Association
(formerly 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 199 - 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> 99
<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 19 of the Series Supplement.
</TABLE>
C-2
<PAGE> 100
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
certificate this ____ day of ____________, ____.
GREENWOOD TRUST COMPANY,
as Master Servicer
By:
---------------------------------------
Title:
C-3
<PAGE> 101
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 , 199
to
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1993
------------------------
$ Class A Certificates
$ Class B Certificates
DISCOVER CARD MASTER TRUST I
SERIES 199 - CERTIFICATES
<PAGE> 102
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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....... 28
SECTION 5. Representations and Warranties of Other Servicers................................. 29
SECTION 6. Representations and Warranties of the Trustee..................................... 29
SECTION 7. Authentication of Certificates.................................................... 29
SECTION 8. Establishment and Administration of Investor Accounts and the Credit Enhancement
Account........................................................................... 29
SECTION 9. Allocations of Collections........................................................ 35
SECTION 10. Payments......................................................................... 46
SECTION 11. Credit Enhancement............................................................... 54
SECTION 12. Alternative Credit Support Election.............................................. 56
SECTION 13. Calculation of Investor Losses................................................... 57
SECTION 14. Servicing Compensation........................................................... 57
SECTION 15. Class Interest Rate Caps......................................................... 58
SECTION 16. Class Interest Rate Swaps........................................................ 59
SECTION 17. Class Currency Swaps............................................................. 60
SECTION 18. Investor Certificateholders' Monthly Statement................................... 62
SECTION 19. Master Servicer's Monthly Certificate............................................ 62
SECTION 20. Notices.......................................................................... 62
SECTION 21. Additional Amortization Events................................................... 63
SECTION 22. Early Accumulation Events........................................................ 65
SECTION 23. Purchase of Investor Certificates and Series Termination......................... 65
SECTION 24. Variable Accumulation Period..................................................... 66
SECTION 25. Optional Accumulation Period Commencement........................................ 67
SECTION 26. Series Yield Factor.............................................................. 67
SECTION 27. Ratification of Pooling and Servicing Agreement.................................. 67
SECTION 28. Counterparts..................................................................... 67
SECTION 29. Governing Law.................................................................... 67
</TABLE>
i
<PAGE> 103
EXHIBITS
EXHIBIT A: Form of Investors Certificates
EXHIBIT B: Form of Certificateholders' Monthly Statement
EXHIBIT C: Form of Master Servicer's Monthly Certificate
C-ii
<PAGE> 1
EXHIBIT 4.6
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 Agent]
Greenwood Trust Company on behalf of
Discover Card Master Trust I, Series 199_-__
[Name of Issuer]
U.S. Bank National Association
[Name of Agent]
_____ , 199_
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: [ ] Class A Credit Card Pass-Through Certificates and
[ ] Class B Credit Card Pass-Through Certificates,
Discover Card Master Trust I, Series 199_-
----------------------------------------------------------
[Insert Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Agent will act as
trustee, paying agent, fiscal agent or other such agent of Issuer with respect
to the Securities pursuant to a trust indenture, trust agreement, or other such
document dated October 1 , 1993 (the "Document").
___________________________________________is distributing the Securities
["Underwriter"] 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
Agent make the following representations to DTC:
____________________
* This Letter of Representations includes the Addendum attached hereto, which
modifies and supersedes this Letter of Representations to the extent set forth
therein.
<PAGE> 2
1. Prior to closing on the Securities on _______, 199_ there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each stated maturity of the Securities in the face
amounts set forth on Schedule A hereto, the total of which represents 100% of
the principal amount of such Securities. If, however, the aggregate principal
amount of any maturity exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. 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.
3. In the event of any solicitation of consents from or voting by holders
of the Securities, Issuer or Agent 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. 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 5.
4. In the event of a full or partial redemption, Issuer or Agent 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 Agent 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
2
<PAGE> 3
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
711 Steward Avenue
Garden City, NY 11530-4719
5. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Agent 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
6. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
7. Issuer or Agent shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized denomination
if less than $1,000 face value) payable on each payment date allocated as to the
interest and principal portions thereof preferably 5, but not less than 2,
business days prior to such 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 Agent
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, 22nd Floor
New York, NY 10004-2695
3
<PAGE> 4
8. [NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT THE
OTHER:] [The interest accrual period is record date to record date.] [The
interest accrual period is payment date to payment date.]
9. Issuer or Agent shall provide a written notice of interest payment
information to a standard interest announcement service subscribed to by DTC as
soon as the information is available. In the unlikely event that no such
service exists, Issuer or Agent shall provide such notice directly to DTC
electronically, as previously arranged by Issuer or Agent and DTC, as soon as
the information is available. If electronic transmission is not available,
absent any other arrangements between Issuer or Agent 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 telephone
(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. Issuer or Agent shall provide CUSIP numbers for each issue for which
payment is being sent, as well as the dollar and cent amount of the payment for
each issue, no later than noon (Eastern Time) on the payment date.
11. 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. Absent any other arrangements between
Issuer or Agent and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account #066-026776
12. Maturity and redemption payments allocated with respect to each CUSIP
number 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). Absent any
other arrangements between Issuer or Agent and DTC, such payments shall be
wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Account #066-027306
4
<PAGE> 5
13. Principal payments (plus accrued interest, if any) as the result of
optional tenders for purchase effected by means of DTC's Repayment Option
Procedures 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. Absent any other
arrangements between Issuer or Agent and DTC, such payments shall be wired as
follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Account #066-027608
14. DTC may direct Issuer or Agent to use any other number or address to
which notices or payments of interest or principal may be sent.
15. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Agent'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 Agent 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 Agent prior to payment, if required.
16. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Agent
shall notify DTC of the availability of certificates. In such event, Issuer or
Agent shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
17. 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 (at which time DTC will confirm with Issuer or Agent the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Agent shall cooperate fully with DTC
by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
18. Nothing herein shall be deemed to require Agent to advance funds on
behalf of Issuer.
19. This Letter of Representations may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts together shall constitute but one and the same
instrument.
20. This Letter of Representations is governed by, and shall be construed
in accordance with, the laws of the State of New York.
5
<PAGE> 6
21. The following riders, attached hereto, are hereby incorporated into
this Letter of Representations.
(1) Addendum; (2) Schedule A; (3) ERISA Rider; and (4) Rider Amending
DTC Letter of Representations.
Notes: Very truly yours,
- ------
A. If there is an Agent
(as defined in this Letter
of Representations), Agent
as well as Issuer must sign
this Letter. If there is
no Agent, in signing this
Letter, Issuer itself
undertakes to perform all
of the obligations set
forth herein.
B. Schedule B contains GREENWOOD TRUST COMPANY
statements that DTC -----------------------
believes accurately (Issuer)
describe DTC, the method of
effecting book-entry
transfers of securities
distributed through DTC, By: _____________________________
and certain related matters. (Authorized Officer's Signature)
Received and Accepted: U.S. BANK NATIONAL ASSOCIATION
------------------------------
THE DEPOSITORY TRUST COMPANY (Agent)
By:___________________ By: ____________________________
(Authorized Officer's Signature)
cc: Underwriter
Underwriter's Counsel
6
<PAGE> 7
ADDENDUM
to
Letter of Representations dated ________, 1998
Discover Card Master Trust I, Series 199_-__
General: For purposes of this Letter of Representations:
"Securities" shall mean the _______________ aggregate principal
amount of _____ Class A Credit Card Pass-Through Certificates and
the _______________ aggregate principal amount of _____ Class B
Credit Card Pass-Through Certificates issued by Discover Card
Master Trust I, Series 199__-__ 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 199__-__; 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 _______, 199_, each by and
between Greenwood as Master Servicer, Servicer and Seller and the
Agent.
Paragraph 1: The following is hereby added after the third sentence of
Paragraph 1:
"Each certificate shall remain in the Agent's custody
subject to the provisions of the Fast Balance Certificate
Agreement currently in effect between the Agent and DTC."
Paragraph 5: The first sentence of Paragraph 5 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 Agent 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 6: The following is hereby added after the first sentence of
Paragraph 6:
<PAGE> 8
"Issuer or Agent 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 14: The following is hereby inserted after the word "Agent" in line 1
of Paragraph 14:
", and if requested, shall confirm such direction in
writing,"
Paragraph 15: The following is hereby inserted at the end of Paragraph 15
before the period:
"provided, however, that this paragraph shall not apply to
any event that causes a reduction in the aggregate
principal amount of Securities outstanding that occurs in
accordance with their terms, including, without
limitation, an Amortization Event (as defined in the
Document)".
2
<PAGE> 9
SCHEDULE A
DISCOVER CARD MASTER TRUST I, SERIES 199_-__
____________ _____ CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
AND ___________ _____ CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES
<TABLE>
<CAPTION>
Principal Amount Maturity Date* Interest Rate
---------------- ----------------------- -----------------------
<S> <C> <C>
CLASS A
CERTIFICATES
CUSIP Number
- -----------------------
[ ]
Certificate Number:
- -----------------------
1 [ ] [ ]
CLASS B
CERTIFICATES
CUSIP Number
- -----------------------
[ ]
Certificate Number:
- -----------------------
1 [ ] [ ]
</TABLE>
* Last Possible Distribution Date
3
<PAGE> 10
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES
TO BE INCLUDED IN DTC LETTER OF REPRESENTATIONS
-----------------------------------------------
Issuer and Agent recognize that DTC does not in any way undertake to, and
shall not have any responsibility to, monitor or ascertain whether a transfer of
Securities could give rise to a transaction prohibited or not otherwise
permissible under the Employee Retirement Income Security Act of 1974 or under
Section 4975 of the Internal Revenue Code of 1986. Issuer and Agent acknowledge
that: a) so long as Cede & Co. is the sole record owner of the Securities, it
shall be entitled to all voting rights in respect thereof and to receive the
full amount of all principal, premium, if any, and interest payable with respect
thereto; and b) DTC shall treat any DTC Participant having Securities credited
to its DTC accounts as entitled to the full benefits of ownership of such
Securities even if the crediting of such Securities to the DTC accounts of such
Participant results from transfers or failures to transfer in violation of such
laws. (The treatment by DTC of the effects of 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).
4
<PAGE> 11
RIDER AMENDING DTC LETTER OF REPRESENTATIONS - BEO COLLATERALIZED MORTGAGE
OBLIGATIONS (CMO) WITHOUT OWNER OPTION TO REDEEM/OTHER ASSET-BACKED SECURITIES
/AND PASS-THROUGH CERTIFICATES
DTC's Reorganization and Dividend Departments have relocated to 55 Water
Street. Following are revisions to the Letter of Representations, including
current addresses, telephone numbers, and telecopy numbers.
Paragraph 3 of the Letter of Representations:
- ---------------------------------------------
Old Telecopier Numbers: Current Telecopier Numbers:
(212) 709-6896 and (212) 709-6897 (212) 855-5181 AND (212) 855-5182
The confirmation number (formerly (212) 709-6870) is now (212) 855-5202.
Paragraph 5 of the Letter of Representations:
- ---------------------------------------------
Old Telecopier Numbers: Current Telecopier Number:
(212) 709-1093 and (212) 709-1094 (212) 855-5278
The confirmation number (formerly (212) 709-6884) is now (212) 855-5280.
The current address is:Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
55 WATER STREET 50TH FLOOR
NEW YORK, NY 10041-0099
Paragraph 7 of the Letter of Representations:
- ---------------------------------------------
Old Telecopier Number: Current Telecopier Number:
(212) 709-1723 (212) 855-4555
The current address is: Manager; Announcements
Dividend Department
The Depository Trust Company
55 WATER STREET 25TH FLOOR
NEW YORK, NY 10041-0099
Paragraph 9 of the Letter of Representations:
- ---------------------------------------------
Old Telecopier Numbers: Current Telecopier Numbers:
(212) 709-1723 and (212) 709-1686 (212) 855-4555 AND (212) 855-4556
The confirmation number (formerly (212) 709-1270) is now (212) 855-4550.
<PAGE> 12
The current address for Paragraph 9 is the same as that listed above, for
Paragraph 7.
The following additional text relates to Paragraph 10 of the Letter of
Representations:
Such information shall be conveyed by automated notification. If the
circumstance prevent the funds paid to Cede & Co., as nominee of DTC, by 2:30
p.m. ET from equaling the dollar amount associated with detail payments by
12:00 noon ET, Issuer or Agent must provide CUSIP-level reconciliation to DTC
no later than 2:30 p.m. ET. Reconciliation may be provided by automated means
or in written format.
The following additional text relates to Paragraph 11 of the Letter of
Representations:
Issuer must remit free funds to Agent by 1:00 p.m. ET on each payment date, or
at such earlier time as required by Agent to guarantee timely credit to the
Dividend Deposit Account of Cede & Co.
The following additional text relates to Paragraph 12 of the Letter of
Representations:
Issuer must remit free funds to Agent by 1:00 p.m. ET on each payment date, or
at such earlier time as required by Agent to guarantee timely credit to the
Redemption Deposit Account of Cede & Co. Issuer or Agent shall deliver
CUSIP-level detail regarding such payments to DTC no later than 2:30 p.m. ET on
each payment date.
The following additional text relates to Paragraph 13 of the Letter of
Representations:
Issuer must remit free funds to Agent by 1:00 p.m. ET on each payment date, or
at such earlier time as required by Agent to guarantee timely credit to the
Reorganization Deposit Account of Cede & Co. Issuer or Agent shall deliver
CUSIP-level detail regarding such payments to DTC no later than 2:30 p.m. ET on
each payment date.
2
<PAGE> 1
EXHIBIT 5.1
[LATHAM & WATKINS LETTERHEAD]
August 26, 1998
Greenwood Trust Company, as Originator
of Discover Card Master Trust I
12 Read's Way
New Castle, Delaware 19720
Re: Discover Card Master Trust I,
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
At your request, we have examined the above-captioned
Registration Statement (the "Registration Statement"), together with the
exhibits thereto, to be filed by you with the Securities and Exchange Commission
registering credit card pass-through certificates (the "Investor Certificates")
representing undivided interests in the Discover Card Master Trust I (the
"Trust"). The Investor Certificates of a particular series will be issued
pursuant to Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of October 1, 1993, a copy of which is included as Exhibit 4.1 to the
Registration Statement, as amended by the First Amendment to Pooling and
Servicing Agreement, dated as of August 15, 1994, a copy of which is included as
Exhibit 4.2 to the Registration Statement, by the Second Amendment to Pooling
and Servicing Agreement, dated as of February 29, 1996, which is incorporated by
reference to Exhibit 4.4 of Greenwood's Current Report on Form 8-K dated April
30, 1996, and by the Third Amendment to Pooling and Servicing Agreement, dated
as of March 30, 1998, which is incorporated by reference to Exhibit 4.1(d) of
the Trust's Registration Statement on Form 8-A filed on April 13, 1998, and as
supplemented by a related Series Supplement (the "Series Supplement"), a copy of
the form of which is included as Exhibit 4.4 to the Registration Statement, each
by and between Greenwood as Master Servicer, Servicer and Seller and U.S. Bank
National Association (formerly First Bank National Association, successor
trustee to Bank of America Illinois, formerly Continental Bank, National
Association) as Trustee. We are familiar with the proceedings taken and to be
taken by Greenwood as originator of the Trust in connection with the
authorization of the issuance and sale of Investor Certificates, and have
examined such documents and such questions of law and fact as we have deemed
necessary in order to express the opinion hereinafter stated.
<PAGE> 2
Greenwood Trust Company
August 26, 1998
Page 2
We have investigated such questions of law for the purpose of
rendering this opinion as we have deemed necessary. We are opining herein as to
the effect on the subject transactions of only United States federal law and the
laws of the State of New York, and we express no opinion with respect to the
applicability thereto or the effect thereon of the laws of any other
jurisdiction or as to any matters of municipal law or the laws of any local
agencies within any state.
Based on the foregoing, and subject to the proposed additional
proceedings being taken as now contemplated prior to the issuance of a
particular series of Investor Certificates and the terms of the particular
series of Investor Certificates being otherwise in compliance with then
applicable law, we are of the opinion, as of the date hereof, that the Investor
Certificates of a particular series, upon issuance and sale thereof in the
manner described in the Registration Statement and as provided in the Pooling
and Servicing Agreement and a related Series Supplement, will be validly issued,
fully paid and nonassessable, and enforceable in accordance with their terms and
entitled to the benefits of the Pooling and Servicing Agreement and the related
Series Supplement, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally or by general principles of equity
(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.
We hereby consent to the filing of (i) this opinion and (ii)
the opinion to be filed as Exhibit 8.1 to the Registration Statement and to the
reference to our firm in the prospectus to be included therein under the
captions "Legal Matters," "Certain Federal Income Tax Consequences," "Certain
State Income Tax Consequences" and "The Seller -- Insolvency Related Matters."
Very truly yours,
/s/ Latham & Watkins
<PAGE> 1
EXHIBIT 5.2
LATHAM & WATKINS
[LETTERHEAD}
[ ]
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive -- Suite 3000
Chicago, Illinois 60601
Re: Greenwood Trust Company
Discover Card Master Trust I,
Series [ ] Investor Certificates
-----------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Greenwood Trust Company ("Greenwood") in
connection with the transactions contemplated by the Pooling and Servicing
Agreement, dated as of October 1, 1993, between Greenwood as Master Servicer,
Servicer and Seller and U.S. Bank National Association (formerly First Bank
National Association, successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association) as Trustee (the "Trustee"), as amended
on or prior to the date hereof (the "Pooling and Servicing Agreement"), as
supplemented by the Series Supplement between Greenwood and the Trustee, dated
as of [ ] (the "Series Supplement"). Pursuant to the Pooling and
Servicing Agreement, Greenwood has sold or otherwise conveyed certain Discover
Card receivables to the Discover Card Master Trust I (the "Trust"). The Trust
will issue the Discover Card Master Trust I, Series [ ] Investor
Certificates pursuant to the Series Supplement. The Trust previously has
issued other series of investor certificates, and is expected to issue one or
more additional series of investor certificates from time to time in the
future.
<PAGE> 2
LATHAM & WATKINS
U.S. Bank National Association
[ ]
Page 2
Except as the context clearly requires otherwise, all capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
to such terms in the Pooling and Servicing Agreement or the Series Supplement.
As used herein "Lien," in addition to the meaning ascribed to such term in the
Pooling and Servicing Agreement, means statutory and non-consensual liens. As
used herein, "Receivables" does not include any Receivables relating to
Additional Accounts or the proceeds thereof. The term "UCC" means the Uniform
Commercial Code as in effect in the State of New York. The phrase "security
interest" is used herein as defined in Section 1-201(37) of the UCC and
includes any interest of a buyer of accounts or chattel paper which is subject
to Article 9 of the UCC.
In our capacity as such counsel, we have examined originals or copies of
such records, documents or other instruments as in our judgment are necessary
or appropriate to enable us to render the opinions expressed below. These
records, documents and instruments include the following (the "Relevant
Documents") for purposes of this opinion letter:
(i) the Pooling and Servicing Agreement;
(ii) the Series Supplement;
(iii) a certificate dated as of the date hereof of a senior financial
officer of Greenwood;
(iv) a certificate dated as of the date hereof of an officer of the
Trustee; and
(v) an opinion of Young Conaway Stargatt & Taylor, LLP (the "Delaware
Counsel Opinion") dated as of the date hereof with respect to
certain matters of Delaware law.
Greenwood, as a Delaware-chartered bank insured by the Federal Deposit
Insurance Corporation (the "FDIC"), is not eligible to be a debtor under the
Bankruptcy Code (11 U.S.C. Section 1 et seq.). Rather, should Greenwood become
insolvent, it would be the subject of a conservatorship or receivership
proceeding. Under the Federal Deposit Insurance Act (12 U.S.C. Section 1811 et
seq.), as amended (the "FDIA" or "Act"), the FDIC is the organization most
likely to be appointed the conservator or receiver in such a proceeding
involving Greenwood. If the FDIC were appointed the receiver or conservator of
Greenwood pursuant to Section 11(c)(3) of the Act, the FDIC may exercise the
powers conferred upon a receiver or conservator by Delaware law and, in
addition, may exercise the powers conferred on the FDIC by the Act as if
Greenwood were a federal depository institution for which the FDIC had been
appointed conservator or receiver. Under Section 11(c)(4) of the Act, the FDIC
may appoint itself as conservator or receiver of Greenwood and, pursuant to such
appointment, may exercise the powers conferred on
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the FDIC by the Act as if Greenwood were a federal depository institution,
except that, under Section 11(c)(13) of the Act, the FDIC shall apply certain
aspects of Delaware law.
With the exception of an FDIC Statement of Policy Regarding Treatment of
Security Interests After Appointment of the FDIC as Conservator or Receiver (58
Fed. Reg. 16833 (1993)) (the "Policy Statement"), no regulations of the FDIC
have been promulgated pursuant to Section 11(d)(1) of the FDIA regarding the
conduct of conservatorships or receiverships under the Act; nor are we aware of
any cases that have been decided under those sections of the FDIA and which are
applicable by analogy to the transactions herein contemplated other than certain
cases decided under Section 11(d) and Section 13(e) of the Act, which cases did
not affect our opinions expressed in respect of the Act. Accordingly, until such
time as a body of jurisprudence develops interpreting the relevant sections of
the FDIA, our analysis and the opinions expressed herein with respect to the Act
are not and cannot be rendered nor relied upon to the same extent as opinions
rendered in areas of law where there exists a well-developed jurisprudence. To
the extent the opinions herein rely on letters issued by the FDIC or its staff,
we note that it is the policy of the FDIC not to issue binding advisory opinions
as to positions it would adopt in hypothetical situations that arise in future
receiverships or conservatorships of insured depository institutions and that
the FDIC's actions as receiver or conservator are determined on a case by case
basis, in accordance with applicable laws and in light of the specific factual
situations. Subject to the foregoing limitations, such analysis and opinions
are based upon our interpretation of the statutory language of the Act and the
legal principles that we believe a court would employ in a conservatorship or
receivership case arising under the Act.
We have investigated such questions of law for the purpose of rendering
this opinion as we have deemed necessary. We are opining herein as to the
effect on the subject transactions of only United States federal law and the
laws of the State of New York, and we express no opinion with respect to the
applicability thereto or the effect thereon of the laws of any other
jurisdiction or as to any matters of municipal law or the laws of any other
local agencies within any state. You understand that the transactions that are
the subject of the opinions set forth in this opinion letter involve significant
matters governed by Delaware law and, insofar as such matters are governed by
Delaware law, we refer you to the Delaware Counsel Opinion. The opinions
expressed herein are subject to the applicable assumptions, qualifications and
limitations set forth in the Delaware Counsel Opinion.
We have assumed the genuineness of all signatures and the authenticity of
all documents submitted to us as originals and the conformity with authentic
originals of all documents submitted to us as copies.
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I. ASSUMPTIONS OF FACT
In rendering the opinions set forth in this opinion letter, we have made no
independent investigation of the facts referred to herein and have relied for
the purpose of rendering this opinion letter exclusively on facts set forth in
each of the Relevant Documents and in officer's certificates from authorized
officers of Greenwood and the Trustee, including the representations and
warranties contained therein, and on the facts and assumptions set forth below,
in each case which we assume have been and will continue to be true.
The Pooling and Servicing Agreement, the Series Supplement and the receipt
of the consideration for Greenwood's obligations thereunder were approved by the
Executive Committee of the Board of Directors of Greenwood, and such approval is
reflected in the minutes of such Executive Committee of the Board of Directors.
Each such agreement has been and will be, continuously from the time of
execution thereof, an official record of Greenwood. Each such agreement and the
transactions contemplated thereby are not subject to a cease and desist order
made under Section 8(b)(6)(D) of the Act, and are not inconsistent with any
formal or informal enforcement action by a bank regulatory agency.
Greenwood received or will receive reasonably equivalent value in return
for the transfer to the Trust of its interest in the Receivables and the
proceeds thereof. To the extent such a transfer is deemed not to constitute an
absolute transfer, Greenwood has granted a security interest to the Trust in the
Receivables. The Pooling and Servicing Agreement is consistent with the terms
that would result from arm's-length negotiations between Greenwood and the
Investor Certificateholders (as such term is defined in the Pooling and
Servicing Agreement) and was entered into in the ordinary course of Greenwood's
business.
Neither Greenwood nor the Trustee has, in contemplation of the insolvency
of Greenwood or with the intent to hinder, delay or defraud Greenwood or its
creditors: (i) executed the Pooling and Servicing Agreement; (ii) granted to the
Trust or received from Greenwood, as applicable, a security interest in the
Receivables or the proceeds thereof; (iii) caused, permitted or suffered the
perfection or attachment of such security interest; or (iv) otherwise
transferred the Receivables to the Trust or received the Receivables from
Greenwood, as applicable, pursuant to the Pooling and Servicing Agreement.
At the present time neither the Receivables nor the proceeds thereof are
subject to any statutory or non-consensual Lien (including without limitation
any attachment or execution lien) or Lien of any kind that does not require the
filing of a financing statement. With respect to Liens that require the filing
of a financing statement, we are relying, with your permission, exclusively on
the Delaware Counsel Opinion.
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The Receivables are created under and are evidenced solely by Credit
Agreements. There has been delivered to the Trustee a list of Accounts with
respect to the Receivables, in accordance with the terms of the Pooling and
Servicing Agreement.
All statements contained in certificates delivered to us by Greenwood or
the Trustee are accurate and correct including, without limitation, the
certificate of Greenwood to the effect that its chief executive office, chief
place of business and the only office where it keeps records concerning the
Receivables are located in the State of Delaware. We have further assumed that
where a certification is made to the best knowledge of a person signing a
certificate described in this paragraph, such person has knowledge of all of
the relevant facts.
II. OPINION
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that, as of the date hereof:
1. The Receivables constitute either "general intangibles" or "accounts,"
in each case as defined in Section 9-106 of the UCC. Under Section 9-103(3) of
the UCC, the perfection and the effect of perfection or non-perfection of a
security interest in the Receivables are governed by Delaware law, as to which
we understand you are relying solely on the Delaware Counsel Opinion.
2. If the transfer of the Receivables and the proceeds thereof to the
Trust pursuant to the Pooling and Servicing Agreement constitutes an absolute
transfer of the Receivables and the proceeds thereof to the Trust, then such
absolute transfer transfers to the Trust all of the right, title and interest
of Greenwood in and to the Receivables and the proceeds thereof.
A. Qualification with respect to Receivables that Constitute
"Accounts."
To the extent that any Receivables constitute "accounts," the
ownership interest of the Trust in such Receivables is subject to the
same limitations applicable to the perfection and priority of the
security interest created by the Pooling and Servicing Agreement in
Receivables in favor of the Trust. See UCC Section 9-102(1). To the
extent our opinion in this paragraph 2 relates to such perfection and
priority, we refer you to the Delaware Counsel Opinion.
We call to your attention that Section 9-318(3) of the UCC provides
in effect that the Obligor in respect of a Receivable is authorized to
make payments to Greenwood until such Obligor receives notification that
such Receivable has been
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assigned to the Trust and that payment thereof is to be made to the Trust.
Accordingly, unless and until such Obligor is so notified and directed,
all payments made to Greenwood (or to a subsequent assignee if Greenwood
should make a subsequent assignment of such Receivable and notify such
Obligor of such assignment and direct such Obligor to make payments to
such subsequent assignee) in respect of such Receivable will discharge a
corresponding amount of such Receivable, and the amount of such payment
may not be recovered from the applicable Account Obligor. We note that
Greenwood is the Servicer for the Greenwood Discover Card Accounts and
that Section 4.03 of the Pooling and Servicing Agreement provides that if,
at any time with respect to any Servicer, any of certain conditions
occurs, thereafter such Servicer shall deposit an amount equal to the
Required Daily Deposit with respect to such Servicer in the Collections
Account not later than two Business Days following the Date of Processing
of such Collections.
B. Qualifications with respect to Receivables that Constitute
"General Intangibles."
To the extent that any Receivables constitute "general intangibles,"
the ownership interest of the Trust in such Receivables is not subject to
the provisions of the UCC. See Official Uniform Comment 2 to Section
9-102. With respect to such Receivables as exist on the date hereof, it
is our opinion that no further action is required under the laws of the
State of New York to protect the ownership interest of the Trust in such
Receivables against creditors of, or subsequent purchasers from, Greenwood
except as set forth in the second following paragraph.
With respect to Receivables that constitute "general intangibles" and
that come into existence after the date hereof, it is arguable that the
Trust's ownership interest in such Receivables will be subject to such
Liens as antedate the date on which any such Receivables come into
existence. However, in our judgment a court, properly presented with the
facts and arguments, should hold that the Trust's ownership interest in
such Receivables is not subject to such Liens and that no further action
is required to protect such ownership interest of the Trust against
creditors of, or subsequent purchasers from, Greenwood except as set forth
in the following paragraph.
A result similar to that under Section 9-318(3) of the UCC noted
supra, with respect to Receivables that constitute "accounts," will occur
if the Obligors of Receivables constituting "general intangibles" are not
directed to make payments to the Trust.
3. If the transfer is deemed not to be a sale, it would be treated as a
loan secured by the property purported to be sold, in which event the Pooling
and Servicing
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Agreement creates a valid security interest in favor of the Trust, in
Greenwood's right, title and interest in and to the Receivables and the proceeds
thereof.
We note that Section 9-205 of the UCC provides that "a security interest is
not invalid or fraudulent against creditors by reason of liberty in the debtor
to . . . collect or compromise accounts or chattel paper . . . . " The omission
of the phrase "general intangibles" from such portion of Section 9-205 may
permit the argument that the security interest in Receivables constituting
"general intangibles" is invalid because of the provision of the Pooling and
Servicing Agreement which provides that Greenwood, with respect to Greenwood
Discover Card Accounts, will service and administer, and collect payments due
under, the Receivables. However, in our opinion, for the reasons set forth
below, the omission of the phrase "general intangibles" was not intended to
limit the scope of the quoted provision of Section 9-205 to exclusively accounts
and chattel paper, and the security interest granted by the Pooling and
Servicing Agreement is not invalidated by the aforementioned provision of the
Pooling and Servicing Agreement.
The purpose of Section 9-205 was to specifically validate security
interests in accounts and chattel paper without requiring the creditor to
exercise dominion and control over such types of collateral and was specifically
included in the Uniform Commercial Code because accounts receivable and
inventory financings on the basis of collateral consisting of accounts and
chattel paper were significant commercial transactions at the time of the
promulgation of the Uniform Commercial Code by the National Conference of
Commissioners on Uniform State Laws. See Official Uniform Comment 1 to Section
9-205.
In our view, general intangibles were not mentioned in the quoted portion
of Section 9-205 not because of an intent to exclude this type of collateral
from the benefits extended to accounts and chattel paper but because financings
on the basis of general intangibles were not a commercially significant method
of finance at the time and, therefore, no consideration was given to including
general intangibles in such portion of Section 9-205. Furthermore, invalidating
a security interest in general intangibles because the debtor may collect the
general intangibles is inconsistent with other provisions of the UCC.
Section 9-502(1), for example, provides that on default a secured party may
notify an account debtor to make payments to the secured party whether or not
the assignor was theretofore making collections on the collateral. Section
9-105 defines "account debtor" as "a person who is obligated on an account,
chattel paper or general intangible." Thus, Section 9-502(1) presupposes that a
debtor may be collecting from an account party that is an obligor on a general
intangible, and such presupposition would be inconsistent with interpreting the
omission of "general intangible" from Section 9-205 as invalidating security
interests in general intangibles in circumstances where debtors collect from
account parties on the general
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intangibles. See also Section 9-318(3) (account party authorized to pay
assignor until notified to pay assignee).
4. Subject to the discussion and qualifications in this letter, it is our
opinion that the security interest granted in the Pooling and Servicing
Agreement in favor of the Trust is enforceable in accordance with its terms,
notwithstanding the insolvency of Greenwood or the appointment of the FDIC as
conservator or receiver of Greenwood, except as may be limited otherwise by
general principles of equity; however, in our opinion, the insolvency of
Greenwood in and of itself would not be a proper basis for a court, if properly
presented, to permanently enjoin the Trustee's rights to enforce its security
interest. Furthermore, in the event of the insolvency of, or appointment of a
receiver or conservator with respect to, Greenwood, the enforceability of such
security interest may be subject to the restrictions and limitations contained
in the Act.
A. Under Section 11(d)(12) of the Act, a court is required
to grant a stay requested by a conservator or receiver of an
insured depository institution, such as Greenwood, of any
judicial action or proceeding to which such insured depository
institution is or becomes a party. Such conservator or
receiver may request such a stay for a period not in excess of
(i) 45 days in the case of a conservator and (ii) 90 days in
the case of a receiver. In addition, under Section 11(d)(3) of
the Act, the FDIC as receiver has the power to determine claims
of creditors of a closed depository institution in accordance
with regulations of the FDIC promulgated pursuant to Section
11(d)(4) of the Act, and the requirements of Section 11(d) of
the Act, including Section 11(d)(11) which establishes the
priority of claims. Nevertheless, no regulations have been
promulgated under Section 11(d)(4) of the Act as of the date
hereof and the priority provisions of 12 C.F.R. Section 360.3
have been expressly amended to not apply to any
conservatorships or receiverships occurring after August 10,
1993. In addition, Section 11(d)(11), while prioritizing the
claims against the closed depository institution, does not
determine the enforceability of a security interest in the
assets thereof.
B. In general, under Section 11(d)(5) of the Act, before the
end of the 180-day period beginning on the date any claim
against a depository institution is filed with the FDIC as
receiver, the FDIC shall determine whether to allow or disallow
the claim and shall notify the claimant of any determination
with respect to such claim unless such 180-day period is
extended by written agreement between such claimant and the
FDIC. However, Section 11(d)(8) of the Act directs the FDIC to
establish a
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procedure outside the general claims procedure for expedited
relief for claimants who --
(i) allege the existence of legally valid and
enforceable or perfected security interests in assets
of any depository institution for which the FDIC has
been appointed receiver; and
(ii) allege that irreparable injury will occur if
the general claims procedure is followed.
To date, no such procedures have been established by the
FDIC. With respect to self-help liquidation of collateral by
secured claimants in FDIC receiverships of insured depository
institutions generally, we call to your attention the letter
dated December 15, 1989 from John L. Douglas, General Counsel
of the FDIC, to Ms. Frances R. Bermanzohn, Senior Vice
President and General Counsel of the Public Securities
Association, a copy of which is attached hereto (the
"Letter").
C. Section 11(d)(9) of the Act states that, subject to an
exception not material for the purposes hereof, any agreement
that does not meet the requirements set forth in Section 13(e)
of the Act shall not form the basis of, or substantially
comprise, a claim against the receiver or the FDIC. Among the
requirements contained in Section 13(e) is:
"(2) [the agreement] was executed by the
depository institution and any person claiming an
adverse interest thereunder, including the obligor,
contemporaneously with the acquisition of the asset by
the depository institution. . . ."
Arguably, the "contemporaneous" requirement of Section
13(e) could defeat the security interest of the Trust in any
Receivables not created contemporaneously with the execution
of the Pooling and Servicing Agreement. However, although
there are no judicial decisions based on directly similar
facts nor any analogous judicial decisions, based on the
considerations set forth below, it is our view that a court,
if properly presented with the facts and arguments, should
hold that the "contemporaneous" requirement of Section 13(e)
does not defeat the enforceability of the security interest
of the Trust with respect to Receivables not created
contemporaneously with the execution of the Pooling and
Servicing Agreement. With respect to Receivables created
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after the date hereof, we refer you to our discussion of such
future Receivables infra.
Section 13(e) of the Act is a re-enactment of the last
paragraph of Section 13(e) of the FDIA (the "Prior Section
13(e)") with certain additions not relevant for the following
discussion. We are not aware of any reported decisions
interpreting Prior Section 13(e) or Section 13(e) of the Act
in a fact situation similar to that presented by the Pooling
and Servicing Agreement. Furthermore, the decisions of which
we are aware interpreting Section 13(e) of the Act did not
interpret the "contemporaneous" requirement; nor do they, in
our view, diminish the applicability of decisions interpreting
or applying Prior Section 13(e).
The reported decisions of which we are aware interpreting
Prior Section 13(e) or Section 13(e) involve circumstances
which would condition or excuse performance of otherwise
valid, although possibly voidable, obligations in favor of
banks, such as a loan by such bank to a borrower. In those
instances, the requirements of Prior Section 13(e) or Section
13(e) serve to ensure appropriate consideration of unusual
loan transactions by senior bank officials and prevent
fraudulent insertion of new terms, with the collusion of bank
employees, when a bank appears headed for failure. See Langley
v. FDIC, 484 U.S. 86, 92 (1987); see also Thigpen v. Sparks,
1993 U.S. App. Lexis 2273 (5th Cir. 1993); but see North
Arkansas Medical Center v. Barrett, 962 F.2d 780 (8th Cir.
1992) (affirming the dismissal of a claim by a depositor of an
insolvent savings and loan association ("S&L") that the
depositor had a perfected security interest in certain assets
held by the S&L to secure the S&L's obligations under certain
certificates of deposit because of the depositor's failure to
comply with Section 13(e)).
Because of the concerns prompted in the financial
industry by the decision in North Arkansas Medical Center, the
FDIC promulgated the Policy Statement, which applies to all
security agreements to which an insured depository institution
is a party regardless of the date of such agreements, if the
FDIC is or was appointed conservator or receiver of such
institution on or after August 9, 1989. In 1994, after the
adoption of the Policy Statement by the FDIC, Congress amended
Section 13(e) of the FDIA to codify the Policy Statement as it
relates to deposits by government agencies.
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The FDIC made the following assumptions in the Policy
Statement:
(a) the agreement was undertaken in the ordinary course
of business, not in contemplation of insolvency, and
with no intent to hinder, delay or defraud the
Institution or its creditors; (b) the secured obligation
represents a bona fide and arm's length transaction; (c)
the secured party or parties are not insiders or
affiliates of the Institution; (d) the grant or creation
of the security interest was for adequate consideration;
and (e) the security agreement evidencing the security
interest is in writing, was approved by the
Institution's board of directors or loan committee
(which approval is reflected in the minutes of a meeting
of the board of directors or committee), and has been,
continuously from the time of its execution, an official
record of the Institution.
58 Fed. Reg. 16834 (1993). See also Letter dated March 2,
1994 from Cristeena G. Naser, Attorney at the FDIC, FDIC 94-10
(restating the assumptions). Provided that these assumptions
and all of the other statutory requirements of Section 13(e)
are met, the Policy Statement states the FDIC's interpretation
of the "contemporaneous" requirement of Sections 11(e) and
13(e) and its policy that the FDIC, acting as conservator or
receiver for a depository institution,
will not seek to avoid an otherwise legally enforceable
and perfected security interest solely because the
security agreement granting or creating such security
interest does not meet the "contemporaneous" requirement
of sections 11(d)(9), 11(n)(4)(I), and 13(e) of the Act.
Specifically, the FDIC will not seek to avoid such a
security interest solely because the secured obligation
or collateral subject to the security interest (a) was
not acquired by the Institution contemporaneously with
the approval and execution of the security agreement
granting the security interest and/or (b) may change,
increase, or be subject to substitution from time to
time during the period that the security interest is
enforceable and perfected.
Id.
With regard to the security interest of the Trust
created by the Pooling and Servicing Agreement, the Policy
Statement precludes, in our
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view, challenges by the FDIC to the enforceability of such
security interest in both (i) existing Receivables not created
contemporaneously with the execution of the Pooling and
Servicing Agreement (including investment proceeds arising in
the future from existing Receivables), and (ii) Receivables
that come into existence after the execution of the Pooling
and Servicing Agreement.
Moreover, in contrast to the situations in the decisions
we reviewed involving Prior Section 13(e) or Section 13(e),
which involved the conditioning or excusing of an obligor's
obligation, the obligations of Obligors in respect of
Receivables are unaffected by the Pooling and Servicing
Agreement. The purpose of the Pooling and Servicing Agreement
is not to provide for the release or modification of Obligors'
obligations but to provide for the transfer of Receivables to
the Trust in return for consideration and, to the extent such
transfer is deemed not to constitute an absolute transfer, the
grant of a security interest in such Receivables to the Trust.
In that regard, we are informed that Greenwood's grant or
creation of a security interest in the Receivables represents
a bona fide and arm's length transaction for adequate
consideration. We are also informed that the Pooling and
Servicing Agreement was undertaken in the ordinary course of
business, not in contemplation of insolvency, and with no
intent to hinder, delay or defraud Greenwood or its creditors.
Finally, the Pooling and Servicing Agreement is in writing and
Greenwood has informed us that such agreement was approved by
the Executive Committee of its Board of Directors as reflected
in the resolutions of the Executive Committee, and has been,
continuously from the time of its execution, an official
record of Greenwood.
With regard to the FDIC's non-affiliation assumption, we
are informed that the Certificateholders (as such term is
defined in the Pooling and Servicing Agreement), the
beneficiaries of the security interest in the Receivables, are
not affiliates or insiders of Greenwood. Furthermore, the
policies underlying Section 13(e) and the Policy Statement
suggest that the FDIC, acting as conservator or receiver for
Greenwood, would not seek to avoid the security interest in
the Receivables. Both Section 13(e) and the Policy Statement
serve to prevent secret and collusive agreements between
failing banks and third parties, including their secured
creditors, which are not for adequate consideration. See
Langley, 484 U.S. at 86; Thigpen, 983 F.2d at 644. Even if
the Trust is treated as an insider or affiliate of
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Greenwood, thereby falling outside of the express assumptions
of the Policy Statement, the above concerns are inapplicable
in the instant circumstance. The Pooling and Servicing
Agreement discloses in full the entire terms of the
transaction contemplated thereby and represents a bona fide
and arm's length transaction for adequate consideration.
Moreover, as indicated above, we are informed that such
agreements have been approved by the Executive Committee of
the Board of Directors. We are also informed that Greenwood
received consideration which it believes to be reasonably
equivalent and fair consideration for the transfer of
Receivables.
D. Section 11(e)(1) of the Act permits any conservator or
receiver of an insured depository institution to disaffirm or
repudiate any contract or lease of such insured depository
institution that such conservator or receiver determines, in
its discretion, to be burdensome and the disaffirmance or
repudiation of which will promote the orderly administration
of the institution's affairs. Nonetheless, Section 11(e)(11)
of the Act provides that:
No provision of [Section 11(e)] shall be construed as
permitting the avoidance of any legally enforceable or
perfected security interest in any of the assets of any
depository institution except where such an interest is
taken in contemplation of the institution's insolvency
or with the intent to hinder, delay or defraud the
institution or the creditors of such institution.
As stated above, we are aware of no facts that indicate any
transfer of Receivables by Greenwood to the Trust has been or
will be made in contemplation of Greenwood's insolvency; nor
are we aware of any facts that indicate any transfer of
Receivables to the Trust has been or will be made with the
intent to hinder, delay or defraud Greenwood or the creditors
of Greenwood.
Notwithstanding the above, the Policy Statement expressly
reserves the FDIC's right, "as conservator or receiver, to
redeem or prepay any secured obligation of a depositary
institution by repudiation or otherwise" (58 Fed. Reg. 16834
(1993)). We note that the Policy Statement further provides
that the FDIC will make such a decision within a reasonable
period of time which generally should not exceed 180 days
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from the date of appointment of the FDIC as conservator or
receiver for the depository institution.
In case of a repudiation pursuant to Section 11(e), the
secured party is entitled to damages. The Policy Statement
emphasizes, however, that Section 11(e) limits the liability
of the FDIC as conservator or receiver for exercising its
repudiation rights to "actual direct compensatory damages" and
that the secured party's damages are to be determined as of
the date of appointment of the conservator or receiver, and
not, as in certain "qualified financial contracts," as of the
date of repudiation (58 Fed. Reg. 16834 (1993). We note that
the Resolution Trust Corporation, which has ceased to exist as
of December 31, 1995 (the FDIC has taken over its
responsibilities), took the position that it had the authority
to repudiate a depository institution's obligation to pay
post-insolvency interest, but adopted a policy of not doing
so. We note that in a 1993 case involving the repudiation by
the Resolution Trust Corporation of certain secured
zero-coupon bonds issued by a savings association, a United
States federal district court held that "actual direct
compensatory damages" in the case of a marketable security
meant the market value of the repudiated bonds as of the date
of repudiation. See Employees' Retirement System of Alabama
v. Resolution Trust Corporation, 840 F.Supp. 972 (S.D.N.Y.
1993).
E. If the FDIC were appointed as receiver or conservator of
Greenwood pursuant to Section 11(c)(3) of the Act, it would
have in addition to the powers conferred on it by Section 11
of the Act, the powers conferred on it under any provision of
Delaware law applicable to a conservator or receiver of a
Delaware state depository institution. However, if the FDIC
were appointed as receiver or conservator of Greenwood
pursuant to Section 11(c)(4) of the Act, Delaware law as a
general rule does not apply to the conservatorship or
receivership.
We do not express any opinion herein:
(i) as to the creation, validity or enforceability of any interest
of Greenwood in the Receivables or the proceeds thereof;
(ii) as to the enforceability of any of the Receivables, or the
extent to which any of the Receivables may be subject to
defenses of the related Account holder (including, without
limitation, any limitation on the enforceability of any of the
Receivables, or any defense to which any of the Receivables
may be subject, as a result of Greenwood's alleged failure to
file with the
<PAGE> 15
LATHAM & WATKINS
U.S. Bank National Association
[ ]
Page 15
federal bankruptcy courts, with respect to certain Accounts,
bankruptcy reaffirmation agreements as required under
applicable provisions of Chapter 7 of the United States
Bankruptcy Code);
(iii) as to Greenwood's rights in or title to any of the Receivables
or the proceeds thereof;
(iv) as to whether the transfer of Receivables to the Trust
constitutes an absolute transfer;
(v) as to whether the purported absolute transfer of all
Receivables now existing or hereafter created is effective to
convey to the Trust, as of the date of purported absolute
transfer, Receivables that do not exist as of the date of such
purported absolute transfer, or as to whether Receivables
hereafter created in an Account are deemed to exist as of the
date hereof;
(vi) with respect to Receivables relating to Additional Accounts or
Surviving Accounts or, in each case, the proceeds thereof;
(vii) as to whether the administrative expenses of the FDIC or any
other receiver or conservator of Greenwood would have priority
over the Trust's interest in Receivables or proceeds thereof;
(viii) as to whether a court in an equitable proceeding might issue
a temporary restraining order or preliminary injunction
pending resolution of the Trust's rights in the Receivables,
the proceeds thereof or rights to payment; and
(ix) as to the consequences of a discontinuation or revocation by
the FDIC or a court of the Policy Statement or the Letter or
the refusal by the FDIC or a court to apply the Policy
Statement or the Letter.
<PAGE> 16
LATHAM & WATKINS
U.S. Bank National Association
[ ]
Page 16
This opinion is rendered only to you and is solely for your benefit in
connection with the above transactions. This opinion may not be relied upon by
you for any other purpose, or furnished to, quoted to, or relied upon by any
other person, firm or corporation for any purpose without our prior written
consent, except that each of Standard & Poor's Ratings Services, Moody's
Investors Service, Fitch IBCA, Inc., Discover Receivables Financing Corporation,
Morgan Stanley & Co. Incorporated and [LIST OTHER UNDERWRITERS, IF ANY] may rely
upon the foregoing opinions to the same extent as if this letter were addressed
to it.
Very truly yours,
<PAGE> 17
[FDIC LETTERHEAD]
December 15, 1989
Ms. Frances R. Bermanzohn
Senior Vice President and General
Counsel
Public Securities Association
40 Broad Street
New York, New York 10004
Re: Self-Help Liquidation of Collateral by
Second Claimants in Insured Depository
Institution Receiverships
Dear Ms. Bermanzohn:
This is in reference to your recent inquiry regarding the rights of certain
creditors of failed insured depository institutions. Specifically, you have
requested my opinion with regard to the ability of secured creditors of an
insured depository institution to proceed with "self-help" liquidation after
the appointment of the Federal Deposit Insurance Corporation (FDIC) or the
Resolution Trust Corporation (RTC) as receiver of such institution. In
particular you have requested my views as to the "exclusivity" of the claims
process under the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 (FIRREA).
As you are aware, neither FDIC nor the RTC issues binding advisory opinions as
to positions they would adopt in hypothetical situations that arise in future
receiverships of insured institutions. The FDIC's and the RTC's actions in
their capacity as receiver of a failed insured institution are determined on a
case by case basis, in accordance with applicable laws and in light of the
specific factual situation. I am willing, however, to provide my views as to
what a court would hold in response to a challenge by the FDIC or the RTC as
receiver of such an institution to a bona fide, perfected secured creditor's
actions to liquidate properly pledged collateral absent the need for the FDIC
or the RTC to be a party to the liquidation process.
In my opinion FIRREA does not contain an "automatic stay provision" similar to
the Bankruptcy Code. Assuming an arms length, bona fide transaction, not
involving an affiliate or insider; which would
<PAGE> 18
2
pass muster under appropriate fraudulent conveyance law or other applicable and
which involved a legally perfected security interest enforceable under other
applicable law, it is my opinion that such a secured creditor of an insured
depository institution for which a receiver had been appointed could liquidate
the creditor's properly pledged collateral by commercially reasonable
"self-help" methods, provided that no involvement of the receiver was required
and that there was a default other than through an ipso facto provision in the
contract. The appointment of a receiver is not a default enforceable against the
FDIC or the RTC under any contract except as specifically provided for in
FIRREA. If some action is required by the receiver or liquidation would require
judicial action, then the claims process in FIRREA would have to be followed.
Moreover, the receiver may have rights outside of the provisions of FIRREA which
may allow the receiver to seek a temporary restraining order or other injunctive
relief in a particular situation.
It is my opinion that the claims process in FIRREA is exclusive. If a "secured
creditor" liquidated its collateral; failed to file a proof of claim within the
prescribed time; and was later challenged by the receiver and lost, the creditor
would have to pay the receiver the proceeds of the liquidation; would be liable
for any damages resulting from the improper liquidation; and would have no claim
against the receivership due to having allowed the period to file a claim to
lapse. Accordingly, any "secured creditor", even one who is comfortable with its
secured position, should file a "protective" proof of claim with the receiver to
not only preserve its rights in the event of a deficiency, but also to avoid any
risk of losing its claim altogether. In situations where the creditor's contract
or claim is assumed by another institution in a resolution transaction, the new
institution would be responsible to the extent set forth in the agreements
governing the transaction and if there were a full assumption of the liability,
no proof of claim would be needed.
Sincerely,
/s/ JOHN L. DOUGLAS
John L. Douglas
General Counsel
<PAGE> 1
EXHIBIT 5.3
[YCS&T LETTERHEAD]
[FORM OF YCS&T OPINION]
_________________, 1998
Greenwood Trust Company
12 Read's Way
New Castle, Delaware 19720
Re: Discover Card Master Trust I
Ladies and Gentlemen:
We have acted as Delaware counsel to Greenwood Trust Company
("Greenwood") in connection with the transactions contemplated by the Pooling
and Servicing Agreement, dated as of October 1, 1993, between Greenwood and U.S.
Bank National Association (formerly First Bank National Association, successor
trustee to Bank of America Illinois, formerly Continental Bank, National
Association), as trustee (the "Trustee") as amended (the "Pooling and Servicing
Agreement"), as supplemented by the Series Supplement (the "Series Supplement")
dated as of ________________, 19__ between Greenwood and the Trustee by which
the Trustee will issue, on behalf of the Trust, Discover Card Master Trust I
Series ________ ______ Class A Credit Card Pass-Through Certificates (the
"______ Class A Certificates") and Discover Card Master Trust I Series _______
______ Class B Credit Card Pass-Through Certificates (the "______ Class B
Certificates"). As such Delaware counsel we are furnishing this opinion letter
to you with respect to matters of Delaware law. No one other than you, Latham &
Watkins, Morgan Stanley & Co. Incorporated, Standard & Poor's Ratings Services,
Moody's Investors Service, Inc. and Fitch IBCA, Inc. shall be entitled to rely
on the opinions expressed herein. This opinion letter is not intended to be
employed in any transaction other than the one described above. This opinion
letter is being delivered to you solely for your benefit in connection with the
offering and sale of the _______ Class A Certificates and the _______ Class B
Certificates on the understanding that neither it nor its contents may be
published, communicated or otherwise made available, in whole or in part, to any
other person or entity other than as set forth above without, in each instance,
our specific prior written consent.
Pursuant to the Pooling and Servicing Agreement, Greenwood has conveyed
and will convey certain Discover Card Receivables to the Discover Card Master
Trust I (the "Trust"). The transactions contemplated by the Pooling and
Servicing Agreement and the Series Supplement are described in that certain
certificate of a senior officer of Greenwood dated _________________, 19__.
All capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Pooling and Servicing Agreement
or the Series Supplement, as the case may be. As used herein "Lien", in addition
to the meaning ascribed to such term in the Pooling and Servicing Agreement,
means statutory and other non-consensual liens. As used herein, "Receivables"
does not include any Receivables relating to Additional Accounts, Surviving
Accounts, or the proceeds thereof. The Uniform Commercial Code as in effect in
the State of Delaware is sometimes hereinafter referred to as the "UCC".
<PAGE> 2
We have reviewed copies supplied by you of the following documents and
any exhibits thereto (the "Relevant Documents") for purposes of this opinion
letter:
(i) the Pooling and Servicing Agreement, as amended;
(ii) the Series Supplement;
(iii) a certificate dated ______________, 19__ of the Assistant
Secretary of Greenwood;
(iv) a certificate dated ______________, 19__ of an authorized
officer of the Trustee;
(v) a certificate dated ______________, 19__ of the Vice President
of Greenwood;
(vi) that certain financing statement dated October 25, 1993 on
Form UCC-1 naming Greenwood as "debtor" and the Trustee as "secured party", as
amended (the "UCC Financing Statement");
(vii) a certificate of the Secretary of State of the State of
Delaware, dated as of ________________, 19__ as to UCC financing statements with
respect to Greenwood on file with such Secretary of State; and
(viii) certain letters dated as of ________ ___________, 19__ as to
filings and notices of federal and state tax liens, attachment liens and
judgment liens with respect to Greenwood (the certificate referred to in clause
(vii) and the letters referred to in this clause are collectively referred to as
the "Lien Searches").
We have assumed that the copies of the Relevant Documents submitted to us as
copies conform to the originals of the Relevant Documents.
We have also examined the opinion letter of Latham & Watkins to you of
even date herewith concerning creditor's rights issues relating to Greenwood.
This opinion is limited solely to matters involving the jurisdiction
and current laws of the State of Delaware as such laws may be applicable to the
opinions expressed herein and we have assumed that there will be no material
changes in such laws. We express no opinion with respect to any Federal laws or
the laws of any other state.
<PAGE> 3
I. ASSUMPTIONS OF FACT
In rendering the opinions set forth in this opinion letter, we have
made no independent investigation of the facts referred to herein and have
relied for the purpose of rendering this opinion letter exclusively on the Lien
Searches (the dates of which are set forth in Schedule I to this opinion
letter), facts set forth in each of the Relevant Documents, including the
representations and warranties contained therein, and on the facts and
assumptions set forth below and which we assume have been and will continue to
be true.
The Pooling and Servicing Agreement, the Series Supplement and the
receipt of the consideration for Greenwood's obligations thereunder were
approved by the Board of Directors of Greenwood and such approval is reflected
in the minutes of such Board of Directors. Each of such agreements has been and
will be, continuously from the time of execution thereof, an official record of
Greenwood.
Greenwood is not required to register as an "investment company"
nor is Greenwood controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
The Trustee had the corporate power and authority to make, execute
and deliver the Pooling and Servicing Agreement and to perform the terms and
provisions thereof. The Pooling and Servicing Agreement was duly authorized,
executed and delivered by the Trustee and is enforceable against the Trustee in
accordance with its terms.
At the time of the filing of the UCC Financing Statement with the
office of the Secretary of State of the State of Delaware, neither the Trustee
nor the Certificateholders had any knowledge of any rights, liens or interests
affecting any Receivables or the proceeds thereof other than as contemplated by
the Pooling and Servicing Agreement.
At the present time neither the Receivables nor the proceeds
thereof are subject to any statutory or non-consensual Lien (including without
limitation any attachment or execution lien) or Lien of any kind that does not
require the filing of a financing statement.
The Receivables are created under and are evidenced solely by
Credit Agreements. None of the Receivables is or will be due from the United
States or any State of the United States or any agency or department of the
United States or any State.
There has been delivered to the Trustee a list of Accounts with
respect to the Receivables in accordance with Section 2.01(b) of the Pooling and
Servicing Agreement.
Immediately prior to the transfer of any Receivables by Greenwood
to the Trust pursuant to the Pooling and Servicing Agreement, all right, title
and interest in and to such Receivables was or will be vested in Greenwood, free
and clear of any lien, security interest, charge or encumbrance except for the
obligations to transfer such Receivables set forth in the Pooling and Servicing
Agreement.
<PAGE> 4
If a third party, including a potential purchaser of Receivables,
should inquire, Greenwood will promptly identify the Receivables transferred to
the Trust pursuant to the Pooling and Servicing Agreement and will indicate that
it has transferred all of its right, title and interest in such Receivables to
the Trust.
The grant of the security interest in the Receivables in favor of
the Trust, as provided in the Pooling and Servicing Agreement, does not result,
pursuant to any agreement, judgment or order to which Greenwood is a party, or
by which its property is bound, in the creation of any Lien in favor of any
entity other than the Trust. We note that pursuant to Section 2.07 of the
Pooling and Servicing Agreement, Greenwood is obligated to repurchase any
Receivables subject to Liens from the Trust.
In connection with the conveyance of the Receivables to the Trust,
Greenwood has indicated and will continue to indicate in its computer files that
the Receivables have been transferred to the Trust. Each Account has been
identified on the computer records of Greenwood with a "41" or "42" in the field
captioned "CHD-Portfolio - No."
All statements contained in certificates delivered to us by
Greenwood or the Trustee are accurate and correct including, without limitation,
(i) the certificate of Greenwood to the effect that (A) at the present time it
owns the Receivables free and clear of all Liens (other than statutory or
non-consensual Liens) except the interests created by the Pooling and Servicing
Agreement; (B) to the best knowledge of the person signing such certificate,
neither the Receivables nor the proceeds thereof are subject to any statutory or
non-consensual Liens (including without limitation any attachment or execution
lien) or Lien of any kind that does not require the filing of a financing
statement; (C) its chief executive office, chief place of business and office
where it keeps records concerning the Receivables are located in the State of
Delaware; (D) it has not changed its name, whether by amendment of its charter,
by reorganization or otherwise within the past four months; nor has it changed
its chief executive office, chief place of business or its office where it keeps
records concerning the Receivables within the last four months; and (E)
Greenwood has not executed as "debtor" any financing statement with respect to
Receivables except for the UCC Financing Statement; and (ii) the certificate of
the Trustee to the effect that the person signing such certificate does not have
knowledge of any Lien affecting the Receivables or the proceeds thereof except
the interests created by the Pooling and Servicing Agreement. We have further
assumed that where a certification is made to the best knowledge of a person
signing a certificate described herein, such person has knowledge of all of the
relevant facts.
All filings and notices with respect to Liens on the property of
Greenwood in the nature of the Receivables (including the UCC Financing
Statement) have been properly filed and indexed; and the Lien Search accurately
and completely reflects all such filings and notices as of the index date
thereof and no filings or notices have been subsequently filed and indexed
except as provided in the Pooling and Servicing Agreement.
<PAGE> 5
II. OPINION
Based upon the foregoing, and in reliance thereon and subject to
the assumptions, qualifications, exceptions and limitations set forth in this
opinion letter, we are of the opinion that:
1. To the extent the substantive law of the State of Delaware is
applicable, the Receivables constitute "accounts", as defined in Section 9-106
of the UCC.
2. If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement constitutes an absolute transfer of the
Receivables to the Trust, such absolute transfer, to the extent the substantive
law of the State of Delaware is applicable, transfers all of the right, title
and interest of Greenwood in and to such Receivables and the proceeds thereof to
the Trust.
The ownership interest of the Trust in such Receivables is subject
to the same limitations applicable to the perfection and priority of the
security interest created by the Pooling and Servicing Agreement in Receivables
in favor of the Trust. See UCC 9-102(1). Accordingly, the ownership interest of
the Trust in Receivables is a perfected ownership interest and a first priority
ownership interest to the same extent that the security interest created by the
Pooling and Servicing Agreement is a perfected security interest and a first
priority security interest. We refer you to paragraphs 5, 6 and 7 of this
opinion letter wherein we express the respective opinions that such security
interest is a perfected security interest and is a first priority security
interest, subject, in each case, to no Liens and to the limitations and
qualifications contained in such paragraphs and the limitation contained in the
following paragraph.
We call to your attention that Section 9-318(3) of the UCC provides
in effect that the Obligor in respect of a Receivable is authorized to make
payments to Greenwood until such Obligor receives notification that such
Receivable has been assigned to the Trust and the payment thereof is to be made
to the Trust. Accordingly, unless and until such Obligor is so notified and
directed, all payments made to Greenwood (or to a second assignee if Greenwood
should make a second assignment of such Receivable and notify such Obligor of
such assignment and direct such Obligor to make payments to such second
assignee) in respect of such Receivable will discharge a corresponding amount of
such Receivable, and the amount of such payment may be recovered only from the
person not entitled to receive the same. We note that Section 4.03 of the
Pooling and Servicing Agreement provides that if at any time Greenwood is the
Servicer and any of certain other conditions occurs, Greenwood shall deposit,
with respect to Receivables for which it is the Servicer, an amount equal to the
sum of the Required Daily Deposits (as defined in the Series Supplements for
each Series then outstanding) in the Collections Account for each Series then
outstanding not later than two Business Days following the date of processing
such Collections, except, under certain circumstances, in the case of the first
such deposit.
3. To the extent the substantive law of the State of Delaware is
applicable, the Pooling and Servicing Agreement created a valid security
interest in favor of the Trust in Greenwood's right, title and interest in and
to the Receivables and the proceeds thereof.
<PAGE> 6
Such security interest is enforceable against Greenwood in
accordance with its terms except as the enforceability thereof may be subject to
(i) general principles of equity (regardless of whether enforceability is sought
in a proceeding at law or in equity) including without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and (ii) receivership,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally.
4. The proper office for filing Financing Statements with respect
to the Receivables and the proceeds thereof is the Office of the Secretary of
State of the State of Delaware. The UCC Financing Statement was in proper form
for filing with the Delaware Secretary of State in order to perfect the security
interest in the Receivables and the proceeds thereof (subject to the limitations
and qualifications contained in Paragraph 5 of this opinion letter) created by
the Pooling and Servicing Agreement.
5. The security interest created by the Pooling and Servicing
Agreement in the Receivables in favor of the Trust is a perfected security
interest in the Receivables in existence on the date hereof and the proceeds
thereof except that in the case of non-identifiable cash proceeds, continuation
of the Trust's security interest therein being limited to the extent set forth
in Section 9-306 of the UCC. We call to your attention that in order to maintain
the effectiveness of the UCC Financing Statement, and therefore the perfection
of the aforementioned security interest:
(i) Section 13.02 of the Pooling and Servicing Agreement and
Article 9 of the UCC require the filing of continuation statements within the
period of six months prior to the expiration of five years from the date of the
filing of the UCC Financing Statement and within six months prior to the
expiration of each succeeding five year period; and
(ii) Article 9 of the UCC requires the filing of additional and/or
amended financing statements if Greenwood changes the location of its chief
executive office from the State of Delaware or under certain circumstances
changes its name, identity or corporate structure.
6. The security interest in favor of the Trust in the Receivables
and the proceeds thereof perfected as described in paragraph 5 is a first
priority security interest except as such priority may be subject to:
(i) Liens of any government or any agency or instrumentality
thereof that are given priority by operation of law, including without
limitation Sections 6323(c)(2) and (d) of the Internal Revenue Code of 1986, as
amended, and the Employee Retirement Income Security Act of 1974, as amended;
(ii) Liens under Section 4-208 of the UCC (relating to the security
interest of a collecting bank);
<PAGE> 7
(iii) Claims of the United States under the Federal priority
statute (31 U.S.C. 3713); and
(iv) Statutory and non-consensual liens, claims or other interests
or rights that may arise by operation of Delaware law and which take priority
over previously perfected security interests by virtue of such law.
7. With respect to Receivables that come into existence after the
date hereof, when such Receivables come into existence and Greenwood acquires
rights therein, the security interest created by the Pooling and Servicing
Agreement in favor of the Trust in such Receivables and the proceeds thereof
will be a perfected security interest and a first priority security interest
subject, in each case, to the respective limitations and qualifications
contained in paragraphs 5 and 6 of this opinion letter. The opinion expressed in
this paragraph 7, as pertaining to Receivables coming into existence after the
date hereof, is also subject to the exception for Liens constituting "purchase
money security interests" (within the meaning of Section 9-107 of the UCC)
created in respect of any Receivables arising after the date hereof to the
extent provided in Section 9-312 of the UCC.
Insofar as the opinions expressed in this paragraph 7 pertain to
the relative priority of the security interest of the Trust and a "lien
creditor" (within the meaning of Section 9-301(3) of the UCC) in Receivables and
the proceeds thereof, and the enforceability of the Trust's security interest,
such opinions are based upon the considerations set forth below.
Section 9-301(1) of the UCC provides in part that "an unperfected
security interest is subordinate to the rights of . . . (b) A person who becomes
a lien creditor before the security interest is perfected". If the FDIC were
appointed as a receiver of Greenwood, a state-chartered bank, it is likely that
the FDIC would qualify as a "lien creditor" within the meaning of Section
9-301(3). See Rockford Housing Authority v. FDIC, slip op. (N.D. Ill. December
5, 1986) (FDIC as receiver under the National Bank Act has the status of a lien
creditor under Section 9-301(1)(b) of the Uniform Commercial Code).
It is arguable that Section 9-301 could be read to provide priority
to a lien creditor of Greenwood (such as the FDIC as a receiver of Greenwood) in
Receivables coming into existence after an entity becomes such lien creditor
(e.g., after the appointment of the FDIC as such receiver) and proceeds on the
following basis: (i) under Section 9-303(1), the security interest of the Trust
in a Receivable is not perfected until it has attached; (ii) under Section
9-203(1), in order for such security interest to attach in any Receivable,
Greenwood must have rights in such Receivable; (iii) Greenwood does not have
rights in any Receivable before it comes into existence, and accordingly, at the
time, for example, the FDIC is appointed as receiver of Greenwood, the security
interest of the Trust in Receivables not then in existence is not perfected at
such time; (iv) under Section 9-301, the question of priority between the Trust
and FDIC as receiver with respect to Receivables is to be determined at the time
of such appointment; and (v) therefore, the FDIC as receiver of Greenwood has
priority with respect to Receivables not in existence at the time of the
appointment of the FDIC as such receiver.
<PAGE> 8
Sperry Corp. v. Farm Implement, Inc., 760 F.2d 196 (8th Cir. 1985)
is the only reported decision we found dealing with the relative priority of a
secured party and a lien creditor in after-acquired property in those
circumstances under Section 9-301. The court in Sperry ruled in favor of the
secured party on the basis that the lien of the lien creditor does not attach
prior to the time at which the security interest is perfected. The lien attaches
and the security interest is perfected at the same time; i.e., the time at which
the after-acquired property comes into existence. 760 F.2d at 198; see also
Texas Oil & Gas Corp. v. United States, 466 F.2d 1040 (5th Cir. 1972), cert.
denied, 410 U.S. 929 (1973) (dictum).
In our view, the Sperry court reached the correct result under the
Uniform Commercial Code.
* * *
We do not express any opinion herein:
(i) as to the creation, validity or enforceability of any interest
of Greenwood in the Receivables or the proceeds thereof;
(ii) as to Greenwood's rights in or title to any of the Receivables
or the proceeds thereof;
(iii) as to whether the transfer of the Receivables to the Trust
constitutes an absolute transfer;
(iv) as to whether the purported sale of all Receivables now
existing or hereafter created is effective to convey to the Trust, as of the
date of purported sale, Receivables that do not exist as of the date of such
purported sale, or as to whether Receivables hereafter created in an Account are
deemed to exist as of the date hereof;
(v) with respect to Receivables relating to Additional Accounts or
the proceeds thereof;
(vi) with respect to Receivables relating to Surviving Accounts or
the proceeds thereof;
(vii) whether the administrative expenses of the FDIC or any other
receiver or conservator of Greenwood would have priority over the Trust's
interest in Receivables or proceeds thereof; and
(viii) as to whether a court in an equitable proceeding might issue a
temporary restraining order or preliminary injunction pending resolution of the
Trust's rights in the Receivables, the proceeds thereof or rights to payment.
Very truly yours,
<PAGE> 9
SCHEDULE I
Lien Searches
Lien Search Dates
Secretary of State's Certificate As of ______________, 19__
Delaware Secretary of State
County of Kent, Delaware As of ______________, 19__
UCC from 10/1/89
County of New Castle, Delaware As of ______________, 19__
UCC from 10/1/89
County of Sussex, Delaware As of ______________, 19__
UCC from 10/1/89
United States District Court As of ______________, 19__
for the District of Delaware
<PAGE> 1
EXHIBIT 8.1
[LATHAM & WATKINS LETTERHEAD]
August 26, 1998
Greenwood Trust Company
12 Read's Way
New Castle, Delaware 19720
Re: Discover Card Master Trust I
Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the filing of the registration statement on Form S-3
with the Securities and Exchange Commission on August __, 1998 (the
"Registration Statement") by Greenwood Trust Company ("Greenwood") relating to
the Discover Master Trust I (the "Trust"), you have requested our opinion
regarding the description of certain tax consequences contained in the
prospectus (the "Prospectus") included in the Registration Statement.
Capitalized terms not otherwise defined herein have the meanings ascribed to
them in the Prospectus.
Our opinion is based on our examination of the Prospectus, the Pooling and
Servicing Agreement dated as of October 1, 1993, as amended (the "Pooling
Agreement") between Greenwood as Seller and Servicer and U.S. Bank National
Association (formerly First Bank National Association, successor trustee to
Bank of America Illinois, formerly Continental Bank, National Association) as
Trustee, and such other documents, instruments and information as we considered
necessary. Our opinion also is based on (i) the assumption that neither the
Trustee nor any affiliate thereof will become either the Servicer or the
delegee of the Servicer; (ii) the assumption that all agreements relating to
the issuance of the investor certificates and the creation of the Trust will
remain in full force and effect; (iii) currently applicable provisions of the
federal income tax laws, including the Internal Revenue Code of 1986, as
amended, applicable Treasury Regulations promulgated thereunder, judicial
authority and current
<PAGE> 2
LATHAM & WATKINS
Greenwood Trust Company
August 26, 1998
Page 2
administrative rulings and practice; and (iv) a legal opinion rendered by local
tax counsel retained by Greenwood relative to the income tax laws of Delaware
(upon which we have relied for purposes of rendering our opinion with respect
to the laws of Delaware).
We also note that the documents reviewed do not relate to a specific
transaction. Accordingly, the above-referenced description of tax consequences
may, under certain circumstances, require modification in the context of a
specific transaction.
Based on the foregoing, it is our opinion that, as of the date hereof, the
statements in the Prospectus under the captions "Certain Federal Income Tax
Consequences" and "Certain State Income Tax Consequences," to the extent that
they constitute matters of law or legal conclusions with respect thereto, are a
fair and accurate summary of the matters addressed therein, under existing law
and the assumptions stated therein.
Very truly yours,
/s/ Latham & Watkins
<PAGE> 1
EXHIBIT 23.2
[YOUNG CONAWAY STARGATT & TAYLOR, LLP LETTERHEAD]
August 24, 1998
Greenwood Trust Company
12 Read's Way
New Castle, Delaware 19720
Re: Discover Card Master Trust I
Ladies and Gentlemen:
We hereby consent to the filing of our opinion as an Exhibit to the
Registration Statement on Form S-3 of Greenwood Trust Company on or about
August 24, 1998 and to the references to our firm in the prospectus included
therein under the captions "The Seller -- Insolvency-Related Matters" and "Legal
Matters".
Very truly yours,
YOUNG CONAWAY STARGATT & TAYLOR, LLP
By: /s/ Richard A. Levine
---------------------------------
Richard A. Levine
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
Each of the undersigned, being a director or officer of Greenwood Trust
Company, a Delaware banking corporation (the "Corporation"), does hereby
constitute and appoint JOHN J. COANE, ALEXANDER C. FRANK and JOSEPH A. YOB with
full power to each of them to act alone, as the true and lawful attorneys and
agents of the undersigned with full power of substitution and resubstitution to
each of said attorneys, to execute, file or deliver any and all instruments and
to do any and all acts and things which said attorneys and agents, or any of
them, deem advisable to enable the Corporation to comply with the Securities Act
of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and any requirements or regulations of the
Securities and Exchange Commission in respect thereto, in connection with the
registration under the Securities Act of Credit Card Pass-Through Certificates
(the "Certificates") to be issued by a trust originated by the Corporation, and
the registration under the Exchange Act of the Certificates, including
specifically, but without limitation of the general authority hereby granted,
the power and authority to sign his or her name in the name and on behalf of the
Corporation or as a director or officer of the Corporation, as indicated below
opposite his or her signature, to the registration statements, or any
amendments, post-effective amendments, supplements or papers supplemental
thereto, to be filed in respect of said Certificates; and each of the
undersigned does hereby fully ratify and confirm all that said attorneys and
agents, or any of them, or the substitute of any of them, shall do or cause to
be done by virtue hereof.
If this Power of Attorney is executed in counterparts, each counterpart
shall be deemed an original.
<PAGE> 2
IN WITNESS WHEREOF, each of the undersigned has duly executed this power of
attorney as of this 26th day of August, 1998.
/s/ J. Nathan Hill
- -------------------------- President, Chief Operating Officer, Loan Officer,
J. Nathan Hill Assistant Secretary and Director (Principal
Executive Officer)
/s/ John J. Coane
- -------------------------- Vice President, Chief Accounting Officer and
John J. Coane Treasurer (Principal Financial Officer and
Principal Accounting Officer)
/s/ Richard M. DeMartini
- -------------------------- Director
Richard M. DeMartini
/s/ Christine A. Edwards
- -------------------------- Director
Christine A. Edwards
/s/ Alexander C. Frank
- -------------------------- Director
Alexander C. Frank
/s/ Raymond A. Kennedy
- -------------------------- Director
Raymond A. Kennedy
/s/ Joseph A. Yob
- -------------------------- Director
Joseph A. Yob
