<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 9, 1998
Discover Card Master Trust I
-------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-23108 51-0020270
- -------------- ----------- ------------------
(State of (Commission (IRS Employer
Organization) File Number) Identification No.)
c/o Greenwood Trust Company
12 Read's Way
New Castle, Delaware 19720
- ---------------------------------------- -----
(Address of principal executive offices)
(Zip Code)
Registrant's Telephone Number, including area code: (302) 323-7184
Former name or former address, if changed since last report: Not Applicable
Page 1
The Exhibit Index appears on Page 4
<PAGE> 2
Item 5. Other Events
Series 1998-4. On April 9, 1998, $500,000,000 aggregate
principal amount of Series 1998-4 5.75% Class A Credit Card Pass-Through
Certificates and $26,316,000 aggregate principal amount of Series 1998-4 5.90%
Class B Credit Card Pass-Through Certificates of Discover Card Master Trust I
were issued pursuant to the Pooling and Servicing Agreement, dated as of October
1, 1993, between Greenwood Trust Company as Master Servicer, Servicer and Seller
and U.S. Bank National Association (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly Continental Bank,
National Association) as Trustee, as amended, and the Series Supplement, dated
as of April 9, 1998, for Series 1998-4 between Greenwood Trust Company as Master
Servicer, Servicer and Seller and U.S. Bank National Association as Trustee.
Item 7. Exhibits
Exhibit No. Description
Exhibit 1.1 Underwriting Agreement between Greenwood Trust Company and
Morgan Stanley & Co. Incorporated, dated August 19, 1997
(incorporated by reference to Exhibit 1.1 of Discover Card
Master Trust I's Current Report on Form 8-K dated August 26,
1997).
Exhibit 1.2 Terms Agreement among Greenwood Trust Company, Morgan Stanley
& Co. Incorporated, BancAmerica Robertson Stephens, Chase
Securities Inc. and First Union Capital Markets Corp., dated
April 3, 1998.
Exhibit 4.1 Series Supplement with respect to Series 1998-4 between
Greenwood Trust Company as Master Servicer, Servicer and
Seller and U.S. Bank National Association as Trustee,
including a form of Class A Certificate and form of Class B
Certificate, dated as of April 9, 1998.
Exhibit 4.2 Credit Enhancement Agreement among U.S. Bank National
Association as Trustee, Greenwood Trust Company as Master
Servicer, Servicer and Seller and Discover Receivables
Financing Corporation as Credit Enhancement Provider, dated as
of April 9, 1998.
Exhibit 4.3 Letter of Representations among Greenwood Trust Company, U.S.
Bank National Association as Trustee and The Depository Trust
Company with respect to Discover Card Master Trust I, Series
1998-4, dated as of April 9, 1998.
Page 2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Discover Card Master Trust I
(Registrant)
By: Greenwood Trust Company
(Originator of the Trust)
Date: April 9, 1998 By: /s/ John J. Coane
-------------------------------------------
John J. Coane
Vice President, Director of Accounting
and Treasurer
Page 3
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Page
- ------------------- ----
<S> <C> <C>
Exhibit 1.1 Underwriting Agreement between Greenwood Trust Company
and Morgan Stanley & Co. [ ] Incorporated, dated August 19, [ ]
1997 (incorporated by reference to Exhibit 1.1 of Discover
Card Master Trust I's Current Report on Form 8-K dated August
26, 1997).
Exhibit 1.2 Terms Agreement among Greenwood Trust Company, Morgan Stanley
& Co. Incorporated, [ ] BancAmerica Robertson Stephens, Chase [ ]
Securities Inc. and First Union Capital Markets Corp., dated
April 3, 1998.
Exhibit 4.1 Series Supplement with respect to Series 1998-4 between
Greenwood Trust Company as [ ] Master Servicer, Servicer and [ ]
Seller and U.S. Bank National Association as Trustee,
including a form of Class A Certificate and form of Class B
Certificate, dated as of April 9, 1998.
Exhibit 4.2 Credit Enhancement Agreement among U.S. Bank National
Association as Trustee, [ ] Greenwood Trust Company as Master [ ]
Servicer, Servicer and Seller and Discover Receivables
Financing Corporation as Credit Enhancement Provider, dated
as of April 9, 1998.
Exhibit 4.3 Letter of Representations among Greenwood Trust Company,
U.S. Bank National [ ] Association as Trustee and The [ ]
Depository Trust Company with respect to Discover Card Master
Trust I, Series 1998-4, dated as of April 9, 1998.
</TABLE>
Page 4
<PAGE> 1
EXHIBIT 1.2
CREDIT CARD PASS-THROUGH CERTIFICATES
TERMS AGREEMENT
Dated: April 3, 1998
To: Greenwood Trust Company, as Seller under the Pooling and Servicing
Agreement, as amended, dated as of October 1, 1993.
Re: Underwriting Agreement dated August 19, 1997
Title: Discover Card Master Trust I, Series 1998-4, Credit Card Pass-Through
Certificates, Class A and Class B.
Initial Principal Amount of Certificates: $526,316,000
Series and Class Designation Schedule: Discover Card Master Trust I, Series
1998-4 $500,000,000 5.75% Class A Credit Card Pass-Through Certificates
Discover Card Master Trust I, Series 1998-4 $26,316,000 5.90% Class B Credit
Card Pass-Through Certificates
Series Cut-Off Date: April 1, 1998
<TABLE>
<CAPTION>
Certificate Rating: Moody's Investors Standard & Poor's
Service, Inc. Ratings Services
<S> <C> <C>
Class A Aaa AAA
Class B A2 A
</TABLE>
Aggregate outstanding balance of Principal Receivables as of March 1, 1998:
$20,006,241,003.28.
Date of Series Supplement: April 9, 1998.
Certificate Rate: Class A: 5.75% per annum; and Class B: 5.90% per annum
Terms of Sale: The purchase price for the Certificates to the Underwriters
will be 99.728125% of the aggregate principal amount of the Class A
Certificates and 99.656250% of the aggregate principal amount of the Class B
Certificates as of April 9, 1998.
Time of Delivery: 9:00 A.M., Chicago, Illinois Time, on April 9, 1998, or at
such other time as may be agreed upon in writing.
<PAGE> 2
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 1998-4 Certificates. This Terms Agreement
may be amended only by written agreement of the parties hereto.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
As Representative of the
Underwriters named in
Schedule I hereto
By: /s/ J. Douglas Van Ness
-----------------------------------
Accepted:
GREENWOOD TRUST COMPANY
By: /s/ John J. Coane
----------------------------------------
<PAGE> 3
SCHEDULE I
UNDERWRITERS
$500,000,000 5.75% Class A Credit Card Pass-Through Certificates, Series 1998-4
<TABLE>
<CAPTION>
Percentage
----------
<S> <C>
Morgan Stanley & Co. Incorporated 25%
BancAmerica Robertson Stephens 25%
Chase Securities Inc. 25%
First Union Capital Markets Corp. 25%
</TABLE>
$26,316,000 5.90% Class B Credit Card Pass-Through Certificates, Series 1998-4
<TABLE>
<CAPTION>
Percentage
----------
<S> <C>
Morgan Stanley & Co. Incorporated 100%
</TABLE>
<PAGE> 1
EXHIBIT 4.1
GREENWOOD TRUST COMPANY
Master Servicer, Servicer and Seller
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders
-------------------
SERIES SUPPLEMENT
Dated as of April 9, 1998
to
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1993
-------------------
$500,000,000 Class A Certificates
$26,316,000 Class B Certificates
DISCOVER CARD MASTER TRUST I
SERIES 1998-4 CERTIFICATES
<PAGE> 2
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4. Representations and Warranties of Greenwood as Master Servicer and Servicer . . . . . . . . . . . . . . . 29
SECTION 5. Representations and Warranties of Other Servicers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6. Representations and Warranties of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7. Authentication of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8. Establishment and Administration of Investor Accounts and the Credit Enhancement
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9. Allocations of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11. Credit Enhancement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12. Alternative Credit Support Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 13. Calculation of Investor Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 14. Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 15. Class Interest Rate Caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 16. Class Interest Rate Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 17. Class Currency Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 18. Investor Certificateholders' Monthly Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 19. Master Servicer's Monthly Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 20. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 21. Additional Amortization Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 22. Early Accumulation Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 23. Purchase of Investor Certificates and Series Termination . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 24. Variable Accumulation Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 25. Optional Accumulation Period Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 26. Series Yield Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 27. Ratification of Pooling and Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 28. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 29. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
</TABLE>
i
<PAGE> 3
EXHIBITS
EXHIBIT A: Form of Investors Certificates
EXHIBIT B: Form of Certificateholders' Monthly Statement
EXHIBIT C: Form of Master Servicer's Monthly Certificate
C-ii
<PAGE> 4
DISCOVER CARD MASTER TRUST I
SERIES 1998-4 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 1998-4 CERTIFICATES.
SERIES TERM SHEET
<TABLE>
<S> <C>
Date of Series Term Sheet April 9, 1998.
Group One.
Series Initial Investor Interest $526,316,000
Class Initial Investor Interest of each Class of Class A - $500,000,000.
Investor Certificates Class B - $26,316,000.
Class Initial Foreign Currency Investor Interest Class A - Not applicable.
of each Class of Investor Certificates Class B - Not applicable.
Class A Expected Final Payment Date The Distribution Date in April 2001.
Class B Expected Final Payment Date The Distribution Date in May 2001.
</TABLE>
1
<PAGE> 5
<TABLE>
<S> <C>
Type of Structure Bullet Maturity.
Certificate Rates Class A - 5.75% per annum, calculated on the basis
of a 360-day year of twelve 30-day months (or, in
the case of accrual of interest for the period
from and including the Series Closing Date to but
excluding the May 1998 Distribution Date,
calculated on the basis of the number of days
elapsed and a 360-day year, assuming the month of
April has 30 days).
Class B - 5.90% per annum, calculated on the basis
of a 360-day year of twelve 30-day months (or, in
the case of accrual of interest for the period
from and including the Series Closing Date to but
excluding the May 1998 Distribution Date,
calculated on the basis of the number of days
elapsed and a 360-day year, assuming the month of
April has 30 days).
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.
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C>
Class Interest Rate Swap Class A - Not applicable.
Class B - Not applicable.
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.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
Escrow Agreement Not applicable.
Initial Exchange Date Not applicable.
Second Exchange Date Not applicable.
LIBOR Determination Date Not applicable.
Series Yield Factor Initially zero, but may be increased pursuant to
Section 23.
Series Cut-Off Date April 1, 1998.
Series Closing Date April 9, 1998.
Date from which Interest for First Interest Series Closing Date.
Payment Date Shall Accrue
Distribution Dates May 15, 1998 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 April and October (or, if
such day is not a Business Day, the next
succeeding Business Day), commencing in October
1998, and with respect to the Class B
Certificates, on the Class B Expected Final
Payment Date (or monthly under certain
circumstances).
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C>
Statement Dates Each Distribution Date, commencing in May 1998.
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) $41,666,666.67 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, $26,316,000.
Principal Commencement Date The first day of the Due Period related to the May
2000 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.
</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C>
Controlled Liquidation Period Not applicable.
Early Accumulation Period Not applicable.
Type of Credit Enhancement Cash collateral account.
Stated Shared Credit Enhancement Amount There shall be no Shared Credit Enhancement.
Stated Class B Credit Enhancement Amount $21,052,640.
Credit Enhancement Provider Collectively, the one or more lenders making a
loan in order to provide the initial funds on
deposit in the Credit Enhancement Account, or any
successor provider of the Credit Enhancement.
Maximum Shared Credit Enhancement Amount There shall be no Shared Credit Enhancement.
</TABLE>
6
<PAGE> 10
<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) $5,263,160 and (ii)
(x) if a Supplemental Credit Enhancement Event has
not occurred, an amount equal to 4.0% of the
Series Investor Interest as of the last day of the
related Due Period, or (y) if a Supplemental
Credit Enhancement Event has occurred, an amount
equal to 5.0% of the Series Investor Interest as
of the last day of the related Due Period or (b)
subsequent to the making of an Effective
Alternative Credit Support Election, the greater
of (i) $5,263,160 and (ii) an amount equal to 8.5%
of the Series Investor Interest as of the last day
of the related Due Period; provided, however, that
if an Amortization Event with respect to the
Series established hereby occurs, the Maximum
Class B Credit Enhancement Amount for each
Distribution Date thereafter shall equal the
Maximum Class B Credit Enhancement Amount for the
Distribution Date immediately preceding the
occurrence of the Amortization Event; and
provided, further, that if a Credit Enhancement
Drawing has been made, until such time as the
Available Class B Credit Enhancement Amount has
been reinstated in an amount at least equal to the
amount of such Credit Enhancement Drawing, the
Maximum Class B Credit Enhancement Amount shall be
the Maximum Class B Credit Enhancement Amount as
of the date of such Credit Enhancement Drawing.
Total Maximum Credit Enhancement Amount On any Distribution Date, the Maximum Class B
Credit Enhancement Amount for such Distribution
Date.
Additional Credit Support Amount The lesser of (x) (i) $23,684,220 prior to the
occurrence of a Supplemental Credit Enhancement
Event or (ii) $18,421,060 following the occurrence
of a Supplemental Credit Enhancement Event and (y)
the difference between the Maximum Class B Credit
Enhancement Amount (after giving effect to an
Alternative Credit Support Election) and the
Available Class B Credit Enhancement Amount
(immediately before giving effect to the
Alternative Credit Support Election).
</TABLE>
7
<PAGE> 11
<TABLE>
<S> <C>
Supplemental Credit Enhancement Amount The lesser of (x) (i) $5,263,160 prior to the
occurrence of an Alternative Credit Support
Election or (ii) zero following the occurrence of
an Alternative Credit Support Election and (y) the
difference between the Maximum Class B Credit
Enhancement Amount (after giving effect to the
occurrence of a Supplemental Credit Enhancement
Event) and the Available Class B Credit
Enhancement Amount (immediately before giving
effect to the occurrence of a Supplemental Credit
Enhancement Event).
Initial Subordinated Amount $44,736,860.
Additional Subordinated Amount $26,315,800.
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.
</TABLE>
8
<PAGE> 12
<TABLE>
<S> <C>
Amount of Additional Funds Initially, zero.
Eligible for Reallocations to and from Other Yes.
Series in Group
Series Termination Date The first Business Day following the Distribution
Date in October 2003.
Estimated Investment Shortfall On any date of determination, the positive
difference, if any, between (i) the Certificate
Rate for the Class for whose benefit the amounts
on deposit in the Series Principal Funding Account
are held as of such date of determination and (ii)
the weighted average yield (expressed as a Money
Market Yield) on the investments in the Series
Principal Funding Account as of such date of
determination.
Estimated Yield On any date of determination, the Portfolio Yield
for the immediately preceding Due Period less
2.00%.
Classes, if any, subject to Regulation S Not applicable.
restrictions
Classes, if any, subject to ERISA restrictions Class B.
Bearer Certificates Not applicable.
Registered Certificates Class A and Class B Certificates.
</TABLE>
9
<PAGE> 13
<TABLE>
<S> <C>
Class A Certificate Each certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1.
Class B Certificate Each certificate executed by the Sellers and
authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2.
Temporary Global Certificate Not applicable.
Permanent Global Certificate Not applicable.
Technical Global Certificate Not applicable.
Class A Coupon Not applicable.
Technical Global Coupon Not applicable.
Special Certificate Not applicable.
Monthly Payment Coupon Not applicable.
Notices Not applicable.
Representative of the Managers Not applicable.
Listing Agent Not applicable.
</TABLE>
10
<PAGE> 14
<TABLE>
<S> <C>
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>
11
<PAGE> 15
IN WITNESS WHEREOF, the Sellers, the Master Servicer, the Servicers
and the Trustee have caused this Series Supplement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.
GREENWOOD TRUST COMPANY,
as Seller, Master Servicer and Servicer
/s/ John J. Coane
----------------------------------------
John J. Coane
Vice President, Director of Accounting
and Treasurer
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
/s/ Martha Sanders
----------------------------------------
Martha Sanders
Vice President
<PAGE> 16
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.
<PAGE> 17
"Available Class B Credit Enhancement Amount" shall mean, with respect
to the first Distribution Date, the Stated Class B Credit Enhancement Amount,
and, thereafter, shall mean the amount available to be drawn under the Credit
Enhancement with respect to the Available Class B Credit Enhancement Amount
from time to time, which on any date of determination shall be equal to the
Available Class B Credit Enhancement Amount for the immediately preceding
Distribution Date minus the amount of all Credit Enhancement Drawings with
respect to the Available Class B Credit Enhancement Amount on or since such
immediately preceding Distribution Date, plus the amount of all payments made
to the Trustee as administrator of the Credit Enhancement with respect to the
Available Class B Credit Enhancement Amount pursuant to Section 9 plus,
following an Effective Alternative Credit Support Election, the Additional
Credit Support Amount and, plus, following a Supplemental Credit Enhancement
Event, the Supplemental Credit Enhancement Amount; provided, however, that from
and after the Fully Funded Date, if any, the Available Class B Credit
Enhancement Amount shall equal zero.
"Available Shared Credit Enhancement Amount," if applicable, shall
mean, with respect to the first Distribution Date, the Stated Shared Credit
Enhancement Amount, and, thereafter, shall mean the amount available to be
drawn under the Credit Enhancement with respect to the Available Shared Credit
Enhancement Amount from time to time, which on any date of determination shall
be equal to the Available Shared Credit Enhancement Amount for the immediately
preceding Distribution Date minus the amount of all Credit Enhancement Drawings
with respect to the Available Shared Credit Enhancement Amount on or since such
immediately preceding Distribution Date, and plus the amounts of all payments
made to the Trustee as administrator of the Credit Enhancement with respect to
the Available Shared Credit Enhancement Amount pursuant to Section 9.
"Available Subordinated Amount," if there is a Subordinate
Class with respect to Class A, shall mean, on a Distribution Date, the sum of
(a) (i) with respect to the first Distribution
Date, the Initial Subordinated Amount or (ii) with respect to any
other Distribution Date, the Available Subordinated Amount after
giving effect to all adjustments on the prior Distribution Date; and
(b) the amount of Series Excess Servicing;
as such amount may be (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
2
<PAGE> 18
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.
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
3
<PAGE> 19
by the Trustee as described in Section 10) or (ii) with respect to a Class that
is not subject to a Class Currency Swap, to the Investor Certificateholders, in
each case, only to the extent permitted by applicable law.
"Class Additional Funds," if applicable, shall mean, with respect to
any Class for any Distribution Date, an amount equal to the product of (i) a
fraction the numerator of which is the Class Investor Interest and the
denominator of which is the sum of the Class Investor Interests for each Class
of the Series established hereby and (ii) the amount of Series Additional
Investor Funds, in each case for such Distribution Date.
"Class Alternative Deficiency Amount" shall mean, with respect to each
Class, on any Payment Date, the Class Deficiency Amount that would have been
calculated for such Class on such Payment Date if the aggregate unreimbursed
Investor Losses on such Payment Date equalled zero.
"Class B Available Collections" shall mean, if there is a Subordinated
Class with respect to Class A, with respect to any Distribution Date, an amount
equal to the sum of (i) Class B Available Finance Charge Collections for such
Distribution Date and (ii) Class B Principal Collections for such Distribution
Date.
"Class B Available Finance Charge Collections" shall mean, if there is
a Subordinate Class with respect to Class A, with respect to any Distribution
Date, an amount equal to the sum of Class B Finance Charge Collections, Class B
Yield Collections, if any, Class B Investment Income, if any, for the related
Due Period and Class B Additional Funds for such Distribution Date (less Class
B Excess Servicing).
"Class Cap Rate," if applicable, shall mean, with respect to a Class
or Subclass that does not have a fixed or maximum Certificate Rate, the rate
that is specified as such in the Series Term Sheet and in the Class Interest
Rate Cap with respect to such Class or Subclass.
"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
4
<PAGE> 20
the Trustee, acting on behalf of the Trust, and the Currency Swap Counterparty,
or any Replacement Class Currency Swap or Qualified Substitute Class Currency
Swap.
"Class Currency Swap Termination Account," if any, shall have the
meaning set forth in Section 8.
"Class Deficiency Amount" shall mean, with respect to each Class, on
any Payment Date, the amount, if any, by which (a) the sum of (i) Certificate
Interest for such Class accrued since the immediately preceding Payment Date,
(ii) if, since the immediately preceding Payment Date and prior to the current
Payment Date, a Reimbursed Loss Event has occurred, the sum of (A) the
Reimbursed Loss Interest for each previous Distribution Date since the last
Distribution Date on which Investor Losses for such Class equalled zero and (B)
the Reimbursed Loss Interest Gross-up Amount for each previous Distribution
Date since the last Distribution Date on which the aggregate amount of
unreimbursed Investor Losses for such Class equalled zero, (iii) the Class
Deficiency Amount on the immediately preceding Payment Date, and (iv) the Class
Deficiency Amount on the immediately preceding Payment Date multiplied by the
product of (A) a fraction the numerator of which is the weighted average of the
Certificate Rates or of the Class Weighted Average Certificate Rates, as
applicable, for such Class for the relevant Due Periods and the denominator of
which is (x) if the relevant Certificate Rate is to be calculated on the basis
of the actual number of days elapsed and a 360-day year, 360 divided by the
actual number of days from and including the immediately preceding Distribution
Date to but excluding the current Distribution Date or (y) if the relevant
Certificate Rate is to be calculated on the basis of a 360-day year of twelve
30-day months, twelve and (B) the number of Distribution Dates from and
including the preceding Payment Date to but excluding the current Payment Date
exceeds (b) the amount deposited since the immediately preceding Payment Date
into the Series Interest Funding Account pursuant to Section 10(a)(2)(A).
"Class Excess Servicing" shall mean, with respect to each Class, on
any Distribution Date, the positive difference, if any, between (i) the sum of
Class Finance Charge Collections for the related Due Period, Class Yield
Collections for the related Due Period, if any, Class Investment Income for the
related Due Period, if any, and Class Additional Funds for such Distribution
Date, if any, and (ii) the Class Required Amount.
"Class Expected Final Payment Date" with respect to each Class, if
applicable, shall mean the date designated as such in the Series Term Sheet.
"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
5
<PAGE> 21
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 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
6
<PAGE> 22
amount of Investor Losses of such Class not reimbursed prior to such
Distribution Date, converted into Foreign Currency at the Currency Swap
Exchange Rate (or, following a Currency Swap Termination, multiplied by a
fraction, the numerator of which is the Class Foreign Currency Invested Amount
on the immediately preceding Distribution Date minus the aggregate amount of
principal payments in Foreign Currency paid to the Certificateholders of such
Class subsequent to such Distribution Date and the denominator of which is the
Class Invested Amount) and (c) the aggregate amount of losses of principal on
investments of funds on deposit for the benefit of such Class in the Series
Principal Funding Account, if applicable, converted into Foreign Currency at
the Currency Swap Exchange Rate (or, following a Currency Swap Termination,
multiplied by a fraction, the numerator of which is the Class Foreign Currency
Invested Amount on the immediately preceding Distribution Date minus the
aggregate amount of principal payments in Foreign Currency paid to the
Certificateholders of such Class subsequent to such Distribution Date and the
denominator of which is the Class Invested Amount).
"Class Foreign Currency Modified Required Amount," if applicable,
shall mean (i) on any Distribution Date prior to a Currency Swap Termination,
the product of (a) the Class Modified Required Amount with respect to such
Distribution Date, (b) the Currency Swap Exchange Rate and (c) a fraction the
numerator of which is the Class Foreign Currency Certificate Rate and the
denominator of which is the Class Certificate Rate and (ii) on any Distribution
Date following a Currency Swap Termination, the product of (a) the Class
Modified Required Amount with respect to such Distribution Date, (b) a
fraction, the numerator of which is the Class Foreign Currency Invested Amount
for such Class for such Distribution Date and the denominator of which is the
Class Invested Amount for such Class for such Distribution Date and (c) a
fraction, the numerator of which is the Class Foreign Currency Certificate Rate
and the denominator of which is the Class Certificate Rate.
"Class Initial Investor Interest" shall mean, with respect to each
Class, the aggregate face amount of Investor Certificates of such Class as
specified in the Series Term Sheet.
"Class Interest Rate Cap," if applicable, shall mean, with respect to
a Class or Subclass that does not have a fixed or maximum Certificate Rate, the
interest rate cap agreement or other interest rate protection for the benefit
of the Investor Certificateholders of such Class or Subclass, dated on or
before the Series Closing Date, between the Trustee, acting on behalf of the
Trust, and the Interest Rate Cap Provider, or any Replacement Interest Rate Cap
or Qualified Substitute Cap Arrangement.
"Class Interest Rate Cap Payment" shall mean, with respect to a Class
or Subclass that does not have a fixed or maximum Certificate Rate, with
respect to any Interest Payment Date, any payment required to be made on such
Interest Payment Date by the Interest Rate Cap Provider with respect to the
Class Interest Rate Cap for such Class or Subclass.
"Class 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
7
<PAGE> 23
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) 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.
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<PAGE> 24
"Class Maximum Rate," if applicable, shall have the meaning set forth
in the Series Term Sheet with respect to any Class or Subclass.
"Class Modified Required Amount" with respect to any Class on any
Distribution Date, shall mean the Class Required Amount for such Distribution
Date minus the sum of all accrued but unpaid Class Monthly Servicing Fees.
"Class Monthly Deficiency Amount" with respect to any Class on any
Distribution Date, shall have the meaning set forth in Section 10. The Class
Monthly Deficiency Amount for each Class initially shall be zero.
"Class Monthly Servicing Fee" with respect to any Class for any
Distribution Date, shall mean an amount equal to the product of (x) a fraction
the numerator of which shall be the Class Investor Interest and the denominator
of which shall be the Series Investor Interest, in each case on the first day
of the related Due Period and (y) the amount of the Investor Servicing Fee for
the related Due Period.
"Class Percentage" shall mean, with respect to any Class with respect
to any Distribution Date or any Trust Distribution Date, as applicable:
(a) when used with respect to the Charged-Off Amount, the
percentage equivalent of a fraction the numerator of which shall be
the amount of the Class Investor Interest and the denominator of which
shall be the greater of (i) the amount of Principal Receivables in the
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
9
<PAGE> 25
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 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
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<PAGE> 26
the immediately preceding Distribution Date (or in the case of the first
Distribution Date, from and including the Series Closing Date) to but excluding
the current Distribution Date or (B) if each Interest Payment Date is not also
a Distribution Date, 360 divided by the actual number of days from and
including the immediately preceding Interest Calculation Date (or in the case
of the first Distribution Date, from and including the Series Closing Date) to
but excluding the Interest Calculation Date following the current Distribution
Date or (y) if the relevant Certificate Rate is to be calculated on the basis
of a 360-day year of twelve 30-day months, twelve (or in the case of the first
Distribution Date, 360 divided by the number of days from and including the
Series Closing Date to but excluding the current Distribution Date (if each
Interest Payment Date is also a Distribution Date) or the Interest Calculation
Date following the current Distribution Date (if each Interest Payment Date is
not also a Distribution Date), assuming each month has 30 days), (ii) the Class
Monthly Deficiency Amount on the immediately preceding Distribution Date, (iii)
the Class Deficiency Amount on the immediately preceding Payment Date
multiplied by a fraction the numerator of which is the weighted average of the
Certificate Rates or of the Class Weighted Average Certificate Rates, as
applicable, for such Class for each Due Period subsequent to the immediately
preceding Payment Date plus 2.00% per annum and the denominator of which is (x)
if the relevant Certificate Rate is to be calculated on the basis of the actual
number of days elapsed and a 360-day year, 360 divided by the actual number of
days from and including the immediately preceding Distribution Date to but
excluding the current Distribution Date or (y) if the relevant Certificate Rate
is to be calculated on the basis of a 360-day year of twelve 30-day months,
twelve, (iv) if on the immediately preceding Distribution Date a Reimbursed
Loss Event occurred, the sum of (A) the Reimbursed Loss Interest for each
previous Distribution Date since the last Distribution Date on which the
aggregate amount of unreimbursed Investor Losses for such Class equalled zero,
(B) the Reimbursed Loss Interest Gross-up Amount for each previous Distribution
Date since the last Distribution Date on which the aggregate amount of
unreimbursed Investor Losses for such Class equalled zero and (C) for any
Distribution Date following the Distribution Date immediately following the
Reimbursed Loss Event to and including the next Payment Date, the Reimbursed
Loss Interest Gross-up Amount for such Distribution Date and (v) the sum of all
accrued but unpaid Class Monthly Servicing Fees.
"Class Required Amount Shortfall" with respect to any Class on any
Distribution Date, shall have the meaning set forth in Section 9.
"Class Subordinated Payment" shall mean, if there is a Subordinate
Class with respect to Class A, with respect to any Distribution Date, the
amount, if any, withheld from Class B Available Collections and paid to or for
the benefit of the Class A Certificateholders pursuant to Section 9 on such
Distribution Date.
"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.
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<PAGE> 27
"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.
"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.
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<PAGE> 28
"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 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.
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<PAGE> 29
"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.
"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.
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<PAGE> 30
"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
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
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<PAGE> 31
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.
"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
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<PAGE> 32
(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 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,
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<PAGE> 33
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.
"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.
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<PAGE> 34
"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.
"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.
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<PAGE> 35
"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.
"Qualified Credit Enhancement Provider" shall mean, (i) if the Credit
Enhancement is not Funded Credit Enhancement, an institution that meets the
Qualified Credit Enhancement Provider Rating Requirements established by each
Rating Agency, which requirements are set forth in the Series Term Sheet if the
Initial Credit Enhancement is not Funded Credit Enhancement, or (ii) if the
Initial Credit Enhancement is Funded Credit Enhancement, an institution that
meets the Qualified Credit Enhancement Provider Rating Requirements established
by each Rating Agency, which requirements will be established by the Rating
Agencies at the time, if any, that the Master Servicer elects to replace the
Initial Credit Enhancement with Credit Enhancement that is not Funded Credit
Enhancement (or, in either case, such lesser requirements as the applicable
Rating Agency shall allow); provided, however, that in the event the Master
Servicer elects to obtain Credit Enhancement that is not Funded Credit
Enhancement and is unable after the exercise of its best efforts to obtain from
a Qualified Credit Enhancement Provider as so defined such Credit Enhancement
with respect to which the representations set forth in Section 11(a) shall be
true, the term "Qualified Credit Enhancement Provider" shall mean a Person who
satisfies such requirements except that its long-term unsecured debt rating by
any nationally recognized rating agency may be lower than that set forth in
such requirements, but shall not be lower than the highest credit rating of any
Person who otherwise satisfies said requirements and from whom the Master
Servicer is able to obtain such a Credit Enhancement.
"Qualified Substitute Cap Arrangement," if any, shall have the meaning
specified in Section 15.
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<PAGE> 36
"Qualified Substitute Currency Swap Counterparty," if any, shall mean
an institution substituted in place of the then-current Currency Swap
Counterparty under a Class Currency Swap, and that otherwise satisfies the
conditions set forth in Section 16.
"Qualified Substitute Class Currency Swap Arrangement," if any, shall
have the meaning specified in Section 16.
"Reimbursed Loss Event" shall mean, with respect to each Class for any
Distribution Date, the occurrence of the reimbursement of Investor Losses
pursuant to Section 13(c) with respect to such Class on such Distribution Date
such that the aggregate amount of unreimbursed Investor Losses for such Class
is reduced to zero.
"Reimbursed Loss Interest" shall mean, for any Class for any
Distribution Date, an amount equal to the product of (i) the aggregate amount
of Investor Losses that have not been reimbursed pursuant to Section 13(c)
prior to the commencement of the related Due Period and (ii) a fraction the
numerator of which is the Certificate Rate or the Class Weighted Average
Certificate Rate, as applicable, for such Class for the related Due Period and
the denominator of which is (x) if the relevant Certificate Rate is to be
calculated on the basis of the actual number of days elapsed and a 360- day
year, (A) if each Interest Payment Date is also a Distribution Date, 360
divided by the actual number of days from and including the immediately
preceding Distribution Date to but excluding the current Distribution Date or
(B) if each Interest Payment Date is not also a Distribution Date, 360 divided
by the actual number of days from and including the Interest Calculation Date
in the preceding calendar month to but excluding the Interest Calculation Date
following the current Distribution Date or (y) if the relevant Certificate Rate
is to be calculated on the basis of a 360-day year of twelve 30-day months,
twelve.
"Reimbursed Loss Interest Gross-up Amount" shall mean, for any Class
for any Distribution Date, an amount equal to the product of (i) the positive
difference, if any, between the Class Alternative Deficiency Amount for the
immediately preceding Payment Date and the actual Class Deficiency Amount for
the immediately preceding Payment Date and (ii) a fraction the numerator of
which is the Certificate Rate or the Class Weighted Average Certificate Rate,
as applicable, for such Class for the related Due Period and the denominator of
which is (x) if the relevant Certificate Rate is to be calculated on the basis
of the actual number of days elapsed and a 360-day year, (A) if each Interest
Payment Date is also a Distribution Date, 360 divided by the actual number of
days from and including the immediately preceding Distribution Date to but
excluding the current Distribution Date or (B) if each Interest Payment Date is
not also a Distribution Date, 360 divided by the actual number of days from and
including the Interest Calculation Date in the preceding calendar month to but
excluding the Interest Calculation Date following the current Distribution Date
or (y) if the relevant Certificate Rate is to be calculated on the basis of a
360-day year of twelve 30-day months, twelve.
"Replacement Class Interest Rate Cap," if any, shall mean an interest
rate cap agreement or other interest rate protection having substantially the
same terms and conditions as the Class Interest Rate Cap that it replaces, and
otherwise satisfying the conditions set forth in Section 15.
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<PAGE> 37
"Replacement Class Currency Swap," if any, shall mean a currency swap
agreement or other currency swap protection having substantially the same terms
and conditions as the Class Currency Swap that it replaces, and otherwise
satisfying the conditions set forth in Section 16.
"Replacement Class Currency Swap Counterparty," if any, shall mean an
institution that succeeds to the interest of or otherwise replaces the
then-current Currency Swap Counterparty under a Class Currency Swap, and
otherwise satisfies the conditions set forth in Section 16.
"Representative of the Managers," if any, shall have the meaning set
forth in the Series Term Sheet.
"Required Daily Deposit" shall mean, if applicable, with respect to
each Servicer, an amount equal to:
(a) during the Revolving Period and the Accumulation
Period or the Controlled Liquidation Period, as
applicable, the sum of
(x)(1) during the Revolving Period, an amount equal
to the sum of (i) the sum of the Class Finance Charge
Collections and the Class Yield Collections for each
Class for such day and (ii) the amount of Class B
Principal Collections for such day; minus the sum of
the Class B Yield Collections for such day and all
accrued but unfunded Class A Monthly Servicing Fees;
or
(2) during the Accumulation Period or the Controlled
Liquidation Period, as applicable, an amount equal to
the sum of (i) the amount set forth in clause (1)
above and (ii)(A) until the aggregate amount
deposited during such Due Period pursuant to this
clause (ii) equals the Controlled Accumulation Amount
or the Controlled Liquidation Amount, as applicable,
for the related Distribution Date, the amount of
Class A Principal Collections for such day less the
amount of Class A Yield Collections for such day and
(B) thereafter, zero 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
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<PAGE> 38
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
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.
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<PAGE> 39
"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.
"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
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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.
"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
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Estimated Yield, in each case on such date of determination, divided by (y)
0.93; provided, however, that Greenwood on behalf of the Holder of the Seller
Certificate may, upon 30 days' prior notice to the Trustee, the Rating Agencies
and the Credit Enhancement Provider, reduce the Series Minimum Principal
Receivables Balance by increasing the divisors set forth above, subject to the
condition that Greenwood on behalf of the Holder of the Seller Certificate
shall have been notified by the Rating Agencies that such reduction would not
result in the lowering or withdrawal of the rating of any Class of any Series
then outstanding, and provided, further, that the divisors set forth above may
not be increased to more than 0.98.
"Series Percentage" shall mean, with respect to any specified
category, with respect to any Distribution Date or Trust Distribution Date, as
applicable, the sum of the Class Percentages with respect to such category for
each Class of the Series established hereby on such Distribution Date or Trust
Distribution Date, as applicable.
"Series Principal Collections" shall mean, with respect to any day or
any Distribution Date or Trust Distribution Date, as applicable, the sum of the
amount of Class Principal Collections for each Class for such day or for the
related Due Period, as applicable.
"Series Principal Collections Account" shall have the meaning
specified in Section 8.
"Series Principal Funding Account" shall mean the Series Principal
Funding Account established pursuant to Section 8. Amounts "on deposit in" the
Series Principal Funding Account shall be deemed to be on deposit for the
benefit of (i) the Class A Certificateholders for the period up to and
including the Class A Expected Final Payment Date or Class A Final Maturity
Date, as applicable, and (ii) if there is a Subordinate Class with respect to
Class A, the Class B Certificateholders for the period beginning immediately
after the Class A Expected Final Payment Date or Class A Final Maturity Date,
as applicable, and ending on the Class B Expected Final Payment Date or Class B
Final Maturity Date, as applicable. Amounts "on deposit in" the Series
Principal Funding Account shall be deemed to include amounts invested in
Permitted Investments pursuant to Section 8 unless the context clearly requires
otherwise.
"Series Required Principal Amount" shall mean, with respect to each
Distribution Date, with respect to each Series that is a member of the same
Group as the Series established hereby (including the Series established
hereby) that is in its Controlled Liquidation Period or Accumulation Period, as
applicable, the product of (x) (i) if the related Due Period does not occur in
February, 1.25 or (ii) if the related Due Period occurs in February, 1.05, and
(y) the Controlled Liquidation Amount or the Controlled Accumulation Amount, as
applicable, for such Series for such Distribution Date.
"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.
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"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).
"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
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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 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.
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(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 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
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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 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
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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 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,
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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 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
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shall possess all right, title and interest in all funds on deposit from time
to time in the Credit Enhancement Account and in all proceeds thereof. The
Credit Enhancement Account shall be under the sole dominion and control of the
Trustee as the administrator of the Credit Enhancement for the benefit of the
Certificateholders and the Credit Enhancement Provider; provided, however, the
Master Servicer may make Credit Enhancement Drawings pursuant to, and for the
purposes set forth in, Section 9. The interest of the Credit Enhancement
Provider in the Credit Enhancement Account shall be subordinated to the
interests of the Certificateholders to the extent provided herein and in the
Credit Enhancement Agreement. The Trustee, at the direction of the Master
Servicer, shall (i) on the Series Closing Date, deposit into the Credit
Enhancement Account an amount equal to the sum of the Stated Shared Credit
Enhancement Amount and the Stated Class B Credit Enhancement Amount (such
amounts to be funded by the Credit Enhancement Provider pursuant to the Credit
Enhancement Agreement) and (ii) make withdrawals from, and deposits to, the
Credit Enhancement Account from time to time in the amounts and for the
purposes set forth in this Series Supplement. The Credit Enhancement Provider
shall not be entitled to reimbursement from the assets of the Trust for any
withdrawals from the Credit Enhancement Account except as specifically provided
in this Series Supplement. The Master Servicer at all times shall maintain
accurate records reflecting each transaction in the Credit Enhancement Account.
Funds on deposit in the Credit Enhancement Account shall be invested
in Permitted Investments by the Trustee as administrator of the Credit
Enhancement at the direction of the Master Servicer, as set forth below. Any
Permitted Investment with a stated maturity shall mature on or prior to the
following Distribution Date or such longer period as will not result in the
lowering or withdrawal of the rating of any Class of any Series then
outstanding by the Rating Agencies and any funds received with respect to the
maturity of a Permitted Investment shall be available in sufficient time to
allow for any payments to be made to the Investor Certificateholders on such
Distribution Date. The Master Servicer's notice to the Trustee shall
specifically identify each such Permitted Investment (including its principal
amount and maturity). In addition, the Master Servicer shall from time to time
provide written notice to the Trustee directing the Trustee to reinvest funds
representing principal, interest or other investment income received by it with
respect to such Permitted Investments (whether upon maturity or otherwise) in
additional Permitted Investments. In the event that the Master Servicer fails
to direct the Trustee to invest or reinvest any funds that are deposited in the
Credit Enhancement Account or that are received by it with respect to Permitted
Investments by 2:00 p.m. on the date such funds are available for investment,
the Trustee shall use reasonable efforts to invest such funds overnight in
securities represented by instruments in bearer or registered form 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
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Enhancement Account shall be paid to the Trustee as administrator of the Credit
Enhancement for application in accordance with the provisions of the Credit
Enhancement Agreement. For purposes of determining the availability of funds
or the balances in the Credit Enhancement Account, all investment earnings on
such funds shall be deemed not to be available or on deposit. If, on any
Distribution Date, after giving effect to all other deposits to and withdrawals
from the Credit Enhancement Account as of such Distribution Date, the amount on
deposit in the Credit Enhancement Account is greater than the Total Maximum
Credit Enhancement Amount, then the excess of the amount on deposit over the
Total Maximum Credit Enhancement Amount shall be withdrawn from the Credit
Enhancement Account and paid to the Trustee as administrator of the Credit
Enhancement for application in accordance with the provisions of the Credit
Enhancement Agreement.
Upon the earliest to occur of (i) the termination of the Trust, (ii)
the Series Termination Date and (iii) the day on which the Class Invested
Amount for each Class of the Series established hereby is paid in full, and
after payment of all amounts to be paid on such day from the Credit Enhancement
Account to or for the benefit of Investor Certificateholders of the Series
established hereby, all amounts remaining on deposit in the Credit Enhancement
Account shall be withdrawn from such account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement.
(f) The Class Foreign Currency Distribution Account. In the event
that any Class is subject to a Class Currency Swap, the Trustee, for the
benefit of the Certificateholders of such Class, shall cause to be established
and maintained in the name of the Paying Agent, an account outside the United
States (the "Class Foreign Currency Distribution Account") bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders of such Class. Pursuant to the authority
granted to it pursuant to Section 3.01(b) of the Pooling and Servicing
Agreement, the Master Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Class Foreign Currency Distribution Account
for the purpose of carrying out the duties of the Master Servicer hereunder.
The Trust shall possess all right, title and interest in all funds on deposit
from time to time in the Class Foreign Currency Distribution Account and in all
proceeds thereof and each Paying Agent with respect to such Class (as specified
in the Series Term Sheet) shall have the revocable authority to make
withdrawals from the Class Foreign Currency Distribution Account.
Notwithstanding Section 6.08(b) of the Pooling and Servicing Agreement, the
Class Foreign Currency Distribution Account shall not be a segregated trust
account and the Principal Paying Agent shall make no certification with respect
thereto.
(g) The Currency Swap Dollar Escrow Account. In the event that
any Class is subject to a Class Currency Swap, the Trustee, for the benefit of
the Certificateholders of such Class and the Currency Swap Counterparty, shall
cause to be established and maintained in the name of the Trust, with the
Escrow Agent identified in the Series Term Sheet, a non-interest bearing escrow
account (the "Currency Swap Dollar Escrow Account") bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders of such Class. The Trust shall possess all right, title
and interest in all funds on deposit from time to time in the
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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 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
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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.
(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
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(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.
(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
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(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
(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.
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(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
(x) the Class A Cumulative Investor Charged-Off
Amount,
(y) the Available Subordinated Amount, and
(z) the Class B Investor Interest.
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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 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.
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(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
(y) the Available Shared Credit Enhancement
Amount
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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.
(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.
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(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 substantially
similar to the clauses preceding
this clause (25)) and
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(2) the amount on deposit in the Group
Finance Charge Collections
Reallocation Account before any
withdrawals therefrom with respect
to any other Series pursuant to a
comparable clause in the applicable
Series Supplements,
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and 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.
(B) If there is a Subordinate Class with respect to Class
A, an amount equal to the lesser of
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(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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(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
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Period, the Master Servicer shall direct the Trustee in writing to withdraw the
amount of Excess Income, if any, on deposit in the Series Principal Funding
Account from the Series Principal Funding Account and pay such amount to the
Holder of the Seller Certificate.
(2) On each Distribution Date, after giving effect to
payments made pursuant to Section 9 and the calculation of Investor Losses and
adjustment of the Class Investor Interest and Class Invested Amount with
respect to each Class pursuant to Section 13, the Master Servicer shall direct
the Trustee in writing to withdraw and cause the Paying Agent to pay funds from
the applicable Investor Account to or for the benefit of each Class of Investor
Certificateholders, seriatim, with respect to each Class, beginning with Class
A, until such payments have been made with respect to each Class, as set forth
below:
(A) First, an amount equal to the lesser of
(x) the Class Modified Required Amount and
(y) the amount 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
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Interest Payment Date), after giving effect to the payments described above on
such day, the Master Servicer shall direct the Trustee in writing to withdraw
the amount deposited into the Series Interest Funding Account with respect to
each Class or Subclass since the preceding Interest Payment Date. Such amount
shall be paid, or converted into Foreign Currency, as follows:
(a) With respect to any Class or Subclass that is not
subject to a Class Currency Swap, the Master Servicer
shall cause the Paying Agent to pay such amount on
each Interest Payment Date to the Investor
Certificateholders of such Class or Subclass in
accordance with Section 5.01 of the Pooling and
Servicing Agreement;
(b) With respect to any Class or Subclass that is subject
to a Class Currency Swap, assuming no Currency Swap
Termination has occurred, the Master Servicer shall
direct the Trustee in writing to deposit such amount
into the Currency Swap Dollar Escrow Account; and
(c) With respect to any Class or Subclass that is subject
to a Class Currency Swap, and following a Currency
Swap Termination, the Master Servicer shall direct
the Trustee in writing to convert such amount into
Foreign Currency at the then prevailing spot exchange
rate in New York; provided, however, that the Trustee
shall not convert any dollars into Foreign Currency
in excess of the amount of dollars that, when so
converted, would equal the sum of the Class Foreign
Currency Modified Required Amounts for each
Distribution Date of the Interest Accrual Period
relating to such Interest Payment Date. The positive
difference, if any, between (i) the sum of the Class
Foreign Currency Modified Required Amounts for each
Distribution Date of the Interest Accrual Period and
(ii) the amount of Foreign Currency so obtained,
shall be the "Class Foreign Currency Interest
Shortfall."
Any amounts withdrawn from the Series Interest Funding Account pursuant to this
clause (4) and not paid or converted into Foreign Currency shall be redeposited
into the Series Interest Funding Account and shall be deemed, on the next
Interest Payment Date, to be amounts deposited since the preceding Interest
Payment Date.
(5) The Master Servicer shall direct the Trustee in
writing to withdraw from the Class Currency Swap Termination Account and
convert into Foreign Currency at the then prevailing spot exchange rate in New
York the lesser of
(x) the amount of dollars that, when converted
into Foreign Currency, will equal the Class
Foreign Currency Interest Shortfall and
(y) the amount on deposit in the Class Currency
Swap Termination Account.
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(6) On each Foreign Business Day immediately preceding
each Interest Payment Date with respect to any Class or Subclass that is
subject to a Class Currency Swap, the Master Servicer shall direct the Trustee
in writing (i) to deposit into the Class Foreign Currency Distribution Account
all amounts received from the Currency Swap Counterparty with respect to the
sum of the Class Foreign Currency Modified Required Amounts for each
Distribution Date of the Interest Accrual Period relating to such Interest
Payment Date, (ii) to deposit into the Class Foreign Currency Distribution
Account all Foreign Currency obtained by the Trustee by converting dollars
pursuant to Sections 10(a)(4) and 10(a)(5) (x) on deposit in the Series
Interest Funding Account and (y) on deposit in the Class Currency Swap
Termination Account (up to the amount necessary to obtain the Class Foreign
Currency Interest Shortfall) into Foreign Currency at the then prevailing spot
exchange rate in New York and (iii) to cause the Paying Agent to pay such
amount to the Investor Certificateholders of such Class in accordance with
subsection (c) of this Section 10.
(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.
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Except as set forth in the following sentence, all such amounts shall be paid
to or with respect to the Class A Investor Certificateholders until the Class A
Invested Amount is reduced to zero; and, thereafter, if there is a Subordinate
Class with respect to Class A, such amounts shall be paid to or with respect to
the Class B Investor Certificateholders until the Class B Invested Amount is
reduced to zero, unless the Series Termination Date occurs prior to such date;
provided, however, that on the Fully Funded Date, if any, the Class B Invested
Amount shall be withdrawn from the Series Principal Funding Account and paid to
the Class B Investor Certificateholders. In no event shall any amounts be paid
with respect to any Class of Investor Certificates pursuant to this clause (7)
in excess of the Class Invested Amount for such Class, nor shall any amounts be
paid in excess of the Class Foreign Currency Invested Amount, if applicable.
Any amounts remaining on deposit in the Series Principal Funding Account after
the Class Invested Amount or the Class Foreign Currency Invested Amount, as
applicable, for each Class has been reduced to zero shall be paid to the Holder
of the Seller Certificate. Any amounts withdrawn from the Series Principal
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.
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Except as set forth in the following sentence, all such amounts shall be paid
to or with respect to the Class A Investor Certificateholders until the Class A
Invested Amount is reduced to zero; and, thereafter, if there is a Subordinate
Class with respect to Class A, such amounts shall be paid to or with respect to
the Class B Investor Certificateholders until the Class B Invested Amount is
reduced to zero, unless the Series Termination Date occurs prior to such date.
In no event shall any amounts be paid with respect to any Class of Investor
Certificates pursuant to this clause (8) in excess of the Class Invested Amount
for such Class, nor shall any amounts be paid in excess of the Class Foreign
Currency Invested Amount, if applicable. Any amounts remaining on deposit in
the Series Principal Funding Account after the Class Invested Amount or the
Class Foreign Currency Invested Amount, as applicable, for each Class has been
reduced to zero shall be paid to the Holder of the Seller Certificate. Any
amounts withdrawn from the Series Principal Funding Account pursuant to this
clause (8) and not paid or converted into Foreign Currency shall be paid to the
Holder of the Seller Certificate.
(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;
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and, thereafter, if there is a Subordinate Class with respect to Class A, such
amounts shall be paid to or with respect to the Class B Investor
Certificateholders until the Class B Invested Amount is reduced to zero, unless
the Series Termination Date occurs prior to such date. In no event shall any
amounts be paid with respect to any Class of Investor Certificates pursuant to
this clause (9) in excess of the Class Invested Amount for such Class, nor
shall any amounts be paid in excess of the Class Foreign Currency Invested
Amount, if applicable. Any amounts remaining on deposit in the Series
Principal Funding Account after the Class Invested Amount or the Class Foreign
Currency Invested Amount, as applicable, for each Class has been reduced to
zero shall be paid to the Holder of the Seller Certificate. Any amounts
withdrawn from the Series Principal Funding Account pursuant to this clause (9)
and not paid or converted into Foreign Currency shall be paid to the Holder of
the Seller Certificate.
(10) On each Special Payment Date, after giving effect to
the payments, withdrawals and conversions described above on such day, the
Master Servicer shall direct the 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
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rate in New York pursuant to Section 10(a)(10) and (iii) to cause the Paying
Agent to pay such amount to the Investor Certificateholders of such Class in
accordance with subsection (c) of this Section 10.
(12) On the Class Expected Final Payment Date or the Class
Final Maturity Date, if applicable (or, if such Class Expected Final Payment
Date or Class Final Maturity Date is not also a Distribution Date, on the
Distribution Date occurring in the same calendar month as the Class Expected
Final Payment Date or the Class Final Maturity Date, if applicable), the Master
Servicer shall direct the Trustee in writing to withdraw the amount on deposit
in the Series Principal Funding Account with respect to each Class; provided
that (i) such amount shall be no greater than the Class Invested Amount and
(ii) funds, if any, remaining on deposit in the Series Principal Funding
Account after the payment in full of the Class Invested Amount with respect to
each Class shall be withdrawn and paid to the Holder of the Seller Certificate.
Such amount shall be paid or converted into Foreign Currency as follows:
(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
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Funding Account into Foreign Currency at the then prevailing spot exchange rate
in New York pursuant to Section 10(a)(12) and (iii) to cause the Paying Agent
to pay such amount to the Investor Certificateholders of such Class in
accordance with subsection (c) of this Section 10.
(b) Payments to the Sellers and/or the Master Servicer.
Notwithstanding the other provisions in Section 9 and this Section 10, any
amounts payable to Greenwood on behalf of the Holder of the Seller Certificate
or to the Master Servicer on any Distribution Date pursuant to Section 9 and
this Section 10 may be paid prior to such Distribution Date pursuant to Section
4.03(d) of the Pooling and Servicing Agreement.
(c) Payments to Holders of Investor Certificates in Bearer Form.
On each Payment Date, with respect to any outstanding Class of Investor
Certificates issued in bearer form and denominated in a Foreign Currency, the
principal and interest on the Bearer Certificates will be payable in Foreign
Currency only against surrender of the Bearer Certificates or Coupons, as the
case may be, and subject to applicable laws and regulations at the offices of
any Paying Agent 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.
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SECTION 11. Credit Enhancement
(a) Initial Credit Enhancement. The Master Servicer hereby
represents with respect to the Initial Credit Enhancement and shall be deemed
to represent with respect to any successor Credit Enhancement that (i) the
Master Servicer has provided for the Credit Enhancement for the account of the
Trustee and for the benefit of the Investor Certificateholders, (ii) the Master
Servicer has entered into a Credit Enhancement Agreement, (iii) the Credit
Enhancement permits the Trustee or the Master Servicer, acting as the Trustee's
attorney-in-fact or otherwise, to make Credit Enhancement Drawings from time to
time in an amount up to the Total Available Credit Enhancement Amount at such
time, for the purposes set forth in this Agreement and (iv) the Credit
Enhancement and the respective Credit Enhancement Agreement may be terminated
by the Trustee without penalty if (x) the Master Servicer elects to obtain a
successor Credit Enhancement and such successor Credit Enhancement does not
cause the ratings of the Investor Certificates of the Series established hereby
to be withdrawn or lowered by either of the Rating Agencies from the respective
ratings of such Investor Certificates immediately prior to such election or (y)
if the Credit Enhancement is not Funded Credit Enhancement, the Credit
Enhancement Provider ceases to be a Qualified Credit Enhancement Provider.
(b) Successor Credit Enhancement.
(i) If the Credit Enhancement is not Funded Credit
Enhancement and if, at any time, the provider of such Credit
Enhancement ceases to be a Qualified Credit Enhancement Provider, the
Master Servicer shall obtain a successor Credit Enhancement within 30
days or such longer period as will not result in the lowering or
withdrawal of the rating of any Class of any Series then outstanding
by the Rating Agencies (a) which, if such successor Credit Enhancement
is not to be Funded Credit Enhancement, will be issued by a Qualified
Credit Enhancement Provider and (b) with respect to which the
representations set forth in Section 11(a) will be satisfied;
provided, however, that the Master Servicer shall not be required to
continue efforts to obtain a successor Credit Enhancement if the then
existing Credit Enhancement Provider again becomes a Qualified Credit
Enhancement Provider and remains such; and, provided, further, that
unless otherwise agreed to by the Rating Agencies, the Credit
Enhancement and Credit Enhancement Agreement will not be terminated
and no successor Credit Enhancement Provider shall be selected if the
successor Credit Enhancement, the successor Credit Enhancement
Agreement, or the selection of such successor Credit Enhancement
Provider would cause the ratings of the Investor Certificates of the
Series established hereby to be withdrawn or lowered by either Rating
Agency from the respective ratings of such Investor 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
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lowered by either of the Rating Agencies from the respective ratings
of such Investor Certificates immediately prior to such election.
(iii) In any case, subject to the foregoing, any successor
Credit Enhancement obtained by the Master Servicer need not consist of
the same type of Credit Enhancement as the Initial Credit Enhancement,
but may consist of a different type of facility, including, but not
limited to, a reserve account, a cash collateral account, an
irrevocable standby letter of credit, a surety bond or a combination
of any of the above. Upon issuance of, or other provision for, any
such successor Credit Enhancement, the Trustee shall terminate the
prior Credit Enhancement and Credit Enhancement Agreement.
(c) Supplemental Credit Enhancement Event. Upon the occurrence of
a Supplemental Credit Enhancement Event, Greenwood as Servicer shall, within 60
days of notice from Standard & Poor's of the withdrawal or downgrade (or such
longer period as may be agreed to by Standard & Poor's), arrange for the
payment of the Supplemental Credit Enhancement Amount, if any, by a Person
other than Greenwood (or from Series Excess Servicing) to the Trustee as
administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. Both the form and the provider
of the Supplemental Credit Enhancement Amount, if any, shall be determined at
the time it is to be paid; provided, that the Master Servicer shall have
received confirmation from Standard & Poor's that the arrangements with respect
to the Supplemental Credit Enhancement Amount, if any, will not result in the
rating of the Investor Certificates of the Series established hereby being
withdrawn or lowered. In addition to the foregoing, the Master Servicer shall
notify Moody's of the occurrence of a Supplemental Credit Enhancement Event as
soon as practicable after such occurrence, and shall notify Moody's in advance
of its implementation of the form and provider of the Supplemental Credit
Enhancement Amount, if any.
SECTION 12. Alternative Credit Support Election.
(a) The Sellers may elect to effect a change in the calculation of
the Class Percentage with respect to Finance Charge Collections during the
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
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of the Credit Enhancement at any time on or prior to the last day of
the Due Period in which the Early Accumulation Event or the
Amortization Event occurs;
(iii) prior to the last day of the Revolving Period (or,
following an Early Accumulation Event or an Amortization Event during
the Revolving Period, on or prior to the last day of the Due Period in
which the Early Accumulation Event or the Amortization Event occurs),
the Rating Agencies shall have confirmed that the Alternative Credit
Support Election shall not cause a reduction in or withdrawal of the
rating of any Class of Investor Certificates of the Series established
hereby; and
(iv) prior to the last day of the Revolving Period (or,
following an Early Accumulation Event or an Amortization Event during
the Revolving Period, on or prior to the last day of the Due Period in
which the Early Accumulation Event or the Amortization Event occurs),
Greenwood on behalf of the Holder of the Seller Certificate shall have
delivered to the Rating Agencies written confirmation that the
conclusions reached in the legal opinions delivered on the Initial
Closing Date regarding the absolute 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
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Invested Amount nor the Class Investor Interest shall exceed the Class Initial
Investor Interest for such Class minus the sum of (x) the aggregate amount of
payments of Certificate Principal paid to the Investor Certificateholders of
such Class prior to such Distribution Date, (y) in the case of the Class
Investor Interest, the amount on deposit in the Series Principal Funding
Account for the benefit of such Class in respect of Collections of Principal
Receivables and (z) the aggregate amount of losses, if any, on investments of
principal of funds on deposit in the Series Principal Funding Account for the
benefit of such Class; and provided, further, that the amount of Investor
Losses with respect to any Class shall not be reduced to an amount less than
zero.
SECTION 14. Servicing Compensation. As compensation for its
servicing activities hereunder and under the Pooling and Servicing Agreement
and reimbursement of its expenses as set forth in Section 3.03 of the Pooling
and Servicing Agreement, the Master Servicer shall be entitled to receive a
monthly servicing fee with respect to the Series established hereby in respect
of any Due Period (or portion thereof) prior to the earlier of the date on
which the Series Investor Interest is reduced to zero and the Series
Termination Date. Such monthly servicing fees shall be 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
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Investor Certificates of the Series established hereby, cause the Interest Rate
Cap Provider to pledge securities in the manner provided by applicable law,
which shall be held by the Trustee or its agent free and clear of the Lien of
any third party, in a manner conferring on the Trustee a perfected first Lien
in such securities securing the Interest Rate Cap Provider's performance of its
obligations under the Class Interest Rate Caps, or (ii) provided that
Replacement Class Interest Rate Caps or Qualified Substitute Cap Arrangements
meeting the requirements of Section 15(c) have been obtained, direct the
Trustee (A) to provide written notice to the Interest Rate Cap Provider of its
intention to terminate the Class Interest Rate Caps within such 30-day period
and (B) to terminate the Class Interest Rate Caps within such 30-day period, to
request the payment to it of all amounts due to the Trust under the Class
Interest Rate Caps through the termination date and to deposit any such amounts
so received, on the day of receipt, to the Series Interest Funding Account, or
(iii) establish any other arrangement (including an arrangement or arrangements
in addition to or in substitution for any prior arrangement made in accordance
with the provisions of this Section 15(b)) satisfactory to the Rating Agencies
such that the Rating Agencies will not reduce or withdraw the rating of any
Investor Certificates of the Series established hereby (a "Qualified Substitute
Cap Arrangement"); provided, however, that in the event at any time any
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
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replacement with such Replacement Class Interest Rate Caps will not adversely
affect the rating of the Investor Certificates of the Series established
hereby.
(f) The Trustee hereby appoints the Master Servicer to perform the
duties of the calculation agent under the Class Interest Rate Caps and the
Master Servicer accepts such appointment.
SECTION 16. Class Interest Rate Swaps. In the event that the
Investor Certificates of any Class are subject to a Class Interest Rate Swap,
the Trust will enter into a Class Interest Rate Swap in a form approved by the
Master Servicer. Pursuant to the terms of the Class Interest Rate Swap, on
each Distribution Date, the Interest Rate Swap Counterparty shall pay to the
Trust the Net Swap Receipt or the Trust shall pay to the Interest Rate Swap
Counterparty the Net Swap Payment, as applicable. If the Trust does not
receive payment from the Interest Rate Swap Counterparty on each Distribution
Date (if due), the Trustee, on behalf of the Trust, shall attempt to determine
from the Interest Rate Swap Counterparty the reasons therefore and whether such
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
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applicable provisions of the Class Currency Swap, either (i) with the prior
confirmation of the Rating Agencies that such action will not result in a
reduction or withdrawal of the rating of any Investor Certificates of the
Series established hereby below the Minimum Investor Certificate Ratings
specified in the Series Term Sheet, cause the Currency Swap Counterparty to
pledge securities in the manner provided by applicable law, which shall be held
by the Trustee or its agent free and clear of the Lien of any third party, in a
manner conferring on the Trustee a perfected first Lien in such securities
securing the Currency Swap Counterparty's performance of its obligations under
the Class Currency Swap, (ii) with the prior confirmation of the Rating
Agencies that such arrangement will not result in the reduction or withdrawal
of the rating of any Investor Certificates of the Series established hereby
below the Minimum Investor Certificate Ratings specified in the Series Term
Sheet, cause the Currency Swap Counterparty to enter into an arrangement the
purpose of which shall be to assure performance by the Currency Swap
Counterparty of its obligations under the Class Currency Swap, (iii) provided
that a Replacement Class Currency Swap or Qualified Substitute Class Currency
Swap Arrangement meeting the requirements of Section 16(c) has been obtained,
direct the Trustee (A) to provide written notice to the Currency Swap
Counterparty of its intention to terminate the Class Currency Swap within such
60- day period and (B) to terminate the Class Currency Swap within such 60-day
period, to request the payment to it of all amounts due to the Trust under the
Class Currency Swap through the termination date and to pay or deposit any such
amounts as provided in the Class Currency Swap, or (iv) establish any other
arrangement (including an arrangement or arrangements in addition to or in
substitution for any prior arrangement made in accordance with the provisions
of this Section 16(b)) satisfactory to the Rating Agencies such that the Rating
Agencies will not reduce or withdraw the rating of any Investor Certificates of
the Series established hereby below the Minimum Investor Certificate Ratings
specified in the Series Term Sheet (a "Qualified Substitute Class Currency Swap
Arrangement"); provided, however, that in the event at any time any alternative
arrangement established pursuant to clause (i), (ii) or (iv) of this Section
16(b) shall cease to be satisfactory to the Rating Agencies then the provisions
of this Section 16(b) shall again be applied and in connection therewith the
60-day period referred to above shall commence on the date the Master Servicer
receives notice of such cessation.
(c) Unless an alternative arrangement pursuant to clause (i), (ii)
or (iv) of Section 16(b) is being established, the Master Servicer shall use
its best efforts (without expenditure of funds unless in its sole discretion it
otherwise elects) to obtain Replacement Class Currency Swaps or Qualified
Substitute Class Currency Swap Arrangements meeting the requirements of this
Section 16(c) during the 60-day period referred to in Section 16(b). The
Trustee shall not terminate the Class Currency Swap unless, prior to the
expiration of the 60-day period referred to in Section 16(b), the Master
Servicer delivers to the Trustee (i) Replacement Class Currency Swaps or
Qualified Substitute Class Currency Swap Arrangements, (ii) to the extent
applicable, an Opinion of Counsel (which may be Counsel for the Replacement
Currency Swap Counterparty or Qualified Substitute Currency Swap Counterparty)
as to the due authorization, execution and delivery and validity and
enforceability of each such Replacement Class Currency Swap or Qualified
Substitute Currency Swap Arrangement, as the case may be, and (iii)
confirmation from each Rating Agency that the termination of the Class Currency
Swap and its replacement with such Replacement Class Currency Swaps or
Qualified Substitute Class
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Currency Swap Arrangements will not result in a reduction or withdrawal of the
rating of the Investor Certificates of the Series established hereby below the
Minimum Investor Certificate Ratings specified in the Series Term Sheet.
(d) The Master Servicer shall notify the Trustee, the Rating
Agencies and the Credit Enhancement Provider within five Business Days after
obtaining knowledge that the long-term, unsecured and unguaranteed debt rating
of the Currency Swap Counterparty has been withdrawn or reduced by either
Rating Agency.
(e) Notwithstanding the foregoing, the Master Servicer may,
subject to the terms of the Class Currency Swap, at any time obtain (without
expenditure of funds unless it otherwise so elects), and the Trustee will enter
into, a Replacement Class Currency Swap, provided that the Master Servicer
delivers to the Trustee (i) an Opinion of Counsel (which may be Counsel for the
Replacement Currency Swap Counterparty or Qualified Substitute Class Currency
Swap Counterparty) as to the due authorization, execution and delivery and
validity and enforceability of such Replacement Class Currency Swap and (ii)
confirmation from the Rating Agencies that the termination of the then current
Class Currency Swap and its replacement with such Replacement Class Currency
Swap will not adversely affect the then-current rating of the Investor
Certificates of the Series established hereby.
SECTION 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
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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 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
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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;
(g) if the amount of Principal Receivables in the Trust at the end
of any Due Period for three consecutive Due Periods of the Early Accumulation
Period shall be less than the Minimum Principal Receivables Balance and
Greenwood shall have failed to assign Receivables in Additional Accounts or
Participation Interests to the Trust in at least the amount of the deficiency
by the tenth day of the calendar month of the following Due Period;
an Amortization Event shall occur with respect to the Investor Certificates of
the Series established hereby, immediately upon the occurrence of such event.
If an Amortization Event described in this Section 21 shall occur, this Section
21 constitutes written notice by the Trustee and not less than 51% of the Class
Invested Amount of each Class of the Series established hereby to the Master
Servicer and the Sellers that such Amortization Event has occurred. No
additional notice of any kind, which is hereby waived by the Sellers and the
Master Servicer, shall be required as a condition of the occurrence of any
Amortization Event described in this Section 21. In addition, if the Series
established hereby is not eligible to have an Early Accumulation Period, each
of the events described in Section 22 as "Early Accumulation Events" shall
instead be Amortization Events.
The Master Servicer's determination that an event described in clause
(e) or (f) has occurred will be evidenced by delivery to the Trustee of (i) a
certificate setting forth a statement of facts showing that such Amortization
Event has occurred or will occur and (ii) an opinion of independent legal
counsel to such effect based on such statement of facts. In any such case, the
Amortization Event shall be deemed to have occurred on the first Distribution
Date following the Master Servicer's determination, without any notice or other
action on the part of the Trustee or the Investor Certificateholders.
SECTION 22. Early Accumulation Events. If the Series established
hereby is eligible to have an Early Accumulation Period, each of the events
described in clause (a), (b), (g) or (i) of
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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 either Class declare by written notice to Greenwood and the
Master Servicer (and to the Trustee if given by the Investor
Certificateholders) that an Early Accumulation Event has occurred as of the
date of the notice. In the case of any event described in clause (a) or (b) of
this Section 22, an Early Accumulation Event shall occur with respect to the
Investor Certificates of such Class immediately upon the occurrence of the
event without any notice or other action on the part of the Trustee or the
Investor Certificateholders of such Class. On the date on which an Early
Accumulation Event is deemed to have occurred the Early Accumulation Period
will commence.
SECTION 23. Purchase of Investor Certificates and Series
Termination.
(a) If as of any Distribution Date during the Amortization Period
(after giving effect to any payments calculated pursuant to Section 9 made on
such Distribution Date) the Series Investor Interest of the Series established
hereby is less than or equal to 5% of the Series Initial Investor Interest,
Greenwood on behalf of the Holder of the Seller Certificate may purchase and
cancel the Investor Certificates of the Series established hereby by depositing
into the Series Distribution Account, on the immediately succeeding
Distribution Date, an amount equal to the Series Investor Interest as of the
last day of the Due Period related to such immediately succeeding Distribution
Date. If any amount deposited pursuant to this Section 23(a) is (i) allocable
to the Investor Certificateholders of a Class that is subject to a Class
Currency Swap, the Master Servicer shall direct the Trustee in writing (x) if
no Currency Swap Termination has occurred, to withdraw the amount allocable to
such Class from the Series Distribution Account and deposit such amount into
the Currency Swap Dollar Escrow Account or (y) if a Currency Swap Termination
has occurred, to convert such amount into Foreign Currency at the then
prevailing spot exchange rate in New York, as applicable, and cause such amount
to be paid to the Investor Certificateholders of such Class pursuant to Section
10(c) of this Series Supplement or (ii) allocable to the Investor
Certificateholders of a Class that is not subject to a Class
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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 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.
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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.
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
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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.
69
<PAGE> 85
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 1998-4
5.75% 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
<PAGE> 86
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 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 April 9, 1998 (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> 87
IN WITNESS WHEREOF, Greenwood has caused this Class A Certificate to
be duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:
-----------------------------------
A-1-3
<PAGE> 88
[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 1998-4 5.75% 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 1998-4 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
1998-4 5.90% Class B Credit Card Pass-Through Certificates" (the "Class B
Certificates"). The Class A Certificates and the Class B Certificates are
collectively referred to herein as the Investor Certificates.
The aggregate interest represented by the Class A Certificates at any
time in the assets of the Trust shall not exceed an amount equal to the Class A
Investor Interest at such time, plus accrued but unpaid Certificate Interest
for the Class A Certificates and any interest thereon. The Class Initial
Investor Interest of the Class A Certificates is $500,000,000. The Class A
Invested Amount on any Distribution Date will be an amount equal to the Class A
Initial Investor Interest minus the sum of (a) the aggregate amount of payments
of Certificate Principal paid to the Class A Certificateholders prior to such
Distribution Date, (b) the aggregate amount of Investor Losses for such Class
not reimbursed prior to such Distribution Date and (c) the aggregate amount of
losses of principal on investments in funds on deposit for the benefit of such
Class in the Series Principal Funding Account. In addition to the Investor
Certificates, a Seller Certificate has been issued pursuant to the Pooling and
Servicing Agreement which represents, at any time, the undivided interest in
the Trust not represented by the Investor Certificates or the investor
certificates of any other Series of investor certificates then outstanding.
Subject to the terms and conditions of the Pooling and Servicing Agreement, the
Sellers may from time to time direct the Trustee, on behalf of the Trust, to
issue one or more new Series of investor certificates, which will represent
Fractional Undivided Interests in the Trust.
A-1-4
<PAGE> 89
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 April and October with respect to interest accrued during
the preceding Interest Accrual Period, commencing in October 1998, 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 April 2001 (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 October
2003 (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
A-1-5
<PAGE> 90
the amount of, or delaying the timing of, distributions which are required to
be made on any Investor Certificate without the consent of the affected
Investor Certificateholders or (b) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of each Investor
Certificateholder of each affected Class then of record. Any such amendment
and any such consent by the Class A Certificateholder shall be conclusive and
binding on such Class A Certificateholder and upon all future Holders of this
Class A Certificate and of any Class A Certificate issued in exchange hereof or
in lieu hereof whether or not notation thereof is made upon this Class A
Certificate.
The transfer of this Class A Certificate shall be registered in the
Certificate Register upon surrender of this Investor Certificate for
registration of transfer at any office or agency maintained by the Transfer
Agent and Registrar accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Class A Certificateholder or such Class A Certificateholder's attorney
duly authorized in writing, and thereupon one or more new Class A Certificates
of authorized denominations and for the same aggregate Fractional Undivided
Interest will be issued to the designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class A Certificates are exchangeable
for new Class A Certificates evidencing like aggregate Fractional Undivided
Interests, as requested by the Class A Certificateholder surrendering such
Class A Certificates. No service charge may be imposed for any such exchange
but the Master Servicer or Transfer Agent and Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Master Servicer, the Trustee, the Paying Agent and the Transfer
Agent, and any agent of any of them, may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Master Servicer, the Trust nor the Trustee, the Paying Agent, the
Transfer Agent, nor any agent of any of them or any such agent shall be
affected by notice to the contrary except in certain circumstances described in
the Pooling and Servicing Agreement.
Subject to certain conditions in the Pooling and Servicing Agreement
and the Series Supplement, if the principal of the Investor Certificates has
not been paid in full prior to the Series Termination Date, the obligations
created by the Pooling and Servicing Agreement and the Series Supplement with
respect to the Investor Certificates shall terminate on the Series Termination
Date.
A-1-6
<PAGE> 91
[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> 92
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 1998-4
5.90% 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
<PAGE> 93
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, 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 April 9, 1998 (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> 94
IN WITNESS WHEREOF, Greenwood has caused this Class B Certificate to
be duly executed and authenticated.
GREENWOOD TRUST COMPANY
By:
--------------------------------
A-2-3
<PAGE> 95
[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 1998-4 5.90% 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 1998-4 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
1998-4 5.75% Class A Credit Card Pass-Through Certificates" (the "Class A
Certificates"). The Class A Certificates and the Class B Certificates are
collectively referred to herein as the Investor Certificates.
The aggregate interest represented by the Class B Certificates at any
time in the assets of the Trust shall not exceed an amount equal to the Class
Investor Interest of the Class B Certificates at such time, plus accrued but
unpaid Certificate Interest for the Class B Certificates and any interest
thereon. The Class B Certificateholders are also entitled to the benefit of
the Credit Enhancement, to the extent provided in the Series Supplement. The
Class Initial Investor Interest of the Class B Certificates is $26,316,000.
The Class B Invested Amount on any Distribution Date will be an amount equal to
the Class B Initial Investor Interest minus the sum of (a) the aggregate amount
of payments of Certificate Principal paid to the Class B Certificateholders
prior to such Distribution Date, (b) the aggregate amount of Investor Losses
for such Class not reimbursed prior to such Distribution Date and (c) the
aggregate amount of losses of principal on investments in funds on deposit for
the benefit of such Class in the Series Principal Funding Account. In addition
to the Investor Certificates, a Seller Certificate has been issued pursuant to
the Pooling and Servicing Agreement which represents, at any time, the
undivided interest in the Trust not represented by the Investor Certificates or
the investor certificates of any other Series of investor certificates then
outstanding. Subject to the terms and conditions of the Pooling and Servicing
Agreement, the Sellers may from time to time direct the
A-2-4
<PAGE> 96
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 April and October with respect to interest accrued during
the preceding Interest Accrual Period, commencing in October 1998, 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 May 2001
(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 October 2003 (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
A-2-5
<PAGE> 97
time by the Master Servicer, the Sellers and the Trustee in certain cases (some
of which require confirmation from the Rating Agencies that such amendment will
not result in the downgrading or withdrawal of the rating assigned to the
Investor Certificates) without the consent of the Investor Certificateholders,
and in all other cases with the consent of the Investor Certificateholders
owning Fractional Undivided Interests aggregating not less than 66-2/3% of the
Class Invested Amount of each such affected Class (and with confirmation from
the Rating Agencies that such amendment will not result in the downgrading or
withdrawal of the rating assigned to the Investor Certificates); provided,
however, that no such amendment shall (a) have a material adverse effect on any
Class of Investor Certificateholders by reducing in any manner the amount of,
or delaying the timing of, distributions which are required to be made on any
Investor Certificate without the consent of the affected Investor
Certificateholders or (b) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of each Investor Certificateholder
of each affected Class then of record. Any such amendment and any such consent
by the Class B Certificateholder shall be conclusive and binding on such Class
B Certificateholder and upon all future Holders of this Class B Certificate and
of any Class B Certificate issued in exchange hereof or in lieu hereof whether
or not notation thereof is made upon this Class B Certificate.
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> 98
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> 99
[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> 100
Exhibit B
Form of Investor Certificateholders' Monthly Statement
Discover Card Master Trust I
Series 1998-4 Monthly Statement
Trust Distribution Date: _______ __, ____ Due Period Ending: _______ __, ____
Pursuant to the Series Supplement dated as of April 9, 1998 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 1998-4
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 1998-4 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 1998-4 Allocations $____________ $___________ N/A N/A
(e) Class A Allocations $____________ $___________ N/A N/A
Class B Allocations $____________ $___________ N/A N/A
</TABLE>
B-2
<PAGE> 101
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 1998-4 $________ $______ $________ $_________
</TABLE>
5. Information Concerning Amount of Controlled Liquidation Payments
<TABLE>
<CAPTION>
Amount Paid This Due Deficit Amount This Total Payments
Period Due Period Through The Due
<S> <C> <C> <C>
Series 1998-4
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 1998-4 $_________ $________
</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> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1998-4 $_________ $_________
(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> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1998-4 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
B-3
<PAGE> 102
10. Reimbursement of Investor Losses This Due Period
<TABLE>
<CAPTION>
Total per $1,000 of Original
Invested Principal
<S> <C> <C> <C>
(a) Group One $_________ $_________
(b) Group Two $_________ $_________
(c) Series 1998-4 $_________ $_________
(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 1998-4 $_________ $_________
(d) Class A $_________ $_________
Class B $_________ $_________
</TABLE>
12. Investor Monthly Servicing Fee Payable This Due Period
<TABLE>
<S> <C> <C>
(a) Group One $_________
(b) Group Two $_________
(c) Series 1998-4 $_________
(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 1998-4, Class B $____________ ________ %
</TABLE>
14. Total Available Credit Enhancement Amounts
<TABLE>
<CAPTION>
Shared Amount Class B Amount
<S> <C> <C>
Maximum Amount N/A $__________
Available Amount N/A $__________
Amount of Drawings on Credit
Enhancement for this Due Period N/A $__________
</TABLE>
B-4
<PAGE> 103
15. Delinquency Summary
<TABLE>
<S> <C>
End of Due Period Master Trust Receivables Outstanding $_________
</TABLE>
<TABLE>
<CAPTION>
Delinquent Amount Percentage of Ending
Payment Status Ending Balance Receivables Outstanding
<S> <C> <C>
30 - 59 days $__________________ __________%
60 - 179 days $__________________ __________%
</TABLE>
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
---------------------------------
B-5
<PAGE> 104
Exhibit C
Form of Master Servicer's Monthly Certificate
Discover Card Master Trust I
Series 1998-4
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 April 9, 1998 (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 1998-4 Certificates for the Distribution
Date occurring on _______________:
<TABLE>
<S> <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> 105
<TABLE>
<S> <C>
7. The sum of all amounts payable to the Class A Certificate-holders
on the current Distribution Date is equal to. . . . . . . . . . . . . . . . . . . . . . $__________
8. The aggregate amount of Class B Principal Collections processed during the related Due
Period is equal to. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $__________
9. The aggregate amount of Class B Finance Charge Collections processed during the related
Due Period is equal to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $__________
10a. The aggregate amount of Class B Principal Collections recharacterized as Series
Yield Collections during the related Due Period is. . . . . . . . . . . . . . . . . . . $__________
10b. The aggregate amount of Class B Additional Funds for this Distribution Date
is equal to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $__________
11. The amount of.drawings under the Credit Enhancement required to be made on the
related Drawing Date pursuant to the Series Supplement:
(a) with respect to the Class B Required Amount Shortfall is equal to. . . . . . . $__________
(b) with respect to the Class B Cumulative Investor Charged-Off Amount is
equal to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $__________
(c) with respect to the Class B Investor Interest is equal to. . . . . . . . . . . $__________
12. The sum of all amounts payable to the Class B Certificate-holders on the current
Distribution Date is equal to. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $__________
13. Attached hereto is a true copy of the statement required to be delivered by the
Master Servicer on the date of this Certificate to the Trustee pursuant to
Section 16 of the Series Supplement.
</TABLE>
C-2
<PAGE> 106
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> 1
EXHIBIT 4.2
CREDIT ENHANCEMENT AGREEMENT
AMONG
U.S. BANK NATIONAL ASSOCIATION
AS TRUSTEE,
GREENWOOD TRUST COMPANY
AS MASTER SERVICER, SERVICER AND SELLER
AND
DISCOVER RECEIVABLES FINANCING CORPORATION
AS CREDIT ENHANCEMENT PROVIDER
-----------------------------
DATED AS OF APRIL 9, 1998
----------------------------
DISCOVER CARD MASTER TRUST I
SERIES 1998-4
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 1. Defined Terms. ...........................................................................................2
Section 2. Loan......................................................................................................3
Section 3. Calculation of Amount of Interest Payable on the Loan.....................................................3
Section 4. Payment of Interest on the Loan...........................................................................4
Section 5. Repayment of Principal of the Loan........................................................................4
Section 6. Payments to the Holder of the Seller Certificate and the Master Servicer..................................5
Section 7. Deposits to and Withdrawals from the Credit Enhancement Account...........................................6
Section 8. Certain Additional Loans..................................................................................6
Section 9. Limited Obligation; Waiver of Setoff; Obligations Absolute................................................7
Section 10. Investments and Information..............................................................................8
Section 11. Servicing Transfer.......................................................................................8
Section 12. Representations and Warranties...........................................................................9
Section 13. Covenants...............................................................................................10
Section 14. Governing Law...........................................................................................10
Section 15. Termination.............................................................................................11
Section 16. Notices.................................................................................................11
Section 17. Bankruptcy..............................................................................................12
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 18. Limitation of Remedies..................................................................................12
Section 19. No Petition.............................................................................................12
Section 20. Amendments..............................................................................................13
Section 21. Successors and Assigns; Replacement of Credit Enhancement Provider......................................13
Section 22. Participation...........................................................................................13
</TABLE>
ii
<PAGE> 4
CREDIT ENHANCEMENT AGREEMENT, dated as of April 9, 1998, among
U.S. BANK NATIONAL ASSOCIATION (formerly First Bank National Association,
successor trustee to Bank of America Illinois, formerly Continental Bank,
National Association) as trustee (together with its successors and assigns as
trustee, the "Trustee") for Discover Card Master Trust I (the "Trust"),
GREENWOOD TRUST COMPANY ("Greenwood") as Master Servicer, Servicer and Seller
with respect to the Trust and DISCOVER RECEIVABLES FINANCING CORPORATION as cash
collateral depositor (the "Credit Enhancement Provider").
W I T N E S S E T H
WHEREAS, Greenwood as Master Servicer, Servicer and Seller and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
October 1, 1993 (as the same may from time to time be amended, modified or
otherwise supplemented, the "Pooling and Servicing Agreement"), and that certain
Series Supplement, dated as April 9, 1998 (as the same may from time to time be
amended, modified or otherwise supplemented, the "Series Supplement");
WHEREAS, the Trust, pursuant to the Pooling and Servicing
Agreement and the Series Supplement, is issuing $526,316,000 in aggregate
principal amount of Investor Certificates of Discover Card Master Trust I,
Series 1998-4 (the "Series"), which will entitle the holders thereof to interest
during the Revolving Period, the Accumulation Period, and the Amortization
Period, if any, and principal on the Class A Expected Final Payment Date, the
Class B Expected Final Payment Date and during the Amortization Period, if any;
WHEREAS, the principal and interest payments on the Investor
Certificates are to be funded by Principal Collections and Finance Charge
Collections received by the Trust on the Receivables;
WHEREAS, it is a condition to the issuance of the Investor
Certificates that at the closing on the date hereof, the Credit Enhancement
Provider make a term loan (the "Loan") to the Trust, for the benefit of the
Investor Certificateholders of the Series, of $21,052,640 (4.0% of the Series
Initial Investor Interest), for deposit in the Credit Enhancement Account to
provide additional funds to make payments on the Investor Certificates under
certain circumstances;
WHEREAS, principal on the Loan will be payable to the Credit
Enhancement Provider after the Investor Certificates are paid in full, except
for certain prepayments funded by certain Finance Charge Collections with
respect to the Receivables, as set forth herein; and
WHEREAS, interest on the Loan will be payable monthly to the
Credit Enhancement Provider, as available, by the Trust at one rate to the
extent the amount in the Credit Enhancement Account equals or exceeds the unpaid
principal on the Loan and at a higher rate to the extent the unpaid principal on
the Loan exceeds the amount in the Credit Enhancement Account.
<PAGE> 5
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
adequacy of which are hereby expressly acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINED TERMS. (a) The capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to them
in the Pooling and Servicing Agreement or the Series Supplement, as applicable.
(b) The following terms have the definitions set forth below:
"Interest Period" means (i) with respect to the initial
Distribution Date, the period commencing on the Series Closing Date and ending
on the day immediately preceding the initial Distribution Date and (ii) with
respect to each subsequent Distribution Date, the period commencing on the
preceding Distribution Date and ending on the day immediately preceding such
Distribution Date.
"Lender Rate" means, with respect to each Interest Period, the
prime commercial lending rate per annum established by the Trustee, as in effect
on each day in the Interest Period.
"LIBOR-Based Rate" means, with respect to each Interest
Period, the per annum interest rate equal to the London Interbank Offered Rate
as shown on the Reuters Screen LIBO Page at approximately 11:00 a.m. (London
time) two LIBOR Business Days prior to the first day of such Interest Period for
deposits of United States dollars for a period of time comparable to the
Interest Period, and in an amount comparable to the principal amount of the
Loan, plus 0.45%.
"Portfolio Yield" means, with respect to any Due Period, the
annualized percentage equivalent of a fraction, the numerator of which shall be
the sum of (i) the amount of Finance Charge Collections received during such Due
Period, (ii) the amount of Series Yield Collections for each Series then
outstanding for such Due Period and (iii) the amount of Series Additional Funds
for each Series then outstanding for such Due Period, and the denominator of
which shall be the total amount of Principal Receivables in the Trust as of the
first day of such Due Period.
"Provider Amount" means, with respect to each Distribution
Date, the lesser of (i) the unpaid principal amount of the Loan (including any
amounts loaned by the Credit Enhancement Provider pursuant to Section 8 hereof)
and (ii) the amount on deposit in the Credit Enhancement Account, in each case
before giving effect to any payments, allocations or distributions on such
Distribution Date.
"Series Interest Payment Amount" means, for any Distribution
Date, an amount equal to the amount of interest payable on the Loan on such
Distribution Date, including any accrued but unpaid interest with respect to
previous Interest Periods and interest thereon, less the
2
<PAGE> 6
amount paid to the Credit Enhancement Provider on such Distribution Date
pursuant to Section 4(a) hereof. The Series Interest Payment Amount shall be the
amount of interest payable pursuant to this Agreement for purposes of
calculating the "Credit Enhancement Fee" for the purpose of, and as such term is
defined in, the Series Supplement and such amount shall be paid in accordance
with the provisions of the Series Supplement.
SECTION 2. LOAN. The Credit Enhancement Provider hereby makes
a term loan to the Trust, for the benefit of the Investor Certificateholders of
the Series, on the Series Closing Date in an amount equal to $21,052,640 (which
amount is the Stated Class B Credit Enhancement Amount), receipt of which is
hereby acknowledged by the Trustee. The amount of such Loan shall be increased
by the amount of any additional loan made by the Credit Enhancement Provider
pursuant to Section 8 hereof.
SECTION 3. CALCULATION OF AMOUNT OF INTEREST PAYABLE ON THE
LOAN.
(a) The Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum determined for such day
as follows. To the extent the unpaid portion of the principal of the Loan during
such Interest Period equals or is less than the amount on deposit in the Credit
Enhancement Account, the rate for such Interest Period on such principal portion
shall be the LIBOR-Based Rate. To the extent any portion of the unpaid principal
of the Loan exceeds such amount on deposit, the rate for such Interest Period on
such principal portion shall be the Lender Rate.
(b) Interest shall be payable monthly in arrears on each
Distribution Date. Interest on the Loan shall be calculated on the basis of the
actual number of days elapsed during the applicable Interest Period divided by
(i) 360, to the extent the LIBOR-Based Rate is applicable, or (ii) 365 or 366,
as the case may be, to the extent the Lender Rate is applicable. The Trustee
shall, as soon as practicable, notify the Seller, the Master Servicer and the
Credit Enhancement Provider of each determination of the Lender Rate and of the
LIBOR-Based Rate. Each determination thereof by the Trustee pursuant to the
provisions of this Agreement shall be conclusive and binding on the Seller, the
Master Servicer and the Credit Enhancement Provider, in the absence of manifest
error.
(c) If any portion of interest due and payable on a
Distribution Date is not paid on such Distribution Date, the unpaid portion of
such interest shall be due and payable on the next succeeding Distribution Date.
Any interest that is not paid on the due date thereof shall accrue interest from
the Distribution Date on which such interest was due and payable to the date
such interest is actually paid at a rate per annum equal to the Lender Rate.
SECTION 4. PAYMENT OF INTEREST ON THE LOAN. On each
Distribution Date, the Trustee as administrator of the Credit Enhancement shall
pay or cause to be paid to the Credit Enhancement Provider the amount of accrued
but unpaid interest on the Loan from the funds and in the order of priority set
forth below; provided, however, that such payments shall not exceed
3
<PAGE> 7
the amount of accrued but unpaid interest on the Loan and that such payments
will be made only to the extent such funds are available:
(a) interest and earnings (net of losses and investment
expenses) accrued since the preceding Distribution Date on the Provider Amount;
and
(b) the Series Interest Payment Amount, to the extent such
amount has been paid to the Trustee as administrator of the Credit Enhancement
pursuant to the Series Supplement.
SECTION 5. REPAYMENT OF PRINCIPAL OF THE LOAN. The principal
amount of the Loan shall be due and payable on the Series Termination Date. The
Trust shall repay the unpaid principal balance of the Loan in full on or before
the Series Termination Date in accordance with the provisions of this Agreement;
provided, however, that the unpaid principal amount of the Loan shall only be
paid from the funds described below, and only to the extent such funds are
available.
(a) On each Distribution Date an amount equal to the lesser of
(i) the amount, if any, paid to the Trustee as administrator of the Credit
Enhancement pursuant to Section 9(b)(27) of the Series Supplement, and (ii) the
unpaid principal amount of the Loan, shall be paid to the Credit Enhancement
Provider for application toward the unpaid principal amount of the Loan.
(b) If, as of any Distribution Date, after giving effect to
all other deposits to and withdrawals from the Credit Enhancement Account as of
such Distribution Date, the amount on deposit in the Credit Enhancement Account
exceeds the Total Maximum Credit Enhancement Amount, the amount of such excess,
up to the unpaid principal amount of the Loan, shall be withdrawn from the
Credit Enhancement Account and paid to the Credit Enhancement Provider for
application toward the unpaid principal amount of the Loan.
(c) On the earlier to occur of (i) the Series Termination Date
and (ii) the day on which the Class Invested Amount with respect to each Class
of the Series is paid in full, and after payment of any amounts to be paid on
such day from the Credit Enhancement Account to or for the benefit of the
Investor Certificateholders of the Series, all amounts remaining on deposit in
the Credit Enhancement Account, up to the amount of the unpaid principal amount
of the Loan, shall be withdrawn from such account and paid to the Credit
Enhancement Provider for application toward the unpaid principal amount of the
Loan.
SECTION 6. PAYMENTS TO THE HOLDER OF THE SELLER CERTIFICATE
AND THE MASTER SERVICER.
(a) On each Distribution Date, the Trustee as administrator of
the Credit Enhancement shall pay or cause to be paid to Greenwood on behalf of
the Holder of the Seller
4
<PAGE> 8
Certificate (i) the interest and earnings (net of losses and investment
expenses) accrued since the preceding Distribution Date on an amount equal to
the positive difference, if any, between (x) the amount on deposit in the Credit
Enhancement Account and (y) the Provider Amount and (ii) the positive
difference, if any, between (x) the amount of interest and earnings (net of
losses and investment expenses) accrued since the preceding Distribution Date on
the Provider Amount and (y) the amount paid to the Credit Enhancement Provider
on such Distribution Date pursuant to Section 4(a).
(b) On each Distribution Date, an amount equal to (i) the
amount, if any, paid to the Trustee as administrator of the Credit Enhancement
pursuant to Section 9(b)(27) of the Series Supplement, less (ii) the amount, if
any, paid to the Credit Enhancement Provider pursuant to Section 5(a) hereof,
shall be paid to Greenwood on behalf of the Holder of the Seller Certificate.
(c) If, as of any Distribution Date, and after any payment to
the Credit Enhancement Provider pursuant to Section 5(b) has been made, the
amount remaining on deposit in the Credit Enhancement Account exceeds the Total
Maximum Credit Enhancement Amount, the amount of such excess shall be withdrawn
from the Credit Enhancement Account and paid to Greenwood on behalf of the
Holder of the Seller Certificate.
(d) On the earlier to occur of (i) the Series Termination Date
and (ii) the day on which the Class Invested Amount with respect to each Class
of the Series is paid in full, and after payment of any amounts to be paid on
such day from the Credit Enhancement Account to or for the benefit of the
Investor Certificateholders of the Series, any amounts remaining on deposit in
the Credit Enhancement Account that are not paid to the Credit Enhancement
Provider pursuant to Section 5(c) hereof shall be withdrawn from such account
and paid to Greenwood on behalf of the Holder of the Seller Certificate.
SECTION 7. DEPOSITS TO AND WITHDRAWALS FROM THE CREDIT
ENHANCEMENT ACCOUNT.
(a) The proceeds of the Loan made by the Credit Enhancement
Provider pursuant to Section 2 hereof, and the proceeds of any additional loan
made by the Credit Enhancement Provider pursuant to Section 8 hereof, shall be
deposited into the Credit Enhancement Account. In addition, any amounts paid to
the Trustee as administrator of the Credit Enhancement on any Distribution Date
with respect to the Total Available Credit Enhancement Amount or the Available
Class B Credit Enhancement Amount pursuant to the terms of the Series Supplement
also shall be deposited into the Credit Enhancement Account upon receipt of such
funds by the Trustee.
(b) Any withdrawals from the Credit Enhancement Account for
the benefit of the Investor Certificateholders pursuant to Section 9 of the
Series Supplement may be made by the Master Servicer or by the Trustee as
administrator of the Credit Enhancement and shall be
5
<PAGE> 9
deemed to be made first from amounts on deposit in the Credit Enhancement
Account as a result of payments of Series Excess Servicing and other amounts to
the Trustee as administrator of the Credit Enhancement to fund the Total
Available Credit Enhancement Amount, including any Series Excess Servicing or
other such amounts on deposit in the Credit Enhancement Account as a result of
an Alternative Credit Support Election having been made or as a result of the
occurrence of a Supplemental Credit Enhancement Event, and only after such
amounts are exhausted shall any such withdrawals be deemed to be made from
amounts on deposit in the Credit Enhancement Account that are attributable to
the Loan.
(c) On or before any Distribution Date on which Greenwood is
the Master Servicer, all payments made pursuant to this Agreement or the Series
Supplement between the Master Servicer or the Holder of the Seller Certificate
and the Credit Enhancement Account, may be aggregated for such Distribution Date
such that Greenwood, acting as Master Servicer and as agent of the Holder of the
Seller Certificate, may make only one payment to the Credit Enhancement Account
in satisfaction of all payments of the Master Servicer and the Holder of the
Seller Certificate pursuant to this Agreement or the Series Supplement, to the
extent that all payment obligations of the Master Servicer and the Holder of the
Seller Certificate to the Credit Enhancement Account on such Distribution Date
exceed all payment obligations of the Credit Enhancement Account to the Master
Servicer and the Holder of the Seller Certificate on such Distribution Date.
SECTION 8. CERTAIN ADDITIONAL LOANS.
(a) ALTERNATIVE CREDIT SUPPORT ELECTION. In the event that an
Alternative Credit Support Election is made pursuant to the provisions of the
Series Supplement, Greenwood on behalf of the Holder of the Seller Certificate
may cause the Additional Credit Support Amount to be funded by Series Excess
Servicing and other amounts paid to the Trustee as administrator of the Credit
Enhancement to fund the Available Class B Credit Enhancement Amount, pursuant to
Section 9 of the Series Supplement, or may request that the Credit Enhancement
Provider make an additional loan in the amount of the Additional Credit Support
Amount. If Greenwood on behalf of the Holder of the Seller Certificate makes
such request, and if the Credit Enhancement Provider elects to make such loan,
the amount of such loan shall be added to the unpaid principal amount of the
Loan. In the event that the Alternative Credit Support Election does not become
effective, the Additional Credit Support Amount (or, if the entire amount of the
Additional Credit Support Amount is not then on deposit in the Credit
Enhancement Account, the portion of the Additional Credit Support Amount that is
then on deposit) shall be withdrawn from the Credit Enhancement Account and
repaid to Greenwood on behalf of the Holder of the Seller Certificate (or, if
such amount was loaned by the Credit Enhancement Provider, returned to the
Credit Enhancement Provider).
(b) SUPPLEMENTAL CREDIT ENHANCEMENT EVENT. In the event that a
Supplemental Credit Enhancement Event occurs, Greenwood as Servicer may cause
the
6
<PAGE> 10
Supplemental Credit Enhancement Amount to be funded by Series Excess
Servicing and other amounts paid to the Trustee as administrator of the Credit
Enhancement to fund the Available Class B Credit Enhancement Amount, or may
request that the Credit Enhancement Provider make an additional loan in the
amount of the Supplemental Credit Enhancement Amount. If Greenwood as Servicer
makes such a request, and if the Credit Enhancement Provider elects to make such
loan, the amount of such loan shall be equal to the Supplemental Credit
Enhancement Amount and shall be added to the unpaid principal amount of the
Loan.
(c) NOTICE. The Credit Enhancement Provider shall give prior
written notice to Moody's of the making of any loan by the Credit Enhancement
Provider other than the additional loans described in this Section 8.
SECTION 9. LIMITED OBLIGATION; WAIVER OF SETOFF; OBLIGATIONS
ABSOLUTE.
(a) Notwithstanding any provision in any other section of this
Agreement to the contrary, the obligation to repay the Loan, together with
interest thereon, shall be without recourse to any Seller, the Master Servicer,
any Servicer, the Trustee, the Trust, any Certificateholder, or any affiliate,
officer, director, employee or person acting on behalf of any of them, and the
obligation to pay such amounts shall be limited solely to the application of
funds pursuant to this Agreement, in the manner and to the extent such funds are
available, except for the direct recourse indemnification obligation of each
successor Master Servicer pursuant to Section 11 hereof. The Credit Enhancement
Provider agrees that its interest in funds on deposit in the Credit Enhancement
Account is subordinated to the interests of the Investor Certificateholders of
the Series, as provided in this Agreement and in the Series Supplement. The
Credit Enhancement Provider further agrees that it shall have no right of setoff
or lender's lien against any Seller, the Master Servicer, any Servicer, the
Trustee, the Trust, or any Certificateholder.
(b) The obligations of the Seller, the Trustee, the Credit
Enhancement Provider and the Master Servicer under this Agreement shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement.
SECTION 10. INVESTMENTS AND INFORMATION.
(a) The Trustee shall from time to time during the term of
this Agreement invest all amounts on deposit in the Credit Enhancement Account
as the Master Servicer shall direct, which investments shall at all times be
made in compliance with the terms of the Pooling and Servicing Agreement and the
Series Supplement.
(b) The Master Servicer shall provide the Credit Enhancement
Provider with such background information and data with respect to the Credit
Enhancement Account as the Credit Enhancement Provider may reasonably request.
7
<PAGE> 11
(c) The Master Servicer shall obtain the consent of the Credit
Enhancement Provider prior to the investment in any Permitted Investments with a
stated maturity, the maturity of which is longer than as would cause them to
mature on or prior to the following Distribution Date as provided in Section
8(e) of the Series Supplement.
SECTION 11. SERVICING TRANSFER. In the event that a successor
Master Servicer is appointed pursuant to the Pooling and Servicing Agreement,
from and after the effective date of such transfer of servicing, the successor
Master Servicer appointed pursuant to the Pooling and Servicing Agreement, and
not the former Master Servicer, shall (a) be responsible for the performance of
all servicing functions to be performed from and after such date, (b) agree to
be bound by the terms, covenants and conditions contained herein applicable to
the Master Servicer and be subject to the duties and obligations of the Master
Servicer hereunder, and (c) agree to indemnify and hold harmless the Credit
Enhancement Provider from and against any and all claims, damages, losses,
liabilities, costs or expenses whatsoever which the Credit Enhancement Provider
may incur (or which may be claimed against the Credit Enhancement Provider) by
reason of the gross negligence or willful misconduct of the successor Master
Servicer in exercising its powers and carrying out its obligations under the
Pooling and Servicing Agreement and the Series Supplement. Such transfer of
servicing shall not affect any rights or obligations of the former Master
Servicer under this Agreement that arose prior to the effective date of the
transfer of servicing, except that such former Master Servicer shall have no
obligation to indemnify the Credit Enhancement Provider as a result of any act
or failure to act of any successor Master Servicer in the performance of the
servicing functions.
SECTION 12. REPRESENTATIONS AND WARRANTIES.
(a) The Credit Enhancement Provider hereby represents and
warrants to the Master Servicer and the Trustee that:
(i) The Credit Enhancement Provider has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Delaware, and has the corporate power and
authority to execute, deliver and perform its obligations under this
Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered on the part of the Credit Enhancement Provider.
(iii) When executed and delivered, this Agreement will
constitute a valid and binding agreement of the Credit Enhancement
Provider enforceable against the Credit Enhancement Provider in
accordance with its terms, except (A) as the same may be limited by
insolvency, bankruptcy or reorganization or other laws relating to or
affecting the enforcement of creditors' rights and (B) as the same may
be limited by general equity principles (whether considered in a
proceeding at law or in equity) and by the discretion of the court
before which any proceeding therefor may be brought.
8
<PAGE> 12
(b) The Master Servicer hereby represents and warrants to the
Credit Enhancement Provider and the Trustee that:
(i) The Master Servicer has been duly incorporated and is
validly existing as a banking corporation in good standing under the
laws of the State of Delaware, and has the corporate power and
authority to execute, deliver and perform its obligations under the
Pooling and Servicing Agreement, the Series Supplement and this
Agreement.
(ii) This Agreement, the Pooling and Servicing Agreement and
the Series Supplement have been duly authorized, executed and delivered
on the part of the Master Servicer.
(iii) When executed and delivered, each of this Agreement, the
Pooling and Servicing Agreement and the Series Supplement will
constitute a valid and binding agreement of the Master Servicer
enforceable against the Master Servicer in accordance with its terms,
except (A) as the same may be limited by insolvency, bankruptcy,
receivership or reorganization or other laws relating to or affecting
the enforcement of creditors' rights and (B) as the same may be limited
by general equity principles (whether considered in a proceeding at law
or in equity) and by the discretion of the court before which any
proceeding therefor may be brought.
(c) The Trustee hereby represents and warrants to the Credit
Enhancement Provider and the Master Servicer that:
(i) The Trustee is organized, existing and in good standing
under the laws of the United States of America.
(ii) The Trustee has full power, authority and right to
execute, deliver and perform this Agreement, the Pooling and Servicing
Agreement and the Series Supplement, and has taken all necessary action
to authorize the execution, delivery and performance by it of this
Agreement, the Pooling and Servicing Agreement and the Series
Supplement.
(iii) Each of this Agreement, the Pooling and Servicing
Agreement and the Series Supplement have been duly executed and
delivered by the Trustee.
SECTION 13. COVENANTS. Greenwood, as Master Servicer and on
behalf of the Holder of the Seller Certificate, covenants and agrees that, so
long as this Agreement shall remain in effect or any monetary obligation arising
hereunder or under the Series Supplement shall remain unpaid, it will change the
terms and provisions of a Credit Agreement with respect to a Greenwood Discover
Card Account or any other Account with respect to which it is the Servicer
(including, without limitation, the calculation of the amount, or the timing, of
charge-offs) only if it does not believe, after a good faith assessment of the
expected effects of such
9
<PAGE> 13
change, that such change will result in a reduction of the Portfolio Yield, for
any Due Period beginning prior to the termination of the Series, to less than
the Base Rate unless such change (i) is required by any Requirements of Law or
(ii) is deemed necessary by Greenwood in its sole reasonable judgment to
maintain its credit card business on a competitive basis. For purposes of this
Section 13, "Base Rate" shall mean (i) the weighted average of the Certificate
Rates for each Class of each Series then outstanding plus (ii) 1% per annum. For
purposes of the immediately preceding sentence, the Certificate Rate for each
Class that does not have a fixed Certificate Rate shall be the actual
Certificate Rate for such Class for the Interest Accrual Period commencing in
the immediately preceding Due Period. In the event that any Additional Seller
shall transfer Receivables in Additional Accounts to the Trust, Greenwood on
behalf of the Holder of the Seller Certificate shall cause the Servicer with
respect to such Additional Accounts to make the covenant set forth above with
respect to such Additional Accounts.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 15. TERMINATION. This Agreement shall terminate on the
date on which the Series terminates in accordance with the provisions of the
Pooling and Servicing Agreement and the Series Supplement; provided, however,
that this Agreement may be terminated by the Master Servicer at any time,
without penalty, provided that such termination does not cause the ratings of
the Investor Certificates to be lowered or withdrawn by either of the Rating
Agencies; and provided, further, that all amounts owing to the Credit
Enhancement Provider hereunder with respect to principal and interest on the
Loan shall have been paid in full. Notwithstanding the foregoing, the Credit
Enhancement Provider shall have no rights under this Agreement, and shall not be
entitled to any payments hereunder, if and for so long as there is no Loan
outstanding hereunder and no accrued but unpaid interest.
SECTION 16. NOTICES. Unless specifically indicated otherwise
herein, all notices and other communications provided for hereunder shall be in
writing and, if to the Credit Enhancement Provider, addressed to:
Discover Receivables Financing Corporation
12 Read's Way
New Castle, Delaware 19720
Attn: Executive Vice President and Secretary
Phone: (302) 323-7167
Fax: (302) 323-7393
10
<PAGE> 14
or, if to the Seller or the Master Servicer, addressed to:
Greenwood Trust Company
12 Read's Way
New Castle, Delaware 19720
Attn: John J. Coane
Phone: (302) 323-7184
Fax: (302) 323-7393
or, if to the Trustee, addressed to:
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive - Suite 3000
Chicago, Illinois 60601
Attn: Martha Sanders
Phone: (312) 228-9452
Fax: (312) 228-9459
or as to any party at such other address as shall be designated by such party in
a written notice to the other parties.
Any notice or other communication shall be sufficiently given
and shall be deemed given when delivered to the addressee in writing or when
transmitted by telecopier, receipt of which by the addressee is confirmed by
telephone.
SECTION 17. BANKRUPTCY. To the extent that the Trustee, the
Master Servicer or Greenwood on behalf of the Holder of the Seller Certificate
makes a payment to the Credit Enhancement Provider or the Credit Enhancement
Provider receives any payment or proceeds with respect to the Loan, which
payment or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any state or federal insolvency or
bankruptcy law then, to the extent such payment or proceeds are set aside, the
amount or part thereof intended to be satisfied shall be revived and continue in
full force and effect, as if such payment or proceeds had not been received by
the Credit Enhancement Provider.
SECTION 18. LIMITATION OF REMEDIES. The Credit Enhancement
Provider shall not have the right to cause the Loan or any portion thereof to
become due and payable prior to the due date for the Loan as set forth herein.
SECTION 19. NO PETITION.
(a) The Credit Enhancement Provider, by entering into this
Agreement, hereby covenants and agrees that it will not at any time institute,
join in or otherwise cause the institution of, against any Seller, the Master
Servicer or the Trust, any bankruptcy,
11
<PAGE> 15
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state or similar law prior to a
year and a day after the final payment of all investor certificates issued by
any trust with respect to which Greenwood is the seller.
(b) Each of Greenwood and the Trustee, by entering into this
Agreement, hereby covenants and agrees that it will not at any time institute,
join in or otherwise cause the institution of, against the Credit Enhancement
Provider, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state or
similar law prior to a year and a day after the final payment of all investor
certificates issued by any trust with respect to which Greenwood is the seller.
SECTION 20. AMENDMENTS. This Agreement shall not be amended or
modified without the written consent of each of the parties hereto. No amendment
hereto shall become effective without prior confirmation from the Rating
Agencies that such amendment will not cause a lowering or withdrawal of the then
current ratings of the Investor Certificates of the Series. The Master Servicer
shall provide a copy of any amendment hereto to the Rating Agencies.
SECTION 21. SUCCESSORS AND ASSIGNS; REPLACEMENT OF CREDIT
ENHANCEMENT PROVIDER.
(a) This Agreement shall be binding upon, and inure to the
benefit of, the Trustee, the Sellers, the Servicers, the Master Servicer and the
Credit Enhancement Provider and their respective successors and permitted
assigns.
(b) No Seller shall assign its interests hereunder and under
the Pooling and Servicing Agreement or the Series Supplement, or any portion of
such interests, except by an assignment that transfers each such interest to the
same assignee.
(c) In the event that a successor trustee is appointed
pursuant to the provisions of the Pooling and Servicing Agreement to replace the
then current Trustee, such successor trustee, from and after its appointment,
shall be the Trustee for purposes of this Agreement and shall assume all of the
rights and obligations of the Trustee hereunder.
(d) The Credit Enhancement Provider may not assign any of its
rights or obligations hereunder without the prior written consent of Greenwood
on behalf of the Holder of the Seller Certificate and without prior written
confirmation from the Rating Agencies that such assignment will not result in
the lowering or withdrawal of the rating of any Class of any Series then
outstanding.
SECTION 22. PARTICIPATION. Any successor Credit Enhancement
Provider that is not a special-purpose corporation that is an affiliate of
Greenwood may, without the consent of the Trustee, the Trust, any Seller, the
Master Servicer, any Servicer or any Certificateholder of
12
<PAGE> 16
the Series, sell participations to one or more banks or other entities in all or
a portion of its rights under this Agreement (including all or a portion of the
Loan); provided, however, that (a) the Credit Enhancement Provider's obligations
under this Agreement shall remain unchanged, (b) the Credit Enhancement Provider
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (c) the Trustee, the Trust, the Sellers and the Master
Servicer shall continue to deal solely and directly with the Credit Enhancement
Provider in connection with the Credit Enhancement Provider's rights and
obligations under this Agreement, and (d) the Credit Enhancement Provider shall
retain the sole right to enforce the obligations of the Trustee, the Trust, the
Sellers or the Master Servicer under this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement.
13
<PAGE> 17
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be duly executed and delivered by the undersigned thereunto duly
authorized as of the day and year first above written.
DISCOVER RECEIVABLES FINANCING
CORPORATION,
as Credit Enhancement Provider
By /s/ Richard W. York
--------------------------------------
Name: Richard W. York
Title: Vice President
GREENWOOD TRUST COMPANY,
as Master Servicer, Servicer and Seller
By /s/ John J. Coane
--------------------------------------
Name: John J. Coane
Title: Vice President, Director of
Accounting and Treasurer
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By /s/ Martha Sanders
--------------------------------------
Name: Martha Sanders
Title: Vice President
14
<PAGE> 1
EXHIBIT 4.3
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
LETTER OF REPRESENTATIONS*
[To be Completed by Issuer and Agent]
Greenwood Trust Company on behalf of
Discover Card Master Trust I, Series 1998-4
-------------------------------------------
[Name of Issuer]
U.S. Bank National Association
------------------------------
[Name of Agent]
April 9, 1998
-------------
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: 5.75% Class A Credit Card Pass-Through Certificates
and 5.90% Class B Credit Card Pass-Through
Certificates, Discover Card Master Trust I, Series
1998-4
----------------------------------------------------
[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"). Morgan Stanley & Co.
Incorporated, BancAmerica Robertson Stephens, Chase Securities Inc. and First
Union Capital Markets Corp. is distributing the Securities through The
["Underwriter"] 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 April 9, 1998,
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
2
<PAGE> 3
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
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
8. The interest accrual period is payment date to
payment date.
3
<PAGE> 4
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 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 #066-027608
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
4
<PAGE> 5
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.
GREENWOOD TRUST COMPANY
----------------------------
(Issuer)
B. Schedule B contains statements that DTC
believes accurately describe DTC, the method
of effecting book-entry transfers of securities
distributed through DTC, and certain
related matters
By: /s/ John J. Coane
--------------------------------
(Authorized Officer's Signature)
U.S. BANK NATIONAL ASSOCIATION
-----------------------------------
(Agent)
Received and Accepted: By: /s/ Martha L. Sanders
--------------------------------
(Authorized Officer's Signature)
THE DEPOSITORY TRUST COMPANY
By: /s/ Authorized Signatory
-------------------------
cc: Underwriter
Underwriter's Counsel
6
<PAGE> 7
A D D E N D U M
to
Letter of Representations dated April 9, 1998
Discover Card Master Trust I, Series 1998-4
General: For purposes of this Letter of Representations:
"Securities" shall mean the $500,000,000 aggregate
principal amount of 5.75% Class A Credit Card
Pass-Through Certificates and the $26,316,000
aggregate principal amount of 5.90% Class B Credit
Card Pass-Through Certificates issued by Discover
Card Master Trust I, Series 1998-4 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 1998-4; 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
April 9, 1998, 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 1998-4
$500,000,000 5.75% CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
AND $26,316,000 5.90% CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES
<TABLE>
<CAPTION>
Principal Amount Maturity Date* Interest Rate
---------------- ------------- -------------
<S> <C> <C> <C>
CLASS A
CERTIFICATES
CUSIP Number
------------
25466KBT5
Certificate Number:
------------------
1 $200,000,000 October 16, 2003 5.75%
2 $200,000,000 October 16, 2003 5.75%
3 $100,000,000 October 16, 2003 5.75%
CLASS B
CERTIFICATES
CUSIP Number
------------
25466KBU2
Certificate Number:
------------------
1 $26,316,000 October 16, 2003 5.90%
</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 nay 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) for 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 account 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
As of March 9, 1998, DTC's Reorganization Department relocated and prior to
that, DTC's Dividend Department relocated to the 55 Water Street location.
Following are the new addresses and related telephone and facsimile numbers
referenced in the Letter of Representations.
THE FOLLOWING CHANGES RELATE TO 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 (212) 709-6870 is now (212) 855-5202.
THE FOLLOWING CHANGES RELATED TO 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 (212) 709-6884 is now (212) 855-5280.
The new address is Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
55 Water Street 50th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 7 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Number Current Telecopier Number
(212) 709-1723 (212) 855-4555
The new address is Manager; Announcements
Dividend Department
The Depository Trust Company
55 Water Street 25th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO 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 (212) 709-1270 is now (212) 855-4550
<PAGE> 12
The new address for the Paragraph 9 is the same as that listed above,
referenced in Paragraph 7.
THE FOLLOWING CHANGES RELATED 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 can be provided by automated means or
written format.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 11 OF THE LETTER OR REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to 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 CHANGES RELATE TO PARAGRAPH 12 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to 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 CHANGES RELATE TO PARAGRAPH 13 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to 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
