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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) July 2, 1996
PEOPLE'S BANK
(Exact Name of Registrant as Specified in its Charter)
Connecticut
(State or Other Jurisdiction of Incorporation)
33-99506 06-1213065
(Commission File Number) (I.R.S. Employer Identification No.)
850 Main Street, Bridgeport, Connecticut 06604
(Address of Principal Executive Offices) (Zip Code)
(203) 338-7171
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
The Registrant is filing final forms of the exhibits listed in Item
7(c) below.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
No. Document Description
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1 Underwriting Agreement.
4.1 Series 1996-1 Supplement to the Pooling and Servicing Agreement.
4.2 Interest Rate Caps.
20 Monthly Servicer's Certificate.
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 hereunto duly authorized.
PEOPLE'S BANK
Dated: July 15, 1996 By:/s/ William T. Kosturko
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Name: William T. Kosturko
Title: Executive Vice President
INDEX TO EXHIBITS
Exhibit Sequential
No. Document Description Page No.
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1 Underwriting Agreement............................. ___
4.1 Series 1996-1 Supplement to the Pooling and
Servicing Agreement................................ ___
4.2 Interest Rate Caps................................. ___
20 Monthly Servicer's Certificate..................... ___
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$379,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1996-1
$21,000,000 Floating Rate Class B
Asset Backed Certificates, Series 1996-1
Underwriting Agreement
GOLDMAN, SACHS & CO.,
as Representatives of
the Class A Underwriters and
as Class B Underwriters
85 Broad Street
New York, New York 10004
June 25, 1996
Dear Sirs:
People's Structured Finance Corp., a Connecticut corporation
("PSFC") and a wholly owned subsidiary of People's Bank, a Connecticut
stock savings bank (the "Bank"), proposes, subject to the terms and
conditions stated herein, to sell to the underwriters listed on Schedule A
hereto (the "Underwriters"), an aggregate of $379,000,000 principal amount
of People's Bank Credit Card Master Trust Floating Rate Class A Asset
Backed Certificates, Series 1996-1 (the "Class A Certificates") and
$21,000,000 Floating Rate Class B Asset Backed Certificates, Series 1996-1
(the "Class B Certificates" and, together with Class A Certificates, the
"Certificates"). We refer to you herein in your capacities as Underwriters
and as representatives of the Underwriters as the "Representatives".
Each Certificate will represent an undivided interest in the
People's Bank Credit Card Master Trust (the "Trust") established pursuant
to a Pooling and Servicing Agreement between the Bank, as Seller and as
Servicer of the credit card receivables transferred to the Trust, and
Bankers Trust Company, as trustee (the "Trustee"), dated as of June 1,
1993, as amended by the Amendment thereto, dated as of December 15, 1995,
(the "P&S Agreement"). Additional credit card receivables have been
transferred to the Trust subsequent to the date of the P&S Agreement
pursuant to Assignment No. 1 between the Bank and the Trustee, dated as of
October 4, 1994 ("Assignment No. 1"), Assignment No. 2 between the Bank and
the Trustee, dated as of July 14, 1995 ("Assignment No. 2") and Assignment
No. 3 between the Bank and the Trustee, dated as of May 1, 1996
("Assignment No. 3"). The Bank assigned to PSFC all of the Bank's right,
title and interest in, to and under the Exchangeable Seller Certificate
pursuant to the Assignment and Assumption Agreement (the "Assignment"),
dated as of December 15, 1995. The Certificates will be issued pursuant to
the P&S Agreement and the Series 1996-1 Supplement between People's Bank,
as Transferor and Servicer, and Bankers Trust Company as Trustee, dated as
of July 2, 1996 (the "Series Supplement" and, together with the P&S
Agreement, Assignment No. 1, Assignment No. 2 and Assignment No. 3, the
"Pooling and Servicing Agreement"). The property of the Trust will
include, among other things, receivables (the "Receivables") generated from
time to time in a portfolio of MasterCard and VISA credit card accounts,
all monies due or to become due in payment of the Receivables, Recoveries
and Interchange allocable to the Trust, the benefits of the funds and
securities on deposit in a Cash Collateral Account with respect to the
Certificates and an interest rate cap agreement for the exclusive benefit
of the Class A Certificateholders and an interest rate cap agreement for
the exclusive benefit of the Class B Certificateholders. To the extent not
defined herein, capitalized terms used herein have the meanings assigned in
the Pooling and Servicing Agreement.
1. PSFC and the Bank,as applicable, each represents and
warrants to, and agrees with, the Underwriters that:
(a) A registration statement in respect of the Certificates has
been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered to the
Underwriters, has been declared effective by the Commission in such form;
no other document with respect to such registration statement has
heretofore been filed with the Commission and no stop order suspending
the effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or, to PSFC's or the
Bank's knowledge, as applicable, threatened by the Commission (any
preliminary prospectus included in such registration statement or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the
"Act"), being hereinafter called a "Preliminary Prospectus"; the various
parts of such registration statement, including all exhibits thereto and
including the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act
to be part of the registration statement at the time it was declared
effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, being hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to either PSFC or the Bank by the
Representatives expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein with respect to the Prospectus, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to either PSFC or the Bank by the
Representatives expressly for use therein;
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there has not been
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
management, financial position, stockholders' equity or results of
operations of either PSFC or the Bank and any of the Bank's subsidiaries,
on a consolidated basis, and (ii) neither PSFC nor the Bank or any of the
Bank's subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to PSFC or
the Bank and the Bank's subsidiaries, taken as a whole, that, in the case
of either such clause (i) or (ii), would reasonably be expected to
materially adversely affect the interests of the holders of the
Certificates, otherwise than as set forth or contemplated in the
Prospectus;
(e) The Bank has been duly incorporated and is validly existing
as a Connecticut stock savings bank in good standing under the laws of
the State of Connecticut, with all power, authority and legal right
necessary to own its properties and conduct its business as described in
the Prospectus, and to enter into and perform its obligations under the
Underwriting Agreement and the Pooling and Servicing Agreement, and had
at all relevant times, and now has, the power, authority and legal right
to acquire, own and sell the Receivables, and is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals with respect to the Bank in each jurisdiction in which failure
to qualify or to obtain such licenses or approvals would render any
Receivable unenforceable by the Bank or the Trust or would have a
material adverse effect on the Certificateholders, or any Enhancement
Provider;
(f) PSFC has been duly incorporated and is validly existing as
a Connecticut corporation in good standing under the laws of the State of
Connecticut, with all power, authority and legal right necessary to own
its properties and conduct its business as described in the Prospectus,
and to enter into and perform its obligations under the Underwriting
Agreement and had at all relevant times, and now has, the power,
authority and legal right to acquire, own and exchange the Exchangeable
Seller Certificate, and is duly qualified to do business and is in good
standing as a foreign corporation (or is exempt from such requirements),
and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such licenses or
approvals would have a material adverse effect on the Certificateholders
or any Enhancement Provider;
(g) The Certificates have been duly authorized and, when
executed, issued and delivered pursuant to the Pooling and Servicing
Agreement, duly authenticated by the Trustee and paid for by the
Underwriters in accordance with the terms of this Agreement, will have
been duly and validly executed, authenticated, issued and delivered and
will be entitled to the benefits provided by the Pooling and Servicing
Agreement; the Pooling and Servicing Agreement has been duly authorized
by the Bank and, when executed and delivered by the Bank and the Trustee,
will constitute a valid and binding agreement of the Bank, subject (x) to
the effect of any applicable bankruptcy, insolvency, reorganization,
moratoriums, and other similar laws affecting creditors' rights
generally, (y) to the effect of general principles of equity including
(without limitation) concepts of materiality, reasonableness, good faith
and fair dealing (regardless of whether considered in a proceeding in
equity or at law), and (z) to the further qualification that certain
remedial provisions in the Pooling and Servicing Agreement may be limited
or rendered ineffective by the applicable laws of the State of New York
or judicial decisions governing such provisions or holding their
enforcement to be unreasonable under the then existing circumstances (but
there exists in the Pooling and Servicing Agreement or pursuant to
applicable law legally adequate remedies for a realization of the
principal benefits purported to be provided thereby); the Certificates
and the Pooling and Servicing Agreement conform to the descriptions
thereof in the Prospectus in all material respects;
(h) the Assignment has been duly authorized by PSFC and the
Bank, as applicable, and constitutes a valid and binding agreement of
PSFC and the Bank, subject to the effect of (x) any applicable
bankruptcy, insolvency, reorganization, moratoriums, and other similar
laws affecting creditors' rights generally and (y) general principles of
equity including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law);
(i) The issuance and sale of the Certificates and the
compliance by PSFC and the Bank, as applicable, with all of the
provisions of the Certificates, the Pooling and Servicing Agreement, the
Assignment and this Agreement, as applicable, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation of any lien,
mortgage, pledge, charge, security interest or encumbrance (collectively,
"Liens"), other than as contemplated in or permitted by the Pooling and
Servicing Agreement or the Assignment, upon any property or assets of
PSFC or the Bank, as applicable, pursuant to, any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which PSFC, the Bank or any of the Bank's other
subsidiaries is a party or by which any of them is bound or to which any
of the property or assets of PSFC, the Bank or any of the Bank's other
subsidiaries is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of PSFC, or
of the Articles of Incorporation or By-laws of the Bank, as applicable,
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over PSFC, the Bank or
any of the Bank's other subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Certificates or the consummation by PSFC or the
Bank, as applicable, of the transactions contemplated by this Agreement,
the Assignment or the Pooling and Servicing Agreement, except the filing
of Uniform Commercial Code financing statements with respect to the
Receivables, the registration under the Act of the Certificates, and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Certificates by the
Underwriters;
(j) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which either PSFC or the
Bank, as applicable, is a party or of which any property of either PSFC
or the Bank is the subject which are reasonably probable of adverse
determination and which, if determined adversely to PSFC or the Bank, as
applicable, would have a material adverse effect on the financial
position, stockholders' equity or results of operations of PSFC or the
Bank or which could interfere with or adversely affect the consummation
of the transactions contemplated herein, or in the Pooling and Servicing
Agreement; and, to the best of PSFC's and the Bank's knowledge, as
applicable, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others except as set forth in
or contemplated by the Prospectus;
(k) Neither PSFC nor the Bank or any of the Bank's other
affiliates does business with the government of Cuba or with any person
or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes;
(l) KPMG Peat Marwick, which have reviewed the statistical data
included in the Registration Statement, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(m) At the Time of Delivery (as specified in Section 4 hereof),
the representations and warranties of the Seller and of the Servicer,
made in Sections 2.3 and 3.3, respectively, of the Pooling and Servicing
Agreement shall be true and correct; and the representations and
warranties of the Seller relating to the Receivables made in Section 2.4
of the Pooling and Servicing Agreement shall be true and correct;
provided, however, that the breach of any such representations and
warranties in Section 2.4 of the Pooling and Servicing Agreement shall
not be deemed to be a breach hereunder unless such breach materially
adversely affects the interests of the holders of either the Class A
Certificates or the Class B Certificates;
(n) At the time of execution and delivery of the Pooling and
Servicing Agreement, the Bank had good and marketable title to the
Receivables transferred to the Trustee pursuant thereto, free and clear
of any Liens (other than as contemplated in the Pooling and Servicing
Agreement or the Assignment), and will not have assigned to any Person
any of its right, title or interest in the Receivables or in such Pooling
and Servicing Agreement and PSFC will not have assigned to any Person any
of its right, title or interest in the Certificates being issued pursuant
to the Pooling and Servicing Agreement (other than, in each case, as
contemplated in the Pooling and Servicing Agreement); the Bank had at
such time the power and authority to transfer the Receivables to the
Trustee; PSFC has on the date hereof the power and authority to transfer
the Certificates to the Underwriters, and, upon execution and delivery to
the Trustee of the Series Supplement and execution, authentication and
delivery to the Underwriters of the Certificates, the Trustee will have
good and marketable title to or a perfected security interest in the
Receivables and the Underwriters will have good and marketable title to
the Certificates, in each case free and clear of any Liens (other than
Liens created by the Underwriters and other than as contemplated in the
Pooling and Servicing Agreement or the Assignment);
(o) Any taxes, fees and other governmental charges imposed upon
PSFC or the Bank or on the assets of the Trust in connection with the
execution, delivery and issuance by the Bank of this Agreement, the
Pooling and Servicing Agreement and the Certificates and which are due at
or prior to the Time of Delivery have been or will have been paid by PSFC
or the Bank, as applicable, at or prior to the Time of Delivery;
(p) The Receivables pledged by the Bank to the Trustee under
the Pooling and Servicing Agreement (including Receivables in Additional
Accounts added on May 1, 1996) have an aggregate outstanding balance
determined as of March 31, 1996 ("the Series Cut-Off Date"), in
accordance with the Pooling and Servicing Agreement of not less than
$1,798,186,706;
(q) The Trust is not an "investment company" or a company
"controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"); and
(r) Neither the Pooling and Servicing Agreement nor any
indenture is required to be qualified under the Trust Indenture Act of
1939.
2. Subject to the terms and conditions herein set forth, PSFC
agrees to sell and deliver to the Underwriters, and the Underwriters agree,
severally and not jointly, to purchase from PSFC the number and type of
Certificates set forth in Schedule A opposite the name of each such
Underwriter. The Class A Certificates being purchased by the Underwriters
hereunder are to be purchased at a purchase price equal to 99.710% of the
principal amount thereof. The Class B Certificates being purchased by the
Underwriters hereunder are to be purchased at a purchase price equal to
99.675% of the principal amount thereof.
3. Upon the authorization by PSFC of the release of the
Certificates, the Underwriters propose to offer the Certificates for sale
upon the terms and conditions set forth in the Prospectus.
4. The Certificates to be purchased by the Underwriters
hereunder, in definitive or book-entry form, and in such authorized
denominations and registered in such names as the Underwriters may request
upon at least forty-eight hours' prior notice to PSFC, shall be delivered
by or on behalf of PSFC to the Underwriters against payment by the
Underwriters or on behalf of the Underwriters of the purchase price
therefor, in immediately available funds, drawn to the order of PSFC, at
the office of Mayer, Brown & Platt, 1675 Broadway, New York, New York
10019, at 10:00 a.m. on July 2, 1996, or at such other place and time and
date as the Underwriters and PSFC may agree upon in writing, such time and
date being herein called the "Time of Delivery" for such Certificates.
Such Certificates will be made available for checking at least twenty-four
hours prior to the Time of Delivery at the office of Mayer Brown & Platt
described above.
5. PSFC and the Bank each agrees with the Underwriters:
(a) To advise the Underwriters promptly of any proposal to
amend or supplement the Registration Statement as filed, or the
Prospectus, and will not effect such amendment or supplement without the
consent of the Representatives, which consent shall not be unreasonably
delayed or withheld; to prepare and file the Prospectus in a form
approved by the Representatives and to file such Prospectus pursuant to
Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and delivery
of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to advise the Underwriters,
promptly after it receives notice thereof, of the time when the
Registration Statement, or any amendment thereto, has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriters with copies
thereof; to advise the Underwriters, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Certificates
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event
of the issuance of any stop order or any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Certificates for
offering and sale under the securities laws of such jurisdictions as the
Underwriters may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the
Certificates, provided that in connection therewith neither PSFC nor the
Bank shall be required to qualify as a foreign corporation or dealer in
securities, or to file a general consent to service of process, in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus
in such quantities as the Underwriters may from time to time reasonably
request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Certificates
and if at such time any event shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus in order to comply with
the Act, to notify the Underwriters and to prepare and file with the
Commission and furnish without charge to the Underwriters and to any
dealer in securities as many copies as the Underwriters may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case the Underwriters are required to deliver a
prospectus in connection with the sales of any of the Certificates at any
time nine months or more after the date of issue of the Prospectus, upon
the request of the Underwriters but at the expense of the Underwriters,
to prepare and deliver to the Underwriters as many copies as the
Underwriters may reasonably request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to the Certificateholders, as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c)), an earnings statement of the Trust (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Bank, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the earlier of (i) the termination of trading
restrictions on the Certificates, as notified to PSFC and the Bank by the
Representatives, and (ii) the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of any securities of PSFC or the
Bank or a trust formed by the Bank which mature more than one year after
the Time of Delivery and which are substantially similar to the
Certificates, without the prior written consent of the Representatives;
(f) So long as any Certificates are outstanding, to furnish to
the Underwriters copies of all reports or other written communications
(financial or other) furnished to holders of the Certificates, and
deliver to the Underwriters as soon as they are available, copies of any
reports and financial statements furnished to or filed by PSFC or the
Bank with the Commission, or any national securities exchange on which
the Certificates or any class of securities of the Bank are listed;
(g) So long as any Certificates are outstanding, to furnish to
the Underwriters copies of all such additional information concerning the
business and financial condition of the Trust as the Underwriters may
from time to time reasonably request; and
(h) To the extent, if any, that the rating provided with
respect to the Certificates by Standard & Poor's Ratings Services and
Moody's Investors Service, Inc. is conditional upon the furnishing of
documents or the taking of any other actions by PSFC or the Bank, PSFC or
the Bank, as applicable, shall furnish such documents and take any such
other actions.
6. PSFC and the Bank each covenants and agrees with the
Underwriters that together they will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the counsel and accountants of
PSFC and the Bank, as applicable, in connection with the registration of
the Certificates under the Act and all other expenses in connection with
the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this
Agreement, the Pooling and Servicing Agreement, the Blue Sky and Legal
Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Certificates; (iii) all
expenses in connection with the qualification of the Certificates for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky and legal investment surveys; (iv) any fees charged by
securities rating services for rating the Certificates; (v) any cost of
preparing the Certificates; (vi) the fees and expenses of the Trustee and
any agent of the Trustee and the fees and disbursements of counsel for the
Trustee in connection with the Pooling and Servicing Agreement, and the
Certificates; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, Section 8 and Section 11 hereof,
the Underwriters will pay all of its own costs and expenses, including the
fees of its counsel, transfer taxes on resale of any of the Certificates by
it, and any advertising expenses connected with any offers it may make.
7. The obligations of each of the Underwriters hereunder shall
be subject, in its discretion, to the condition that all representations
and warranties and other statements of each of PSFC and the Bank herein
are, at and as of the Time of Delivery, true and correct, the condition
that each of PSFC and the Bank shall have performed all of their respective
obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or, to the
knowledge of PSFC, the Bank or the Underwriters, threatened by the
Commission; and all requests for additional information on the part of
the Commission shall have been complied with to the reasonable
satisfaction of the Representatives;
(b) Since the respective dates as of which information is given
in the Prospectus, there shall not have been any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, business, management, financial position,
stockholders' equity or results of operations of either PSFC or the Bank
and its subsidiaries on a consolidated basis otherwise than as set forth
or contemplated in the Prospectus, the effect of which in the judgment of
the Underwriters makes it impracticable to proceed with the public
offering or the delivery of the Certificates on the terms and in the
manner contemplated in the Registration Statement;
(c) At the Time of Delivery, each of PSFC and the Bank shall
have furnished to the Underwriters certificates of an executive officer
of PSFC or the Bank, as applicable, as to the accuracy of the
representations and warranties of PSFC or the Bank, as applicable, herein
at and as of the Time of Delivery, as to the performance by PSFC or the
Bank of all of their respective obligations hereunder to be performed at
or prior to such Time of Delivery, as to the matters set forth in
subsections (a) through (c) of this Section and as to such other matters
as the Underwriters may reasonably request;
(d) Skadden, Arps, Slate, Meagher & Flom, counsel for the
Underwriters, shall have furnished to the Underwriters such opinion or
opinions, dated the Time of Delivery, with respect to the validity of the
Pooling and Servicing Agreement, the Certificates, the Registration
Statement, the Prospectus, and other related matters as the Underwriters
may reasonably request, and such counsel shall have received from PSFC or
the Bank and their counsel such papers and information as they may
reasonably request from PSFC or the Bank and their counsel to enable them
to pass upon such matters;
(e) Mayer, Brown & Platt, counsel for PSFC and the Bank, shall
have furnished to the Underwriters their written opinion, addressed to
the Underwriters and dated the Time of Delivery, in form and substance
satisfactory to the Underwriters and their counsel, substantially to the
effect that:
(i) The Underwriting Agreement has been duly
authorized, executed and delivered by each of PSFC and the
Bank;
(ii) The Certificates have been duly authorized,
executed and delivered by the Bank and, when duly authenticated
in accordance with the terms of the Pooling and Servicing
Agreement and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, will be
validly issued and entitled to the benefits provided by the
Pooling and Servicing Agreement;
(iii) The Pooling and Servicing Agreement has been
duly authorized, executed and delivered by the Bank and
constitutes the legal, valid and binding agreement of the Bank
enforceable against the Bank in accordance with its terms,
subject (x) to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws
affecting creditors' rights generally, (y) to the effect of
general principles of equity including (without limitation)
concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether considered in a proceeding in
equity or at law), and (z) with respect to the Pooling and
Servicing Agreement, to the further qualification that certain
remedial provisions in the Pooling and Servicing Agreement may
be limited or rendered ineffective by the applicable laws of the
State of New York or judicial decisions governing such
provisions or holding their enforcement to be unreasonable under
the then existing circumstances (but, in such counsel's opinion,
there exists in the Pooling and Servicing Agreement or pursuant
to applicable law legally adequate remedies for a realization of
the principal benefits purported to be provided thereby);
(iv) The Assignment has been duly authorized,
executed and delivered by each of PSFC and the Bank and
constitutes the legal, valid and binding agreement of each of
PSFC and the Bank enforceable against PSFC and the Bank in
accordance with its terms, subject (x) to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium,
and other similar laws affecting creditors' rights generally and
(y) to the effect of general principles of equity including
(without limitation) concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law);
(v) The Pooling and Servicing Agreement need not be
qualified under the Trust Indenture Act of 1939, as amended; and
the Trust is not now, and immediately following the sale of the
Certificates pursuant to the Underwriting Agreement will not be,
required to register under the 1940 Act;
(vi) Such counsel has participated in the
preparation of the Registration Statement and Prospectus. From
time to time, such counsel has had discussions with the officers
and employees of PSFC and the Bank, the independent accountants
of PSFC and the Bank, and employees and representatives of the
Underwriters concerning the information contained in the
Registration Statement and Prospectus. Based thereupon such
counsel is of the opinion that the Registration Statement and
the Prospectus (except for the operating statistics, financial
statements, financial schedules and other financial and
operating data included therein, as to which it expresses no
view) comply as to form with the Act and the rules and
regulations thereunder;
(vii) The statements in the Prospectus under
"Certain Legal Aspects of the Receivables," insofar as such
statements constitute a summary of the legal matters, documents
or proceedings referred to therein, have been reviewed by such
counsel and are correct in all material respects. Furthermore,
insofar as the statements contained in the Registration
Statement purport to summarize certain provisions of the
Certificates and the Pooling and Servicing Agreement, such
statements present summaries of such provisions that are
accurate in all material respects;
(viii) The Registration Statement has become
effective under the Act, and the Prospectus has been filed with
the Commission pursuant to Rule 424(b) thereunder in the manner
and within the time period required by Rule 424(b). To the best
of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceedings for that purpose are pending or threatened by the
Commission. Such counsel does not know of any contracts or
documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement that are not described and filed
as required;
(ix) Such counsel has not independently verified and
is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness (except as set forth in
paragraph (vi) above and under the headings "Prospectus
Summary--Tax Status," "Prospectus Summary--ERISA
Considerations," "Certain Federal Income Tax Consequences" and
"Certain Employee Benefit Plan Considerations") of the
information contained in the Registration Statement and
Prospectus. Based upon the participation and discussions
described above, no facts have come to such counsel's attention
that cause it to believe that the Registration Statement, as of
its effective date (except for the financial statements,
financial schedules and other financial data included therein as
to all of which such counsel expresses no view), contains any
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading, or that the Prospectus,
as of its date and as of the Closing Date (except for the
financial statements, financial schedules, and other financial
data included therein as to which such counsel expresses no
view) contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
and
(x) The Receivables are accounts or general
intangibles as defined in the Uniform Commercial Code.
In rendering such opinion, such counsel shall be entitled to rely as to
matters of fact upon such certificates or other assurances of public
officials and such certificates of one or more officers of PSFC, the Bank
and/or the Bank's other subsidiaries or the legal opinion of the general
counsel of PSFC and/or the Bank as such counsel shall reasonably deem
necessary.
(f) Mayer, Brown & Platt, counsel for PSFC and the Bank, shall
have furnished to the Underwriters their opinion or opinions, dated the
Time of Delivery and satisfactory in form and substance to the
Underwriters and its counsel, with respect to certain matters relating to
the transfer of the Receivables to the Trust, and the Financial
Institutions Reform, Recovery and Enforcement Act with respect to the
effect of receivership of the Bank and with respect to other related
matters in a form previously approved by the Underwriters and its
counsel;
(g) Mayer, Brown & Platt, special tax counsel for the Bank,
shall have furnished to the Underwriters their opinion or opinions, dated
the Time of Delivery and satisfactory in form and substance to the
Underwriters, to the effect that for federal and New York State income
tax purposes the Certificates will be characterized as indebtedness that
is secured by the Receivables, and that the Trust will be treated as a
mere security device for Federal and New York State income tax purposes,
and the statements set forth in the Prospectus under the headings
"Prospectus Summary -- Tax Status," "Prospectus Summary -- ERISA
Considerations," "Certain Federal Income Tax Consequences" and "Certain
Employee Benefit Plan Considerations" are a fair and accurate summary of
the material tax consequences of the issuance and holding of the
Certificates;
(h) Pullman & Comley, LLC, special Connecticut tax counsel for
the Bank, shall have furnished to the Underwriters their opinion, dated
the Time of Delivery and satisfactory in form and substance to the
Underwriters and its counsel, to the effect that for Connecticut state
income tax purposes the Certificates will be characterized as
indebtedness that is secured by the Receivables and that the Trust will
be treated as a mere security device for Connecticut state tax purposes;
(i) Pullman & Comley, LLC, special Connecticut counsel for PSFC
and the Bank, shall have furnished to the Underwriters their opinion or
opinions, dated the Time of Delivery and satisfactory in form and
substance to the Underwriter and its counsel, with respect to the
perfection of the Trust's interest in the Receivables and with respect to
the applicability of certain provisions of Connecticut state banking law
with respect to the effect of receivership of the Bank and with respect
to other related matters in a form previously approved by the
Underwriters and its counsel;
(j) William T. Kosturko, general counsel of each of PSFC and
the Bank, shall have furnished to the Underwriters his written opinion,
addressed to the Underwriters and dated the Time of Delivery, in form and
substance satisfactory to the Underwriters and their counsel,
substantially to the effect that:
(i) The Bank has been duly incorporated and is
validly existing as a Connecticut stock savings bank in good
standing under the laws of the State of Connecticut, with power,
authority and legal right necessary to own its properties and to
conduct its business as described in the Prospectus and to enter
into and perform its obligations under the Underwriting
Agreement, and the Pooling and Servicing Agreement and had at
all relevant times, and now has, the power, authority and legal
right to acquire, own and sell the Receivables, and is duly
qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has
obtained all necessary licenses and approvals with respect to
the Bank in each jurisdiction in which failure to qualify or to
obtain such licenses or approvals would render any retail
installment sale contract or any Receivable unenforceable by the
Bank or the Trust or would have a material adverse effect on the
Certificateholders, or any Enhancement Provider;
(ii) PSFC has been duly incorporated and is validly
existing as a Connecticut corporation in good standing under the
laws of the State of Connecticut, with all power, authority and
legal right necessary to own its properties and conduct its
business as described in the Prospectus, and to enter into and
perform its obligations under the Underwriting Agreement and had
at all relevant times, and now has, the power, authority and
legal right to acquire, own and exchange the Exchangeable Seller
Certificate, and is duly qualified to do business and is in good
standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to qualify or to
obtain such licenses or approvals would have a material adverse
effect on the Certificateholders or any Enhancement Provider;
(iii) The Underwriting Agreement, the Pooling and
Servicing Agreement, the Certificates and the Assignment have
been duly authorized, executed and delivered by the Bank;
(iv) The Underwriting Agreement and the Assignment
have been duly authorized, executed and delivered by PSFC;
(v) No consent, approval, authorization or order of
any governmental agency or body is required for (A) the
performance by the Bank of its obligations under the Pooling and
Servicing Agreement, or (B) the issuance and sale of the
Certificates, except such as have been obtained under the Act
and as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the
Certificates by the Underwriters;
(vi) Neither the execution and delivery of the
Underwriting Agreement and the Assignment by PSFC and the Bank,
or the Certificates or the Pooling and Servicing Agreement by
the Bank, nor the performance by PSFC or the Bank of the
transactions therein contemplated will result in any material
violation of any statute or regulation or any order or decree
known to such counsel of any court or governmental authority
binding upon PSFC or the Bank, as applicable, or their
respective property, or conflict with, or result in a breach or
violation of any term or provision of, or result in a default
under any of the terms and provisions of, the Certificate of
Incorporation of PSFC, the Articles of Incorporation of the
Bank, the By-laws of PSFC or the Bank, as applicable, or any
material indenture, loan agreement or other material agreement
of PSFC or the Bank known to such counsel by which PSFC or the
Bank is bound, or result in a violation, or contravene the
terms, of any statute or regulation or, to the knowledge of such
counsel, order applicable to PSFC or the Bank of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over PSFC or the Bank, except such counsel
need express no opinion as to any statute, order or regulation
the violation of which would not have any material adverse
effect on PSFC or the Bank or their respective activities or to
which PSFC or the Bank may be subject as a result of the legal
or regulatory status of the addressees of the opinion or as a
result of such Persons' involvement in the transactions
contemplated by the Underwriting Agreement, or the Pooling and
Servicing Agreement;
(vii) There are no proceedings or investigations
pending or, to the best knowledge of such counsel, threatened
against PSFC or the Bank, before any governmental authority (i)
asserting the invalidity of the Underwriting Agreement, the
Pooling and Servicing Agreement, the Certificates or the
Assignment, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by the Underwriting Agreement, the Pooling and
Servicing Agreement, the Certificates or the Assignment, (iii)
seeking any determination or ruling that would materially and
adversely affect the performance by PSFC or the Bank of their
respective obligations under the Underwriting Agreement, or the
Pooling and Servicing Agreement, (iv) seeking any determination
or ruling that would materially and adversely affect the
validity or enforceability of the Underwriting Agreement, the
Pooling and Servicing Agreement, the Certificates or the
Assignment, or (v) seeking to assert any tax liability against
the Trust under the United States Federal, New York State or
Connecticut State income tax systems;
(viii) The statements in the Prospectus concerning
PSFC and the Bank and conduct of their respective business have
been reviewed by such counsel and are correct in all material
respects; and
(ix) Such counsel has not independently verified and
is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness (except as set forth in
paragraph (viii) above) of the information contained in the
Registration Statement and Prospectus. Based upon the
participation and discussions described in subsection 7(e)(vi)
above, no facts have come to such counsel's attention that cause
him to believe that the Registration Statement, as of its
effective date (except for the financial statements, financial
schedules and other financial data included therein as to all of
which such counsel expresses no view), contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus, as of
its date and as of the Closing Date (except for the financial
statements, financial schedules, and other financial data
included therein as to which such counsel expresses no view)
contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(k) On the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also at the Time of Delivery, KPMG Peat
Marwick shall have furnished to the Underwriters letters, dated the
respective dates of delivery thereof, in form and substance satisfactory
to the Underwriters, containing statements and information of the type
customarily included in accountants' "comfort letters" and "specified
procedures letters" to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus;
(l) At the Time of Delivery, the Underwriters shall have
received an opinion of Seward & Kissel, counsel to the Trustee, dated the
Time of Delivery, and satisfactory in form and substance to the
Underwriters and their counsel, to the effect that:
(i) the Trustee is a banking corporation duly
incorporated and validly existing under the laws of the State of
New York;
(ii) the Trustee has full power and authority to
execute and deliver, and to perform its obligations under the
Pooling and Servicing Agreement and to carry out the
transactions contemplated by the Pooling and Servicing
Agreement;
(iii) each of the P&S Agreement, Assignment No. 1,
Assignment No. 2, Assignment No.3, the Amendment and the Series
Supplement has been duly authorized, executed and delivered by
the Trustee;
(iv) assuming the due execution and delivery by the
Bank of the Pooling and Servicing Agreement and that the Pooling
and Servicing Agreement is the legal, valid and binding
obligation of the Bank, the Pooling and Servicing Agreement
constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its
terms, except as the enforceability thereof may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium,
liquidation and other similar laws affecting the enforceability
of creditors' rights generally, and general principles of equity
(regardless of whether the enforcement of such remedies is
considered in a proceeding at law or in equity) as well as
concepts of reasonableness, good faith and fair dealing;
(v) the Certificates have been duly authenticated by
the Trustee pursuant to the Pooling and Servicing Agreement;
(vi) no approval, authorization or other action by
or filing with, any governmental authority of the United States
of America or the State of New York having jurisdiction over the
banking or trust powers of the Trustee is required in connection
with the execution and delivery by the Trustee of the Pooling
and Servicing Agreement or the performance by the Trustee
thereunder; and
(vii) the execution and delivery of the Pooling and
Servicing Agreement and the Assignment and the performance by
the Trustee of their respective terms do not conflict with or
result in a violation of (A) any United States of America or
State of New York law or regulation governing the banking or
trust powers of the Trustee or (B) the Articles of Incorporation
or By-laws of the Trustee;
(m) At the Time of Delivery, the Underwriters shall have
received an opinion of Simpson Thacher & Bartlett, counsel to Swiss Bank
Corporation (the "Bank"), addressed to the Underwriters, dated the
Closing Date, satisfactory to the Underwriters and their counsel and
substantially to the effect that:
(i) The Bank's New York branch (the "Cash Collateral
Depositor") is licensed by the Superintendent of Banks of the
State of New York and qualified to do business as a New York
branch of the Bank in accordance with the provisions of Article
V of the Banking Law of the State of New York.
(ii) The Cash Collateral Depositor has the power and
authority under the banking laws of the State of New York to
enter into the Loan Agreement and to make the loan provided for
therein.
(iii) The Loan Agreement constitutes a valid and legally
binding obligation of the Bank enforceable against the Cash
Collateral Depositor in accordance with its terms, subject to
the effects of (w) bankruptcy, insolvency, fraudulent
conveyance, liquidation, receivership, conservatorship,
reorganization, moratorium or other similar laws affecting
creditors' rights generally, (x) general equitable principles
(whether considered in a proceeding in equity or at law), (y) an
implied covenant of good faith and fair dealing and (z) the
possible judicial application of foreign laws or foreign
governmental action affecting creditors' rights.
(n) At the Time of Delivery, the Underwriters shall have
received an opinion of foreign counsel to the Bank in Basel-City,
Switzerland, addressed to the Underwriters, dated the Closing Date,
satisfactory to the Underwriters and their counsel and substantially to
the effect that:
(i) The Bank is a banking corporation duly organized and
validly existing under the laws of Switzerland and has the
corporate power under Swiss law to execute, deliver and perform
its obligations under the Loan Agreement.
(ii) The Loan Agreement has been duly authorized by the
Bank and, when duly executed and delivered by the Bank acting
through the Cash Collateral Depositor, will constitute the
legal, valid and binding obligation of the Bank enforceable
against the Bank through the Cash Collateral Depositor in
accordance with its terms.
(iii) The Loan Agreement is enforceable in accordance with
its terms against the Bank's head office in Switzerland if the
Cash Collateral Depositor defaults in its obligations under the
Loan Agreement or the Bank ceases to have a presence in The City
of New York.
(iv) The choice of the law of the State of New York to
govern the Loan Agreement is valid under the laws of Switzerland
and a court in Switzerland would uphold such choice of law in a
suit or other proceeding on the Loan Agreement brought in a
court of Switzerland, provided that the application of such law
to the case would not result in a contravention of Swiss public
policy.
(v) Any final and conclusive judgment for a fixed and
definite sum obtained against the Cash Collateral Depositor in
any competent United States Federal or State court having
jurisdiction over the Cash Collateral Depositor in respect of
any suit, action or proceeding against the branch for the
enforcement of the Loan Agreement will, upon request, be
declared valid and enforceable against the Bank by the competent
courts at the legal domicile of the Bank in Basel, Switzerland
without relitigation of the matters adjudicated, provided that
the contents of such final judgment are not contrary to, and the
judgment has not been rendered in violation of, Swiss public
policy and provided that due process was not denied and the same
subject matter was not first brought or earlier adjudicated in
another court.
(vi) The opinions expressed in paragraphs (ii) and (iii)
may be subject to the following qualification: Such enforcement
may be limited by bankruptcy, insolvency, liquidation,
reorganization, moratorium or other similar laws affecting the
rights of creditors against the Bank generally, from time to
time in effect, as the same would apply in the event of the
bankruptcy, insolvency, liquidation or reorganization of, or
other similar occurrence with respect to, the Bank or in the
event of a moratorium or similar occurrence affecting the Bank.
(vii) With respect to the opinions expressed in
paragraphs (iv) and (v) such counsel may state that: As a
general rule judgements of federal courts and courts of the
State of New York rendered in application of the law of the
State of New York are enforceable in Switzerland and, with the
exception of judgments awarding treble or punitive damages or
judgements rendered against a defendant domiciled outside the
United States upon whom service of process or pleadings was not
made by way of legal assistance by the local authorities, such
counsel knows of no reason why such judgements would be a
violation of Swiss public policy or the rules on due process of
law prevailing in Switzerland.
(viii) The obligations of the Bank under the Loan
Agreement rank pari passu with all deposits and other unsecured
obligations of the Bank except that the bankruptcy law of
Switzerland provides for a number of priorities, the most
material of which are (a) employment wage claims, (b) social
security claims and (c) the claims of "savings depositors" in
the amount of up to 10,000 Swiss Francs per depositor.
(ix) No license, consent or approval of, or registration
with, any governmental department, agency, commission or
regulatory authority of Switzerland is required in connection
with the execution or performance of the Loan Agreement by the
Bank acting through the Cash Collateral Depositor, to make the
Loan Agreement fully enforceable in accordance with its terms.
(o) The Underwriters shall have received evidence satisfactory
to the Underwriters that the Class A Certificates have received the
rating of AAA by Standard & Poor's Ratings Services and the rating of Aaa
by Moody's Investors Service, Inc., the Class B Certificates shall have
received the rating of A from Standard and Poor's Ratings Services and a
rating of A2 from Moody's Investor's Service, Inc. and such ratings shall
not have been rescinded or lowered, or at the Time of Delivery be under
surveillance or review;
(p) At the Time of Delivery, the Underwriters shall have
received one or more opinions of counsel to Swiss Bank Corporation,
London branch (the "Interest Rate Cap Provider"), addressed to you, in
form and substance satisfactory to the Underwriters and their counsel
regarding the due authorization, execution, delivery and enforceability
by or against the Interest Rate Cap Provider of the interest rate cap
agreements, the first to be dated June 19, 1996, between People's Bank
and the Interest Rate Cap Provider, and the second to be dated on or
prior to July 2, 1996, between the Trustee and the Interest Rate Cap
Provider (the interest rate cap agreements are collectively referred to
herein as the "Interest Rate Cap"), and such other matters as the
Underwriters or their counsel may reasonably request regarding the
Interest Rate Cap.
(q) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war if the effect of any
such event specified in this clause (iii) in the reasonable judgment of
the Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Certificates on the terms and
in the manner contemplated in the Prospectus;
(r) The Underwriters shall have received evidence satisfactory
to the Underwriters that, on or before the Time of Delivery, UCC-1
financing statements have been filed in the appropriate filing offices of
the State of Connecticut and such other jurisdictions as counsel to PSFC
and the Bank deems appropriate to reflect the interest of the Trustee in
the Receivables;
(s) At the Time of Delivery, the Underwriters shall have
received any and all opinions of counsel and other memoranda prepared by
any such counsel to PSFC and the Bank which have been addressed to or
supplied to each Rating Agency rating the Certificates relating to, among
other things, the security interest of the Trustee in the Receivables and
certain monies due or to become due with respect thereto, certain
bankruptcy issues and certain matters with respect to the Certificates.
Any such opinions or memoranda shall be addressed to the Underwriters or
shall indicate that the Underwriters may rely on such opinions as though
they were addressed to the Underwriters, and shall be dated the Time of
Delivery;
(t) No Pay Out Event or other event or condition, which event
or condition with notice, the passage of time or both would result in a
Pay Out Event, shall have occurred or shall exist with respect to the
Certificates at the Time of Delivery; and
(u) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto and
thereto shall be satisfactory in form and substance to the
Representatives and their counsel and the Underwriters and their counsel
shall have received such information, certificates or documents as the
Underwriters or their counsel may reasonably request.
8. (a) PSFC and the Bank will jointly and severally indemnify
and hold harmless the Underwriters against any losses, claims, damages or
liabilities, joint or several, to which the Underwriters may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the
Underwriters for any legal or other expenses reasonably incurred by the
Underwriters in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
neither PSFC nor the Bank shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
either PSFC or the Bank by the Underwriters for use therein; provided
further that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any Preliminary Prospectus, or in
the Prospectus, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any of the Underwriters to the extent
that such loss, claim, damage or liability of such Underwriters results
from the fact that such Underwriter sold Certificates to a person as to
whom it shall be established that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such
Securities to such person, a copy of the Prospectus or of the Prospectus
as then amended or supplemented, if such delivery of such Prospectus or
such amended or supplemented Prospectus was required under the Act, and
if the Underwriters consented to and approved any such amendment or
supplement to such Prospectus pursuant to Section 5(a) of this Agreement
and if either PSFC or the Bank had previously furnished copies thereof to
such Underwriters and the untrue statement or omission or alleged untrue
statement or omission contained in such Preliminary Prospectus or the
Prospectus was corrected in the Prospectus or the Prospectus as then
amended or supplemented.
(b) The Underwriters will indemnify and hold harmless PSFC and
the Bank against any losses, claims, damages or liabilities to which
either PSFC or the Bank may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
either PSFC or the Bank by the Underwriters expressly for use therein;
and will reimburse PSFC and the Bank for any legal or other expenses
reasonably incurred by PSFC or the Bank in connection with investigating
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation. Any indemnifying party against whom indemnity may be
sought shall not be liable to indemnify any indemnified party under this
Section 8 if any settlement of any such action is effected without such
indemnifying party's consent, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by PSFC and
the Bank on the one hand and the Underwriters on the other from the
offering of the Certificates. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion
as is appropriate to reflect not only the relative benefits but also the
relative fault of PSFC and the Bank on the one hand and the Underwriters
on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by PSFC and the Bank on the one hand and
the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by PSFC bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by PSFC
or the Bank on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. PSFC, the
Bank and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d),
the Underwriters shall not be required to contribute any amount in excess
of the amount by which the total price at which the Certificates
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which the Underwriters has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(e) The obligations of PSFC and the Bank under this Section 8
shall be in addition to any liability which PSFC and the Bank may
otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls the Underwriters within the meaning of
the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of PSFC or the Bank and to each person, if any,
who controls PSFC or the Bank within the meaning of the Act.
9. The respective indemnities, agreements, representations,
warranties and other statements of PSFC, the Bank and the Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriters or any controlling person
of the Underwriters, PSFC, or the Bank, or any officer or director or
controlling person of PSFC or the Bank, and shall survive delivery of and
payment for the Certificates.
Anything herein to the contrary notwithstanding, the indemnity agreement of
PSFC and the Bank in subsection (a) of Section 8 hereof, the
representations and warranties in subsections (b) and (c) of Section 1
hereof and any representation or warranty as to the accuracy of the
Registration Statement or the Prospectus contained in any certificate
furnished by PSFC or the Bank pursuant to Section 7 hereof, insofar as they
may constitute a basis for indemnification for liabilities (other than
payment by PSFC or the Bank of expenses incurred or paid in the successful
defense of any action, suit or proceeding) arising under the Act, shall not
extend to the extent of any interest therein of a controlling person or
partner of the Underwriters or a person who is a director, officer or
controlling person of PSFC or the Bank when the Registration Statement has
become effective, except in each case to the extent that an interest of
such character shall have been determined by a court of appropriate
jurisdiction as not against public policy as expressed in the Act. Unless
in the opinion of counsel for PSFC and the Bank the matter has been settled
by controlling precedent, PSFC or the Bank, as applicable, will, if a claim
for such indemnification is asserted, submit to a court of appropriate
jurisdiction the question whether such interest is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
10. (a) If any Underwriter shall default in its obligation to
purchase the Class A Certificates which it has agreed to purchase
hereunder, the non-defaulting Underwriters may in their discretion arrange
for themselves as they may agree or another party or other parties to
purchase such Class A Certificates on the terms contained herein. If
within thirty-six hours after such default by any Underwriter the
Underwriters do not arrange for the purchase of such Class A Certificates,
then PSFC shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to the
Underwriters to purchase such Class A Certificates on such terms. In the
event that, within the respective periods, the Underwriters notify PSFC
that the Underwriters have so arranged for the purchase of such Class A
Certificates or PSFC notifies the Underwriters that it has so arranged for
the purchase of such Certificates, the Underwriters or PSFC shall have the
right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and PSFC and the Bank agree to file promptly any amendments
to the Registration Statement or the Prospectus which in the opinion of the
Underwriters may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to this
Agreement with respect to such Class A Certificates.
(b) If, after giving effect to any arrangements for the
purchase of the Class A Certificates of a defaulting Underwriter by the
non-defaulting Underwriters and PSFC as provided in subsection (a) above,
the aggregate principal amount of such Class A Certificates which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of all the Class A Certificates, then PSFC shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of Class A
Certificates which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase a pro rata
portion of the Class A Certificates of the defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing
herein shall relieve the defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the
purchase of the Class A Certificates of a defaulting Underwriter by the
non-defaulting Underwriters and PSFC as provided in subsection (a) above,
the aggregate principal amount of Class A Certificates which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all
the Class A Certificates, or if PSFC shall not exercise the right described
in subsection (b) above to require each non-defaulting Underwriter to
purchase Securities of the defaulting Underwriter, then this Agreement
shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter, PSFC or the Bank, except for the expenses to
be borne by PSFC, the Bank and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof;
but nothing herein shall relieve the defaulting Underwriter from liability
for its default.
11. If either the Class A Certificates or the Class B
Certificates are not delivered by or on behalf of PSFC for any reason as
provided herein, PSFC or the Bank will reimburse the Underwriters for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Certificates, but
neither PSFC nor the Bank shall then have any further liability to the
Underwriters except as provided in Section 6 and Section 8 hereof.
12. All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent
by mail, telex or facsimile transmission to Goldman, Sachs & Co., at 85
Broad Street, New York, New York 10004, Attention: Registration
Department; if to PSFC shall be delivered or sent by mail, telex or
facsimile transmission to 850 Main Street, Bridgeport, Connecticut 06604,
Attention: William T. Kosturko, Esq; and if to the Bank shall be delivered
or sent by mail, telex or facsimile transmission to the address of the Bank
set forth in the Registration Statement, Attention: William T. Kosturko,
Esq. Any such statements, request notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, PSFC the Bank and, to the extent provided
in Section 8 and Section 9 hereof, the officers and directors of PSFC and
the Bank and each person who controls PSFC, the Bank or the Underwriters,
and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Certificates from the
Underwriters shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence in this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
17. Any covenant, provision, agreement or term of this
Agreement that is prohibited or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof.
18. Each Underwriter represents and warrants to, and agrees
with, PSFC and the Bank that (w) it has complied and shall comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Certificates in, from or otherwise
involving the United Kingdom; (x) it has only issued or passed on and shall
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Certificates to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 or who is a person to whom the
document may otherwise lawfully be issued or passed on; and (y) if that
Underwriter is an authorized person under the Financial Services Act 1986,
it has only promoted and shall only promote (as the term is defined in
Regulation 1.02 of the Financial Services (Promotion of Unregulated
Schemes) Regulations 1991) to any person in the United Kingdom the scheme
described in the Prospectus if that person is of a kind described either in
Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of
the Financial Services (Promotion of Unregulated Schemes) Regulations 1991.
If the foregoing is in accordance with your understanding,
please sign and return two counterparts hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement between the Underwriters and the Bank.
Very truly yours,
PEOPLE'S STRUCTURED FINANCE CORP.
By: _______________________
Name:
Title:
PEOPLE'S BANK
By: _______________________
Name:
Title:
Accepted as of the date hereof:
____________________________
GOLDMAN, SACHS & CO.,
as Representatives on
behalf of the Class A
Underwriters and as
Class B Underwriters
SCHEDULE A
----------
Aggregate
Principal
Amount of the Class A
Underwriter Certificates
- ----------- ----------------------
Goldman, Sachs & Co. $106,334,000
J.P. Morgan Securities Inc. 106,333,000
Salomon Brothers Inc 106,333,000
Lehman Brothers Inc. 20,000,000
Morgan Stanley & Co.
Incorporated 20,000,000
SBC Warburg $20,000,000
------------------
$379,000,000
Aggregate
Principal
Amount of the Class B
Underwriter Certificates
- ----------- ----------------------
Goldman, Sachs & Co. $21,000,000
-----------
$21,000,000
==============================================================================
PEOPLE'S BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1996-1 Certificateholders
---------------------------------
SERIES 1996-1 SUPPLEMENT
Dated as of July 1, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1993
-----------------------------------
$400,000,000
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$379,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1996-1
$21,000,000 Floating Rate Class B
Asset Backed Certificates, Series 1996-1
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. Designation......................................... 1
SECTION 2. Definitions......................................... 1
SECTION 2.1 Other Definitional Provisions....................... 20
SECTION 3. Conveyance of Interest in Cash
Collateral Account.................................. 20
SECTION 4. Minimum Seller Interest, Minimum
Aggregate Principal Receivables
and Removal of Accounts............................. 20
SECTION 5. Reassignment and Transfer Terms..................... 21
SECTION 6. Delivery and Payment for the Series 1996-1
Certificates........................................ 21
SECTION 7. Depositary; Form of Delivery of Series 1996-1
Certificates........................................ 21
SECTION 8. Enhancement......................................... 22
SECTION 9. Article IV of Agreement............................. 22
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Investor Certificateholders............... 22
SECTION 4.2B The Series 1996-1 Collection Subaccount............. 23
SECTION 4.3 Establishment of Series 1996-1 Investor Accounts.... 25
SECTION 4.4 Allocations......................................... 27
SECTION 4.5 Defaulted Accounts and Charge-Offs.................. 29
SECTION 4.6 Monthly Payments.................................... 30
SECTION 4.7 Payment of Certificate Interest..................... 41
SECTION 4.8 Payment of Certificate Principal.................... 41
SECTION 4.9 Establishment of the Cash Collateral
Account............................................. 43
SECTION 4.10 Transferor's or Servicer's Failure to Make a
Deposit or Payment.................................. 45
SECTION 4.11 Interest Rate Caps.................................. 48
SECTION 4.12 Reallocated Principal Collections................... 52
SECTION 4.13 Determination of LIBOR.............................. 53
SECTION 4.14 Discount Option..................................... 53
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.1 Distributions....................................... 55
SECTION 5.2 Monthly Certificateholders' Statement............... 56
SECTION 9.A Series 1996-1 Pay Out Events........................ 58
SECTION 10. Series 1996-1 Termination........................... 61
SECTION 11. Ratification and Reaffirmation of Pooling and
Servicing Agreement................................. 62
SECTION 12. Ratification and Reaffirmation of
Representations and Warranties...................... 62
SECTION 13. [RESERVED].......................................... 62
SECTION 14. No Subordination.................................... 62
SECTION 15. Repurchase of the Series 1996-1
Certificates........................................ 63
SECTION 16. Counterparts........................................ 64
SECTION 17. Additional Covenants of Transferor.................. 64
SECTION 18. Series 1996-1 Investor Exchange..................... 64
SECTION 19. Governing Law....................................... 65
SECTION 20. Notification to Luxembourg Stock
Exchange............................................ 65
EXHIBIT 1-A Form of Class A Investor Certificate
EXHIBIT 1-B Form of Class B Investor Certificate
EXHIBIT 2 Form of Monthly Certificateholders' Statement
EXHIBIT 3 DTC Letter of Representations
EXHIBIT 4 Form of Monthly Payment Instructions to Trustee
EXHIBIT 5 Form of Notice to Trustee Regarding Completion of Required
Deposits and Withdrawals
EXHIBIT 6 Form of Notification to Trustee Regarding Failure to Make
Payment
EXHIBIT 7 Form of Notification to Trustee Regarding Withdrawal From
the Cash Collateral Account
SERIES 1996-1 SUPPLEMENT, dated as of July 1, 1996 (this "Series
Supplement") by and between PEOPLE'S BANK, a Connecticut capital stock
savings bank, as Transferor and Servicer, and BANKERS TRUST COMPANY, a
banking corporation organized and existing under the laws of the State of
New York, not in its individual capacity but solely as Trustee under the
Pooling and Servicing Agreement dated as of June 1, 1993 between PEOPLE'S
BANK and the Trustee, as amended (the "Pooling and Servicing Agreement").
RECITALS:
1. Section 6.9(b) of the Pooling and Servicing Agreement provides,
among other things, that the Transferor and the Trustee may at any time and
from time to time enter into a supplement to the Pooling and Servicing
Agreement for the purpose of authorizing the delivery by the Trustee to the
Transferor for the execution and redelivery to the Trustee for
authentication of one or more Series of Certificates.
2. Pursuant to this Series Supplement, the Transferor and the
Trustee on behalf of the Trust shall create a new Series of Investor
Certificates and shall specify the principal terms thereof.
SECTION 1. Designation. The Certificates authorized hereby shall be
designated generally as the "Series 1996-1 Certificates." The Series
1996-1 Certificates shall be issued in two Classes, which shall be
designated generally as the Floating Rate Class A Asset Backed
Certificates, Series 1996-1 and the Floating Rate Class B Asset Backed
Certificates, Series 1996-1.
SECTION 2. Definitions. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Pooling and Servicing Agreement, the terms and provisions
of this Series Supplement shall govern. All capitalized terms not
otherwise defined herein are defined in the Pooling and Servicing
Agreement. All Article, Section or subsection references herein shall mean
Article, Section or subsections of the Pooling and Servicing Agreement
except as otherwise provided herein. Each capitalized term used or defined
herein shall relate only to the Series 1996-1 Certificates and to no other
Series of Certificates issued by the Trust.
"Agreement" shall mean the Pooling and Servicing Agreement as
supplemented by this Series Supplement.
"Amortization Period" shall mean the period following the Revolving
Period which shall be either the Controlled Amortization Period or the
Rapid Amortization Period.
"Available Cash Collateral Amount" shall mean, with respect to any
date of determination, the lesser of (i) the amount on deposit in the Cash
Collateral Account and (ii) the Required Cash Collateral Amount.
"Available Finance Charge Collections" shall mean, with respect to
any given Monthly Period, Collections of Finance Charge Receivables (other
than the proceeds of the sale of any Interest Rate Cap pursuant to
subsection 4.11(g)) processed on any Date of Processing during such Monthly
Period, which are allocated to the Investor Interest and deposited in the
Finance Charge Account pursuant to Article IV (or which will be deposited
in the Collection Account on the Transfer Date following such Monthly
Period pursuant to the fourth paragraph of subsection 4.2(a) and will be
allocated to the Investor Interest pursuant to Section 4.4(c)(i), 4.4(d)(i)
or 4.4(e)(i) as if they had been deposited in the Collection Account during
such Monthly Period).
"Available Principal Collections" shall mean, with respect to any
given Monthly Period, Collections of Principal Receivables processed on any
Date of Processing during such Monthly Period, which were allocated to the
Investor Interest and were deposited in the Principal Account pursuant to
subsection 4.4(d)(ii) or 4.4(e)(ii) (or which will be deposited in the
Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection 4.2(a) and will be allocated
to the Investor Interest pursuant to Section 4.4(d)(ii)or 4.4(e)(ii) as if
they had been deposited in the Collection Account during such Monthly
Period).
"Available Shared Principal Collections" shall mean, with respect to
any Monthly Period, Shared Principal Collections available to be allocated
to the Certificates from each other Series that has a controlled or
scheduled amortization or accumulation period beginning after the Class B
Expected Final Distribution Date.
"Base Rate" shall mean, with respect to any Monthly Period, the
weighted average of (i) the lesser of the Class A Certificate Rate and the
Class A Cap Rate and (ii) the lesser of the Class B Certificate Rate and
the Class B Cap Rate (weighted based on the Class A Investor Interest and
the Class B Investor Interest, respectively, as of the last day of the
preceding Monthly Period) plus 2.00% per annum.
"Calculation Period" shall have the meaning specified in the
applicable Interest Rate Cap.
"Cash Collateral Account" shall have the meaning specified in Section
4.9.
"Cash Collateral Account Surplus" shall mean, on any date of
determination, the amount, if any, by which the amount on deposit in the
Cash Collateral Account exceeds the Required Cash Collateral Amount.
"Cash Collateral Depositor" shall mean the bank or banks (other than
the Transferor or the Trustee) which are parties to the Loan Agreement on
the Closing Date, such bank or banks to be selected by the Transferor on or
prior to the Closing Date to make the deposit of a portion of the Initial
Cash Collateral Amount in the Cash Collateral Account on the Closing Date,
or any successors thereto or assignees thereof appointed as provided in the
Loan Agreement.
"Certificate Rate" for purposes of Section 17 hereof shall mean the
weighted average of the lesser of (i) the Class A Certificate Rate and (ii)
the Class A Cap Rate and the lesser of (i) the Class B Certificate Rate and
(ii) the Class B Cap Rate.
"Class A Available Finance Charge Collections" shall mean, with
respect to any given Monthly Period, the sum of (a) the Class A Investor
Percentage of Available Finance Charge Collections and (b) the proceeds of
the sale of any Class A Interest Rate Cap deposited into the Collection
Account during the related Monthly Period pursuant to subsection 4.11(g).
"Class A Cap Rate" shall mean 9.15% per annum.
"Class A Certificate Rate" shall mean 5.63047% per annum from July 2,
1996 through July 14, 1996, and with respect to each Interest Accrual
Period thereafter, a per annum rate 0.15% in excess of LIBOR as determined
on the related LIBOR Determination Date.
"Class A Certificateholder" shall mean the Person in whose name a
Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean the portion of the
Investor Interest evidenced by the Class A Certificates.
"Class A Certificates" shall mean any of the Floating Rate Class A
Asset Backed Certificates, Series 1996-1 executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit 1-A hereto.
"Class A Controlled Amortization Amount" shall mean $27,071,428.57;
provided, however, that such amount shall be reduced following a Series
1996-1 Investor Exchange to an amount equal to the product of (i)
$27,071,428.57 and (ii) a fraction the numerator of which is the Class A
Investor Interest following such Series 1996-1 Investor Exchange and the
denominator of which is the Class A Initial Investor Interest.
"Class A Excess Interest" shall mean on any date of determination, an
amount equal to the product of (a) the amount by which the Class A
Certificate Rate exceeds 9.15% per annum, (b) the Class A Excess Principal,
if any, and (c) the actual number of days in the related Interest Accrual
Period divided by 360.
"Class A Excess Principal" shall mean on any date of determination
the amount by which the Class A Investor Interest exceeds the Expected
Class A Principal after giving effect to all payments, deposits and
withdrawals on such date.
"Class A Expected Final Distribution Date" shall mean the January
2002 Distribution Date.
"Class A Initial Investor Interest" shall mean the aggregate initial
principal amount of the Class A Certificates on the Closing Date, which is
$379,000,000, less the portion of such amount represented by Class A
Certificates tendered and canceled pursuant to any Series 1996-1 Investor
Exchange.
"Class A Interest Rate Cap" shall mean the master agreement dated as
of July 2, 1996 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated on
or prior to July 2, 1996 between the Trustee and the Interest Rate Cap
Provider, relating to the Class A Certificates and for the exclusive
benefit of the Class A Certificateholders, or any Replacement Interest Rate
Cap or Qualified Substitute Arrangement.
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.5(a).
"Class A Investor Default Amount" shall mean, with respect to any
Distribution Date, the Class A Investor Percentage of the Investor Default
Amount.
"Class A Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class A Initial Investor Interest, minus (b) the
aggregate amount of payments of principal paid to the Class A
Certificateholders pursuant to Section 4.8 prior to such date of
determination, minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs over Class A Investor Charge-Offs reimbursed
pursuant to subsections 4.6(a)(iv), 4.6(c)(i) and 4.6(d) prior to such date
of determination; provided, however, that upon the tender and cancellation
of any Class A Certificates pursuant to a Series 1996-1 Investor Exchange,
the amounts stated in clauses (b) and (c) shall be computed with respect to
the Class A Certificates not tendered or canceled pursuant to such Series
1996-1 Investor Exchange.
"Class A Investor Percentage" shall mean, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of
which is the Class A Investor Interest determined as of the last day of the
Monthly Period immediately preceding such date of determination and the
denominator of which is the sum of the Class A Investor Interest and the
Class B Investor Interest determined as of the last day of the Monthly
Period immediately preceding such date of determination.
"Class A Monthly Cap Rate Interest" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the lesser of the
Class A Certificate Rate and the Class A Cap Rate, (b) the Class A Investor
Interest as determined as of the preceding Distribution Date or, for the
initial Interest Accrual Period, the Closing Date (after giving effect to
all payments, deposits and withdrawals on such Distribution Date or Closing
Date as applicable) and (c) the actual number of days in the related
Interest Accrual Period divided by 360.
"Class A Monthly Interest" shall mean, with respect to any
Distribution Date, an amount equal to the sum of (a) the product of (i) the
Class A Certificate Rate and, (ii) the lesser of the Class A Investor
Interest as of the preceding Distribution Date or, for the initial Interest
Accrual Period, the Closing Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date or Closing Date), and
the Expected Class A Principal as of the preceding Distribution Date and
(iii) the actual number of days in the related Interest Accrual Period
divided by 360 and (b) the product of (i) the Class A Excess Principal,
(ii) the lesser of the Class A Certificate Rate and 9.15% and (iii) the
actual number of days in the related Interest Accrual Period divided by
360.
"Class A Monthly Servicing Fee" shall mean with respect to the first
Distribution Date, $0.00 and with respect to any subsequent Distribution
Date, one-twelfth of the product of 2.00% and the Class A Investor Interest
on the last day of the preceding Monthly Period.
"Class A Notional Amount" shall mean, on any date of determination,
an amount equal to the Expected Class A Principal.
"Class A Required Amount" shall have the meaning specified in
subsection 4.6(d).
"Class B Available Finance Charge Collections" shall mean, with
respect to any given Monthly Period, the sum of (a)) the Class B Investor
Percentage of Available Finance Charge Collections and (b) the proceeds of
the sale of any Class B Interest Rate Cap deposited into the Collection
Account during the related Monthly Period pursuant to subsection 4.11(g).
"Class B Cap Rate" shall mean 9.30% per annum.
"Class B Certificate Rate" shall mean 5.78047% per annum from July 2,
1996 through July 14, 1996, and with respect to each Interest Accrual
Period thereafter, a per annum rate 0.30% in excess of LIBOR, as determined
on the related LIBOR Determination Date.
"Class B Certificateholder" shall mean the Person in whose name a
Class B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean the portion of the
Investor Interest evidenced by the Class B Certificates.
"Class B Certificates" shall mean any of the Floating Rate Class B
Asset Backed Certificates, Series 1996-1 executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit 1-B hereto.
"Class B Controlled Amortization Amount" shall mean $21,000,000;
provided, however, that such amount shall be reduced following a Series
1996-1 Investor Exchange to an amount equal to the Class B Investor
Interest following such Series 1996-1 Investor Exchange.
"Class B Excess Interest" shall mean, on any date of determination,
an amount equal to the product of (a) the amount by which the Class B
Certificate Rate exceeds 9.30% per annum, (b) the Class B Excess Principal,
if any, and (c) the actual number of days in the related Interest Accrual
Period divided by 360.
"Class B Excess Principal" shall mean on any date of determination
the amount by which the Class B Investor Interest exceeds the Expected
Class B Principal after giving effect to all payments, deposits and
withdrawals on such date.
"Class B Expected Final Distribution Date" shall mean the February
2002 Distribution Date.
"Class B Initial Investor Interest" shall mean the aggregate initial
principal amount of the Class B Certificates on the Closing Date, which is
$21,000,000, less the portion of such amount represented by Class B
Certificates tendered and canceled pursuant to any Series 1996-1 Investor
Exchange.
"Class B Interest Rate Cap" shall mean the master agreement dated as
of July 2, 1996, between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated on
or prior to July 2, 1996 between the Trustee and the Interest Rate Cap
Provider, relating to the Class B Certificates and for the exclusive
benefit of the Class B Certificateholders, or any Replacement Interest Rate
Cap or Qualified Substitute Arrangement.
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.5(b).
"Class B Investor Default Amount" shall mean, for any Distribution
Date, the Class B Investor Percentage of the Investor Default Amount.
"Class B Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class B Initial Investor Interest, minus (b) the
aggregate amount of payments of principal paid to the Class B
Certificateholders pursuant to Section 4.8 prior to such date of
determination, minus (c) the amount of Reallocated Principal Collections
allocated on all prior Distribution Dates pursuant to Section 4.12, minus
(d) the aggregate amount of Class B Investor Charge-Offs, minus (e) the
amount by which the Class B Investor Interest has been reduced on all prior
Distribution Dates pursuant to the second sentence of subsection 4.5(a)
plus (f) the aggregate amount allocated and available on all prior
Distribution Dates for the purpose of reimbursing amounts deducted pursuant
to the foregoing clauses (c), (d) and (e); provided, however, that upon the
tender and cancellation of any Class B Certificates pursuant to a Series
1996-1 Investor Exchange, the amounts stated in clauses (b), (c), (d), (e)
and (f) shall be computed with respect to the Class B Certificates not
tendered or canceled pursuant to such Series 1996-1 Investor Exchange.
"Class B Investor Percentage" shall mean, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of
which is the Class B Investor Interest determined as of the last day of the
Monthly Period immediately preceding such date of determination and the
denominator of which is the sum of the Class A Investor Interest and the
Class B Investor Interest determined as of the last day of the Monthly
Period immediately preceding such date of determination.
"Class B Monthly Cap Rate Interest" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the lesser of the
Class B Certificate Rate and the Class B Cap Rate, (b) the Class B Investor
Interest as determined as of the preceding Distribution Date or, for the
initial Interest Accrual Period, the Closing Date (after giving effect to
all payments, deposits and withdrawals on such Distribution Date or Closing
Date) and (c) the actual number of days in the related Interest Accrual
Period divided by 360.
"Class B Monthly Interest" shall mean, with respect to any
Distribution Date, an amount equal to the sum of (a) the product of (i) the
Class B Certificate Rate, (ii) the lesser of the Class B Investor Interest
as of the preceding Distribution Date or, for the initial Interest Accrual
Period, the Closing Date (after giving effect to all payments, deposits and
withdrawals on such Distribution Date or Closing Date) and the Expected
Class B Principal as of the preceding Distribution Date and (iii) the
actual number of days in the related Interest Accrual Period divided by 360
and (b) the product of (i) the Class B Excess Principal, (ii) the lesser of
the Class B Certificate Rate and 9.30% and (iii) the actual number of days
in the related Interest Accrual Period divided by 360.
"Class B Monthly Servicing Fee" shall mean, with respect to the first
Distribution Date, $0.00, and with respect to any subsequent Distribution
Date, one-twelfth of the product of 2.00% and the Class B Investor Interest
on the last day of the preceding Monthly Period.
"Class B Notional Amount" shall mean, on any date of determination,
an amount equal to the Expected Class B Principal.
"Class B Payment Commencement Date" shall mean either the
Distribution Date on which the Class A Investor Interest is reduced to zero
or, if the Class A Investor Interest is paid in full on the Class A
Expected Final Distribution Date and the Rapid Amortization Period has not
commenced, the Distribution Date following the Class A Expected Final
Distribution Date.
"Class B Required Amount" shall have the meaning specified in
subsection 4.6(e).
"Closing Date" shall mean July 2, 1996.
"Controlled Amortization Date" shall mean the first day of the
Monthly Period relating to the December 2000 Distribution Date.
"Controlled Amortization Period" shall mean unless a Pay Out Event
shall have occurred prior to such date an amortization period commencing on
the Controlled Amortization Date and continuing to, but not including, a
Pay Out Commencement Date or to, and including, (i) the date of termination
of the Trust pursuant to Section 12.1 of the Agreement or (ii) the Series
1996-1 Termination Date.
"Controlled Distribution Amount" shall have the meaning specified in
subsection 4.4(d)(ii).
"Controlled Excess Amount" shall have the meaning specified in
subsection 4.4(d)(ii).
"Deficit Controlled Amortization Amount" shall initially mean zero
and shall change as provided in subsection 4.8(a).
"Definitive Certificates" shall have the meaning specified in Section
6.11.
"Discount Option" shall have the meaning specified in Section 4.14.
"Discount Percentage" shall have the meaning specified in Section
4.14.
"Distribution Account" shall have the meaning specified in subsection
4.3(b).
"Distribution Date" shall mean July 15, 1996 and the fifteenth day of
each calendar month thereafter, or, if such fifteenth day is not a Business
Day, the next succeeding Business Day; provided, however, that no
Distribution Date shall occur after the earliest to occur of (x) the
Distribution Date on which the Investor Interest has been paid in full, (y)
the date of termination of the Trust pursuant to Section 12.1 of the
Agreement, and (z) the Series 1996-1 Termination Date.
"Enhancement" shall mean the funds and securities on deposit in the
Cash Collateral Account, up to the Available Cash Collateral Amount and,
with respect to the Class A Certificates, the subordination of the Class B
Certificates to the extent provided herein.
"Enhancement Provider" shall mean, with respect to the Series 1996-1
Certificates, the Cash Collateral Depositor and with respect to any other
Series, the applicable provider of credit enhancement, if any.
"Excess Spread" shall mean the sum of the amounts specified pursuant
to subsections 4.6(a)(v) and 4.6(b)(v).
"Expected Class A Principal" shall mean, with respect to any date of
determination, the amount of the Class A Investor Interest that is equal to
(a) on each date to but excluding the Initial Class A Scheduled Principal
Payment Date, the Class A Initial Investor Interest, (b) on each date
thereafter to but excluding the Class A Expected Final Distribution Date,
the Class A Initial Investor Interest less the product of (i) the Class A
Controlled Amortization Amount, and (ii) the number of Distribution Dates
from and including the Initial Class A Scheduled Principal Payment Date,
and (c) on each date thereafter, zero.
"Expected Class B Principal" shall mean, with respect to any date of
determination, the amount of Class B Investor Interest that is equal to (a)
the Class B Initial Investor Interest on each date to but not including the
Class B Expected Final Distribution Date, and (b) on each date thereafter,
zero.
"Finance Charge Account" shall have the meaning specified in Section
4.3(a).
"Finance Charge Collections" shall mean Collections in respect of
Finance Charge Receivables.
"Floating Rate" shall have the meaning specified in the applicable
Interest Rate Cap.
"Initial Cash Collateral Amount" shall mean $36,000,000.
"Initial Class A Scheduled Principal Payment Date" shall mean the
December 2000 Distribution Date.
"Initial Investor Interest" shall mean the sum of the Class A Initial
Investor Interest and the Class B Initial Investor Interest.
"Interest Accrual Period" shall mean, with respect to any
Distribution Date, the period beginning on and including the Distribution
Date occurring in the preceding calendar month (or, in the case of the
first Distribution Date, from and including the Closing Date) to and
including the day preceding the current Distribution Date.
"Interest Rate Cap Payment" shall mean, with respect to any
Distribution Date, any payment required to be made by an Interest Rate Cap
Provider to the Trust pursuant to an Interest Rate Cap with respect to such
Distribution Date.
"Interest Rate Cap Provider" shall mean Swiss Bank Corporation,
acting through its London Branch, in its capacity as obligor under the
Interest Rate Caps, or if any Replacement Interest Rate Cap or Qualified
Substitute Arrangement is obtained pursuant to Section 4.11, any obligor
with respect to such Replacement Interest Rate Cap or Qualified Substitute
Arrangement.
"Interest Rate Cap" shall mean either the Class A Interest Rate Cap
or the Class B Interest Rate Cap.
"Interest Rate Caps" shall mean the Class A Interest Rate Cap and the
Class B Interest Rate Cap.
"Investor Accounts" shall mean the Finance Charge Account, the
Distribution Account and the Principal Account.
"Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the sum of the
Default Amounts for all Defaulted Accounts during the immediately preceding
Monthly Period and (b) the Investor Percentage for such Monthly Period.
"Investor Interest" shall mean for any date of determination, the sum
of the Class A Investor Interest and the Class B Investor Interest.
"Investor Percentage" shall mean, for any date of determination:
(a) when used with respect to Principal Receivables on any
date of determination during the Revolving Period, the percentage
equivalent of a fraction, the numerator of which shall be (x) for any
date of determination occurring other than during the Paired
Amortization Period, the Investor Interest at the close of business
on the last day of the prior Monthly Period and (y) for any date of
determination occurring during the Paired Amortization Period, the
excess of the amount in the foregoing clause (x) over the numerator
used to calculate the investor percentage for such date of
determination with respect to Principal Receivables for the Paired
Certificates pursuant to the related Supplement, and the denominator
of which shall be the greater of (a) the Aggregate Principal
Receivables determined as of the close of business on the last day of
the prior Monthly Period (or with respect to any date of
determination occurring on or before July 31, 1996, determined as of
the Closing Date) and (b) the sum of the numerators used to calculate
the investor percentages with respect to Principal Receivables for
such date of determination for all Series outstanding;
(b) when used with respect to Principal Receivables on any
date of determination during the Controlled Amortization Period or
the Rapid Amortization Period, the percentage equivalent of a
fraction, the numerator of which shall be (x) for any date of
determination occurring other than during the Paired Amortization
Period, the Investor Interest at the end of the last day of the
Revolving Period (or, if there has been a Series 1996-1 Investor
Exchange after the end of the Revolving Period, such Investor
Interest will be reduced ratably to reflect the amount of Series
1996-1 Certificates tendered and cancelled pursuant to any Series
1996-1 Investor Exchange) and (y) for any date of determination in
the Rapid Amortization Period occurring during the Paired
Amortization Period, the excess of the amount in the foregoing clause
(x) over the numerator used to calculate the investor percentage for
such date of determination with respect to Principal Receivables for
the Paired Certificates pursuant to the related Supplement, and the
denominator of which shall be the greater of (i) the Aggregate
Principal Receivables determined at the close of business on the last
day of the prior Monthly Period (or with respect to any date of
determination occurring on or before July 31, 1996, determined as of
the Closing Date) and (ii) the sum of the numerators used to
calculate the investor percentages for such date of determination
with respect to Principal Receivables for all Series outstanding;
provided, however, that during the Controlled Amortization Period,
the Investor Percentage of Principal Receivables may be reset by and
at the option of the Servicer (and any such reset Investor Percentage
will apply in any Rapid Amortization Period following the Controlled
Amortization Period) on the date of issuance of any new Series of
certificates to a fixed percentage equivalent of a fraction which
shall not be greater than the fraction described above in subclause
(x) of this clause (b) and shall not be less than the greater of (i)
a fraction, the numerator of which is the Investor Interest,
determined as of the close of business on the last day of the Monthly
Period immediately preceding the date of determination, and the
denominator of which is the greater of (a) the Aggregate Principal
Receivables, determined as of the end of the last day of the Monthly
Period immediately preceding such date of determination, and (b) the
sum of the numerators used to calculate the investor percentages for
such date of determination with respect to Principal Receivables for
all Series outstanding and (ii) a fraction that when multiplied by
the amount of collections of Principal Receivables for the preceding
Monthly Period will equal (x) the Controlled Distribution Amount for
such Monthly Period plus 10% of (I) the Class A Controlled
Amortization Amount (so long as the Class A Certificates remain
outstanding) or (II) the Class B Controlled Amortization Amount (at
all relevant times after payment in full of the Class A Investor
Interest), minus (y) the amount of any Available Shared Principal
Collections with respect to such Monthly Period;
(c) when used with respect to Finance Charge Receivables and
Receivables in Defaulted Accounts on any date of determination, the
percentage equivalent of a fraction, the numerator of which shall be
the Investor Interest at the close of business on the last day of the
prior Monthly Period (or with respect to any date of determination
occurring on or before July 31, 1996, determined as of the Closing
Date) and the denominator of which shall be the greater of (i)
Aggregate Principal Receivables at the close of business on the last
day of the prior Monthly Period and (ii) the sum of the numerators
used to calculate the investor percentages with respect to Principal
Receivables for all Series then outstanding; and
(d) in no event shall any Investor Percentage be greater than
100%.
"LIBOR" shall mean, for any Interest Accrual Period, the London
interbank offered quotations for one-month Dollar deposits determined for
each Interest Accrual Period in accordance with the provisions of Section
4.13.
"LIBOR Determination Date" shall mean June 25, 1996 and the second
London Banking Day prior to the commencement of the second and each
subsequent Interest Accrual Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee and the Cash Collateral Depositor, dated as of July
2, 1996, as amended from time to time.
"London Banking Day" shall mean any day on which commercial banks are
open for business (including dealings in foreign exchange and deposits in
U.S. dollars) in London.
"Minimum Aggregate Principal Receivables" shall have the meaning
specified in Section 4 hereof.
"Minimum Seller Interest" shall have the meaning specified in Section
4 hereof.
"Monthly Investor Servicing Fee" shall mean, with respect to the
first Monthly Period, $0.00, and with respect to each subsequent Monthly
Period, an amount equal to one twelfth of the product of 2.00% and the
Investor Interest as of the last day of the preceding Monthly Period.
"Monthly Total Principal Allocation" shall mean (a) with respect to
any day in a Monthly Period, the Principal Allocation for such day plus the
sum of all Principal Allocations on each prior day of such Monthly Period
or (b) with respect to a Monthly Period shall mean the Principal
Allocation, if any, for the last day of such Monthly Period plus the sum of
all Principal Allocations on each prior day of such Monthly Period.
"Paired Amortization Period" shall mean the period from and including
the Closing Date to and including the date on which the investor interest
of the Paired Certificates has been paid in full.
"Paired Certificates" shall mean the Series 1993-1 4.80% Asset Backed
Certificates of the Trust.
"Pay Out Commencement Date" shall mean, with respect to the Series
1996-1 Certificates, the date on which a Trust Pay Out Event is deemed to
occur or occurs pursuant to Section 9.1 of the Agreement or a Series 1996-1
Pay Out Event is deemed to occur or occurs pursuant to Section 9A hereof.
"Permitted Investments" shall mean with respect to the Series 1996-1
Collection Subaccount, the Investor Accounts and the Cash Collateral
Account (a) negotiable instruments or securities either represented by
instruments in bearer or registered form or book-entry form at a federal
reserve bank or held by a clearing corporation which are registered in the
name of the Trustee upon books maintained for that purpose by or on behalf
of the issuer thereof and identified on books maintained for that purpose
by the Trustee and held for the benefit of the Trust or the
Certificateholders and which evidence (i) direct obligations of the United
States of America or any agency or instrumentality thereof the full and
timely payment of which is guaranteed by the full faith and credit of the
United States of America; (ii) demand deposits, time deposits or
certificates of deposit of, or bankers' acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal or state banking or depositary institution
authorities; provided, however, that at the time of the Trust's investment
or contractual commitment to invest therein, the certificates of deposit or
short-term deposits, if any, of such depositary institution or trust
company shall have a credit rating from Standard & Poor's of A-1+, and
either such certificates of deposit or short-term deposits shall have a
credit rating from Moody's of P-1 or the long-term unsecured debt
obligations of such depositary institution or trust company (other than
such obligations whose rating is based on collateral or on the credit of a
Person other than such institution or trust company) shall have a rating
from Moody's of at least Aa3, and the amount of such time deposits, demand
deposits or certificates of deposit are fully insured within the limits of
insurance set by the FDIC and the combined capital, surplus and undivided
profits of such depositary institution or trust company is not less than $3
million; (iii) certificates of deposit having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from
Moody's and Standard & Poor's of P-1 and A-1+, respectively; (iv)
commercial paper having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating from Moody's and
Standard & Poor's of P-1 and A-1+, respectively; and (v) investments in
money market funds registered under the Investment Company Act rated in
each case in the highest investment category by Standard & Poor's and
Moody's, or otherwise approved in writing by the Rating Agency and
acceptable to the Enhancement Provider; and (b) demand deposits in the name
of the Trust or the Trustee, on behalf of the Trust, in any depositary
institution or trust company referred to in clause (a)(ii) above; provided,
however, that with respect to any of the Permitted Investments referred to
herein, if requested by the Enhancement Provider, the Servicer shall
furnish to the Enhancement Provider an Opinion of Counsel, in form and
substance satisfactory to the Enhancement Provider and from counsel
reasonably acceptable to it, to the effect that, upon conveyance of
possession or registered ownership to the Trustee or its agent, nominee or
custodian, on behalf of the Trust, of such Permitted Investment, the
Trustee, on behalf of the Trust, will have a perfected first priority
security interest in and to such Permitted Investment for the benefit of
the Series 1996-1 Certificateholders. Such opinion will be required only
with respect to Permitted Investments of a type that have not previously
been the subject of such an opinion or that have been the subject of a
change in law. Notwithstanding the foregoing, if the Rating Agency rating
the Investor Certificates is not Standard & Poor's or Moody's, any
investments specified in this definition of "Permitted Investments" as
requiring a specific credit rating from Standard & Poor's or Moody's must
also have a comparable credit rating from, or otherwise be acceptable to,
the Rating Agency rating the Investor Certificates, as confirmed to the
Trustee in writing by such Rating Agency, and any investments specified in
this definition of "Permitted Investments" as requiring written approval
from Standard & Poor's or Moody's must also receive written approval from
such other Rating Agency.
"Pool Factor" shall mean, with respect to any Record Date, a number
carried out to seven decimal places representing the ratio of the Investor
Interest as of the end of the last day of the preceding Monthly Period
(determined after taking into account any increases or decreases in the
Investor Interest which will occur on the following Distribution Date) to
the Initial Investor Interest.
"Portfolio Yield" shall mean, with respect to Series 1996-1 and with
respect to any Monthly Period, the annualized percentage equivalent of a
fraction the numerator of which is equal to the lesser of (x) the Finance
Charge Receivables allocable to the Investor Interest for such Monthly
Period, calculated on a billed basis, after subtracting therefrom an amount
equal to the Investor Default Amount with respect to such Monthly Period,
and (y) the aggregate amount of Collections with respect to such Monthly
Period, and the denominator of which is the Investor Interest as of the
last day of the preceding Monthly Period.
"Principal Account" shall have the meaning specified in subsection
4.3(a).
"Principal Allocation" shall have the meaning specified in subsection
4.4(d)(ii).
"Principal Shortfall" shall mean (x) on any Date of Processing for
the Series 1996-1 Certificates, the excess of the Controlled Distribution
Amount over the Monthly Total Principal Allocation for such Date of
Processing, or (y) for any other Series the amounts specified as such in
the Supplement for such other Series.
"Qualified Substitute Arrangement" shall have the meaning specified
in subsection 4.11(b).
"Qualified Trust Institution" shall mean a depository institution or
trust company having corporate trust powers under applicable federal and
state laws organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia; provided, however,
that the long-term unsecured debt obligations (other than such obligation
whose rating is based on collateral or on the credit of a Person other than
such institution or trust company) of such depository institution or trust
company shall have a credit rating from Moody's and Standard & Poor's of at
least Baa3 and BBB-, respectively, and the deposits in whose accounts are
insured to the limits provided by law and as required by the FDIC.
"Rapid Amortization Period" shall mean an Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to
occur of (i) the date of termination of the Trust pursuant to Section 12.1
or (ii) the Series 1996-1 Termination Date.
"Rating Agency" shall mean, with respect to the Series 1996-1
Certificates, each of Moody's and Standard & Poor's.
"Reallocated Principal Collections" shall have the meaning specified
in subsection 4.12(a).
"Reference Banks" shall mean four major banks in the London interbank
market selected by the Trustee.
"Replacement Interest Rate Cap" shall mean any interest rate cap
having substantially the same terms and conditions as the Class A Interest
Rate Cap or the Class B Interest Rate Cap, as the case may be, and
otherwise satisfying the conditions set forth in Section 4.11.
"Required Cash Collateral Amount" means (a) initially $36,000,000 and
(b) on any Transfer Date, the product of (i) the Investor Interest as of
the last day of the Monthly Period preceding such date and (ii) 9.0%, but
in no event less than the lesser of $12,000,000 and the Investor Interest
as of the last day of the related Monthly Period; provided, however, that
if either (a) there are any withdrawals from the Cash Collateral Account
pursuant to subsection 4.6(d) or 4.6(e) during the Controlled Amortization
Period or (b) a Pay Out Event has occurred, the Required Cash Collateral
Amount for any Transfer Date shall be the lesser of the Required Cash
Collateral Amount for the Transfer Date immediately preceding such
withdrawal or Pay Out Event and the unpaid principal amount of the
Certificates.
"Revolving Period" shall mean the period from and including the
Closing Date to, but not including, the earlier to occur of the close of
business on the last day of the October 2000 Monthly Period or the Pay Out
Commencement Date.
"Scheduled Series 1996-1 Termination Date" shall mean the November
2004 Distribution Date.
"Series 1996-1" shall mean the Series represented by the Series
1996-1 Certificates.
"Series 1996-1 Certificateholder" shall mean the holder of record of
any Series 1996-1 Certificate.
"Series 1996-1 Certificates" shall have the meaning specified in
Section 1 of this Series Supplement.
"Series 1996-1 Collection Subaccount" shall have the meaning
specified in Section 4.2B.
"Series 1996-1 Investor Exchange" shall mean an Investor Exchange
pursuant to Section 6.9(b) of the Agreement and Section 18 hereof.
"Series 1996-1 Pay Out Event" shall have the meaning specified in
Section 9A hereof.
"Series 1996-1 Termination Date" shall mean the earlier to occur of
(i) the day after the Distribution Date on which the Series 1996-1
Certificates are paid in full or (ii) the Scheduled Series 1996-1
Termination Date.
"Series Servicing Fee Percentage" shall mean 2.0%.
"Series Supplement" shall have the meaning specified on the first
page of this document.
"Shared Finance Charge Collections" shall mean, with respect to any
Business Day, as the context requires, either (a) the amount described in
subsection 4.6(c)(xii) allocated to the Series 1996-1 Certificates but
available to cover shortfalls in amounts paid from Finance Charge
Collections for other Series, if any, or (b) the aggregate amount of
Finance Charge Collections allocable to other Series in excess of the
amounts necessary to make required payments with respect to such Series, if
any, and available to cover shortfalls with respect to the Series 1996-1
Certificates.
"Shared Principal Collections" shall mean, as the context requires,
either (a) the amounts allocated to the Series 1996-1 Certificates which,
in accordance with subsections 4.4(c)(ii), 4.4(d)(ii) and 4.4(e)(ii), may
be applied to Principal Shortfalls with respect to other outstanding Series
or (b) the amounts allocated to the investor certificates (which are not
retained by the Transferor) of other Series which the applicable
Supplements for such Series specify are to be treated as "Shared Principal
Collections" and which may be applied to cover Principal Shortfalls with
respect to the Series 1996-1 Certificates.
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Jones Telerate Service (or such other page as may
replace that page on that service for the purpose of displaying comparable
rates or prices).
"Transferor" shall mean People's Bank, a Connecticut capital stock
savings bank, the Seller under the Agreement.
SECTION 2.1 Other Definitional Provisions. Whenever a determination
is to be made under the Agreement as to whether a given action, course of
conduct or set of facts or circumstances could or would have a material
adverse effect on the Trust or the Investor Certificateholders (or any
similar or analogous determination), such determination shall be made
without giving effect to the Enhancement.
SECTION 3. Conveyance of Interest in Cash Collateral Account. The
Transferor and the Trustee intend that the Cash Collateral Account and all
property credited thereto be the property of the Trust. If and to the
extent the Cash Collateral Account and the property credited thereto are
characterized as property of the Transferor, the Transferor hereby assigns,
sets-over, conveys, pledges and grants a security interest and lien (free
and clear of all other Liens) to the Trustee for the benefit of the Series
1996-1 Certificateholders, in all of the Transferor's right, title and
interest (if any) in and to the Cash Collateral Account and the amounts on
deposit in the Cash Collateral Account and all property now or hereafter
credited thereto, including but not limited to Permitted Investments,
together with all proceeds thereof, as collateral security for the amounts
payable from time to time to the Trustee, for the benefit of the Series
1996-1 Certificateholders.
SECTION 4. Minimum Seller Interest, Minimum Aggregate Principal
Receivables and Removal of Accounts. (a) The Minimum Seller Interest
applicable to the Series 1996-1 Certificates shall be 7%. The Minimum
Aggregate Principal Receivables shall be the sum of the numerators used to
calculate the Investor Percentage with respect to Principal Receivables for
all Series then outstanding. Upon final payment of the Series 1996-1
Certificates, the Minimum Aggregate Principal Receivables shall be computed
in a manner consistent with the Agreement or any future Supplement, as
appropriate.
(b) In addition to the requirements contained in subsections 2.7(a)
and (b) of the Agreement with respect to the removal of Accounts, pursuant
to subsection 2.7(b)(iii)(c) of the Agreement, the removal of any
Receivables of any Removed Accounts on any Removal Date shall not, in the
reasonable belief of the Transferor, result in the failure to make a
Controlled Distribution Amount payment.
SECTION 5. Reassignment and Transfer Terms. The Series 1996-1
Certificates shall be subject to transfer to the Transferor at its option,
in accordance with the terms specified in subsection 12.2(a) of the
Agreement, on any Distribution Date on or after the Distribution Date on
which the Investor Interest is reduced to an amount less than or equal to
5% of the Initial Investor Interest. The Series 1996-1 Certificates shall
be subject to mandatory transfer to the Transferor, in accordance with the
terms specified in subsection 12.2(a) of the Agreement, on the Distribution
Date immediately preceding the Scheduled Series 1996-1 Termination Date if
the Investor Interest is reduced to an amount less than or equal to 5% of
the Initial Investor Interest and the conditions specified in the proviso
to Section 12.2(a) shall have been satisfied. The deposit required in
connection with any such purchase shall be equal to (a) the Investor
Interest, plus (b) accrued and unpaid interest (other than Class A Excess
Interest or Class B Excess Interest, as the case may be) on the Series
1996-1 Certificates through and including the day preceding the day on
which such purchase occurs, plus (c) all amounts then due and payable to
the Cash Collateral Depositor, less (d) the amount on deposit in the
Finance Charge Account which will be transferred to the Distribution
Account pursuant to Section 4.6 on the related Transfer Date, less (e) the
amount on deposit in the Principal Account which will be transferred to the
Distribution Account pursuant to the second paragraph of Subsection 4.8(a)
on the related Transfer Date. The mandatory purchase requirement is in
addition to any other provisions and remedies provided by the Agreement and
shall not serve to relieve any party of obligations it may otherwise have
or waive any remedy that is otherwise provided in the Agreement.
SECTION 6. Delivery and Payment for the Series 1996-1 Certificates.
The Transferor shall execute and deliver the Series 1996-1 Certificates to
the Trustee for authentication in accordance with Section 6.1 of the
Agreement. The Trustee shall deliver the Series 1996-1 Certificates when
authenticated in accordance with Section 6.2 of the Agreement.
SECTION 7. Depositary; Form of Delivery of Series 1996-1
Certificates. (a) The Certificates shall be delivered as Book-Entry
Certificates as provided in Sections 6.1, 6.2, 6.9 and 6.11 of the
Agreement.
(b) The depositary for Series 1996-1 shall be The Depository Trust
Company, and the Class A Certificates and the Class B Certificates shall be
initially registered in the name of CEDE & Co., its nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1996-1 Certificates, Class A Certificates or Class B Certificates
having Undivided Interests aggregating a specified percentage, such
direction or consent may be given by Certificate Owners having interests in
the requisite percentage of Series 1996-1 Certificates, Class A
Certificates or Class B Certificates, acting through the Clearing Agency
and the Clearing Agency Participants; provided, however that the Trustee
shall only be obligated to follow such directions or consents from the
depositary or Clearing Agency.
SECTION 8. Enhancement. Enhancement for the Series 1996-1
Certificates shall be all funds and securities on deposit in the Cash
Collateral Account up to the Available Cash Collateral Amount and, with
respect to the Class A Certificates, the subordination of the Class B
Certificates to the extent provided herein.
SECTION 9. Article IV of Agreement. Any provision of Article IV of
the Agreement which distributes Collections to the Holder of the
Exchangeable Seller Certificate on the basis of the Seller Percentage shall
continue to apply irrespective of the issuance of the Series 1996-1
Certificates. Sections 4.1 and 4.2 of the Agreement shall be read in their
entirety as provided in the Agreement. Article IV of the Agreement (except
for Sections 4.1 and 4.2 thereof) shall read in its entirety as follows and
shall be applicable only to the Series 1996-1 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Investor Certificateholders. The Series
1996-1 Certificates shall represent fractional Undivided Interests in the
Trust, consisting of the right to receive, to the extent necessary to make
the required payments with respect to such Series 1996-1 Certificates at
the times and in the amount specified in this Agreement, (a) the related
Investor Percentage of Collections received with respect to the
Receivables, (b) funds on deposit in the Collection Account and the Excess
Funding Account allocable to the Series 1996-1 Certificates, (c) funds on
deposit in the Finance Charge Account, the Principal Account, the
Distribution Account and the Series 1996-1 Collection Subaccount, (d) funds
on deposit in the Cash Collateral Account up to the Available Cash
Collateral Amount and (e) the right to receive payments pursuant to the
Interest Rate Caps in accordance with Section 4.11. The Exchangeable
Seller Certificate shall represent the ownership interest in the Trust
Assets not allocated to the Series 1996-1 Certificates or any other Series
outstanding; provided, however, the ownership interest represented by the
Exchangeable Seller Certificate and any other Series outstanding shall not
represent any interest in the Series 1996-1 Collection Subaccount, the Cash
Collateral Account or the Interest Rate Caps, except as specifically
provided in this Article IV.
SECTION 4.2B The Series 1996-1 Collection Subaccount. Pursuant to
Section 4.1 of the Agreement, the Servicer, on behalf of the Trustee, shall
establish and maintain a subaccount of the Collection Account to be
maintained with a Qualified Trust Institution, which shall initially be
Bankers Trust Company, for the benefit of the Series 1996-1
Certificateholders, bearing a designation clearly indicating that the funds
therein are held in trust for the benefit of the Series 1996-1
Certificateholders (the "Series 1996-1 Collection Subaccount"). Funds
allocable to Series 1996-1 which are deposited into the Collection Account
will be transferred to the Series 1996-1 Collection Subaccount prior to
further application. References in this Series Supplement to deposits of
such funds into the Collection Account should be read to include such
transfers. The Servicer, on behalf of the Trustee, at all times shall
maintain accurate records reflecting each transaction in the Series 1996-1
Collection Subaccount and that funds held therein shall at all times be
held in trust for the benefit of the Series 1996-1 Certificateholders.
Pursuant to the authority granted to it pursuant to subsection 3.1(b), the
Servicer shall have the power, revocable by the Trustee, to withdraw funds,
and to instruct the Trustee to withdraw funds, from the Series 1996-1
Collection Subaccount for the purpose of carrying out its duties hereunder.
All such instructions from the Servicer to the Trustee shall be in writing;
provided, however, that the Servicer is entitled to give instructions to
the Trustee by facsimile. Funds on deposit in the Series 1996-1 Collection
Subaccount (not required to be deposited in the Finance Charge Account or
the Principal Account pursuant to Section 4.4 hereof) shall at all times be
invested by the Trustee, at the direction of the Servicer, in Permitted
Investments. Any such investment shall mature and such funds shall be
available for withdrawal, on the Transfer Date following the Monthly Period
in which such funds were processed for collection; provided, however, that
any Permitted Investment in short term U.S. treasury securities may mature
one day after such Transfer Date and may be sold on such Transfer Date.
All interest and earnings (net of losses and investment expenses) on funds
on deposit in the Series 1996-1 Collection Subaccount shall be deposited by
the Trustee in a separate deposit account with a Qualified Trust
Institution in the name of the Transferor, which shall not constitute a
part of the Trust, or shall otherwise be turned over to the Transferor or,
as applicable, the Person designated in Section 2.9(b)(ii) of the Loan
Agreement, not less frequently than monthly; provided, however, that
following the failure of the Servicer to make a payment or deposit, which
failure results in the occurrence of a Servicer Default with respect to the
Series 1996-1 Certificates, such interest and earnings shall not be paid to
the Transferor or deposited in such separate deposit account during the
period such Servicer Default is continuing, but shall be retained in, or
deposited into, the Finance Charge Account and shall be treated as
Collections of Finance Charge Receivables allocable to the Series 1996-1
Certificateholders. The Qualified Trust Institution shall maintain, either
on its own or through its nominee or custodian for the benefit of the
Series 1996-1 Certificateholders, possession of any certificated negotiable
instrument or security (other than certificated securities held by a
clearing corporation) evidencing the Permitted Investments described in
clause (a) of the definition thereof relating to the Collection Account
from the time of purchase thereof until the time of maturity. Subject to
the restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, shall instruct the Trustee in writing with respect
to the investment of funds on deposit in the Series 1996-1 Collection
Subaccount. For purposes of determining the availability of funds or the
balances in the Series 1996-1 Collection Subaccount for any reason under
this Agreement, all investment earnings on such funds (net of losses and
expenses) shall be deemed not to be available or on deposit so long as a
Servicer Default shall not be continuing pursuant to this Section 4.2B.
Permitted Investments shall not be disposed of prior to their maturity
other than as provided above with respect to short term U.S. treasury
securities.
SECTION 4.3 Establishment of Series 1996-1 Investor Accounts.
(a) The Finance Charge Account and Principal Account. The
Servicer, for the benefit of the Series 1996-1 Certificateholders,
shall establish and maintain with a Qualified Trust Institution,
initially Bankers Trust Company, in the name of the Trustee, on
behalf of the Trust, two segregated trust accounts maintained in the
corporate trust department of such Qualified Trust Institution, and
held in trust by such Qualified Trust Institution (the "Finance
Charge Account" and the "Principal Account," respectively), bearing a
designation clearly indicating that the funds therein are held in
trust for the benefit of the Series 1996-1 Certificateholders. The
Servicer, on behalf of the Trustee, (or the Trustee so long as the
Finance Charge Account or the Principal Account are established with
the Trustee) at all times shall maintain accurate records reflecting
each transaction in the Principal Account and the Finance Charge
Account and that funds held therein shall at all times be held in
trust for the benefit of the Series 1996-1 Certificateholders.
Pursuant to the authority granted to it pursuant to subsection
3.1(b), the Servicer shall have the power, revocable by the Trustee,
to withdraw funds, and to instruct the Trustee to withdraw funds,
from the Finance Charge Account and Principal Account for the purpose
of carrying out its duties hereunder. All such instructions from the
Servicer to the Trustee shall be in writing; provided, however, that
the Servicer is entitled to give instructions to the Trustee by
facsimile.
(b) The Distribution Account. The Servicer, for the benefit of
the Series 1996-1 Certificateholders, shall cause to be established
and maintained in the name of the Trustee, on behalf of the Trust,
with an office or branch of a Qualified Trust Institution (other than
the Transferor), initially Bankers Trust Company, a non-interest
bearing segregated demand deposit account maintained in the corporate
trust department of such Qualified Trust Institution, and held in
trust by such Qualified Trust Institution (the "Distribution
Account") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Series
1996-1 Certificateholders. The Paying Agent shall have the revocable
authority to make withdrawals from the Distribution Account. Funds
on deposit in the Distribution Account shall not be invested.
(c) Administration of the Finance Charge Account and Principal
Account. Funds on deposit in the Principal Account and the Finance
Charge Account shall at all times be invested by the Trustee at the
direction of the Servicer in Permitted Investments. Any such
investment shall mature and such funds shall be available for
withdrawal on or prior to the Transfer Date following the Monthly
Period in which such funds were processed for collection. The
Qualified Trust Institution which holds the Principal Account and the
Finance Charge Account shall maintain either on its own or through
its nominee or custodian for the benefit of the Series 1996-1
Certificateholders, possession of any certificated negotiable
instrument or security (other than certificated securities held by a
clearing corporation) evidencing the Permitted Investments relating
to the Principal Account or the Finance Charge Account, as the case
may be, described in clause (a) of the definition of Permitted
Investments from the time of purchase thereof until the time of
maturity; provided, however, that any Permitted Investment in short
term U.S. treasury securities may mature one day after such Transfer
Date and may be sold on such Transfer Date. At the end of each
month, all interest and earnings (net of losses and investment
expenses) on funds on deposit in the Principal Account and the
Finance Charge Account shall be deposited by the Trustee in a
separate deposit account with a Qualified Trust Institution in the
name of the Transferor, or a Person designated in writing by the
Transferor, which shall not constitute a part of the Trust, or shall
otherwise be turned over by the Trustee to the Transferor not less
frequently than monthly. Subject to the restrictions set forth
above, the Servicer, or a Person designated in writing by the
Servicer, shall instruct the Qualified Trust Institution which holds
the Principal Account and the Finance Charge Account in writing with
respect to the investment of funds on deposit in the Principal
Account and the Finance Charge Account. For purposes of determining
the availability of funds or the balances in the Principal Account or
the Finance Charge Account for any reason under this Agreement, all
investment earnings on such funds (net of losses and expenses) shall
be deemed not to be available or on deposit. Permitted Investments
shall not be disposed of prior to their maturity other than as
provided above with respect to short term U.S. treasury securities.
(d) Termination of Qualified Trust Institution. If the entity
with which any of the accounts established pursuant to this Section
4.3 ceases to be a "Qualified Trust Institution," then (i) such
entity shall provide the Trustee and the Servicer with prompt written
notice that it is no longer a "Qualified Trust Institution" and (ii)
transfer the funds deposited in each of the accounts in the manner
directed by the Servicer within 10 Business Days of the day on which
such entity ceased to be a "Qualified Trust Institution."
SECTION 4.4 Allocations.
(a) [Reserved]
(b) [Reserved]
(c) Allocations During the Revolving Period. During the
Revolving Period, the Servicer shall, prior to the close of business
on the day any Collections are deposited in the Collection Account,
direct the Trustee to transfer from the Collection Account (or, if
applicable, the Principal Account) the following amounts as set forth
below:
(i) Deposit in the Finance Charge Account an amount equal
to the sum of (x) the product of (A) the applicable Investor
Percentage on the Date of Processing of such Collections and (B)
the aggregate amount of Collections processed in respect of
Finance Charge Receivables on such Date of Processing and (y)
the proceeds of the sale of any Interest Rate Cap pursuant to
subsection 4.11(g) on such Date of Processing.
(ii) Treat as Shared Principal Collections allocable to
other Series, after giving effect to reallocation of principal
collections under Section 4.12 of this Agreement, and apply in
accordance with Section 4.2(e) of the Agreement an amount equal
to the product of (A) the applicable Investor Percentage on the
Date of Processing of such Collections and (B) the aggregate
amount of such Collections processed in respect of Principal
Receivables on such Date of Processing.
(d) Allocations During the Controlled Amortization Period.
During the Controlled Amortization Period, the Servicer shall, prior
to the close of business on the day any Collections are deposited in
the Collection Account, direct the Trustee to transfer from the
Collection Account (or, if applicable, the Principal Account) the
following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal
to the sum of (x) the product of (A) the applicable Investor
Percentage on the Date of Processing of such Collections and (B)
the aggregate amount of Collections processed in respect of
Finance Charge Receivables on such Date of Processing and (y)
the proceeds of the sale of any Interest Rate Cap pursuant to
subsection 4.11(g) on such Date of Processing.
(ii) Deposit in the Principal Account an amount, if any,
equal to the product of (A) the applicable Investor Percentage
on the Date of Processing of such Collections and (B) the
aggregate amount of such Collections processed in respect of
Principal Receivables on such Date of Processing (for any such
Date of Processing, a "Principal Allocation"); provided,
however, that if the Monthly Total Principal Allocation on such
Date of Processing exceeds the sum of the Class A Controlled
Amortization Amount, if such Date of Processing is during the
Controlled Amortization Period prior to the beginning of the
Monthly Period in which the Class A Expected Final Distribution
Date occurs, or the Class B Controlled Amortization Amount if
such Date of Processing is in the Controlled Amortization Period
thereafter, and the Deficit Controlled Amortization Amount for
such Monthly Period (the "Controlled Distribution Amount"), then
such excess (the "Controlled Excess Amount") shall not be
treated as a Principal Allocation and shall be treated as Shared
Principal Collections and applied in accordance with Section
4.2(e) of the Agreement; provided, further, that if on any Date
of Processing the aggregate Principal Allocation for such Date
of Processing and for each prior Date of Processing in such
Monthly Period is less than the Controlled Distribution Amount,
then Shared Principal Collections from other Series, if any,
allocable to the Certificates will be deposited to the Principal
Account in accordance with Section 4.2(e) of the Agreement to
the extent of such shortfall.
(e) Allocations During the Rapid Amortization Period. During
the Rapid Amortization Period, the Servicer shall, prior to the close
of business on the day any Collections are deposited in the
Collection Account, direct the Trustee to transfer from the
Collection Account the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal
to the sum of (x) the product of (A) the applicable Investor
Percentage on the Date of Processing of such Collections and (B)
the aggregate amount of such Collections processed in respect of
Finance Charge Receivables on such Date of Processing and (y)
the proceeds of the sale of any Interest Rate Cap pursuant to
subsection 4.11(g).
(ii) Deposit in the Principal Account an amount equal to
the Principal Allocation; provided, however, that after the date
on which the Investor Interest has been reduced to zero, the
amount determined in accordance with this subparagraph (ii)
shall be treated as Shared Principal Collections allocable to
other Series and applied in accordance with Section 4.2(e) of
the Agreement; provided, further, that if on any Date of
Processing the Monthly Total Principal Allocation for such Date
of Processing in such Monthly Period is less than the aggregate
outstanding principal amount of the Certificates, then Shared
Principal Collections from other Series, if any, allocable to
the Certificates pursuant to Section 4.2(e) of the Agreement
will be deposited in the Principal Account to the extent of such
shortfall.
SECTION 4.5 Defaulted Accounts and Charge-Offs.
(a) On each Determination Date, the Servicer shall calculate
the Class A Investor Default Amount for the preceding Monthly Period.
If on any Determination Date, the Class A Investor Default Amount for
such Determination Date exceeds the sum of the amounts allocated with
respect thereto pursuant to subsections 4.6(a)(iii), 4.6(c)(i),
4.6(d) and 4.12(a) with respect to the Monthly Period immediately
preceding such Determination Date, the Class B Investor Interest will
be reduced by the amount of such excess, but not more than the lesser
of the Class A Investor Default Amount for the related Distribution
Date and the Class B Investor Interest for such Determination Date.
In the event that such reduction would cause the Class B Investor
Interest to be a negative number, the Class B Investor Interest will
be reduced to zero, and the Class A Investor Interest will be reduced
by the amount by which the Class B Investor Interest would have been
reduced below zero, but not more than the Class A Investor Default
Amount for such Distribution Date (a "Class A Investor Charge-Off").
If the Class A Investor Interest has been reduced by the amount of
any Class A Investor Charge-Offs, it will be reimbursed on any
Distribution Date (but not by an amount in excess of the aggregate
Class A Investor Charge-Offs) by the amounts allocated and available
for such purpose pursuant to subsections 4.6(a)(iv), 4.6(c)(i),
4.6(d) and 4.12(a).
(b) On each Determination Date, the Servicer shall calculate
the Class B Investor Default Amount for the preceding Monthly Period.
If on any Determination Date, the Class B Investor Default Amount for
such Determination Date exceeds the amount allocated and available to
fund such amount pursuant to subsections 4.6(b)(iii), 4.6(c)(ii) and
4.6(e), the Class B Investor Interest shall be reduced by such
amount, but not more than the Class B Investor Default Amount for
such Distribution Date (a "Class B Investor Charge-Off"). The Class
B Investor Interest will also be reduced by the amount of Reallocated
Principal Collections pursuant to Section 4.12 and the amount of any
portion of the Class B Investor Interest allocated to the Class A
Certificates to avoid a reduction in the Class A Investor Interest
pursuant to subsection 4.5(a). The Class B Investor Interest will
thereafter be reimbursed (but not in the excess of the unpaid
principal balance of the Class B Certificates) on any Distribution
Date by amounts allocated and available for that purpose as described
under subsections 4.6(b)(iv), 4.6(c)(ii) and (v) and 4.6(e).
SECTION 4.6 Monthly Payments. On each Determination Date, the
Servicer shall notify the Trustee that the Servicer will withdraw, or shall
instruct the Trustee to withdraw, and the Trustee acting in accordance with
such instructions shall withdraw, on the succeeding Transfer Date, the
amounts required to be withdrawn from the Finance Charge Account pursuant
to subsections 4.6(a), (b), (c), (d) and (e). On each Determination Date,
the Servicer shall also notify the Trustee of the amounts to be withdrawn
by the Trustee, acting on instructions from the Servicer, from the Cash
Collateral Account, pursuant to subsections 4.6(d) and (e). Any such
withdrawal from the Cash Collateral Account shall be made on the date
provided in this Section 4.6 with respect to such withdrawal.
(a) On each Transfer Date, an amount equal to the Class A
Available Finance Charge Collections will be distributed in the
following priority:
(i) Class A Monthly Cap Rate Interest. On each Transfer
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account and deposit to the Distribution Account, to the
extent funds are available from Class A Available Finance Charge
Collections, (i) first, an amount equal to the Class A Monthly
Cap Rate Interest for the related Distribution Date; and (ii)
then, an amount equal to the amount of any overdue Class A
Monthly Cap Rate Interest, for which a payment has not been made
under this subsection 4.6(a)(i) or otherwise pursuant to this
Agreement; provided, however, that with respect to the first
Distribution Date relating to the Series 1996-1 Certificates,
the amount referred to in (i) above shall be $770,592.38
(reflecting an initial period of 13 days).
(ii) Class A Monthly Servicing Fee. On each Transfer
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Class A
Available Finance Charge Collections after giving effect to the
withdrawals pursuant to subsection 4.6(a)(i), an amount equal to
the Class A Monthly Servicing Fee accrued in respect of the
preceding Monthly Period, plus all accrued and unpaid Class A
Monthly Servicing Fees in respect of previous Monthly Periods,
and the Servicer or the Trustee, as the case may be, shall pay
such amount to the Servicer.
(iii) Class A Investor Default Amount. On each Transfer
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Class A
Available Finance Charge Collections after giving effect to the
withdrawal pursuant to subsections 4.6(a)(i)and (ii), an amount
equal to the Class A Investor Default Amount, if any, for the
preceding Monthly Period, and the Servicer or the Trustee, as
the case may be, shall (A) during the Revolving Period, apply
such amount in accordance with subsection 4.4(c)(ii), and (B)
during the Controlled Amortization Period or the Rapid
Amortization Period, and apply such amount in accordance with
Section 4.8, as if such amount were Collections of Principal
Receivables.
(iv) Reimbursement of Class A Investor Charge Offs. On
each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions of the Servicer, shall withdraw
from the Finance Charge Account, to the extent funds are
available from Class A Available Finance Charge Collections
after giving effect to the withdrawals and transfers pursuant to
subsections 4.6(a)(i) through (iii), an amount equal to the
aggregate amount of Class A Investor Charge Offs, if any, which
have not theretofore been reimbursed pursuant to this subsection
4.6(a)(iv) or otherwise pursuant to the Agreement and shall (x)
during the Revolving Period, apply such amount in accordance
with subsection 4.4(c)(ii) and (y) during the Controlled
Amortization Period or the Rapid Amortization Period, apply such
amount in accordance with Section 4.8, as if such amount were
Collections of Principal Receivables. On the date of any such
reimbursement, the Class A Investor Interest shall be increased
by the amount of such reimbursement of Class A Investor Charge
Offs.
(v) Excess Spread. The remaining Class A Available
Finance Charge Collections, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth in
subsection 4.6(c).
(b) On each Transfer Date, an amount equal to Class B Available
Finance Charge Collections will be distributed in the following
priority:
(i) Class B Monthly Cap Rate Interest. On each Transfer
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account and deposit to the Distribution Account, to the
extent funds are available from Class B Available Finance Charge
Collections, (i) first, an amount equal to the Class B Monthly
Cap Rate Interest for the related Distribution Date; and (ii)
then, an amount equal to the amount of any overdue Class B
Monthly Cap Rate Interest, for which a payment has not been made
under this subsection 4.6(b)(i) or otherwise pursuant to the
Agreement; provided, however, that with respect to the first
Distribution Date relating to the Series 1996-1 Certificates,
the amount referred to in (i) above shall be $43,835.23
(reflecting an initial period of 13 days).
(ii) Class B Monthly Servicing Fee. On each Transfer
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Class B
Available Finance Charge Collections after giving effect to the
withdrawals pursuant to subsection 4.6(b)(i), an amount equal to
the Class B Monthly Servicing Fee accrued in respect of the
preceding Monthly Period, plus all accrued and unpaid Class B
Monthly Servicing Fees in respect of previous Monthly Periods,
and the Servicer or the Trustee, as the case may be, shall pay
such amount to the Servicer.
(iii) Class B Investor Default Amount. On each Transfer
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Class B
Available Finance Charge Collections after giving effect to the
withdrawal pursuant to subsections 4.6(b)(i) and (ii) an amount
equal to the Class B Investor Default Amount, if any, for the
preceding Monthly Period, and the Servicer or the Trustee, as
the case may be, shall apply such amount in accordance with
Section 4.12 as if such amount were Collections of Principal
Receivables allocable to the Class B Investor Interest.
(iv) Reimbursement of Class B Investor Charge Offs. On
each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions of the Servicer, shall withdraw
from the Finance Charge Account, to the extent funds are
available from Class B Available Finance Charge Collections
after giving effect to the withdrawals and transfers pursuant to
subsections 4.6(b)(i) through (iii), an amount equal to the
aggregate amount of Class B Investor Charge Offs, if any, which
have not theretofore been reimbursed pursuant to this subsection
4.6(b)(iv) or otherwise pursuant to this Agreement and shall
apply such amount in accordance with Section 4.12 as if such
amounts were Collections of Principal Receivables allocable to
the Class B Investor Interest. On the date of any such
reimbursement, the Class B Investor Interest shall be increased
by the amount of such reimbursement of Class B Investor Charge
Offs.
(v) Excess Spread. The remaining Class B Available
Finance Charge Collections, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth in
subsection 4.6(c).
(c) On each Transfer Date, an amount equal to Excess Spread
will be distributed in the following priority:
(i) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread, an amount equal to the Class A
Required Amount, if any, with respect to the related Monthly
Period, to be applied, with respect to each of the components
thereof, in accordance with Section 4.6(a).
(ii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread, after giving effect to the
withdrawal pursuant to subsection 4.6(c)(i), an amount equal to
the Class B Required Amount, if any, with respect to the related
Monthly Period, to be applied, with respect to each of the
components thereof, in accordance with Section 4.6(b).
(iii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) and (ii), an
amount equal to the amount of any accrued and unpaid interest on
any overdue Class A Monthly Interest, calculated on the basis of
(x) a default rate of interest equal to the Class A Certificate
Rate plus 0.5% and (y) the actual number of days such Class A
Monthly Interest is or was at any time overdue, divided by 360.
(iv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (iii), an
amount equal to the amount of any accrued and unpaid interest on
any overdue Class B Monthly Interest, calculated on the basis of
(x) a default rate of interest equal to the Class B Certificate
Rate plus 0.5% and (y) the actual number of days such Class B
Monthly Interest is or was at any time overdue, divided by 360.
(v) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (iv), an
amount equal to any reductions in the Class B Investor Interest
in connection with the payment of the Class A Required Amount,
to reinstate the Class B Investor Interest to the extent of any
such reduction and shall be applied in accordance with Section
4.12 as if such amounts were Collections of Principal
Receivables allocable to the Class B Investor Interest.
(vi) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (v), and
shall deposit in the Cash Collateral Account, an amount equal to
the excess of the Required Cash Collateral Amount for such
Transfer Date over the amount of funds on deposit in the Cash
Collateral Account (without giving effect to any deposit made on
such date hereunder).
(vii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (vi), an
amount equal to the amount by which the Class A Monthly Interest
for the related Interest Accrual Period exceeds the Class A
Monthly Cap Rate Interest (other than Class A Excess Interest),
to the extent such amount is not paid by the Interest Rate Cap
Provider pursuant to the Class A Interest Rate Cap in accordance
with Section 4.11(a), plus any such amounts accrued and unpaid
for prior Interest Accrual Periods.
(viii) On each Transfer Date, the Servicer or the
Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Finance Charge Account, to the
extent funds are available from Excess Spread after giving
effect to the withdrawals pursuant to subsections 4.6(c)(i)
through (vii), an amount equal to the amount by which the Class
B Monthly Interest for the related Interest Accrual Period
exceeds the Class B Monthly Cap Rate Interest (other than Class
B Excess Interest), to the extent such amount is not paid by the
Interest Rate Cap Provider pursuant to the Class B Interest Rate
Cap in accordance with Section 4.11(a), plus any such amounts
accrued and unpaid for prior Interest Accrual Periods.
(ix) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account an amount equal to the
amount of any Excess Spread remaining after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (viii),
and apply any such amount to the extent specified in accordance
with the Loan Agreement.
(x) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (ix), an
amount equal to the amount of any Class A Excess Interest which
accrued during the related Interest Accrual Period, which shall
be deposited in the Distribution Account.
(xi) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (x), an
amount equal to the amount of any Class B Excess Interest which
accrued during the related Interest Accrual Period, which shall
be deposited in the Distribution Account.
(xii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i) through (xi), and
shall make such amounts available to be applied as Shared
Finance Charge Collections to pay to Certificateholders of other
Series to the extent of shortfalls, if any, in amounts payable
to such Certificateholders from Finance Charge Collections
allocated to such other Series in accordance with the related
Supplements.
(xiii) On each Transfer Date, the Servicer or the
Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Finance Charge Account, to the
extent funds are available from Excess Spread after giving
effect to the withdrawals pursuant to subsections 4.6(c)(i)
through (xii), and shall make such amounts available to the
Trustee to pay any accrued and unpaid expenses of the Trust, if
any, not otherwise paid pursuant to this Section 4.6.
(xiv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, the remaining Excess
Spread after giving effect to the withdrawals pursuant to
subsections 4.6(c)(i) through (xiii), and shall pay such amount
to the holder of the Exchangeable Seller Certificate.
(d) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the
"Class A Required Amount"), if any, by which the sum of (i) Class A
Monthly Cap Rate Interest for such Distribution Date, (ii) any Class
A Monthly Cap Rate Interest previously due but not paid to the Class
A Certificateholders on a prior Distribution Date, (iii) the Class A
Monthly Servicing Fee for the related Distribution Date and any
accrued and unpaid Class A Monthly Servicing Fees from prior Monthly
Periods, (iv) the Class A Investor Default Amount, if any, for such
Distribution Date and (v) the unreimbursed Class A Investor Charge
Offs, exceeds the Class A Available Finance Charge Collections
deposited in the Finance Charge Account for the related Monthly
Period. In the event that the Class A Required Amount for such
Distribution Date is greater than zero, the Servicer shall give
written notice to the Trustee of such positive Class A Required
Amount on the related Determination Date and all or a portion of the
Excess Spread with respect to the related Monthly Period in an amount
equal to the Class A Required Amount for such Distribution Date shall
be distributed from the Finance Charge Account on such Distribution
Date pursuant to Section 4.6(c)(i). In the event that the Class A
Required Amount for such Distribution Date exceeds the amount of
Excess Spread with respect to the related Monthly Period, then the
Trustee shall, in accordance with the related Supplements, withdraw
from the finance charge accounts for other Series the amounts of
Shared Finance Charge Collections with respect to the related Monthly
Period, if any, allocable to Series 1996-1 from other Series, in an
amount equal to the remaining Class A Required Amount, and such
amount shall be deposited into the Distribution Account and be
distributed on such Distribution Date in accordance with subsections
4.6(a)(i) through (iv). In the event that the Class A Required
Amount for such Distribution Date exceeds the amount of Excess Spread
and the amount of the Shared Finance Charge Collections allocable to
the Series 1996-1 Certificates with respect to the related Monthly
Period, then by 1:00 p.m. New York City time on the related Transfer
Date, the Trustee, acting upon instruction from the Servicer, shall
make a withdrawal from the Cash Collateral Account of all or a
portion of the Available Cash Collateral Amount with respect to such
Distribution Date in an amount equal to such excess, which amount
shall be applied to fund the Class A Required Amount in accordance
with subsection 4.6(a). In the event that the Class A Required
Amount for such Distribution Date exceeds the amount of Excess
Spread, Shared Finance Charge Collections allocable to the Class A
Certificates, and the Available Cash Collateral Amount with respect
to such Distribution Date, all or a portion of the Reallocated
Principal Collections with respect to such Monthly Period in an
amount equal to such excess shall be distributed on such Distribution
Date pursuant to Section 4.12(a).
(e) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the
"Class B Required Amount"), if any, by which the sum of (i) Class B
Monthly Cap Rate Interest for such Distribution Date, (ii) any Class
B Monthly Cap Rate Interest previously due but not paid to the Class
B Certificateholders on a prior Distribution Date, (iii) the Class B
Monthly Servicing Fee for the related Distribution Date and any
accrued and unpaid Class B Monthly Servicing Fees from prior Monthly
Periods, (iv) the Class B Investor Default Amount and (v) the
unreimbursed Class B Investor Charge Offs, if any, for such
Distribution Date, exceeds the Class B Available Finance Charge
Collections deposited in the Finance Charge Account for the related
Monthly Period. In the event that the Class B Required Amount for
such Distribution Date is greater than zero, the Servicer shall give
written notice to the Trustee of such positive Class B Required
Amount on the related Determination Date and all or a portion of
Excess Spread (other than Excess Spread applied to fund the Class A
Required Amount with respect to such Distribution Date) with respect
to the related Monthly Period shall be distributed from the Finance
Charge Account on such Distribution Date pursuant to Section
4.6(c)(ii). In the event that the Class B Required Amount for such
Distribution Date exceeds the amount of Excess Spread with respect to
such Monthly Period remaining after application thereof to fund the
Class A Required Amount, then the Trustee shall, in accordance with
the related Supplements, withdraw from the finance charge accounts
for other Series the amounts of Shared Finance Charge Collections
with respect to the related Monthly Period, if any, allocable to the
Series 1996-1 Certificates from other Series, after the application
thereof pursuant to subsection 4.6(d), in an amount equal to the
remaining Class B Required Amount, and such amount shall be deposited
to the Distribution Account and be distributed on such Distribution
Date in accordance with subsections 4.6(b)(i) through (iv) and then
applied to the amount of any reduction in the Class B Investor
Interest in connection with the payment of the Class A Required
Amount which has not been reinstated pursuant to subsection
4.6(c)(v), and then applied to the amount of any remaining excess
pursuant to subsection 4.6(c)(vii), and then applied to the amount of
any remaining excess pursuant to subsection 4.6(c)(viii). In the
event that the Class B Required Amount for such Distribution Date
exceeds the amount of Excess Spread and the amount of the remaining
Shared Finance Charge Collections allocable to the Series 1996-1
Certificates with respect to the related Monthly Period, then by 1:00
p.m. New York City time on the related Transfer Date, the Trustee,
acting upon instruction from the Servicer, shall make a withdrawal
from the Cash Collateral Account of all or a portion of the Available
Cash Collateral Amount (other than that portion of the Available Cash
Collateral Amount applied to fund the Class A Required Amount with
respect to such Distribution Date) in an amount equal to such excess,
and any amount so withdrawn shall be applied to fund the remaining
Class B Required Amount in accordance with subsection 4.6(b).
SECTION 4.7 Payment of Certificate Interest. On each Distribution
Date, the Paying Agent shall pay in accordance with Section 5.1 to the
Class A Certificateholders from the Distribution Account the amount
deposited into the Distribution Account and allocated to the Class A
Certificates pursuant to subsections 4.6(a)(i), 4.6(c)(i), (iii), (vii) and
(x), 4.6(d), 4.11(a) and 4.12(a) on the related Transfer Date or on such
Distribution Date, as applicable, and to the Class B Certificateholders
from the Distribution Account the amount deposited into the Distribution
Account and allocated to the Class B Certificates pursuant to subsections
4.6(b)(i), 4.6(c)(ii), (iv), (viii) and (xi), 4.6(e) and 4.11(a) on the
related Transfer Date or on such Distribution Date, as applicable.
SECTION 4.8 Payment of Certificate Principal.
(a) On the Determination Date in the Monthly Period following the
Monthly Period in which either the Controlled Amortization Period or the
Rapid Amortization Period commences and on each Determination Date
thereafter, the Servicer shall, subject to the following paragraph, give
notice to the Trustee that it will itself withdraw, or shall instruct the
Trustee to withdraw, and on the Transfer Date succeeding such Determination
Date, the Servicer or the Trustee shall, subject to the following
paragraph, (i) first, withdraw from the Principal Account and deposit in
the Distribution Account the Available Principal Collections for the
preceding Monthly Period and (ii) second, to the extent the amount then on
deposit in the Distribution Account and available for distribution to
Series 1996-1 Certificateholders as principal is (A) during the Controlled
Amortization Period, less than the Class A Controlled Amortization Amount
or the Class B Controlled Amortization Amount, as applicable and (B) during
the Rapid Amortization Period less than the Investor Interest, withdraw
from the Finance Charge Account and deposit in the Distribution Account the
sum of the amounts allocated to Investor Default Amounts, Class A Investor
Charge-Offs and Class B Investor Charge-Offs pursuant to subsections
4.6(a)(iii), 4.6(a)(iv), 4.6(b)(iii), 4.6(b)(iv) 4.6(c)(i), 4.6(c)(ii) and
4.12, as applicable; provided, however that the amount so deposited in the
Distribution Account shall not exceed (a) during the Controlled
Amortization Period, the Controlled Distribution Amount and (b) during the
Rapid Amortization Period, the Investor Interest, and in each case, any
amounts in excess thereof shall be treated as Shared Principal Collections
and be applied in accordance with Section 4.2(e) of the Agreement; further
provided, however, that on each Transfer Date in the Controlled
Amortization Period, the Servicer shall withdraw, or instruct the Trustee
to withdraw, and on such Transfer Date the Trustee shall withdraw, from the
Excess Funding Account and deposit to the Distribution Account, an amount
equal to the lesser of (x) the amount on deposit therein (exclusive of
investment earnings) and (y) the amount by which the Controlled
Distribution Amount exceeds the sum of (I) the Monthly Total Principal
Allocation, (II) the amount deposited or to be deposited in the
Distribution Account on such Transfer Date pursuant to clause (ii) above
and (III) the amount of Shared Principal Collections from other Series
deposited in the Principal Account during the preceding Monthly Period
pursuant to Section 4.4(d)(ii) (for any Monthly Period, the sum of the
unpaid excess of the Class A Controlled Amortization Amount or the Class B
Controlled Amortization Amount, as applicable, over the sum of the amounts
specified in clauses (I), (II) and (III) above for such Monthly Period plus
the unpaid amount of such excesses from any prior Monthly Period, shall be
the "Deficit Controlled Amortization Amount" with respect to such Monthly
Period; and further provided, however, that on the first Transfer Date in
the Rapid Amortization Period, the Servicer shall withdraw, or instruct the
Trustee to withdraw, and on such Transfer Date the Trustee shall withdraw,
from the Excess Funding Account and deposit to the Distribution Account,
any amount on deposit therein (exclusive of investment earnings). The
amounts deposited into the Distribution Account pursuant to the preceding
sentence on each Transfer Date shall be distributed on the related
Distribution Date in accordance with Section 5.1 hereof first to the Class
A Certificateholders until the earlier of the Distribution Date on which
the Class A Investor Interest is paid in full and the Scheduled Series
1996-1 Termination Date and then, beginning on the Class B Payment
Commencement Date and on each Distribution Date thereafter, to the Class B
Certificateholders until the Series 1996-1 Termination Date.
On the Determination Date preceding the final Transfer Date, the
Servicer shall determine the amounts to be deposited pursuant to this
sentence and on the final Transfer Date: (x) the Servicer shall, or shall
instruct the Trustee to, and the Trustee shall, withdraw from the Principal
Account and deposit into the Distribution Account, an amount which is no
greater than the sum of the Class A Investor Interest and the Class B
Investor Interest as of the end of the day on the preceding Record Date;
and (y) the Servicer shall, or shall instruct the Trustee to, and the
Trustee shall, withdraw from the Principal Account and deposit into the
Collection Account, for allocation to other Series as Principal Collections
pursuant to Article IV, the amount, if any, remaining in the Principal
Account after giving effect to the withdrawals made pursuant to clause (x).
(b) On each Distribution Date occurring after a deposit is made to
the Distribution Account pursuant to subsection 4.8(a) or Sections 5 or 15
of the Series Supplement relating to Series 1996-1, the Paying Agent shall
pay in accordance with Section 5.1 to the Series 1996-1 Certificateholders
from the Distribution Account, the amount so deposited into the
Distribution Account.
SECTION 4.9 Establishment of the Cash Collateral Account.
(a) Cash Collateral Account. The Servicer, for the benefit of the
Series 1996-1 Certificateholders, shall establish and maintain or cause to
be established and maintained with a Qualified Trust Institution (other
than the Servicer) in the name of the Trustee, on behalf of the Series
1996-1 Certificateholders, the "Cash Collateral Account," which shall be a
segregated trust account with the corporate trust department of such
Qualified Trust Institution, and held in trust by such Qualified Trust
Institution bearing a designation clearly indicating that the funds
deposited therein are held by the Trustee, on behalf of the Series 1996-1
Certificateholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Cash Collateral
Account and in all proceeds thereof. If, at any time, the institution
holding the Cash Collateral Account ceases to be a Qualified Trust
Institution, the Servicer shall within 20 Business Days establish a new
Cash Collateral Account meeting the conditions specified above with a
Qualified Trust Institution and shall transfer any cash and/or any
investments to such new Cash Collateral Account. From the date such new
Cash Collateral Account is established, it shall be the "Cash Collateral
Account." On the Closing Date, the Cash Collateral Account will be funded
from the proceeds of a loan made pursuant to the Loan Agreement by the Cash
Collateral Depositor and from a deposit by the Transferor on the Closing
Date in the aggregate amount of $36,000,000 to the Cash Collateral Account
and on each Transfer Date the Servicer or the Trustee acting in accordance
with the instructions from the Servicer shall make deposits and withdrawals
in the accounts specified in Sections 4.6 and 4.10 hereof, as the case may
be. The Trustee, acting in accordance with instructions from the Servicer,
shall make withdrawals from the Cash Collateral Account from time to time
in an amount up to the Available Cash Collateral Amount at such time, for
the purposes set forth in this Section 4.9. Such withdrawals shall be made
in the priority set forth below and the Available Cash Collateral Amount
will be reduced by the amount of each such withdrawal as provided in the
definition thereof set forth in Section l.
(b) Administration of the Cash Collateral Account. The Servicer
shall administer the Cash Collateral Account in accordance with Section 2.7
of the Loan Agreement and this Agreement. Funds on deposit in the Cash
Collateral Account on any Transfer Date, after giving effect to any
deposits to or withdrawals from the Cash Collateral Account on such
Transfer Date, shall be invested in Permitted Investments that will mature
so that such funds will be available for withdrawal on or prior to the
following Transfer Date; provided, however, that no such investment shall
be made before 2:00 p.m. (New York City time) on such Transfer Date; and
further provided, however, that each Permitted Investment shall mature not
later than the Business Day preceding the following Transfer Date. The net
earnings from such investment shall be applied as specified in the Loan
Agreement.
The Trustee shall maintain, either on its own behalf or through its
nominee or custodian, on behalf of the Series 1996-1 Certificateholders,
possession of any certificated negotiable instrument or security (other
than certificated securities held by a clearing corporation) evidencing the
Permitted Investments made pursuant to this subsection 4.9(b) described in
clause (a) of the definition of "Permitted Investments" from the time of
purchase thereof until the time of sale or maturity. Subject to the
restrictions set forth above, the Servicer and the Agent (as such term is
defined in the Loan Agreement) shall have the authority to instruct the
Trustee with respect to the investment of funds on deposit in the Cash
Collateral Account as and to the extent provided in the Loan Agreement.
For purposes of determining the availability of funds or the balances in
the Cash Collateral Account for any reason under this Agreement, all
investment earnings on such funds shall be deemed not to be available or on
deposit.
(c) Notice of Withdrawals. In the event that, for any Transfer
Date, the sum of the amount required to be withdrawn from the Cash
Collateral Account pursuant to subsections 4.6(d) and (e) (such sum being
referred to as the "Total Withdrawal Amount") is greater than zero, the
Servicer shall give written notice to the Trustee, in substantially the
form of Exhibit 7 to the Series Supplement, of such positive Total
Withdrawal Amount.
(d) Application of Cash Collateral Account Surplus. In the event
that the Cash Collateral Account Surplus on any Transfer Date, after giving
effect to all deposits to and withdrawals from the Cash Collateral Account
pursuant to subsections 4.6(d) and (e) on such Transfer Date, is greater
than zero, the Trustee, acting in accordance with the instructions of the
Servicer, shall withdraw from the Cash Collateral Account not later than
1:00 p.m. (New York City time) an amount equal to the Cash Collateral
Account Surplus and, as directed, either (x) apply such amount in
accordance with subsections 4.6(c)(ix) through (xiv) hereof or (y) in the
case of a Cash Collateral Account Surplus arising as a result of an
Additional Loan (as defined in the Loan Agreement), pay such amount to the
Holder of the Exchangeable Seller Certificate.
(e) Termination of Series. On the Business Day succeeding the
Series 1996-1 Termination Date, the Trustee, acting in accordance with the
instructions of the Servicer, after the prior payment of all amounts owing
to the Series 1996-1 Certificateholders and the Servicer and payable from
the Cash Collateral Account as provided herein, shall withdraw from the
Cash Collateral Account not later than 1:00 p.m. (New York City time) and
pay in accordance with subsections 4.6(c)(ix) through (xiv) of this
Agreement, all amounts then on deposit in the Cash Collateral Account.
SECTION 4.10 Transferor's or Servicer's Failure to Make a Deposit or
Payment.
(a) If (i) the Servicer fails to give instructions on any
Determination Date to make any payment or deposit relating to the Series
1996-1 Certificates required to be made by the Servicer on the related
Transfer Date at the time specified in the Agreement (including applicable
grace periods), or (ii) the Trustee shall not have received the notice
referred to in the first paragraph of subsection 4.10(c) in the manner and
at the time specified in the first paragraph of subsection 4.10(c), and, in
either case, the Trustee determines that any payment or deposit (other than
as required by subsection 2.4(d) (except as provided in the immediately
following paragraph), 2.4(e), 2.4(f), 3.3, 9.2, 10.2, or 12.2(a) of the
Agreement, or Sections 4 or 15 of the Series Supplement relating to Series
1996-1 (collectively, "Excluded Payments")) required to be made by the
Transferor or the Servicer, as the case may be, has not been made on the
related Transfer Date, the Trustee (x) shall make such payment from the
applicable Investor Account or the Cash Collateral Account, as the case may
be, without instruction from the Servicer, or (y) shall (except in the case
of (i) a deposit or payment which was required to have been made to or from
the Cash Collateral Account, (ii) payments required to be made to the
Servicer pursuant to subsection 4.6(a)(ii) or (b)(ii) and (iii) Excluded
Payments), subject to subsection 4.10(c), make a withdrawal from the Cash
Collateral Account (up to the Available Cash Collateral Amount), in an
amount equal to the amount of such payment or deposit. The Trustee shall
be required to make any such payment, deposit or withdrawal hereunder only
to the extent that it has sufficient information to allow the Trustee to
determine the amount thereof; provided, however, that the Trustee shall in
all cases be deemed to have sufficient information to determine the amount
of interest (i) required to be paid or provided for under subsections
4.6(a)(i) and (b)(i) on each Transfer Date, and (ii) payable to the Series
1996-1 Certificateholders on each Distribution Date. The Servicer shall,
upon request of the Trustee, promptly provide the Trustee with all
information necessary to allow the Trustee to make such a payment or
withdrawal. Such funds or the proceeds of such withdrawal shall be applied
by the Trustee in the manner in which such payment or deposit should have
been made by the Transferor or the Servicer, as the case may be.
If (i) the Servicer or the Transferor fails to make any payment or
deposit relating to the Series 1996-1 Certificates (including, but not
limited by, any deposits pursuant to Section 4.4, and other than (w)
payments or deposits (referred to above) required to be made on any
Transfer Date relating to the Series 1996-1 Certificates, (x) payments or
deposits required by subsection 2.4(d) (except as referred to below) or (y)
payments or deposits required by subsection 2.4(e), 2.4(f), 3.3, 9.2, 10.2
or 12.2(a) of the Agreement or Section 5 or 15 of the Series Supplement
relating to Series 1996-1) required to be made by the Servicer or
Transferor, respectively, at the time specified in the Agreement (including
applicable grace periods) and (ii) the Trustee shall have received the
notice referred to in the second paragraph of subsection 4.10(c) from the
Transferor or the Servicer, as the case may be, in the manner and at the
time specified in the second paragraph of subsection 4.10(c), the Trustee
shall make such payment from the applicable Investor Account without
instruction from the Servicer, or shall, subject to subsection 4.10(c),
make a withdrawal from the Cash Collateral Account (up to the Available
Cash Collateral Amount) in an amount equal to the amount of such payment or
deposit relating to the Series 1996-1 Certificates; provided, however, that
the Trustee shall make a withdrawal from the Cash Collateral Account (up to
the Available Cash Collateral Amount) in an amount equal to the deposit
required to be made by the Transferor pursuant to subsection 2.4(d) hereof,
to the extent allocable to the Investor Interest, that has not been made
for any Ineligible Receivable as to which (i) reassignment would have
occurred under subsection 2.4(d) hereof but for the Transferor's failure to
make a deposit into the Collection Account required under subsection 2.4(d)
to the extent allocable to the Investor Interest and (ii) either (A)
Collections with respect to such Ineligible Receivable have not been
deposited, or are prohibited from being deposited, in the Collection
Account, or (B) the Obligor with respect to such Ineligible Receivable does
not make one or more payments to the Servicer with respect thereto because
it is an Ineligible Receivable. The Trustee shall be required to make any
such payment, deposit or withdrawal hereunder only to the extent that it
has sufficient information to allow the Trustee to determine the amount
thereof. Such funds or the proceeds of such withdrawal shall be applied by
the Trustee in the manner in which such payment or deposits should have
been made by the Transferor or the Servicer, as the case may be.
(b) If a withdrawal is made from the Cash Collateral Account
pursuant to subsection 4.10(a) because of a failure of the Servicer or the
Transferor to make, or give instructions to make, any payment or deposit
required to be made or given by the Servicer or the Transferor from sources
other than a withdrawal from the Cash Collateral Account, the Servicer or
the Transferor, as the case may be, shall, as appropriate, (i) make the
required payment, deposit or transfer within five Business Days, or (ii)
give the Trustee instructions to transfer the required payment or deposit
in respect of which such withdrawal from the Cash Collateral Account was
made, to the Cash Collateral Account.
(c) The Transferor and the Servicer covenant and agree hereby to
notify the Trustee, no later than 10:00 a.m. (New York time) on each
Transfer Date, that the Transferor or the Servicer, as the case may be, has
made all deposits and withdrawals required to be made on such Business Day
by the Servicer or the Transferor, as the case may be, relating to the
Series 1996-1 Certificates on such Transfer Date, which notice may be by
telephone confirmed by facsimile. Such notice shall be substantially in
the form of Exhibit 5 to the Series Supplement, with such changes as the
Servicer may determine to be necessary or desirable; provided, however,
that no change shall serve to exclude information required pursuant to this
Section 4.10(c). The Trustee shall be entitled to rely on such telephone
notice as conclusive evidence that such deposits and withdrawals have been
made by the Transferor or the Servicer, as the case may be, in a timely
manner unless such Trustee shall not have received such facsimile
confirmation by 12:00 noon, (New York time) on such Transfer Date.
If, on any Business Day, the Transferor or the Servicer fails to make
any payment or deposit relating to the Series 1996-1 Certificates required
to be made by it on such Business Day (other than the deposits and payments
required to be made by the Transferor or the Servicer on each Transfer
Date), the Transferor or the Servicer, as the case may be, shall notify the
Trustee not later than 11:00 a.m. (New York time) on such Business Day that
it has failed to make such payment or deposit, which notice shall specify
(i) the amount of such deposit or payment and (ii) if applicable, the
account from which such payment was to be made and the Person to whom, or
the account into which, such payment was to be made. Such notice shall be
substantially in the form of Exhibit 6 to the Series Supplement.
If, on any Business Day, the Trustee shall be required to make a
withdrawal from the Cash Collateral Account pursuant to Section 4.10, the
Trustee shall make such withdrawal from the Cash Collateral Account not
later than 2:00 p.m. (New York City time) on such Business Day.
SECTION 4.11 Interest Rate Caps.
(a) The Trustee hereby acknowledges that the Class A Interest Rate
Cap has been obtained for the benefit of the Class A Certificateholders and
the Class B Interest Rate Cap for the benefit of the Class B
Certificateholders. Each of the Interest Rate Caps provides that (i) the
Trust shall not be required to make any payments thereunder and (ii) the
Trust shall be entitled to receive a payment (determined in accordance with
the respective Interest Rate Cap) from the Interest Rate Cap Provider on or
prior to each Transfer Date if LIBOR plus 0.15% for the related Interest
Accrual Period exceeds the Class A Cap Rate or LIBOR plus 0.30% for the
related Interest Accrual Period exceeds the Class B Cap Rate. The Interest
Rate Cap Provider will make a payment on or prior to each Transfer Date to
the Trustee, on behalf of the Trust, in an amount equal to the product of
(i) the amount by which, in the case of the Class A Interest Rate Cap,
LIBOR plus 0.15% exceeds the Class A Cap Rate or, in the case of the Class
B Interest Rate Cap, LIBOR plus 0.30% exceeds the Class B Cap Rate, as
applicable, (ii) the Class A Notional Amount or the Class B Notional
Amount, as applicable, for the related Calculation Period, and (iii) the
actual number of days in such Calculation Period divided by 360. Payments
pursuant to the Class A Interest Rate Cap will be deposited in the
Distribution Account for payment to the Class A Certificateholders on the
following Distribution Date. Payments pursuant to the Class B Interest
Rate Cap will be deposited in the Distribution Account for payment to the
Class B Certificateholders on the following Distribution Date.
(b) In the event that either (I) the short term unsecured debt or
short term certificate of deposit rating of the Interest Rate Cap Provider
is withdrawn or reduced below A-1+ by Standard & Poor's or (II) the long
term unsecured debt or long term certificate of deposit rating of the
Interest Rate Cap Provider is withdrawn or reduced below Aa3 by Moody's,
then within 60 days (in the case of a withdrawal or reduction by Standard &
Poor's) or 30 days (in the case of a withdrawal or reduction by Moody's)
after such decline in the creditworthiness of the Interest Rate Cap
Provider as determined by the applicable Rating Agency (notice of which the
Interest Rate Cap Provider shall provide to the Trustee and the Servicer
promptly upon obtaining knowledge thereof), the Interest Rate Cap Provider,
at its own expense, will either (x) obtain a Replacement Interest Rate Cap
for each Interest Rate Cap under which it is then currently an obligor or
(y) enter into a Qualified Substitute Arrangement. Upon receipt of notice
of any such reduction or withdrawal, the Trustee, at the direction of the
Servicer, shall at its option either (i) with the prior written
confirmation of the applicable Rating Agency that such action will not
result in a reduction or withdrawal of the rating of the Class A
Certificates or the Class B Certificates, use its best efforts to (1) cause
the Interest Rate Cap Provider to pledge securities in the manner provided
by applicable law or (2) otherwise cause to be pledged securities, which in
each case shall be held by the Trustee, its custodian, 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 applicable
Interest Rate Cap or Caps, or (ii) provided that, for each Interest Rate
Cap under which such Interest Rate Cap Provider is then currently an
obligor, a Replacement Interest Rate Cap or Qualified Substitute
Arrangement meeting the requirements of Section 4.11(c) has been obtained
or will be obtained prior to or simultaneously with the termination of such
Interest Rate Cap pursuant to clause (B) below, (A) provide written notice
to the Interest Rate Cap Provider of its intention to terminate the
Interest Rate Cap within such 30-day period or 60-day period, as
applicable, and (B) terminate such Interest Rate Cap within such 30-day
period or 60-day period, as applicable, request the payment to it of all
amounts due to the Trust under such Interest Rate Cap through the
termination date and deposit any such amounts so received, on the day of
receipt, to the Collection Account for application as Finance Charge
Receivables for the benefit of the applicable Class of Certificateholders,
or (iii) use reasonable efforts to establish any other arrangement
satisfactory to the Rating Agency including collateral, guarantees or
letters of credit, which arrangement will result in the applicable Rating
Agency not reducing or withdrawing the then rating of the Class A
Certificates or the Class B Certificates (a "Qualified Substitute
Arrangement"); provided, however, that in the event at any time any
alternative arrangement established pursuant to clause (x) or clause (y) of
the preceding sentence or pursuant to clause (i) or clause (iii) of this
sentence shall cease to be satisfactory to the Rating Agency or shall
terminate prior to the Class B Expected Final Payment Date, then the
provisions of this Section 4.11(b) shall again be applied and in connection
therewith the 30-day period or 60-day period, as applicable, referred to
above shall commence on the date the Servicer receives notice of such
cessation or termination, as the case may be.
(c) Unless an alternative arrangement pursuant to clause (x) or
(y)(i) of Section 4.11(b) is being established, the Trustee, at the
direction of the Servicer shall use its best efforts to obtain with respect
to each Interest Rate Cap referenced in Section 4.11(b) a Replacement
Interest Rate Cap or Qualified Substitute Arrangement meeting the
requirements of this Section 4.11(c) during the 30-day period referred to
in Section 4.11(b). The Trustee shall not at any time terminate any such
Interest Rate Cap unless, prior to or simultaneously with the termination
thereof, the Trustee or the Servicer has obtained or shall obtain (i) a
Replacement Interest Rate Cap or Qualified Substitute Arrangement with
respect thereto, (ii) to the extent applicable, an Opinion of Counsel as to
the due authorization, execution, delivery, validity and enforceability of
such Replacement Interest Rate Cap or Qualified Substitute Arrangement, as
the case may be, and (iii) a letter from the Rating Agency confirming that
the termination of such Interest Rate Cap and its replacement with such
Replacement Interest Rate Cap or Qualified Substitute Arrangement will not
adversely affect its rating of the Class A Certificates or the Class B
Certificates.
(d) The Servicer shall notify the Trustee, the Rating Agency and the
Cash Collateral Depositor within five Business Days after obtaining
knowledge that the long term unsecured debt or the long term certificate of
deposit rating of the Interest Rate Cap Provider has been withdrawn or
reduced by Standard & Poor's or Moody's.
(e) Notwithstanding the foregoing, the Servicer may at any time
obtain a Replacement Interest Rate Cap, provided that the 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
Interest Rate Cap and (ii) a letter from the Rating Agency confirming that
the termination of the then current Interest Rate Cap and its replacement
with such Replacement Interest Rate Cap will not adversely affect its
rating of the Class A Certificates or the Class B Certificates.
(f) The Trustee hereby appoints the Interest Rate Cap Provider to
perform the duties of the calculation agent under the Interest Rate Cap and
the Interest Rate Cap Provider accepts such appointment. The Trustee
shall, at the direction of the Servicer, request a copy of the audited
annual consolidated financial statements of Swiss Bank Corporation,
prepared in accordance with accounting principles that are generally
accepted in Switzerland.
(g) The Trustee, on behalf of the Certificateholders, shall have the
right (during the Amortization Period) to, and upon notification from the
Servicer shall, sell all or a portion of the Interest Rate Caps subject to
the following conditions having been met:
(i) The Notional Amount of the unsold portion of each Interest
Rate Cap remaining as an asset of the Trust shall at least equal the
Class A Investor Interest, in the case of the Class A Interest Rate
Cap, and the Class B Investor Interest, in the case of the Class B
Interest Rate Cap, outstanding as of the date of such sale; and
(ii) Such sale will not result in a downgrading or withdrawal
of the then current rating on the relevant class of Certificates by
the Rating Agency.
The Servicer shall have the duty of obtaining a fair market value
price for the sale of the Trust's rights under an Interest Rate Cap,
notifying the Trustee of prospective purchasers and bids, selecting the
purchaser of such Interest Rate Cap, and instructing the selected purchaser
(and/or the Trustee) to deposit the purchase price therefor into the
Collection Account. The Trustee, upon receipt of the purchase price into
the Collection Account, shall execute all documentation, prepared by the
Servicer, necessary to effect the transfer of the Trust's rights under the
Interest Rate Cap and to release the lien of the Trustee on the Interest
Rate Cap and proceeds thereof.
Funds deposited in the Collection Account in respect of the sale of
all or a portion of a Class A Interest Rate Cap or a Class B Interest Rate
Cap shall be applied on the next Transfer Date as, respectively, Class A
Available Finance Charge Collections or Class B Available Finance Charge
Collections in accordance with subsections 4.6(a) through (c).
SECTION 4.12 Reallocated Principal Collections. The Servicer shall
apply or shall cause the Trustee to apply on each Distribution Date
Collections of Principal Receivables (including amounts specified pursuant
to subsections 4.6(b)(iii) and (iv) to be treated as Collections of
Principal Receivables allocable to the Class B Investor Interest) in an
amount, not to exceed the Class B Investor Interest, equal to the product
of (a) the Class B Investor Percentage of the Investor Percentage and (b)
the amount of Collections of Principal Receivables with respect to the
Monthly Period relating to such Distribution Date, and to make the
following distributions in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Distribution Date over
(ii) the sum of (x) the amount of Excess Spread and Shared Finance
Charge Collections from other Series with respect to the related
Monthly Period and (y) the Available Cash Collateral Amount with
respect to such Distribution Date, shall be distributed by the
Trustee to fund any deficiency pursuant to Sections 4.6(a)(i) through
(iv), in that order of priority (such amount, "Reallocated Principal
Collections"); and
(b) the balance, if any, of such Principal Collections
allocable to the Class B Investor Interest shall be treated during
the Revolving Period as Shared Principal Collections and during an
Amortization Period as a portion of Available Principal Collections.
SECTION 4.13 Determination of LIBOR. "LIBOR" shall mean, for a
specific Interest Accrual Period (other than the initial Interest Accrual
Period), the rate for deposits in United States dollars for one month
(commencing on the first day of the relevant Interest Accrual Period) which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the LIBOR
Determination Date for such Interest Accrual Period. If such rate does not
appear on Telerate Page 3750, the rate for such Interest Accrual Period
will be determined on the basis of the rates at which deposits in the
United States dollars are offered by the Reference Banks at approximately
11:00 a.m., London time, on such LIBOR Determination Date to prime banks in
the London interbank market for a period equal to one month (commencing on
the first day of Interest Accrual Period). The Trustee will request the
principal London office of each such bank to provide a quotation of its
rate. If at least two such quotations are provided, the rate for such
Interest Accrual Period will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for such
Interest Accrual Period 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 the first day of such
Interest Accrual Period for loans in United States dollars to leading
European banks for a period equal to one month (commencing on the first day
of such Interest Accrual Period).
SECTION 4.14 Discount Option. (a) The Transferor may at its option
(the "Discount Option"), at any time, upon not less than 20 Business Days
prior written notice to the Servicer, the Trustee, the Cash Collateral
Depositor, and each Rating Agency, designate a percentage, which may be a
fixed percentage or a variable percentage based on a formula (the
"Discounted Percentage"), of the amount of Principal Receivables in
Accounts designated in such notice to be treated on and after such
designation, or for the period specified in such notice, as Finance Charge
Receivables (it being understood and agreed that an increase in the
Discount Percentage shall constitute a new exercise of the Discount
Option); provided, however, that no such designation shall become effective
on the date specified in such written notice unless the following
conditions have been satisfied:
(i) on or before the date specified in the written notice, the
Transferor shall have received written confirmation from each
Rating Agency which is then rating an outstanding Series of
Certificates that such designation will not result in a
withdrawal or reduction of its rating of such Series of
Certificates;
(ii) such exercise of the Discount Option shall not, in the
reasonable belief of the Transferor, cause a Pay Out Event to
occur or cause an event which with notice or the lapse of time
or both would constitute a Pay Out Event;
(iii) the Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses
(i) and (ii) above. The Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no
liability in so relying.
On and after the date of satisfaction of each of the above
conditions, in processing Collections of the Principal Receivables of the
Accounts designated pursuant to such notice, the Servicer shall deem the
product of the Discount Percentage and Collections of such Principal
Receivables as Collections of Finance Charge Receivables.
(b) The Transferor may at it option, at any time, upon not less
than 20 Business Days prior written notice to the Servicer, the Trustee,
the Cash Collateral Depositor, and each Rating Agency, suspend or terminate
the Discount Option or reduce the Discount Percentage to a percentage
specified in such notice; provided however that such notice shall specify
the period of time for which the Discount Option shall be suspended, the
effective date of the termination of the Discount Option or the percentage
to which the Discount Option shall be reduced, as the case may be.
(c) Each Certificateholder by its acceptance of a beneficial
interest in a Certificate shall be deemed to have consented to the exercise
by the Transferor of the Discount Option at such time as the Transferor
determines to exercise such options.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
[THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1996-1.]
SECTION 5.1 Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the certificate delivered by the Servicer to the Trustee
pursuant to subsection 3.4(b)) to each Class A Certificateholder of record
on the immediately preceding Record Date (other than as provided in
subsection 2.4(e) or Section 12.3 respecting a final distribution) such
Class A Certificateholder's pro rata share (based on the aggregate
Undivided Interests represented by Class A Certificates held by such Class
A Certificateholder) of amounts on deposit in the Distribution Account as
are payable to the Class A Certificateholders pursuant to Sections 4.7 and
4.8 hereof by check mailed to each Class A Certificateholder except that,
with respect to Class A Certificates registered in the name of the nominee
of a Clearing Agency, such distribution shall be made in immediately
available funds.
(b) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the certificate delivered by the Servicer to the Trustee
pursuant to subsection 3.4(b)) to each Class B Certificateholder of record
on the immediately preceding Record Date (other than as provided in
subsection 2.4(e) or Section 12.3 respecting a final distribution) such
Class B Certificateholder's pro rata share (based on the aggregate
Undivided Interests represented by Class B Certificates held by such Class
B Certificateholder) of amounts on deposit in the Distribution Account as
are payable to the Class B Certificateholders pursuant to Sections 4.7 and
4.8 hereof by check mailed to each Class B Certificateholder except that,
with respect to Class B Certificates registered in the name of the nominee
of a Clearing Agency, such distribution shall be made in immediately
available funds.
SECTION 5.2 Monthly Certificateholders' Statement.
(a) On or before each Distribution Date, the Paying Agent shall
forward to each Series 1996-1 Certificateholder and the Rating Agencies a
statement substantially in the form of Exhibit 2 to the Series Supplement
relating to Series 1996-1 prepared by the Servicer setting forth among
other things the following information (which, in the case of subclauses
(i), (ii) and (iii) below, shall be stated on the basis of an original
principal amount of $1,000 per Certificate and, in the case of subclauses
(viii) and (ix) shall be stated on an aggregate basis and on the basis of
an original principal amount of $1,000 per Certificate):
(i) the total amount distributed to the Class A
Certificateholders and the Class B Certificateholders,
respectively, on such Distribution Date;
(ii) the amount of such distribution, if any, allocable
to principal with respect to the Class A Certificates and the
Class B Certificates, respectively;
(iii) the amount of such distribution allocable to
interest on the Class A Certificates and the Class B
Certificates, respectively;
(iv) the amount of Collections of Principal Receivables
processed during the preceding Monthly Period, as appropriate,
and allocated in respect of the Class A Certificates and the
Class B Certificates, respectively;
(v) the aggregate amount of Principal Receivables, the
Class A Investor Interest, the Class B Investor Interest, the
Investor Percentage, the Class A Investor Percentage and the
Class B Investor Percentage as of the close of business on the
last day of the preceding Monthly Period;
(vi) the aggregate outstanding balance of Accounts which
are up to 30, 31-60, 61-90 and 91 or more days delinquent in
accordance with the Servicer's then existing Account Guidelines
as of the close of business on the last day of the preceding
Monthly Period;
(vii) the Class A Investor Default Amount and the Class B
Investor Default Amount for the preceding Monthly Period;
(viii) the aggregate amount of Class A Investor Charge
Offs and the Class B Investor Charge Offs for the preceding
Monthly Period;
(ix) the aggregate amount of Investor Charge Offs
reimbursed to the Class A Certificateholders and the Class B
Certificateholders on the Transfer Date immediately preceding
such Distribution Date;
(x) the amount of the Class A Monthly Servicing Fee and
the Class B Monthly Servicing Fee for the preceding Monthly
Period;
(xi) the Available Cash Collateral Amount and the
Required Cash Collateral Amount as of the close of business on
such Distribution Date;
(xii) the Pool Factor as of the end of the last day of
the preceding Monthly Period;
(xiii) the Deficit Controlled Amortization Amount for
each class of the Series 1996-1 Certificates;
(xiv) the aggregate amount of Collections of Finance
Charge Receivables during the preceding Monthly Period
(including amounts arising from the sale of either Interest Rate
Cap to be treated as Collections of Finance Charge Receivables),
as appropriate, and allocated in respect of the Series 1996-1
Certificates;
(xv) the amounts required to be withdrawn from the Cash
Collateral Account, the amount of Reallocated Principal
Collections, if any, to be applied with respect to the Class A
Required Amount and the amount of any reductions in the Class B
Investor Interest to satisfy the Class A Required Amount; and
(xvi) the ratio of the Available Cash Collateral Amount
to the Investor Interest of the Certificates as of the last day
of the preceding Monthly Period.
The Monthly Certificateholders' Statement shall be substantially in
the form of Exhibit 2, with such changes as the Servicer may determine to
be necessary or desirable; provided, however, that no such change shall
serve to exclude information required by this subsection 5.2(a). The
Servicer shall, upon making such determination, deliver to the Trustee and
the Rating Agency an Officer's Certificate to which shall be annexed the
form of Exhibit 2, as so changed. Upon the delivery of such Officer's
Certificate to the Trustee, Exhibit 2, as so changed, shall for all
purposes of this Agreement constitute Exhibit 2. The Trustee may
conclusively rely upon such Officer's Certificate as to such change
conforming to the requirements of this Agreement.
(b) On or before January 31 of each calendar year, beginning with
calendar year 1997, the Servicer shall furnish to the Paying Agent, who
shall distribute to each Person who at any time during the preceding
calendar year was a Series 1996-1 Certificateholder, a statement prepared
by the Servicer containing the information required to be contained in the
regular monthly report to Series 1996-1 Certificateholders, as set forth in
subclauses (i), (ii) and (iii) above, aggregated for such calendar year or
the applicable portion thereof during which such Person was a Series 1996-1
Certificateholder, together with such other customary information
(consistent with the treatment of the Certificate as debt) as the Trustee
or the Servicer deems necessary or desirable to enable the Series 1996-1
Certificateholders to prepare their tax returns. Such obligations of the
Paying Agent shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Paying Agent
pursuant to any requirements of the Internal Revenue Code as from time to
time in effect.
SECTION 9.A Series 1996-1 Pay Out Events. If any one of the
following events shall occur during the Revolving Period or the Controlled
Amortization Period with respect to the Series 1996-1 Certificates:
(a) failure on the part of the Transferor or the
Holder of the Exchangeable Seller Certificate (i) to make any payment
or deposit required by the terms of (A) the Agreement relating to the
Series 1996-1 Certificates, or (B) this Series Supplement, in each
case on or before the date occurring five Business Days after the
date such payment or deposit is required to be made herein or (ii)
duly to observe or perform in any material respect any covenants or
agreements of the Transferor set forth in the Agreement, which
failure has a material adverse effect on the Series 1996-1
Certificateholders (which determination shall be made without regard
to whether any funds are available pursuant to the Enhancement or the
Interest Rate Caps) and which continues unremedied for a period of 60
days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by
the Holders of Series 1996-1 Certificates evidencing Undivided
Interests aggregating not less than 50% of each of the Class A
Investor Interest and the Class B Investor Interest of this Series
1996-1, and continues to affect materially and adversely the
interests of the Series 1996-1 Certificateholders for such period;
(b) any representation or warranty made by the
Transferor in the Agreement, including this Series Supplement, or any
information contained in a computer file or microfiche list required
to be delivered by the Transferor pursuant to Section 2.1, 2.6 or
3.4(c), (i) shall prove to have been incorrect in any material
respect when made or when delivered, which continues to be incorrect
in any material respect for a period of 60 days, after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee, or
to the Transferor and the Trustee by the Holders of the Series 1996-1
Certificates evidencing Undivided Interests aggregating not less than
50% of each of the Class A Investor Interest and the Class B Investor
Interest of this Series 1996-1, and (ii) as a result of which the
interests of the Series 1996-1 Certificateholders are materially and
adversely affected (which determination shall be made without regard
to whether any funds are available pursuant to the Enhancement or the
Interest Rate Caps) and continue to be materially and adversely
affected for such period; provided, however, that a Series 1996-1 Pay
Out Event pursuant to this subsection 9A(b) shall not be deemed to
have occurred hereunder if the Transferor has accepted reassignment
of the related Receivable, or all of such Receivables, if applicable,
during such period in accordance with the provisions hereof;
(c) the average of the Portfolio Yields for any
three consecutive Monthly Periods is a rate which is less than the
Base Rate;
(d) the Transferor shall fail to convey Receivables
arising under Additional Accounts to the Trust, as required by
subsection 2.6(e);
(e) any Servicer Default shall occur which would
have a material adverse effect on the holders of the Series 1996-1
Certificates (which determination shall be made without regard to
whether funds are available pursuant to the Enhancement or the
Interest Rate Caps);
(f) on any Transfer Date, the Available Cash
Collateral Amount shall be less than the lesser of 3% of the Initial
Investor Interest and the Investor Interest as of the close of
business on the last day of the related Monthly Period;
(g) failure to pay the Class A Certificates in full
on the Class A Expected Final Distribution Date;
(h) failure to pay the Class B Certificates in full
on the Class B Expected Final Distribution Date; or
(i) failure of the Interest Rate Cap Provider to
make any payment under the Class A Interest Rate Cap or the Class B
Interest Rate Cap within five days of the date on which such payment
was due;
then, in the case of any event described in subparagraphs (a), (b) or (e),
after the applicable grace period set forth in such subparagraphs, either
the Trustee or the Holders of Series 1996-1 Certificates evidencing
Undivided Interests aggregating more than 50% of each of the Class A
Investor Interest and the Class B Investor Interest by notice then given in
writing to the Transferor and the Servicer (and to the Trustee if given by
the Certificateholders) may declare that a pay out event (a "Series 1996-1
Pay Out Event") has occurred as of the date of such notice, and in the case
of any event described in subparagraphs (c), (d), (f), (g), (h) or (i) a
Series 1996-1 Pay Out Event shall occur without any notice or other action
on the part of the Trustee or the Series 1996-1 Certificateholders
immediately upon the occurrence of such event.
Notwithstanding the foregoing, any failure of performance under
Section 9A(a)(i) for a period of up to 60 calendar days with respect to an
event described in clause (i) below or up to 15 calendar days with respect
to an event described in clause (ii) below (in addition to the five
Business Days provided above) shall not constitute a Pay Out Event for
purposes of this sentence until the expiration of such period, if such
failure could not be prevented by the exercise of reasonable diligence by
the Transferor and such failure was caused by (i) an act of God or the
public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes or (ii) computer malfunction,
communication malfunction or other electronic system malfunction; the
preceding clause shall not relieve the Transferor from using its best
efforts to perform its respective obligations in a timely manner in
accordance with the terms of this Agreement and any Supplement and the
Transferor shall provide the Trustee, each Rating Agency, the Cash
Collateral Depositor, and the Certificateholders with an Officer's
Certificate giving prompt notice of such failure, together with a
description of its efforts to so perform its obligations. Notice of any
such Pay Out Event shall be given by the Servicer to the Rating Agencies.
SECTION 10. Series 1996-1 Termination.
All principal or interest with respect to the Certificates shall be
due and payable no later than the Scheduled Series 1996-1 Termination Date.
In the event that the Investor Interest of the Certificates is greater than
zero on the Scheduled Series 1996-1 Termination Date, after giving effect
to all transfers, withdrawals, deposits and drawings to occur on such date
and the payment of principal to be made on the Certificates on such date,
the Trustee will sell or cause to be sold, and pay the proceeds to the
Certificateholders pro rata in final payment of all principal of and
accrued interest on the Certificates, an amount of Principal Receivables
and the related Finance Charge Receivables (or interests therein) up to
110% of the Investor Interest at the close of business on such date (but
not more than an amount of Receivables equal to the sum of (1) the product
of (A) the Seller Percentage, (B) the aggregate outstanding Principal
Receivables and (C) a fraction the numerator of which is the related
Investor Percentage of Collections of Finance Charge Receivables and the
denominator of which is the sum of all Investor Percentages with respect to
Collections of Finance Charge Receivables of all Series outstanding and (2)
the Investor Interest of such Series). The Transferor or any of its
Affiliates shall be permitted to bid for such Receivables. In addition,
the Transferor or any of its Affiliates shall have the right to match any
bid by a third person and be granted the right to purchase the Receivables
at such matched bid price. Any proceeds of such sale in excess of such
principal and interest paid shall be paid to the Cash Collateral Depositor
to satisfy any amounts owing under the Loan Agreement and thereafter paid
to the Holder of the Exchangeable Seller Certificate. Upon such Scheduled
Series 1996-1 Termination Date, final payment of all amounts allocable to
the Certificates shall be made in the manner provided in Section 12.3 of
the Agreement.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
Agreement. As supplemented by this Series Supplement, the Agreement is in
all respects ratified and confirmed and the Agreement as so supplemented by
this Series Supplement shall be read, taken, and construed as one and the
same instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
Warranties. Except as otherwise provided in the Agreement, each of the
Transferor, the Servicer and the Trustee hereby ratify and reaffirm its
representations and warranties contained in the Agreement as follows: (a)
with respect to the Transferor, the representations and warranties
contained in (i) Section 2.3 of the Agreement, (ii) Section 2.4(a) of the
Agreement (with respect to the Agreement as supplemented by this Series
Supplement) and (iii) Section 2.4(b) of the Agreement, (b) with respect to
the Servicer, the representations and warranties contained in Section 3.3
of the Agreement and (c) with respect to the Trustee, the representations
and warranties contained in Section 11.15 of the Agreement, as though such
representations and warranties were made by such party as of the Closing
Date.
SECTION 13. [RESERVED]
SECTION 14. No Subordination. Notwithstanding the provisions
contained in Section 13.1 of the Agreement to the contrary, the Agreement
may also be amended from time to time by the Servicer, the Transferor and
the Trustee with the consent of the Holders of Series 1996-1 Certificates
evidencing Undivided Interests aggregating not less than 100% of the
Investor Interest for the purpose of (i) adding any provisions to or
changing in any manner or eliminating any of the provisions of this Series
Supplement or (ii) modifying in any manner the rights of the Investor
Certificateholders which would, in either case, result in the subordination
of the rights of the Series 1996-1 Certificateholders to the rights of the
Holders of any other Series.
SECTION 15. Repurchase of the Series 1996-1 Certificates. In the
event of a breach of any of the representations and warranties set forth in
Section 12(a)(ii) hereof, either the Trustee or the Holders of Series
1996-1 Certificates evidencing Undivided Interests aggregating more than
50% of each of the Class A Investor Interest and the Class B Investor
Interest, by notice then given in writing to the Transferor (and to the
Trustee and the Servicer, if given by the Series 1996-1
Certificateholders), may direct the Transferor to purchase the Series
1996-1 Certificates (as specified below) within 60 days of such notice, or
within such longer period as may be specified in such notice, which period
shall not exceed 120 days, and the Transferor shall be obligated to
purchase on a Distribution Date specified by the Transferor (such
Distribution Date, the "Repurchase Date") occurring within such applicable
period on the terms and conditions set forth below; provided, however, that
no such purchase shall be required to be made if, at any time during such
applicable period, the representations and warranties contained in Section
12(a)(ii) hereof, shall then be true and correct in all material respects.
The Transferor shall deposit on the Transfer Date (in New York Clearing
House, next day funds) immediately preceding such Repurchase Date, an
amount equal to the reassignment deposit amount for such Certificates in
the Distribution Account, for distribution to the Series 1996-1
Certificateholders pursuant to Article XII of the Agreement and Section 10
hereof. The reassignment deposit amount for such reassignment shall be
equal to the sum of (i) the Investor Interest at the end of the day on the
last day of the Monthly Period preceding the Repurchase Date, less the
amount on deposit in the Principal Account which will be transferred to the
Distribution Account pursuant to the second paragraph of subsection 4.8(a)
on the related Transfer Date, (ii) an amount equal to all interest accrued
but unpaid on the Series 1996-1 Certificates at the Certificate Rate
through and including the last day of the month preceding the month in
which such Transfer Date occurs, less the amount on deposit in the Finance
Charge Account and the Cash Collateral Account which will be transferred to
the Distribution Account to pay interest pursuant to subsections 4.6(a)
through (e) on the related Transfer Date and (iii) any amounts owing to the
Cash Collateral Depositor pursuant to the Loan Agreement. Payment of the
portion of the reassignment deposit amount and the transfer into the
Distribution Account of the amounts referred to in the second portion of
clauses (i) and (ii) of the preceding sentence, shall be considered a
prepayment in full of the Series 1996-1 Certificates. The Series 1996-1
Termination Date shall be deemed to have occurred on the Repurchase Date as
long as such amount was deposited in full into the Distribution Account on
such Transfer Date. If the Trustee or the Series 1996-1 Certificateholders
give notice directing the Transferor to purchase the Series 1996-1
Certificates as provided above, the obligation of the Transferor to
purchase the Series 1996-1 Certificates and to pay the reassignment deposit
amount pursuant to this Section 15 shall constitute the sole remedy
respecting a breach of the representations and warranties referenced in
Section 12(a)(ii) hereof available to the Series 1996-1 Certificateholders
or the Trustee on behalf of the Series 1996-1 Certificateholders.
SECTION 16. 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 17. Additional Covenants of Transferor. People's Bank, in
its capacity as Transferor, hereby covenants that following the occurrence
of a Series Pay Out Event described in Section 9A(c) hereof, except as
otherwise required by any Requirements of Law, it will not reduce the
Periodic Finance Charges assessed on any Receivable, or other fees on any
Account if the Transferor reasonably believes that, as a result of such
reduction, (i) the weighted average of the Periodic Finance Charges on the
last day of the Monthly Period during which such reduction will be
effective (weighted based on the Transferor's reasonable belief as to the
Principal Receivables which will be outstanding on such last day) will be
less than (ii) the sum of (1) 2.00% and (2) the weighted average of the
Certificates Rates of each Series that will be outstanding on such last day
(weighted based on the Transferor's reasonable belief as to (x) the amount
of the Investor Interest of each Series will be outstanding on such last
day, and (y) in the case of Series for which the Certificate Rate is a
floating rate, the Certificate Rate applicable to such Monthly Period, and
(z) in the case of Series 1996-1, the weighted average of (A) the lesser of
the Class A Certificate Rate and the Class A Cap Rate and (B) the lesser of
the Class B Certificate Rate and the Class B Cap Rate (weighted based on
the Transferor's reasonable belief as to the Principal Receivables, which
will be outstanding on such last day)).
SECTION 18. Series 1996-1 Investor Exchange. Pursuant to subsection
6.9(b) of the Agreement, the Series 1996-1 Certificateholders may tender
their Series 1996-1 Certificates, and the Holders of the Exchangeable
Seller Certificate may tender the Exchangeable Seller Certificate, in
exchange for (i) one or more newly issued Series of Investor Certificates
and (ii) a reissued Exchangeable Seller Certificate in accordance with the
terms and conditions contained in a notice of exchange delivered to the
Series 1996-1 Certificateholders. Such notice of exchange will specify,
among other things: (a) the amount of Series 1996-1 Certificates that may
be tendered, (b) the Certificate Rate with respect to the new Series, (c)
the term of the Series, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to the
Series and (f) the time and the manner of the tender and cancellation of
the Series 1996-1 Certificates and the issuance of the new Series of
Certificates will be effectuated. Upon satisfaction of the conditions
contained in subsections 6.9(b) and 6.9(c) of the Agreement, and the
receipt by the Trustee of the Exchange Notice and the related Supplement,
the Trustee shall cancel the existing Exchangeable Seller Certificate and
the applicable Series 1996-1 Certificates, and shall issue such Series of
Investor Certificates a new Exchangeable Seller Certificates, each dated
the Exchange Date.
SECTION 19. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE 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 20. Notification to Luxembourg Stock Exchange. On or prior
to each Distribution Date the Servicer shall, or shall cause the Trustee
to, send written notice to the Luxembourg Stock Exchange specifying (i) the
Class A Certificate Rate for the immediately following Distribution Date,
(ii) the amount of interest to be distributed in respect of the Class A
Certificates for the immediately following Distribution Date and (iii) the
Class A Investor Interest on the Distribution Date on which such report is
being furnished (after giving effect to all payments of principal to be
made on such Distribution Date). Promptly following each Distribution Date
the Servicer shall cause a notice to be published in a daily newspaper,
which initially shall be the Luxemburger Wort, specifying the information
described in clauses (i) and (ii) of the preceding sentence.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Series Supplement to be duly executed by their respective
officers as of the day and year first above written.
PEOPLE'S BANK,
Transferor and Servicer
By:____________________________
Name:
Title:
BANKERS TRUST COMPANY, not in
its individual capacity but
solely as Trustee
By:____________________________
Name:
Title:
EXHIBIT 1-A
-----------
FORM OF CLASS A INVESTOR CERTIFICATE
------------------------------------
$
No. CUSIP No. 710318 AG 1
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS A ASSET BACKED CERTIFICATE, SERIES 1996-1
Evidencing an undivided interest in certain assets of a trust, the
corpus of which consists of a portfolio of selected VISA 1/<F1> and
MasterCard1/<F1> credit card receivables generated or to be generated by
People's Bank.
<F1>
- ---------------------
1/ VISA and MasterCard are registered trademarks of VISA USA, Inc.,
and MasterCard International Incorporated, respectively.</F1>
(Not an interest in or obligation of
People's Bank
or any Affiliate thereof.)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S BANK
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS 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.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns of
CEDE & CO. with respect to this certificate, the "Class A Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter
created under selected VISA and MasterCard credit card accounts (the
"Accounts") of People's Bank, a Connecticut stock savings bank, all
Receivables in Automatic Additional Accounts and Additional Accounts added
to the Trust from time to time, all monies due or to become due in payment
of the Receivables (including all Finance Charge Receivables), and the
other assets and interests constituting the Trust pursuant to a Pooling and
Servicing Agreement dated as of June 1, 1993, as amended by an Amendment,
dated as of December 15, 1995 and as supplemented by the Series 1996-1
Supplement dated as of July 1, 1996 (collectively, the "Agreement"), by and
between People's Bank, as Seller or Transferor and Servicer, and Bankers
Trust Company, as Trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth herein below.
The Seller has structured the Agreement and the Investor Certificates
with the intention that the Investor Certificates will qualify under
applicable tax law as indebtedness, and the Seller, the Holder of the
Exchange able Seller Certificate, the Servicer and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Certificate
(or, in the case of a Certificate Owner, by virtue of such Certificate
Owner's acquisition of a beneficial interest therein), agrees to treat the
Investor Certificates consistently with, and to take no action inconsistent
with, the treatment of the Investor Certificates (or beneficial interest
therein) for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any
Certificateholder acquiring an interest in a Certificate through it to
comply with this Agreement as to treatment as indebtedness under applicable
tax law.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder
is bound. In the case of conflict between the terms specified in this
Class A Certificate and any terms specified in the Agreement, the terms of
the Agreement shall govern.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE 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.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge
Receivables which arise generally from Periodic Finance Charges and other
fees and charges as fully specified in the Agreement. The assets of the
Trust in which this Certificate represents an interest, consist of (i)(a)
the Receivables now existing and hereafter created and arising in
connection with the Accounts, and all Receivables in the Automatic
Additional Accounts and Additional Accounts added to the Trust from time to
time (b) all monies due or to become due with respect thereto (including
all Finance Charge Receivables), (c) all proceeds (as defined in Section
9-306 of the UCC as in effect in the State of New York) of such
Receivables, (d) proceeds of insurance policies relating to the
Receivables, (e) Interchange and Recoveries pursuant to subsections 2.5(k)
and (l) of the Agreement, (ii) such funds as from time to time are
deposited in the Collection Account, the Excess Funding Account, the Series
1996-1 Collection Subaccount, (iii) the benefits of a Cash Collateral
Account having an initial balance of $36,000,000, and (iv) the benefit of
the Class A Interest Rate Cap between the Trustee and the Interest Rate Cap
Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$379,000,000 Floating Rate Class A Asset Backed Certificates, Series 1996-1
(the "Class A Certificates"), each of which represents an undivided
interest in certain assets of the Trust, including the right to receive
Collections allocable to the Class A Certificates and other amounts at the
times and in the amounts specified in the Agreement to be deposited in the
Investor Accounts or paid to the Investor Certificateholders. The
aggregate interest represented by the Class A Certificates at any time in
the Principal Receivables in the Trust shall not exceed an amount equal to
the Class A Investor Interest at such time. The Initial Class A Investor
Interest is $379,000,000 minus the retirement of any Class A Certificates
pursuant to an Investor Exchange. The Class A Investor Interest on any
date of determination will be an amount equal to (a) the Class A Initial
Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class A Certificateholders prior to such
date of determination, minus (c) the excess, if any, of the aggregate
amount of Class A Investor Charge Offs over Class A Investor Charge Offs
reimbursed prior to such date of determination. In addition to the Class A
Certificates, a class of certificates entitled "People's Bank Credit Card
Master Trust $21,000,000 Floating Rate Class B Asset Backed Certificates,
Series 1996-1" (the "Class B Certificates") will be issued, and the
Exchangeable Seller Certificate will be reissued to the Holder of the
Exchangeable Seller Certificate pursuant to the Agreement, and other Series
of certificates have been, and may from time to time be, issued by the
Trust, which represent or will represent an undivided interest in the
Trust. The Exchangeable Seller Certificate will represent the interest in
the Principal Receivables not represented by the Investor Certificates or
any other Series of certificates.
During the Revolving Period, which begins on the date of issuance of
this Class A Certificate, Certificate Interest at the Class A Certificate
Rate will be distributed on July 15, 1996 and on the fifteenth day of each
calendar month thereafter, or if such fifteenth day is not a Business Day,
on the next succeeding Business Day (a "Distribution Date"), to the Class A
Certificateholders of record on the Record Date preceding the related
Distribution Date. During either the Controlled Amortization Period, which
is scheduled to begin with the November 2000 Monthly Period, except in
certain limited circumstances set forth in the Agreement, or the Rapid
Amortization Period, Certificate Interest and Certificate Principal will be
distributed to the Class A Certificateholders on the Distribution Date of
each calendar month commencing in the month following the month in which
either the Controlled Amortization Period or the Rapid Amortization Period
commences.
The Servicer shall deposit all Collections in the Collection Account
as promptly as possible after the Date of Processing of such Collections,
but in no event later than the second Business Day following such Date of
Processing.
Notwithstanding anything in the Agreement to the contrary, for so
long as, and only so long as, the Seller shall remain the Servicer
hereunder and (a)(i) the Servicer provides to the Trustee a letter of
credit or other arrangement covering risk of collection of the Servicer
acceptable to the Rating Agency (as evidenced by letters from the Rating
Agency) and (ii) the Seller shall not have received a notice from the
Rating Agency that such letter of credit or other arrangement would result
in the lowering or withdrawal of such Rating Agency's then-existing rating
of any Series of Investor Certificates or (b) under certain other
circumstances permitted under the Agreement, the Servicer need not deposit
Collections into the Collection Account, the Principal Account or the
Finance Charge Account in accordance with the immediately preceding
sentence, or make payments to the Holder of the Exchangeable Seller
Certificate prior to the close of business on the day any Collections are
received, but may make such payments on the Transfer Date in the Monthly
Period following the Monthly Period in which such Collections are received
in an amount equal to the net amount of such deposits, payments and
withdrawals which would have been made but for the provisions of this
paragraph.
On each Transfer Date, the Servicer or the Trustee acting in
accordance with instructions from the Servicer shall withdraw from the
Finance Charge Account and/or deposit to the Distribution Account to the
extent funds are available on the terms specified in the Agreement from
Available Finance Charge Collections, from payments made pursuant to the
Class A Interest Rate Cap and from Excess Spread an amount equal to, with
respect to Class A Certificates, the sum of: (i) the product of (a) the
Class A Certificate Rate, (b) the lesser of the Class A Investor Interest
determined as of the preceding Distribution Date (or, for the initial
Interest Accrual Period, the Closing Date), after giving effect to all
payments, deposits and withdrawals on such Distribution Date or Closing
Date, and the Expected Class A Principal as of the preceding Distribution
Date or Closing Date, and (c) the actual number of days in the related
Interest Accrual Period divided by 360, plus (ii) the product of (a) the
Class A Excess Principal, (b) the lesser of the Class A Certificate Rate
and 9.15% per annum, and (c) the actual number of days in the related
Interest Period divided by 360 (collectively, the "Class A Monthly
Interest"), plus (iii) to the extent permitted by applicable law, any
interest accrued on the Class A Certificates (including interest on any
overdue Class A Monthly Interest) during any prior accrual period which has
not been distributed to the Class A Certificateholders, plus, (iv) to the
extent that there is available Excess Spread, an amount equal to the
product of (a) the amount by which the Class A Certificate Rate exceeds
9.15%, (b) the Class A Excess Principal and (c) the actual number of days
in the related Interest Period divided by 360 (the "Class A Excess
Interest"). On such Transfer Date the Servicer or the Trustee shall
deposit such funds into the Distribution Account.
If, in any Monthly Period, collections of Finance Charge Receivables
allocable to the Class A Investor Interest for such Monthly Period
available to the Class A Certificates are insufficient to pay (i) the
interest which accrued on the Class A Certificates with respect to the
related Distribution Date, in an amount equal to the product of (a) the
lesser of the Class A Certificate Rate and the Class A Cap Rate, (b) the
Class A Investor Interest as determined as of the preceding Distribution
Date (or, for the initial Interest Accrual Period, the Closing Date), after
giving effect to all payments, deposits and withdrawals on such
Distribution Date or Closing Date and (c) the actual number of days in the
related Interest Accrual Period divided by 360 (the "Class A Monthly Cap
Rate Interest"), and any Class A Monthly Cap Rate Interest accrued during
any prior period which has not been distributed to the Class A
Certificateholders, (ii) the Class A Monthly Servicing Fee and any accrued
and unpaid Class A Monthly Servicing Fees from prior Monthly Periods, (iii)
the Class A Investor Default Amount for such Distribution Date, and (iv)
any unreimbursed Class A Investor Charge Offs (the sum of the foregoing
clauses (i) through (iv) being referred to as the "Class A Required
Amount"), then first, Excess Spread, if any, from collections of Finance
Charge Receivables allocable to the Class B Certificates will be allocated
to the Class A Certificates up to the unpaid amount of the Class A Required
Amount, second, Shared Finance Charge Collections, if any, allocable to the
Series 1996-1 will be allocated to the Class A Certificates up to the
amount of the Class A Required Amount remaining unpaid and third, a
withdrawal will be made from the Cash Collateral Account on the
Distribution Date immediately following such Monthly Period, to the extent
of any Class A Required Amount remaining unpaid (but not more than the
applicable Available Cash Collateral Amount). If such applicable Available
Cash Collateral Amount is less than the unpaid amount of the Class A
Required Amount for such Distribution Date (after application of any
available Excess Spread and Shared Finance Charge Receivables), the
applicable Class B Investor Percentage of the Investor Percentage of
collections in respect of Principal Receivables for the preceding Monthly
Period will then be used to fund the remaining Class A Required Amount
(such collections, "Reallocated Principal Collections"). The Class B
Investor Interest will be reduced by the amount of Reallocated Principal
Collections.
If, on such Distribution Date, the Excess Spread, Shared Finance
Charge Collections, Available Cash Collateral Amount and Reallocated
Principal Collections are insufficient to fund the remaining Class A
Required Amount for such Monthly Period, the remaining Class B Investor
Interest will be reduced (but not in excess of the Class A Investor Default
Amount for such Distribution Date) by the amount of such remaining
insufficiency, until such time as the Class B Investor Interest has been
reduced to zero. Thereafter, the Class A Investor Interest will be reduced
by the amount of any remaining unpaid Class A Required Amount (a "Class A
Investor Charge Off"), but not in excess of the Class A Investor Default
Amount for such Distribution Date.
The Trustee has entered into the Class A Interest Rate Cap and Class
B Interest Rate Cap with the Interest Rate Cap Provider for the exclusive
benefit of the Class A Certificateholders and the Class B
Certificateholders, respectively. On each Transfer Date that the Class A
Certificate Rate or the Class B Certificate Rate for the related Interest
Period exceeds the Class A Cap Rate or the Class B Cap Rate, respectively,
the Interest Rate Cap Provider will make a payment to the Trustee, on
behalf of the Trust, based on the amount of such excess and the notional
amount of the applicable Interest Rate Cap. The Class A Notional Amount
will at all times equal the amount of the Expected Class A Principal, and
the Class B Notional Amount will at all times equal the amount of the
Expected Class B Principal. The Class A Interest Rate Cap and the Class B
Interest Rate Cap, or its Replacement Interest Rate Cap or Qualified
Substitute Arrangement, will terminate on the day immediately following the
Class A Expected Final Distribution Date and the Class B Expected Final
Distribution Date, respectively.
People's Bank, as Servicer, is entitled to receive as servicing
compensation a monthly servicing fee in an amount equal to one-twelfth of
the product of 2.00% per annum and the Aggregate Principal Receivables in
the Trust on the last day of each Monthly Period, payable on each
succeeding Distribution Date. With respect to any Distribution Date, the
share of the servicing fee allocable to the Class A Certificates shall be
equal to one-twelfth of the product of 2.00% per annum and the Class A
Investor Interest as of the last day of the preceding Monthly Period. The
remainder of the servicing fee, which will be allocable to the Class B
Certificateholders, the Holder of the Exchangeable Seller Certificate and
the other Series of certificates, if any, will be payable by the Class B
Certificateholders, the Holder of the Exchangeable Seller Certificate or by
the Holders of such Series of certificates, and none of the Trust, the
Trustee or the Class A Certificateholders will have any obligation to pay
such portion of the servicing fee.
On the Determination Date in the Monthly Period following the Monthly
Period in which either the Controlled Amortization Period or the Rapid
Amortization Period commences, and on each Determination Date thereafter,
the Servicer shall notify the Trustee that it will withdraw, or shall
instruct the Trustee to withdraw, and on the next succeeding Transfer Date
the Servicer or the Trustee acting in accordance with such notice or
instructions shall withdraw all amounts on deposit in the Principal Account
in respect of Collections processed during the preceding Monthly Period and
deposit such amounts in the Distribution Account for distribution to the
Class A Certificateholders to the extent specified in the Agreement on the
next succeeding Distribution Date.
If on any Distribution Date in the Controlled Amortization Period
through and including the Class A Expected Final Distribution Date, the
Monthly Total Principal Allocations for the prior Monthly Period are equal
to or greater than the Controlled Distribution Amount, the amount of the
Controlled Distribution Amount will be paid from the Trust to the Class A
Certificateholders up to the outstanding Class A Investor Interest, as
provided in the Agreement, and any excess of such Monthly Total Principal
Allocations over the Controlled Distribution Amount will be applied as
Shared Principal Collections and if not so used, paid from the Trust to the
holder of the Exchangeable Seller Certificate. If, while the Class A
Investor Interest exceeds zero, the Monthly Total Principal Allocations for
any Monthly Period during the Controlled Amortization Period is less than
the Controlled Distribution Amount, the sum of such Monthly Total Principal
Allocations and the amount of any Shared Principal Collections available
from other Series to the Certificates of this Series will be paid from the
Trust to the applicable Class A Certificateholders in respect to the Class
A Investor Interest to the extent specified in the Agreement.
On each Distribution Date beginning in the month following the
Monthly Period in which the Rapid Amortization Period commences, the
Monthly Total Principal Allocations from the prior Monthly Period along
with Shared Principal Collections from other Series, if any, will be
distributed to the Class A Certificateholders until the earlier of the date
on which the Class A Investor Interest is paid in full and the Series
1996-1 Termination Date and, following the final principal payment to the
Class A Certificateholders, to the Class B Certificateholders until the
earlier of the date on which the Class B Investor Interest is paid in full
and the Series 1996-1 Termination Date.
On each Distribution Date occurring after a deposit is made pursuant
to the paragraphs above, the Paying Agent shall pay the Class A
Certificateholders the amount deposited into the Distribution Account on
the related Transfer Date in respect of interest payable to the Class A
Certificateholders and, in addition, during either the Controlled
Amortization Period or the Rapid Amortization Period, the Paying Agent
shall pay to the Class A Certificateholders the amount deposited on the
related Transfer Date into the Distribution Account in respect of principal
payable to the Class A Certificateholders. Distributions with respect to
this Class A Certificate will be made by the Paying Agent by check mailed
to the address of the holders 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 Certificate or
the making of any notation thereon, except that with respect to
Certificates registered in the name of the nominee of a Clearing Agency,
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 Seller or the Servicer, and neither the Class A
Certificates nor the Accounts or Receivables are insured or guaranteed by
the Federal Deposit Insurance Corporation or any other governmental agency.
This Class A Certificate is limited in right of payment to certain
collections respecting the Receivables, as more specifically set forth
hereinabove and in the Agreement.
As provided in the Agreement, withdrawals from the Series 1996-1
Investor Accounts may be made upon the instructions of the Servicer from
time to time for purposes other than distributions to Class A
Certificateholders.
The Seller may designate (subject to the terms and conditions of the
Agreement), Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust; provided, however, that
the Seller shall not make more than one such designation in any Monthly
Period.
The Agreement and any Supplement may be amended by the Seller, the
Servicer and the Trustee, without the consent of the Certificateholders of
any Series, to cure any ambiguity, to correct or supplement any provision
therein which may be inconsistent with any other provision therein, and to
add any other provisions with respect to matters or questions arising under
the Agreement and any Supplement which are not inconsistent with the
provisions of the Agreement and any Supplement. The Agreement may be
amended from time to time by the Seller, the Servicer and the Trustee, with
the consent of any Trustee and without the consent of any
Certificateholders, to (a) provide for the transfer by the Seller of its
interest in and to all or part of the Accounts in accordance with the
provisions of the Agreement and (b) provide for the purchase of Principal
Receivables by the Trust at a price which is less than 100% of the
outstanding balance thereof, and to provide for the treatment of
Collections of Principal Receivables, in an amount up to the aggregate
amount by which the purchase price of Principal Receivables as sold
thereafter is less than 100%, as Collections of Finance Charge Receivables;
provided, however, that any such action shall not adversely affect in any
material respect the interests of Certificateholders; provided further that
the Servicer and Trustee shall have received notice from the Rating Agency
that any such amendment will not result in the reduction or withdrawal of
its then-existing rating of the certificates of any Series. In addition,
the Agreement and any Supplement may be amended from time to time by the
Seller, the Servicer and the Trustee, without Certificateholder consent, to
add to or change any of the provisions of the Agreement to provide that
bearer certificates issued with respect to any other Series may be
registrable as to principal, to change or eliminate any restrictions on the
payment of principal of or any interest on such bearer certificates, to
permit such bearer certificates to be issued in exchange for registered
certificates or bearer certificates of other authorized denominations or to
permit the issuance of uncertificated certificates, subject to certain
conditions. Moreover, any Supplement and any amendments regarding the
addition or removal of Receivables from the Trust will not be considered
amendments requiring certificateholder consent under the provisions of the
Agreement or any Supplement.
The Agreement and any Supplement may be amended by the Seller, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregating not less than 66-2/3% of the
principal amount of each Series adversely affected, for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or any Supplement or of modifying in any manner
the rights of certificateholders of any Series. No such amendment,
however, may (a) reduce in any manner the amount of, or delay the timing
of, distributions required to be made on such Series, (b) change the
definition of or the manner of calculating the interest of any
certificateholder of such Series or (c) reduce the aforesaid percentage of
undivided interests, the holders of which are required to consent to any
such amendment, in each case without the consent of all certificateholders
of all Series adversely affected. Promptly following the execution of any
amendment to the Agreement or any Supplement, the Trustee will furnish
written notice of the substance of such amendment to each certificateholder
of all Series (or with respect to an amendment of a Supplement, to the
applicable Series).
The transfer of this Class A Certificate shall (subject to the
limitations set forth in the Agreement) be registered in the Certificate
Register upon surrender of this Class A 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-in-fact duly authorized in writing, and
thereupon one or more new Class A Certificates of authorized denomination
and for the same aggregate Undivided Interests will be issued to the
designated transferee or transferees.
Pursuant to the Series 1996-1 Supplement, the Seller has the option
(the "Discount Option") at any time to designate as Finance Charge
Receivables a fixed or variable percentage of Receivables in designated
Accounts which otherwise would be treated as Principal Receivables. The
exercise by the Seller of the Discount Option will be subject to, among
other things, the receipt by the Trustee of written confirmation from each
Rating Agency that the exercise of such option will not result in a
withdrawal or reduction of its rating of the Certificates. Each
Certificateholder by its acceptance of a beneficial interest in a
Certificate shall be deemed to have consented to the exercise by the Seller
of the Discount Option at such time as the Seller determines to exercise
such options.
As provided in the Agreement and subject to certain limitations
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates evidencing like aggregate 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 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 Servicer, the Trustee, the Paying Agent and the Transfer Agent
and Registrar, 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 Servicer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them or of any such
agent shall be affected by notice to the contrary except in certain
circumstances described in the Agreement.
Subject to the prior termination of Series 1996-1, the Agreement
provides that the right of the Class A Certificateholders to receive
payments from the Trust will terminate on the Scheduled Series 1996-1
Termination Date. Upon the termination of Trust pursuant to Section 12.1
of the Agreement (and subject to the exceptions set forth in the
Agreement), the Trustee will assign and convey to the Holder of the
Exchangeable Seller Certificate (without recourse, representation or
warranty) all right, title and interest of the Trust in the Receivables,
whether then existing or thereafter created, and Recoveries allocable to
the Trust relating thereto and Interchange pursuant to subsections 2.5(k)
and (l) of the Agreement. The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Holder of the Exchangeable Seller
Certificate to vest in such Holder all right, title and interest which the
Trustee had in the Receivables.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class A Certificate
shall not be entitled to any benefit under the Agreement, or be valid for
any purpose.
IN WITNESS WHEREOF, People's Bank has caused this Class A Certificate
to be executed by its duly authorized officer.
PEOPLE'S BANK
By:_________________________
Dated: July 2, 1996
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY, not in
its individual capacity,
but solely as Trustee
By:_____________________________
(Authorized Officer)
EXHIBIT 1-B
FORM OF CLASS B INVESTOR CERTIFICATE
------------------------------------
$
No. R-1 CUSIP No. 710318 AH 9
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS B ASSET BACKED CERTIFICATE, SERIES 1996-1
Evidencing an undivided interest in certain assets of a trust, the corpus
of which consists of a portfolio of selected VISA1/<F2> and MasterCard1/<F2>
credit card receivables generated or to be generated by People's Bank
<F2>
- -----------------------
1/ VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.</F2>
(Not an interest in or obligation of
People's Bank
or any Affiliate thereof.)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S BANK
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS 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.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns of
CEDE & CO. with respect to this certificate, the "Class B Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter
created under selected VISA and MasterCard credit card accounts (the
"Accounts") of People's Bank, a Connecticut stock savings bank, all
Receivables in Automatic Additional Accounts and Additional Accounts added
to the Trust from time to time, all monies due or to become due in payment
of the Receivables (including all Finance Charge Receivables), and the
other assets and interests constituting the Trust pursuant to a Pooling and
Servicing Agreement dated as of June 1, 1993, as amended by an Amendment,
dated as of December 15, 1995 and as supplemented by the Series 1996-1
Supplement dated as of July 1, 1996 (collectively, the "Agreement"), by and
between People's Bank, as Seller or Transferor and Servicer, and Bankers
Trust Company, as Trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth herein below.
The Seller has structured the Agreement and the Investor Certificates
with the intention that the Investor Certificates will qualify under
applicable tax law as indebtedness, and the Seller, the Holder of the
Exchangeable Seller Certificate, the Servicer and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Certificate
(or, in the case of a Certificate Owner, by virtue of such Certificate
Owner's acquisition of a beneficial interest therein), agrees to treat the
Investor Certificates consistently with, and to take no action inconsistent
with, the treatment of the Investor Certificates (or beneficial interest
therein) for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any
Certificateholder acquiring an interest in a Certificate through it to
comply with this Agreement as to treatment as indebtedness under applicable
tax law.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder
is bound. In the case of conflict between the terms specified in this
Class B Certificate and any terms specified in the Agreement, the terms of
the Agreement shall govern.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE 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.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge
Receivables which arise generally from Periodic Finance Charges and other
fees and charges as fully specified in the Agreement. The assets of the
Trust in which this Certificate represents an interest, consist of (i)(a)
the Receivables now existing and hereafter created and arising in
connection with the Accounts and all Receivables in Automatic Additional
Accounts and Additional Accounts added to the Trust from time to time, (b)
all monies due or to become due with respect thereto (including all Finance
Charge Receivables), (c) all proceeds (as defined in Section 9-306 of the
UCC as in effect in the State of New York) of such Receivables, (d)
proceeds of insurance policies relating to the Receivables, (e) Interchange
and Recoveries pursuant to subsections 2.5(k) and (l) of the Agreement,
(ii) such funds as from time to time are deposited in the Collection
Account, the Excess Funding Account, the Investor Accounts and Series
1996-1 Collection Subaccount, (iii) the benefits of a Cash Collateral
Account having an initial balance of $36,000,000 and (iv) the benefit of
the Class B Interest Rate Cap between the Trustee and the Interest Rate Cap
Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$21,000,000 Floating Rate Class B Asset Backed Certificates, Series 1996-1
(the "Class B Certificates"), each of which represents an undivided
interest in certain assets of the Trust, including the right to receive
Collections allocable to the Class B Certificates and other amounts at the
times and in the amounts specified in the Agreement to be deposited in the
Investor Accounts or paid to the Investor Certificateholders. The
aggregate interest represented by the Class B Certificates at any time in
the Principal Receivables in the Trust shall not exceed an amount equal to
the Class B Investor Interest at such time. The Initial Class B Investor
Interest is $21,000,000 minus the retirement of any Class B Certificates
pursuant to an Investor Exchange. The Class B Investor Interest on any
date of determination will be an amount equal to (a) the Class B Initial
Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class B Certificateholders prior to such
date of determination, minus (c) the excess, if any, of the aggregate
amount of Class B Investor Charge Offs and Reallocated Principal
Collections over Class B Investor Charge Offs and Reallocated Principal
Collections reimbursed prior to such date of determination. In addition to
the Class B Certificates, a class of certificates entitled "People's Bank
Credit Card Master Trust $379,000,000 Floating Rate Class A Asset Backed
Certificates, Series 1996-1" (the "Class A Certificates") will be issued,
and an Exchangeable Seller Certificate will be issued to the Seller
pursuant to the Agreement, and other Series of certificates have been, and
may from time to time be, issued by the Trust, which represent or will
represent an undivided interest in the Trust. The Exchangeable Seller
Certificate will represent the interest in the Principal Receivables not
represented by the Investor Certificates or any other Series of
certificates.
During the Revolving Period, which begins on the date of issuance of
this Class B Certificate, Class B Certificate Interest at the Class B
Certificate Rate will be distributed on July 15, 1996 and on the fifteenth
day of each calendar month thereafter, or if such fifteenth day is not a
Business Day, on the next succeeding Business Day (a "Distribution Date"),
to the Class B Certificateholders of record on the Record Date preceding
the related Distribution Date. During either the Controlled Amortization
Period or the Rapid Amortization Period, Certificate Interest and
Certificate Principal will be distributed to the Class B Certificateholders
on the Distribution Date of each calendar month commencing with the Class B
Payment Commencement Date.
The Servicer shall deposit all Collections in the Collection Account
as promptly as possible after the Date of Processing of such Collections,
but in no event later than the second Business Day following such Date of
Processing.
Notwithstanding anything in the Agreement to the contrary, for so
long as, and only so long as, the Seller shall remain the Servicer
hereunder and (a)(i) the Servicer provides to the Trustee a letter of
credit or other arrangement covering risk of collection of the Servicer
acceptable to the Rating Agency (as evidenced by letters from the Rating
Agency) and (ii) the Seller shall not have received a notice from the
Rating Agency that such letter of credit or other arrangement would result
in the lowering or withdrawal of such Rating Agency's then-existing rating
of any Series of Investor Certificates or (b) under certain circumstances
permitted under the Agreement, the Servicer need not deposit Collections
into the Collection Account, the Principal Account or the Finance Charge
Account in accordance with the immediately preceding sentence or make
payments to the Holder of the Exchangeable Seller Certificate prior to the
close of business on the day any Collections are deposited in the
Collection Account, but may make such payments on the Transfer Date in the
Monthly Period following the Monthly Period in which such Collections are
received in an amount equal to the net amount of such deposits, payments
and withdrawals which would have been made but for the provisions of this
paragraph.
On each Transfer Date, the Servicer or the Trustee acting in
accordance with instructions from the Servicer shall withdraw from the
Finance Charge Account and/or deposit to the Distribution Account to the
extent funds are available on the terms specified in the Agreement from
Available Finance Charge Collections, from payments made pursuant to the
Class B Interest Rate Cap and from Excess Spread an amount equal to, with
respect to Class B Certificates, the sum of: (i) the product of (a) the
Class B Certificate Rate, (b) the lesser of the Class B Investor Interest
determined as of the preceding Distribution Date (or, for the initial
Interest Accrual Period, the Closing Date), after giving effect to all
payments, deposits and withdrawals on such Distribution Date and the
Expected Class B Principal as of the preceding Distribution Date or Closing
Date and (c) the actual number of days in the related Interest Period
divided by 360, plus (ii) the product of (a) the Class B Excess Principal,
(b) the lesser of the Class B Certificate Rate and 9.30%, and (c) the
actual number of days in the related Interest Period divided by 360
(collectively, the "Class B Monthly Interest"), plus (iii) to the extent
permitted by applicable law, any interest accrued on the Class B
Certificates (including interest on any overdue Class B Monthly Interest)
during any prior accrual period which has not been distributed to the Class
B Certificateholders, plus, (iv) to the extent that there is available
Excess Spread, an amount equal to the product of (a) the amount by which
the Class B Certificate Rate exceeds 9.30%, (b) the Class B Excess
Principal and (c) the actual number of days in the related Interest Period
divided by 360 (the "Class B Excess Interest"). On such Transfer Date the
Servicer or the Trustee shall deposit such funds into the Distribution
Account.
If, in any Monthly Period, collections of Finance Charge Receivables
allocable to the Class B Investor Interest for such Monthly Period
available to the Class B Certificates are insufficient to pay (i) the
interest which accrued on the Class B Certificates with respect to the
related Distribution Date, in an amount equal to the product of (a) the
lesser of the Class B Certificate Rate and the Class B Cap Rate, (b) the
Class B Investor Interest as determined as of the preceding Distribution
Date (or, for the initial Interest Accrual Period, the Closing Date), after
giving effect to all payments, deposits and withdrawals on such
Distribution Date or Closing Date and (c) the actual number of days in the
related Interest Accrual Period divided by 360 (the "Class B Monthly Cap
Rate Interest"), and any Class B Monthly Cap Rate Interest accrued during
any prior period which has not been distributed to the Class B
Certificateholders, (ii) the Class B Monthly Servicing Fee and any accrued
and unpaid Class B Monthly Servicing Fees from prior Monthly Periods, (iii)
the Class B Investor Default Amount for such Distribution Date Monthly
Period, and (iv) unreimbursed Class B Investor Charge Offs (the sum of the
foregoing clauses (i) through (iv) being referred to as the "Class B
Required Amount"), then first, Excess Spread, if any, from collections of
Finance Charge Receivables allocable to the Class A Certificates will be
allocated to the Class B Certificates up to the unpaid amount of the Class
B Required Amount, second, Shared Finance Charge Collections, if any,
allocable to the Series 1996-1 and not required to pay the Class A Required
Amount for such Distribution Date will be allocated to the Class B
Certificates up to the amount of the Class B Required Amount remaining
unpaid and third, a withdrawal will be made from the Cash Collateral
Account on the Distribution Date immediately following such Monthly Period,
to the extent of any remaining Class B Required Amount (but not more than
the portion of the applicable Available Cash Collateral Amount, if any, not
required to pay the Class A Required Amount for such Distribution Date).
If on any Distribution Date the Available Cash Collateral Amount is
less than any remaining Class A Required Amount after application of any
available Excess Spread and Shared Finance Charge Collections for such
Distribution Date, the applicable Class B Investor Percentage of the
Investor Percentage of collections in respect of Principal Receivables
(such collections, "Reallocated Principal Collections") will then be used
to fund the Class A Required Amount remaining after application of all
funds on deposit in the Cash Collateral. The Class B Investor Interest
will be reduced by the amount of Reallocated Principal Collections. If, on
such Distribution Date, the Excess Spread, Shared Finance Charge
Collections, Available Cash Collateral Amount and Reallocated Principal
Collections are insufficient to fund any Class A Required Amount for such
Monthly Period, the remaining Class B Investor Interest will be reduced
(but not in excess of the Class A Investor Default Amount for such
Distribution Date) by the amount of such remaining insufficiency, until
such time as the Class B Investor Interest has been reduced to zero. In
addition, if on such Distribution Date the Excess Spread, Shared Finance
Charge Collections and any remaining Available Cash Collateral Amount are
insufficient to fund the Class B Required Amount for such Monthly Period,
the remaining Class B Investor Interest will be reduced (but not in excess
of the Class B Investor Default amount for such Distribution Date) by the
amount of such remaining insufficiency, until such time as the Class B
Investor Interest has been reduced to zero.
The Trustee has entered into the Class A Interest Rate Cap and Class
B Interest Rate Cap with the Interest Rate Cap Provider for the exclusive
benefit of the Class A Certificateholders and the Class B
Certificateholders, respectively. On each Transfer Date that the Class A
Certificate Rate or the Class B Certificate Rate for the related Interest
Period exceeds the Class A Cap Rate or the Class B Cap Rate, respectively,
the Interest Rate Cap Provider will make a payment to the Trustee, on
behalf of the Trust, based on the amount of such excess and the notional
amount of the applicable Interest Rate Cap. The Class A Notional Amount
will at all times equal the amount of the Expected Class A Principal, and
the Class B Notional Amount will at all times equal the amount of the
Expected Class B Principal. The Class A Interest Rate Cap and the Class B
Interest Rate Cap, or its Replacement Interest Rate Cap or Qualified
Substitute Arrangement, will terminate on the day immediately following the
Class A Expected Final Distribution Date and the Class B Expected Final
Distribution Date, respectively.
People's Bank, as Servicer, is entitled to receive as servicing
compensation a monthly servicing fee in an amount equal to one-twelfth of
the product of 2.00% per annum and the Aggregate Principal Receivables in
the Trust on the last day of each Monthly Period, payable on each
succeeding Distribution Date. With respect to any Distribution Date, the
share of the servicing fee for each Monthly Period allocable to the Class B
Certificates shall be equal to one-twelfth of the product of 2.00% per
annum and the Class B Investor Interest as of the last day of the preceding
Monthly Period. The remainder of the servicing fee, which will be
allocable to the Class A Certificateholders, the Holder of the Exchangeable
Seller Certificate and the other Series of certificates, if any, will be
payable by the Class A Certificateholders, the Holder of the Exchangeable
Seller Certificate or by the Holders of such Series of certificates, and
none of the Trust, the Trustee or the Class B Certificateholders will have
any obligation to pay such portion of the servicing fee.
On the Determination Date immediately preceding the Class B Payment
Commencement Date, and on each Determination Date thereafter, the Servicer
shall notify the Trustee that it will withdraw, or shall instruct the
Trustee to withdraw, and on the next succeeding Transfer Date the Servicer
or the Trustee acting in accordance with such notice or instructions shall
withdraw all amounts on deposit in the Principal Account, in respect of
Collections processed during the preceding Monthly Period and deposit such
amounts less any amounts required to be paid on the succeeding Distribution
Date to the Class A Certificateholders in the Distribution Account for
distribution to the Class B Certificateholders to the extent specified in
the Agreement on the next succeeding Distribution Date.
If on any Distribution Date in the Controlled Amortization Period
commencing with the Class B Payment Commencement Date, the Monthly Total
Principal Allocations for the prior Monthly Period are equal to or greater
than the Controlled Distribution Amount, the amount of the Controlled
Distribution Amount will be paid from the Trust to the Class B
Certificateholders up to the outstanding Class B Investor Interest, as
provided in the Agreement and any excess of such Monthly Total Principal
Allocations over the Controlled Distribution Amount will be applied as
Shared Principal Collections and if not so used, paid from the Trust to the
holder of the Exchangeable Seller Certificate. If Monthly Total Principal
Allocation for any Monthly Period during the Controlled Amortization Period
is less than the Controlled Distribution Amount, the sum of such Monthly
Total Principal Allocations and the amount of any Shared Principal
Collections available from other Series to the Certificates of this Series
will be paid from the Trust to the applicable Class B Certificateholders in
respect to the Class B Investor Interest to the extent specified in the
Agreement.
On each Distribution Date beginning with the month following the
Monthly Period in which the Rapid Amortization Period commences, the
Monthly Total Principal Allocation from the prior Monthly Period along with
Shared Principal Collections from other Series, if any, will be distributed
to the Class A Certificateholders until the earlier of the date on which
the Class A Investor Interest is paid in full and the Series 1996-1
Termination Date and, following the final principal payment to the Class A
Certificateholders, to the Class B Certificateholders until the Series
1996-1 Termination Date.
On each Distribution Date occurring after a deposit is made pursuant
to the paragraphs above, the Paying Agent shall pay the Class B
Certificateholders the amount deposited into the Distribution Account on
the related Transfer Date in respect of interest payable to the Class B
Certificateholders and, in addition, upon and following the Class B Payment
Commencement Date, the Paying Agent shall pay to the Class B
Certificateholders the amount deposited on the related Transfer Date into
the Distribution Account in respect of principal payable to the Class B
Certificateholders. Distributions with respect to this Class B Certificate
will be made by the Paying Agent by check mailed to the address of the
holder 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 Certificate or the making of any notation
thereon, except that with respect to Certificates registered in the name of
the nominee of a Clearing Agency, 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 Seller or the Servicer, and neither the Class B
Certificates nor the Accounts or Receivables are insured or guaranteed by
the Federal Deposit Insurance Corporation or any other governmental agency.
This Class B Certificate is limited in right of payment to certain
collections respecting the Receivables, as more specifically set forth
hereinabove and in the Agreement.
As provided in the Agreement, withdrawals from the Series 1996-1
Investor Accounts may be made upon the instructions of the Servicer from
time to time for purposes other than distributions to Class B
Certificateholders.
The Seller may designate (subject to the terms and conditions of the
Agreement) Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust; provided, however, that
the Seller shall not make more than one such designation in any Monthly
Period.
The Agreement and any Supplement may be amended by the Seller, the
Servicer and the Trustee, without the consent of the Certificateholder of
any Series, to cure any ambiguity, to correct or supplement any provision
therein which may be inconsistent with any other provision therein, to add
any other provisions with respect to matters or questions arising under the
Agreement and any Supplement which are not inconsistent with the provisions
of the Agreement and any Supplement. The Agreement may be amended from
time to time by the Seller, the Servicer and the Trustee, with the consent
of the Trustee and without the consent of the certificateholders, to (a)
provide for the transfer by the Seller of its interest in and to all or
part of the Accounts in accordance with the provisions of the Agreement and
(b) provide for the purchase of Principal Receivables by the Trust at a
price which is less than 100% of the outstanding balance thereof, and to
provide for the treatment of Collections of Principal Receivables, in an
amount up to the aggregate amount by which the purchase price of Principal
Receivables as sold thereafter is less than 100%, as Collections of Finance
Charge Receivables; provided, however, that any such action shall not
adversely affect in any material respect the interests of the
certificateholders; provided further that the Servicer and the Trustee
shall have received notice from the Rating Agency that any such amendment
will not result in the reduction or withdrawal of its then-existing rating
of the certificates of any Series. In addition, the Agreement and any
Supplement may be amended from time to time by the Seller, the Servicer and
the Trustee, without certificateholder consent, to add to or change any of
the provisions of the Agreement to provide that bearer certificates issued
with respect to any other Series may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
interest on such bearer certificates, to permit such bearer certificates to
be issued in exchange for registered certificates or bearer certificates of
other authorized denominations or to permit the issuance of uncertificated
certificates, subject to certain conditions. Moreover, any Supplement and
any amendments regarding the addition or removal of Receivables from the
Trust will not be considered amendments requiring certificateholder consent
under the provisions of the Agreement or any Supplement.
The Agreement and any Supplement may be amended by the Seller, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregating not less than 66-2/3% of the
principal amount of each Series adversely affected, for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or any Supplement or of modifying in any manner
the rights of Certificateholders of any Series. No such amendment,
however, may (a) reduce in any manner the amount of, or delay the timing
of, distributions required to be made on such Series, (b) change the
definition of or the manner of calculating the interest of any
Certificateholder of such Series or (c) reduce the aforesaid percentage of
undivided interests, the holders of which are required to consent to any
such amendment, in each case without the consent of all Certificateholders
of all Series adversely affected. Promptly following the execution of any
amendment to the Agreement or any Supplement, the Trustee will furnish
written notice of the substance of such amendment to each Certificateholder
of all Series (or with respect to an amendment of a Supplement, to the
applicable Series).
The transfer of this Class B Certificate shall be registered in the
Certificate Register upon surrender of this Class B 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-in-fact duly authorized in writing, and
thereupon one or more new Class B Certificates of authorized denomination
and for the same aggregate Undivided Interests will be issued to the
designated transferee or transferees.
Pursuant to the Series 1996-1 Supplement, the Seller has the option
(the "Discount Option") at any time to designate as Finance Charge
Receivables a fixed or variable percentage of Receivables in designated
Accounts which otherwise would be treated as Principal Receivables. The
exercise by the Seller of the Discount Option will be subject to, among
other things, the receipt by the Trustee of written confirmation from each
Rating Agency that the exercise of such option will not result in a
withdrawal or reduction of its rating of the Certificates. Each
Certificateholder by its acceptance of a beneficial interest in a
Certificate shall be deemed to have consented to the exercise by the Seller
of the Discount Option at such time as the Seller determines to exercise
such options.
As provided in the Agreement and subject to certain limitations
therein set forth, Class B Certificates are exchangeable for new Class B
Certificates evidencing like aggregate 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 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 Servicer, the Trustee, the Paying Agent and the Transfer Agent
and Registrar, 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 Servicer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them or of any such
agent shall be affected by notice to the contrary except in certain
circumstances described in the Agreement.
Subject to the prior termination of Series 1996-1, the Agreement
provides that the right of the Class B Certificateholders to receive
payments from the Trust will terminate on the Scheduled Series 1996-1
Termination Date. Upon the termination of Trust pursuant to Section 12.1
of the Agreement, the Trustee will assign and convey to the Holder of the
Exchangeable Seller Certificate (without recourse, representation or
warranty) all right, title and interest of the Trust in the Receivables,
whether then existing or thereafter created, and Recoveries allocable to
the Trust relating thereto and Interchange pursuant to subsections 2.5(k)
and (l) of the Agreement. The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Holder of the Exchangeable Seller
Certificate to vest in such Holder all right, title and interest which the
Trustee had in the Receivables.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class B Certificate
shall not be entitled to any benefit under the Agreement, or be valid for
any purpose.
IN WITNESS WHEREOF, People's Bank has caused this Class B Certificate
to be executed by its duly authorized officer.
PEOPLE'S BANK
By:__________________________
Dated: July 2, 1996
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY, not in
its individual capacity,
but solely as Trustee
By:____________________________
(Authorized Officer)
EXHIBIT 2
---------
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
---------------------------------------------
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, Series 1996-1
MONTHLY CERTIFICATEHOLDERS' STATEMENT FOR MONTHLY PERIOD #___
Monthly Period - Beginning Date _________
Monthly Period - Ending Date _________
Determination Date _________
Distribution Date _________
(Note: Monthly Period numbers found herein refer solely to Series
1996-1 and may not correspond to Monthly Period numbers used for
other Series of the Trust.)
I. Information Regarding Distributions to Certificateholders
A. Total amount distributed to
Certificateholders (per $1,000
Initial Investor Interest) _____________
B. Total principal amount
distributed to Certificateholders
(per $1,000 Initial Investor Interest) _____________
C. Total interest amount
distributed to Certificateholders
(Per $1,000 Initial Investor Interest) _____________
II. Receivables Balances
A. Aggregate Principal Receivables in
Trust, end of period __
(i) Aggregate Principal Receivables
in Trust on Closing Date _____________
B. Investor Interest, end of period __
(i) Investor Interest as of Closing Date _____________
C. Investor Interest as a percentage
of Trust Principal Receivables _____________
(i) Investor Interest as a percentage of
Trust Principal Receivables as of the
Closing Date _____________
III. Collections
A. Aggregate amount of Collections Processed
during the Monthly Period allocated to
Certificateholders _____________
B. Monthly Pay Rate for:
1. Period - 1 _________%
2. Period - 2 _________%
3. Period - 3 _________%
4. Period - 4 _________%
5. Period - 5 _________%
6. Period - 6 _________%
7. 6 mo. Avg. _________%
C. Collections of Principal Receivables during _____________
the Monthly Period allocated to
Certificateholders
D. Amount by which Controlled Amortization
Amount exceeds principal allocated to
Investors _____________
E. Collections of Finance Charge Receivables
during the Monthly Period allocated to
Certificateholders _____________
F. Annualized Gross Portfolio Yield for:
1. Period - 1 _________%
2. Period - 2 _________%
3. Period - 3 _________%
4. 3 mo. avg. _________%
IV. Delinquent Balances*
Aggregate
Account
Balances
---------
A. Less than 31 days delinquent ___________
B. 31 - 60 days delinquent ___________
C. 61-90 days delinquent ___________
D. More than 90 days delinquent ___________
E. Total ___________
Percent of
Aggregate
Receivables
- -----------
___________%
___________%
___________%
___________%
___________%
V. Default Summary
A. Aggregate Investor Default Amount _____________
Aggregate Percent of
Account Aggregate
Balances Receivables
---------- -----------
B. Investor default percentage for:
1. Period - 1 _________%
2. Period - 2 _________%
3. Period - 3 _________%
4. 3 mo. avg. _________%
C. Investor Charge Offs
1. Aggregate dollar amount ____________
2. Per $1,000 of Initial Investor Interest ____________
D. Reimbursed Investor Charge Offs
1. Aggregate dollar amount ____________
2. Per $1,000 of Initial Investor Interest ____________
E. Base Rate ____________
F. Portfolio Yield minus Base Rate for:
1. Period - 1 _________%
2. Period - 2 _________%
3. Period - 3 _________%
4. 3 mo. avg. _________%
VI. Monthly Investor Servicing Fee _____________
VII. Withdrawal from Cash Collateral Account under
Section 4.6 _____________
VIII. Required Cash Collateral Amount _____________
IX. Available Cash Collateral Amount _____________
X. Deficit Controlled Amortization Amount _____________
XI. Pool Factor
PEOPLE'S BANK, Servicer
By:_______________________
Calculations
------------
Monthly Pay Rate = Aggregate Collections (excluding Interchange) during
the Monthly Period/Aggregate Amount of Receivables at the end
of the prior Monthly Period
Amount by which Controlled Amortization Amount exceeds Principal allocated
to Investors during the Monthly Period = $________ - Principal
allocated to Investors
Gross Portfolio Yield = Finance Charges allocated to Investors during the
Monthly Period (including Interchange allocated to Investors
and deposited in the Finance Charge Account)/Investor Interest
for the prior Monthly Period #_______
Portfolio Yield minus Base Rate - Finance charges allocated to Investors
during the Monthly Period (including Interchange allocated to
Investors and deposited in the Finance Charge Amount) - Investor
Default Amount for the Monthly Period/Investor Interest for the
prior Monthly Period - Base Rate.
Exhibit 4
Form of Monthly Payment Instructions to Trustee
ON __________, PLEASE PERFORM THE FOLLOWING TRANSACTIONS PURSUANT TO THE
SERIES 1996-1 SUPPLEMENT AND THE POOLING AND SERVICING AGREEMENT DATED
JUNE 1, 1993:
Per Section Please withdraw $_________ from Finance
4.6(a)(i) & Charge Account - and deposit into the
4.6(c)(vii) Distribution Account - to pay Class A
Monthly Interest to Class A Certificate
Holders.
Per Section Please withdraw $_________ from Finance
4.6(b)(i) & Charge Account - and deposit into the
4.6(c)(viii) Distribution Account - to pay Class B
Monthly Interest to Class B Certificate
Holders.
Per Section Please withdraw $__________ from Finance
4.6(a)(ii) & Charge Account - to pay Monthly Investor
4.6(b)(ii) Servicing Fee to People's Bank.
Per Section Please withdraw $__________ from Finance
4.6(a)(iii) & Charge Account - to pay Investor Default
4.6(b)(iii) Amount to People's Bank.
Per Section Please withdraw $_________ from Finance
Charge Account - to pay Monthly Loan Fee to
_____________, as Administrative Agent under
the Loan Agreement, dated as of June __, 1996
among Trustee, People's Bank, _______________________
and ___________ ______________, Individually
and as Administrative Agent.
Per Section Please withdraw $____________ from Finance
4.6(c)(xiv) Charge Account - and pay to People's
Structured Finance Corp.
AUTHORIZED BY: _______________________________
Exhibit 5
Form of Notification to Trustee Regarding
Completion of Required Deposits and Withdrawals
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, Series 1996-1
This is to inform you that on the Transfer Date occurring on
_________ we have made all deposits and withdrawals for the Monthly Period
beginning on ________ and ending on _________.
Name:__________________________
Title:
Exhibit 6
Form of Notification to Trustee Regarding
Failure to Make Payment
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, Series 1996-1
This is to inform you that we have been unable to make a
[payment or deposit] in the amount of __________ for the Monthly Period
beginning on ________ and ending on _________. Such payments were to be
made from [Account] on _________ and such payment or deposit was to be made
to [Person or Account].
Name:___________________________
Title:
Exhibit 7
Form of Notification to Trustee of Amount Required to be
Withdrawn From the Cash Collateral Account
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, Series 1996-1
This is to inform you that for the Transfer Date occurring on
________, the Total Withdrawal Amount will be $___________.
Name:______________________________
Title:
(Multicurrency-Cross Border)
ISDA
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of July 2, 1996
BANKERS TRUST COMPANY, not in its individual capacity, but solely as
Trustee for People's Bank Credit Card Master Trust and SWISS BANK
CORPORATION, LONDON BRANCH have entered and/or anticipate entering into one
or more transactions (each a "Transaction") that are or will be governed by
this Master Agreement, which includes the schedule (the "Schedule"), and
the documents and other confirming evidence (each a "Confirmation")
exchanged between the parties confirming those Transactions.
Accordingly, the parties agree as follows:-
1. Interpretation.
(a) Definitions. The terms defined in Section 14 and in the
Schedule will have the meanings therein specified for the purpose of this
Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master
Agreement, the Schedule will prevail. In the event of any inconsistency
between the provisions of any Confirmation and this Master Agreement
(including the Schedule), such Confirmation will prevail for the purpose of
the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance
on the fact that this Master Agreement and all Confirmations form a single
agreement between the parties (collectively referred to as this
"Agreement"), and the parties would not otherwise enter into any
Transactions.
2. Obligations.
(a) General Conditions.
(i) Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other provisions
of this Agreement.
Copyright(c) 1992 by International Swap Dealers Association, Inc.
(ii) Payments under this Agreement will be made on the due date
for value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is,
other than by payment), such delivery will be made for receipt on the
due date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has
occurred and is continuing, (2) the condition precedent that no Early
Termination Date in respect of the relevant Transaction has occurred
or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for
receiving a payment or delivery by giving notice to the other party at
least five Local Business Days prior to the scheduled date for the payment
or delivery to which such change applies unless such other party gives
timely notice of a reasonable objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been
payable by one party exceeds the aggregate amount that would otherwise have
been payable by the other party, replaced by an obligation upon the party
by whom the larger aggregate amount would have been payable to pay to the
other party the excess of the larger aggregate amount over the smaller
aggregate amount.
The parties may elect in respect of two or more Transactions that a
net amount will be determined in respect of all amounts payable on the same
date in the same currency in respect of such Transactions, regardless of
whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or a Confirmation by specifying that
subparagraph (ii) above will not apply to the Transactions identified as
being subject to the election, together with the starting date (in which
case subparagraph (ii) above will not, or will cease to, apply to such
Transactions from such date). This election may be made separately for
different groups of Transactions and will apply separately to each pairing
of Offices through which the parties make and receive payments or
deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made
without any deduction or withholding for or on account of any Tax
unless such deduction or withholding is required by any applicable
law, as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required to deduct or
withhold, then that party ("X") will:-
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full amount
required to be deducted or withheld from any additional amount
paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been assessed
against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable to
Y, evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled under
this Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal
the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to
pay any additional amount to Y to the extent that it would not
be required to be paid but for:-
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d);
or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true unless
such failure would not have occurred but for (I) any
action taken by a taxing authority, or brought in a court
of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.
(ii) Liability. If:-
(1) X is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the
amount of such liability (including any related liability for
interest, but including any related liability for penalties only
if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or
effective designation of an Early Termination Date in respect of the
relevant Transaction, a party that defaults in the performance of any
payment obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay interest (before as well as after
judgment) on the overdue amount to the other party on demand in the same
currency as such overdue amount, for the period from (and including) the
original due date for payment to (but excluding) the date of actual
payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If,
prior to the occurrence or effective designation of an Early Termination
Date in respect of the relevant Transaction, a party defaults in the
performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in
the relevant Confirmation or elsewhere in this Agreement.
3. Representations.
Each party represents to the other party (which representations will
be deemed to be repeated by each party on each date on which a Transaction
is entered into and, in the case of the representations in Section 3(f), at
all times until the termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organized and validly existing under the
laws of the jurisdiction of its Organization or incorporation and, if
relevant under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and
any other documentation relating to this Agreement to which it is a
party, to deliver this Agreement and any other documentation relating
to this Agreement that it is required by this Agreement to deliver
and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a
party and has taken all necessary action to authorize such execution,
delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment
of any court or other agency of government applicable to it or any of
its assets or any contractual restriction binding on or affecting it
or any of its assets;
(iv) Consents. All governmental and other consents that are
required to have been obtained by it with respect to this Agreement
or any Credit Support Document to which it is a party have been
obtained and are in full force and effect and all conditions of any
such consents have been complied with; and
(v) Obligations Binding. Its obligations under this Agreement
and any Credit Support Document to which it is a party constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential
Event of Default or, to its knowledge, Termination Event with respect to it
has occurred and is continuing and no such event or circumstance would
occur as a result of its entering into or performing its obligations under
this Agreement or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its
knowledge, threatened against it or any of its Affiliates any action, suit
or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to
affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit
Support Document.
(d) Accuracy of Specified Information. All applicable information
that is furnished in writing by or on behalf of it to the other party and
is identified for the purpose of this Section 3(d) in the Schedule is, as
of the date of the information, true, accurate and complete in every
material respect.
(e) Payer Tax Representation. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is
accurate and true.
(f) Payee Tax Representations. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is
accurate and true.
4. Agreements.
Each party agrees with the other that, so long as either party has or
may have any obligation under this Agreement or under any Credit Support
Document to which it is a party:-
(a) Furnish Specified Information. It will deliver to the other
party or, in certain cases under subparagraph (iii) below, to such
government or taxing authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to
make a payment under this Agreement or any applicable Credit Support
Document without any deduction or withholding for or on account of
any Tax or with such deduction or withholding at a reduced rate (so
long as the completion, execution or submission of such form or
document would not materially prejudice the legal or commercial
position of the party in receipt of such demand), with any such form
or document to be accurate and completed in a manner reasonably
satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or,
if none is specified, as soon as reasonably practicable.
(b) Maintain Authorizations. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or other
authority that are required to be obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party and will
use all reasonable efforts to obtain any that may become necessary in the
future.
(c) Comply with Laws. It will comply in all material respects with
all applicable laws and orders to which it may be subject if failure so to
comply would materially impair its ability to perform its obligations under
this Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true
promptly upon learning of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any
Stamp Tax levied or imposed upon it or in respect of its execution or
performance of this Agreement by a jurisdiction in which it is
incorporated, organized, managed and controlled, or considered to have its
seat, or in which a branch or office through which it is acting for the
purpose of this Agreement is located ("Stamp Tax Jurisdiction") and will
indemnify the other party against any Stamp Tax levied or imposed upon the
other party or in respect of the other party's execution or performance of
this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp
Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events.
(a) Events of Default. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any of the following events constitutes
an event of default (an "Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make,
when due, any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) required to be made by it if such failure is not
remedied on or before the third Local Business Day after notice of
such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with
or perform any agreement or obligation (other than an obligation to
make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to
be complied with or performed by the party in accordance with this
Agreement if such failure is not remedied on or before the thirtieth
day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider
of such party to comply with or perform any agreement or
obligation to be complied with or performed by it in accordance
with any Credit Support Document if such failure is continuing
after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its
terms) prior to the satisfaction of all obligations of such
party under each Transaction to which such Credit Support
Document relates without the written consent of the other party;
or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed
to have been made or repeated by the party or any Credit Support
Provider of such party in this Agreement or any Credit Support
Document proves to have been incorrect or misleading in any material
respect when made or repeated or deemed to have been made or
repeated;
(v) Default under Specified Transaction. The party, any Credit
Support Provider of such party or any applicable Specified Entity of
such party (1) defaults under a Specified Transaction and, after
giving effect to any applicable notice requirement or grace period,
there occurs a liquidation of, an acceleration of obligations under,
or an early termination of, that Specified Transaction, (2) defaults,
after giving effect to any applicable notice requirement or grace
period, in making any payment or delivery due on the last payment,
delivery or exchange date of, or any payment on early termination of,
a Specified Transaction (or such default continues for at least three
Local Business Days if there is no applicable notice requirement or
grace period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is taken by
any person or entity appointed or empowered to operate it or act on
its behalf);
(vi) Cross Default. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence of (1)
a default, event of default or other similar condition or event
(however described) in respect of such party, any Credit Support
Provider of such party or any applicable Specified Entity of such
party under one or more agreements or instruments relating to
Specified Indebtedness of any of them (individually or collectively)
in an aggregate amount of not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such
Specified Indebtedness becoming, or becoming capable at such time of
being declared, due and payable under such agreements or instruments,
before it would otherwise have been due and payable or (2) a default
by such party, such Credit Support Provider or such Specified Entity
(individually or collectively) in making one or more payments on the
due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments
(after giving effect to any applicable notice requirement or grace
period);
(vii) Bankruptcy. The party, any Credit Support Provider of
such party or any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights,
or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted
or presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous
effect to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any
of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit
Support Provider of such party consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all its assets
to, another entity and, at the time of such consolidation,
amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity fails
to assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by operation
of law or pursuant to an agreement reasonably satisfactory to
the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of
its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to
a party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any event specified below constitutes an
Illegality if the event is specified in (i) below, a Tax Event if the event
is specified in (ii) below or a Tax Event Upon Merger if the event is
specified in (iii) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to (iv) below or an
Additional Termination Event if the event is specified pursuant to (v)
below:-
(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation
by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes
unlawful (other than as a result of a breach by the party of Section
4(b)) for such party (which will be the Affected Party):-
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or delivery
in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other obligation which
the party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party to
this Agreement) or (y) a Change in Tax Law, the party (which will be
the Affected Party) will, or there is a substantial likelihood that
it will, on the next succeeding Scheduled Payment Date (1) be
required to pay to the other party an additional amount in respect of
an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld
for or on account of a Tax (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required
to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party")
on the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an Indemnifiable
Tax under Section 2(d)(i)(4) (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which
an amount has been deducted or withheld for or on account of any
Indemnifiable Tax in respect of which the other party is not required
to pay an additional amount (other than by reason of Section
2(d)(i)(4)(A) or (B)), in either case as a result of a party
consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity
(which will be the Affected Party) where such action does not
constitute an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity
of X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) Additional Termination Event. If any "Additional
Termination Event" is specified in the Schedule or any Confirmation
as applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for such
Additional Termination Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance
which would otherwise constitute or give rise to an Event of Default also
constitutes an Illegality, it will be treated as an Illegality and will not
constitute an Event of Default.
6. Early Termination.
(a) Right to Terminate Following Event of Default. If at any time
an Event of Default with respect to a party (the "Defaulting Party") has
occurred and is then continuing, the other party (the "Non-defaulting
Party") may, by not more than 20 days notice to the Defaulting Party
specifying the relevant Event of Default, designate a day not earlier than
the day such notice is effective as an Early Termination Date in respect of
all outstanding Transactions. If, however, "Automatic Early Termination"
is specified in the Schedule as applying to a party, then an Early
Termination Date in respect of all outstanding Transactions will occur
immediately upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent
analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(4) or, to the extent analogous
thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party
will, promptly upon becoming aware of it, notify the other party,
specifying the nature of that Termination Event and each Affected
Transaction and will also give such other information about that
Termination Event as the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there
is only one Affected Party, or if a Tax Event Upon Merger occurs and
the Burdened Party is the Affected Party, the Affected Party will, as
a condition to its right to designate an Early Termination Date under
Section 6(b)(iv), use all reasonable efforts (which will not require
such party to incur a loss, excluding immaterial, incidental
expenses) to transfer within 20 days after it gives notice under
Section 6(b)(i) all its rights and obligations under this Agreement
in respect of the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will
give notice to the other party to that effect within such 20 day
period, whereupon the other party may effect such a transfer within
30 days after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the
other party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties,
each party will use all reasonable efforts to reach agreement within
30 days after notice thereof is given under Section 6(b)(i) on action
to avoid that Termination Event.
(iv) Right to Terminate. If:-
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section 6(b)(i);
or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event occurs, or
a Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than
one Affected Party, or the party which is not the Affected Party in
the case of a Credit Event Upon Merger or an Additional Termination
Event if there is only one Affected Party may, by not more than 20
days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier
than the day such notice is effective as an Early Termination Date in
respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given
under Section 6(a) or (b), the Early Termination Date will occur on
the date so designated, whether or not the relevant Event of Default
or Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each party
will make the calculations on its part, if any, contemplated by
Section 6(e) and will provide to the other party a statement (1)
showing, in reasonable detail, such calculations (including all
relevant quotations and specifying any amount payable under Section
6(e)) and (2) giving details of the relevant account to which any
amount payable to it is to be paid. In the absence of written
confirmation from the source of a quotation obtained in determining a
Market Quotation, the records of the party obtaining such quotation
will be conclusive evidence of the existence and accuracy of such
quotation.
(ii) Payment Date. An amount calculated as being due in
respect of any Early Termination Date under Section 6(e) will be
payable on the day that notice of the amount payable is effective (in
the case of an Early Termination Date which is designated or occurs
as a result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is
effective (in the case of an Early Termination Date which is
designated as a result of a Termination Event). Such amount will be
paid together with (to the extent permitted under applicable law)
interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at
the Applicable Rate. Such interest will be calculated on the basis
of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date
occurs, the following provisions shall apply based on the parties' election
in the Schedule of a payment measure, either "Market Quotation" or "Loss",
and a payment method, either the "First Method" or the "Second Method". If
the parties fail to designate a payment measure or payment method in the
Schedule, it will be deemed that "Market Quotation" or the "Second Method",
as the case may be, shall apply. The amount, if any, payable in respect of
an Early Termination Date and determined pursuant to this Section will be
subject to any Set-off.
(i) Events of Default. If the Early Termination Date results
from an Event of Default:-
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party will pay
to the Non-defaulting Party the excess, if a positive number, of
(A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss in
respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it
is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and
Loss apply, an amount will be payable equal to the
Non-defaulting Party's Loss in respect of this Agreement. If
that amount is a positive number, the Defaulting Party will pay
it to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount
to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results
from a Termination Event:-
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss applies and
fewer than all the Transactions are being terminated, Loss shall
be calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:-
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to (I)
the sum of (a) one-half of the difference between the
Settlement Amount of the party with the higher Settlement
Amount ("X") and the Settlement Amount of the party with
the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less
(II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than all
the Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of that amount to
Y.
(iii) Adjustment for Bankruptcy. In circumstances where an
Early Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate
and permitted by law to reflect any payments or deliveries made by
one party to the other under this Agreement (and retained by such
other party) during the period from the relevant Early Termination
Date to the date for payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and the loss of protection against future risks
and except as otherwise provided in this Agreement neither party will
be entitled to recover any additional damages as a consequence of
such losses.
7. Transfer.
Subject to Section 6(b)(ii), neither this Agreement nor any interest
or obligation in or under this Agreement may be transferred (whether by way
of security or otherwise) by either party without the prior written consent
of the other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant
to a consolidation or amalgamation with, or merger with or into, or
transfer of all or substantially all its assets to, another entity
(but without prejudice to any other right or remedy under this
Agreement); and
(b) a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party under
Section 6(e).
Any purported transfer that is not in compliance with this Section will be
void.
8. Contractual Currency.
(a) Payment in the Contractual Currency. Each payment under this
Agreement will be made in the relevant currency specified in this Agreement
for that payment (the "Contractual Currency"). To the extent permitted by
applicable law, any obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by any tender in
any currency other than the Contractual Currency, except to the extent such
tender results in the actual receipt by the party to which payment is owed,
acting in a reasonable manner and in good faith in converting the currency
so tendered into the Contractual Currency, of the full amount in the
Contractual Currency of all amounts payable in respect of this Agreement.
If for any reason the amount in the Contractual Currency so received falls
short of the amount in the Contractual Currency payable in respect of this
Agreement, the party required to make the payment will, to the extent
permitted by applicable law, immediately pay such additional amount in the
Contractual Currency as may be necessary to compensate for the shortfall.
If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount
of such excess.
(b) Judgments. To the extent permitted by applicable law, if any
judgment or order expressed in a currency other than the Contractual
Currency is rendered (i) for the payment of any amount owing in respect of
this Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of a judgment
or order of another court for the payment of any amount described in (i) or
(ii) above, the party seeking recovery, after recovery in full of the
aggregate amount to which such party is entitled pursuant to the judgment
or order, will be entitled to receive immediately from the other party the
amount of any shortfall of the Contractual Currency received by such party
as a consequence of sums paid in such other currency and will refund
promptly to the other party any excess of the Contractual Currency received
by such party as a consequence of sums paid in such other currency if such
shortfall or such excess arises or results from any variation between the
rate of exchange at which the Contractual Currency is converted into the
currency of the judgment or order for the purposes of such judgment or
order and the rate of exchange at which such party is able, acting in a
reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with
the amount of the currency of the judgment or order actually received by
such party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of
or conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable
law, these indemnities constitute separate and independent obligations from
the other obligations in this Agreement, will be enforceable as separate
and independent causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not be affected
by judgment being obtained or claim or proof being made for any other sums
payable in respect of this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss
had an actual exchange or purchase been made.
9. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to its subject
matter and supersedes all oral communication and prior writings with
respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of
this Agreement will be effective unless in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the parties
or confirmed by an exchange of telexes or electronic messages on an
electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections
2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement
will survive the termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver
in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed
an original.
(ii) The parties intend that they are legally bound by the
terms of each Transaction from the moment they agree to those terms
(whether orally or otherwise). A Confirmation shall be entered into
as soon as practicable and may be executed and delivered in
counterparts (including by facsimile transmission) or be created by
an exchange of telexes or by an exchange of electronic messages on an
electronic messaging system, which in each case will be sufficient
for all purposes to evidence a binding supplement to this Agreement.
The parties will specify therein or through another effective means
that any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any
right, power or privilege in respect of this Agreement will not be presumed
to operate as a waiver, and a single or partial exercise of any right,
power or privilege will not be presumed to preclude any subsequent or
further exercise, of that right, power or privilege or the exercise of any
other right, power or privilege.
(g) Headings. The headings used in this Agreement are for
convenience of reference only and are not to affect the construction of or
to be taken into consideration in interpreting this Agreement.
10. Offices; Multibranch Parties.
(a) If Section 10(a) is specified in the Schedule as applying, each
party that enters into a Transaction through an Office other than its head
or home office represents to the other party that, notwithstanding the
place of booking office or jurisdiction of incorporation or organization of
such party, the obligations of such party are the same as if it had entered
into the Transaction through its head or home office. This representation
will be deemed to be repeated by such party on each date on which a
Transaction is entered into.
(b) Neither party may change the Office through which it makes and
receives payments or deliveries for the purpose of a Transaction without
the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule,
such Multibranch Party may make and receive payments or deliveries under
any Transaction through any Office listed in the Schedule, and the Office
through which it makes and receives payments or deliveries with respect to
a Transaction will be specified in the relevant Confirmation.
11. Expenses.
A Defaulting Party will, on demand, indemnify and hold harmless the
other party for and against all reasonable out-of-pocket expenses,
including legal fees and Stamp Tax, incurred by such other party by reason
of the enforcement and protection of its rights under this Agreement or any
Credit Support Document to which the Defaulting Party is a party or by
reason of the early termination of any Transaction, including, but not
limited to, costs of collection.
12. Notices.
(a) Effectiveness. Any notice or other communication in respect of
this Agreement may be given in any manner set forth below (except that a
notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or
number or in accordance with the electronic messaging system details
provided (see the Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the
date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback
is received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient
in legible form (it being agreed that the burden of proving receipt
will be on the sender and will not be met by a transmission report
generated by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the date
that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt,
as applicable, is not a Local Business Day or that communication is
delivered (or attempted) or received, as applicable, after the close of
business on a Local Business Day, in which case that communication shall be
deemed given and effective on the first following, day that is a Local
Business Day.
(b) Change of Addresses. Either party may by notice to the other
change the address, telex or facsimile number or electronic messaging
system details at which notices or other communications are to be given to
it.
13. Governing Law and Jurisdiction.
(a) Governing Law. This Agreement will be governed by and construed
in accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings
relating to this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan
in New York City, if this Agreement is expressed to be governed by
the laws of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.
Nothing in this Agreement precludes either party from bringing Proceedings
in any other jurisdiction (outside, if this Agreement is expressed to be
governed by English law, the Contracting States, as defined in Section 1(3)
of the Civil Jurisdiction and Judgments Act 1982 or any modification,
extension or re-enactment thereof for the time being in force) nor will the
bringing of Proceedings in any one or more jurisdictions preclude the
bringing of Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process
Agent (if any) specified opposite its name in the Schedule to receive, for
it and on its behalf, service of process in any Proceedings. If for any
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute
process agent acceptable to the other party. The parties irrevocably
consent to service of process given in the manner provided for notices in
Section 12. Nothing in this Agreement will affect the right of either
party to serve process in any other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to itself and its
revenues and assets (irrespective of their use or intended use), all
immunity on the grounds of sovereignty or other similar grounds from (i)
suit, (ii) jurisdiction of any court, (iii) relief by way of injunction,
order for specific performance or for recovery of property, (iv) attachment
of its assets (whether before or after judgment) and (v) execution or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction
and irrevocably agrees, to the extent permitted by applicable law, that it
will not claim any such immunity in any Proceedings.
14. Definitions.
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in Section
5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination
Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b)
with respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any
person, any entity controlled, directly or indirectly, by the person, any
entity that controls, directly or indirectly, the person or any entity
directly or indirectly under common control with the person. For this
purpose, "control" of any entity or person means ownership of a majority of
the voting power of the entity or person.
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Defaulting Party, the Default
Rate;
(b) in respect of an obligation to pay an amount under Section 6(e)
of either party from and after the date (determined in accordance with
Section 6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or
which would have been but for Section 2(a)(iii)) by a Non-defaulting Party,
the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after
the date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorization,
exemption, notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is
specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the relevant payee (as certified
by it) if it were to fund or of funding the relevant amount plus 1% per
annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or
former connection between the jurisdiction of the government or taxation
authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection
arising from such recipient or related person being or having been a
citizen or resident of such jurisdiction, or being or having been
organized, present or engaged in a trade or business in such jurisdiction,
or having or having had a permanent establishment or fixed place of
business in such jurisdiction, but excluding a connection arising solely
from such recipient or related person having executed, delivered, performed
its obligations or received a payment under, or enforced, this Agreement or
a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in
the case of tax matters, by the practice of any relevant governmental
revenue authority) and "lawful" and "unlawful" will be construed
accordingly.
"Local Business Day" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) (a) in relation to any obligation
under Section 2(a)(i), in the place(s) specified in the relevant
Confirmation or, if not so specified, as otherwise agreed by the parties in
writing or determined pursuant to provisions contained, or incorporated by
reference, in this Agreement, (b) in relation to any other payment, in the
place where the relevant account is located and, if different, in the
principal financial center, if any, of the currency of such payment, (c) in
relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address
for notice provided by the recipient and, in the case of a notice
contemplated by Section 2(b), in the place where the relevant new account
is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant
locations for performance with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more
Terminated Transactions, as the case may be, and a party, the Termination
Currency Equivalent of an amount that party reasonably determines in good
faith to be its total losses and costs (or gain, in which case expressed as
a negative number) in connection with this Agreement or that Terminated
Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of such
party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related
trading position (or any gain resulting from any of them). Loss includes
losses and costs (or gains) in respect of any payment or delivery required
to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made,
except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will
determine its Loss as of the relevant Early Termination Date, or, if that
is not reasonably practicable, as of the earliest date thereafter as is
reasonably practicable. A party may (but need not) determine its Loss by
reference to quotations of relevant rates or prices from one or more
leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount determined on
the basis of quotations from Reference Market-makers. Each quotation will
be for an amount, if any, that would be paid to such party (expressed as a
negative number) or by such party (expressed as a positive number) in
consideration of an agreement between such party (taking into account any
existing Credit Support Document with respect to the obligations of such
party) and the quoting Reference Market-maker to enter into a transaction
(the "Replacement Transaction") that would have the effect of preserving
for such party the economic equivalent of any payment or delivery (whether
the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties under
Section 2(a)(i) in respect of such Terminated Transaction or group of
Terminated Transactions that would, but for the occurrence of the relevant
Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group
of Terminated Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early Termination
Date, have been required (assuming satisfaction of each applicable
condition precedent) after that Early Termination Date is to be included.
The Replacement Transaction would be subject to such documentation as such
party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable
as of the same day and time (without regard to different time zones) on or
as soon as reasonably practicable after the relevant Early Termination
Date. The day and time as of which those quotations are to be obtained
will be selected in good faith by the party obliged to make a determination
under Section 6(e), and, if each party is so obliged, after consultation
with the other. If more than three quotations are provided, the Market
Quotation will be the arithmetic mean of the quotations, without regard to
the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation
in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the Non-defaulting Party (as
certified by it) if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such
party's head or home office.
"Potential Event of Default" means any event which, with the giving
of notice or the lapse of time or both, would constitute an Event of
Default.
"Reference Market-makers" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good faith
(a) from among dealers of the highest credit standing which satisfy all the
criteria that such party applies generally at the time in deciding whether
to offer or to make an extension of credit and (b) to the extent
practicable, from among such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the
jurisdictions (a) in which the party is incorporated, organized, managed
and controlled or considered to have its seat, (b) where an Office through
which the party is acting for purposes of this Agreement is located, (c) in
which the party executes this Agreement and (d) in relation to any payment,
from or through which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery
is to be made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the payer
of an amount under Section 6 is entitled or subject (whether arising under
this Agreement, another contract, applicable law or otherwise) that is
exercised by, or imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early
Termination Date, the sum of:-
(a) the Termination Currency Equivalent of the Market
Quotations (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a Market
Quotation is determined; and
(b) such party's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transaction or
group of Terminated Transactions for which a Market Quotation cannot
be determined or would not (in the reasonable belief of the party
making the determination) produce a commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any
obligation (whether present or future, contingent or otherwise, as
principal or surety or otherwise) in respect of borrowed money.
"Specified Transaction"means, subject to the Schedule, (a) any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such
party) and the other party to this Agreement (or any Credit Support
Provider of such other party or any applicable Specified Entity of such
other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination
of these transactions and (c) any other transaction identified as a
Specified Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar
tax.
"Tax" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing
authority in respect of any payment under this Agreement other than a
stamp, registration, documentation or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination
Date (a) if resulting from a Termination Event, all Affected Transactions
and (b) if resulting from an Event of Default, all Transactions (in either
case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if "Automatic Early
Termination" applies, immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency amount
and, in respect of any amount denominated in a currency other than the
Termination Currency (the "Other Currency"), the amount in the Termination
Currency determined by the party making the relevant determination as being
required to purchase such amount of such Other Currency as at the relevant
Early Termination Date, or, if the relevant Market Quotation or Loss (as
the case may be), is determined as of a later date, that later date, with
the Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of
such Other Currency with the Termination Currency at or about 11:00 a.m.
(in the city in which such foreign exchange agent is located) on such date
as would be customary for the determination of such a rate for the purchase
of such Other Currency for value on the relevant Early Termination Date or
that later date. The foreign exchange agent will, if only one party is
obliged to make a determination under Section 6(e), be selected in good
faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event
Upon Merger or, if specified to be applicable, a Credit Event Upon Merger
or an Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic
mean of the cost (without proof or evidence of any actual cost) to each
party (as certified by such party) if it were to fund or of funding such
amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on
or prior to such Early Termination Date and which remain unpaid as at such
Early Termination Date and (b) in respect of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have been but
for Section 2(a)(iii)) required to be settled by delivery to such party on
or prior to such Early Termination Date and which has not been so settled
as at such Early Termination Date, an amount equal to the fair market value
of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding)
such Early Termination Date, at the Applicable Rate. Such amounts of
interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation
referred to in clause (b) above shall be reasonably determined by the party
obliged to make the determination under Section 6(e) or, if each party is
so obliged, it shall be the average of the Termination Currency Equivalents
of the fair market values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
BANKERS TRUST COMPANY, not in its SWISS BANK CORPORATION,
individual capacity, but solely as LONDON BRANCH
Trustee for People's Bank Credit Card
Master Trust
By:____________________________________ By:____________________________
Name: Name:
Title: Title:
Date: Date:
SCHEDULE
to the
MASTER AGREEMENT
Dated as of July 2, 1996
between
BANKERS TRUST COMPANY, a New York banking corporation,
not in its individual capacity, but solely as Trustee
("Party A"), for PEOPLE'S BANK CREDIT CARD
MASTER TRUST (the "Trust")
and
SWISS BANK CORPORATION, LONDON BRANCH
("Party B").
PART 1
Termination Provisions
----------------------
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), none.
Section 5(a)(vi), none.
Section 5(a)(vii), none.
Section 5(b)(iv), none.
and in relation to Party B for the purpose of:
Section 5(a)(v), none.
Section 5(a)(vi), none.
Section 5(a)(vii), none.
Section 5(b)(iv), none.
(b) "Specified Transaction" will have the meaning specified in
Section 14.
"Credit Event Upon Merger" has the meaning specified in Section 5(b)
as it applies to Party B but not Party A. "Materially weaker" as such term
is used in Section 5(b)(iv) means that the resulting, surviving or
transferee entity has suffered a Downgrade (as defined herein except that
the resulting, surviving or transferee entity will replace Party B within
the Downgrade definition).
(c) The "Cross-Default" provisions of Section 5(a)(vi) will not
apply to Party A but will apply to Party B but shall exclude any default
that results solely from wire transfer difficulties or an error or omission
of an administrative or operational nature (so long as sufficient funds are
available to the relevant party on the relevant date and only if payment is
made within three Business Days after such transfer difficulties have been
corrected or the error or omission has been discovered).
"Threshold Amount" means with respect to Party B, 2% of "Total
Capital and Reserves" as shown on the most recent annual audited financial
statements of Swiss Bank Corporation.
(d) The "Automatic Early Termination" provision of Section 6(a) will
not apply to Party A or Party B.
(e) Payments on Early Termination. For the purpose of Section 6(e):
(i) Loss will apply; provided, however, that for the avoidance
of doubt, if at any time and so long as Party A shall have
satisfied in full all its payment obligations under
Section 2(a)(i) of this Agreement and shall at the time
have no future payment obligations, (i) if Party A shall
be determining its Loss in respect of any Terminated
Transaction, such Loss shall never be a negative number,
and (ii) if Party B shall be determining its Loss in
respect of any Terminated Transaction, such Loss shall
never be expressed as a positive number.
(ii) The Second Method will apply.
(f) "Termination Currency" means United States Dollars.
(g) Additional Termination Event; Credit Downgrade.
(i) If either (A) the long-term unsecured debt or long-term
certificate of deposit rating of Party B is withdrawn or reduced
below Aa3 by Moody's Investors Service, Inc. ("Moody's") or (B) the
short-term unsecured debt or short-term certificate of deposit rating
of Party B is withdrawn or reduced below A-1+ by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc.
("S&P") (each such withdrawal or reduction, a "Downgrade"), Party B
shall promptly notify in writing Party A and the Rating Agencies of
such Downgrade, and shall within 30 days of the date of such
Downgrade (in the case of a Downgrade by Moody's) or within 60 days
of the date of such Downgrade (in the case of a Downgrade by S&P), in
each case with the prior written confirmation of each of the Rating
Agencies that such arrangement will not result in the reduction or
withdrawal of the rating of the Series 1996-1 Certificates in effect
immediately prior to such Downgrade, at the expense of Party B, (x)
obtain a substitute cap provider ("X"), reasonably acceptable to
Party A and with respect to which the Rating Agencies shall have
provided the foregoing prior written confirmation, and replace the
Transactions hereunder with Transactions on identical terms except
that X shall be "Party B", or (y) enter into a "Qualifying Substitute
Arrangement" (as defined below) to assure performance by Party B of
its obligations under the Transactions.
(ii) In the event that Party B fails to satisfy any of its
obligations referred to in Clause (i) above within the time periods
prescribed, such failure shall constitute an Additional Termination
Event with Party B as the Affected Party.
(iii) "Qualifying Substitute Arrangement" shall mean any
arrangement satisfactory to the Rating Agencies, including
collateral, guarantees or letters of credit, which arrangement will
result in the Rating Agencies not reducing or withdrawing the rating
in effect of the Series 1996-1 Certificates outstanding immediately
prior to the Downgrade.
(h) Notwithstanding any provision contained herein, in the Agreement
or in any Confirmation (including any provision relating to Section
2(a)(iii) of the Agreement regarding Events of Default and Potential Events
of Default, Section 5 of the Agreement regarding Events of Default and
Termination Events, but excluding Section 5(b)(i) of the Agreement, or
Section 6 of the Agreement regarding Early Termination), the obligations of
Party B contained herein, in the Agreement or in any Confirmation shall be
absolute, unconditional and irrevocable and all payments required to be
made by Party B hereunder, under the Agreement and under any Confirmation
shall be made without offset, counterclaim or defense.
(i) The first sentence of Section 6(d)(ii) of the Agreement is
hereby modified to read in its entirety as follows: "An amount calculated
as being due in respect of an Early Termination Date under section 6(e)
will be payable on (i) the day that notice of the amount payable is
effective if such notice is given prior to 10:00 a.m. (New York time) or
(ii) the next New York City Business Day after notice of the amount payable
is effective if such notice is given after 10:00 a.m. (New York time)."
PART 2
Tax Representations
-------------------
(a) Payer Tax Representations. For the purposes of Section 3(e) of
this Agreement, Party B will make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to Party A under
this Agreement.
(b) Payee Tax Representations. For the purposes of Sections 3(e)
and 3(f) of this Agreement, Party A makes no representations.
PART 3
Agreement to Deliver Documents
------------------------------
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party required to deliver Form/Document/ Date by which
document Certificate to be delivered
- -------- ----------- ---------------
Party B IRS Form 4224 Upon execution of this
Agreement.
Party A W-9 for the Trust Upon execution of this
Agreement.
(b) Other documents to be delivered are:
Date by Covered by
Party required to Form/Document/ which to be Section 3(d)
deliver document Certificate delivered Representation
- ---------------- ----------- --------------
Party A A Certificate of an Upon Yes.
authorized officer of execution of
the party, certifying this
the names, true Agreement.
signatures and authority
of the officers of the
party signing this
Agreement.
Party A Opinion of counsel of Upon Yes.
Party A in form and execution of
substance satisfactory this
to Party B. Agreement.
Party B A certificate of an Upon Yes.
authorized officer of execution of
the party, certifying this
the names, true Agreement.
signatures and authority
of the officers of the
party signing this
Agreement.
Party B Opinions of Swiss Upon Yes.
counsel, United Kingdom execution of
counsel and New York this
counsel to Party B and Agreement.
addressed to Party A,
the rating agencies
rating the Certificates
issued by he Trust,
covering such other
matters as reasonably
requested by, and
satisfactory to the
addressees.
Party B Audited annual 120 days Yes.
consolidated financial after each
statements of Swiss Bank fiscal year
Corporation, prepared of Party B.
in accordance with
accounting principles
that are generally
accepted in Switzerland.
PART 4
Miscellaneous
-------------
(a) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: Bankers Trust Company, as Trustee
for People's Bank Credit Card
Master Trust
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
Facsimile No.: (212) 250-6439
Telephone No.: (212) 250-6137
(For all purposes)
With copies to the Servicer:
Address: People's Bank
Bridgeport Center
850 Main Street
Bridgeport, Connecticut 06604-4913
Attention: General Counsel and
Interest Rate Risk Manager
Address for notices or communications to Party B:
Address: Swiss Bank Corporation, London Branch
1 High Timber Street
London EC4V 3SB, England
Attention: Swaps Group
Telex No.: 887434 Answerback: SBCOG
Facsimile No.: 071-711-2634
Telephone No.: 071-711-2131
(For all purposes.)
(b) Process Agent. For the purpose of Section 13(c):
Party B appoints as its Process Agent in the State of New York: Swiss
Bank Corporation, New York Branch, 222 Broadway, New York, New York
10038, Attention: Legal Affairs.
(c) Offices. The provisions of Section 10(a) will apply to this
Agreement, it being the understanding of the parties that while obligations
entered into by Party B pursuant to this Agreement constitute obligations
of Swiss Bank Corporation ("SBC") (and not merely of its London Branch),
Party A will, in respect of any Transaction and in the ordinary course of
business, send payments and notices to and receive payments and notices
from Party B rather than any other Office of SBC. Party A may seek payment
from the head office of SBC with respect to this Agreement in the event
that an amount payable to Party A by Party B pursuant to this Agreement
(including any amount payable as a result of the occurrence or designation
of an Early Termination Date) has not been paid in full when due.
(d) Multibranch Party. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party B, unless
otherwise specified in a Confirmation in relation to the relevant
Transaction.
(f) Credit Support Document. None, except as may be provided
pursuant to paragraph (g) of Part 1 of this Schedule.
(g) Credit Support Provider. None, except as may be applicable
pursuant to paragraph (g) of Part 1 of this Schedule.
(h) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
CHOICE OF LAW DOCTRINE.
(i) "Affiliate" will have the meaning specified in Section 14 of
this Agreement.
(j) Netting of Payments. The limitation set forth in Section
2(c)(ii) of this Agreement will apply and therefore the netting specified
in Section 2(c) of this Agreement will be limited to the same Transaction.
PART 5
Other Provisions
----------------
(a) Recourse. Notwithstanding anything to the contrary contained in
this Agreement, the obligations of Party A under this Agreement shall not
be recourse to Bankers Trust Company or People's Bank, a Connecticut
capital stock savings bank ("People's Bank"), as Seller and Servicer under
the Pooling and Servicing Agreement (as defined below under "Capitalized
Terms"), or any Class A Certificateholder or Class B Certificateholder
(either, any "Certificateholder") (or any person or organization acting on
behalf of Bankers Trust Company, People's Bank or any Certificateholder or
any affiliate, officer or director of Bankers Trust Company, People's Bank
or any Certificateholder) and, with respect to any payment obligations of
Party A, recourse shall be had solely to the assets of the Trust.
(b) Limitation of Defaults and Termination. Notwithstanding the
terms of Sections 5 and 6 of this Agreement, if at any time and so long as
Party A shall have satisfied in full all of its payment obligations under
Section 2(a)(i) of this Agreement and shall at the time have no future
payment obligations, whether absolute or contingent, under such Section,
then unless Party B is required pursuant to appropriate proceedings to
return to Party A or otherwise returns to Party A upon demand of Party A of
any portion of any such payment, (i) the occurrence of an event described
in Section 5(a) of this Agreement with respect to Party A shall not
constitute an Event of Default or a Potential Event of Default with respect
to Party A as the Defaulting Party and (ii) Party B shall be entitled to
designate an Early Termination Date pursuant to Section 6 of this Agreement
only as a result of the occurrence of a Termination Event set forth in
Section 5(b)(i) of this Agreement with respect to Party B as the Affected
Party; provided, however, that upon the occurrence of a Termination Event
as set forth in Section 5(b)(ii) or 5(b)(iii) of the Agreement with respect
to Party B as the Affected Party, Party B may transfer all its rights and
obligations under this Agreement in respect of the Affected Transactions to
another branch of SBC so that such Termination Event ceases to exist. Any
such transfer will be subject to and conditional upon the prior written
consent of Party A, which consent will not be withheld if Party A's
policies in effect at such time would permit it to enter into Transactions
with the transferee on the terms proposed. For the purposes of the
immediately preceding sentence and Section 6(b)(ii) of the Agreement and
for the avoidance of doubt, Party A's policies include, without limitation,
a requirement that each of the Rating Agencies confirm in writing that the
relevant transfer not result in the reduction or withdrawal of the rating
of the Series 1996-1 Certificates in effect immediately prior to the
applicable Termination Event.
(c) Covenant Not to Institute Proceedings. In connection with this
Agreement, Party B hereby covenants and agrees that it will not at any time
institute against the Trust, or join in any institution against the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
or any foreign bankruptcy or similar law.
(d) Transfer of Rights. Notwithstanding anything in Section 7 of
the Agreement or any Confirmation to the contrary, Party B hereby agrees
and acknowledges that Party A shall have the right to transfer all or a
portion of its rights to payment from Party B under any Transaction to any
Person, provided that either (A) (i) such Person meets the U.K. money
laundering internal policies of Party B and is a corporation or financial
institution organized under the laws of the United States or any State or
political subdivision thereof, and (ii) neither party is required to pay to
the other party an additional amount under Section 2(d)(i)(4) or to receive
a payment from which an amount is required to be deducted or withheld for
or on account of a Tax and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) of the Agreement or (B) Party
B has given its consent to such transfer (which consent shall not be
unreasonably withheld by Party B). In the case of clause (A)(i) of the
immediately preceding sentence, within five Business Days after Party A
notifies Party B in writing of the identity of the prospective transferee,
Party B shall notify Party A whether or not such Person meets the policies
of Party B described in such clause (A)(i). Any transfer pursuant to this
paragraph (d) shall be in accordance with the provisions of Section 4.11 of
the Supplement (as defined herein). Party B hereby agrees to make such
payments due hereunder as have been transferred to the transferee
designated by Party A and to the account or accounts specified in a written
notice to be provided by Party A to Party B at least 5 Business Days prior
to the effectiveness of such transfer but not more than 30 days prior to
the effectiveness of such transfer.
(e) Successors. Notwithstanding anything in Section 7 of the
Agreement or any Confirmation to the contrary, the terms Party A and other
terms with like significance as used in the Agreement or therein shall
include all successors from time to time to Bankers Trust Company, as
trustee for the Trust and no consent of Party B shall be required for any
transfer or assignment to a successor trustee for the Trust.
(f) No Personal Liability. In the absence of gross negligence,
willful misconduct, or bad faith on the part of the Trustee, the Trustee
will have no personal liability for any amounts required to be paid by the
Trust under this Agreement.
(g) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of the
Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction. The parties hereto shall endeavor in good faith
negotiations to replace the prohibited or unenforceable provision with a
valid provision, the economic effect of which comes as close as possible to
that of the prohibited or unenforceable provision.
(h) Amendment. No amendment, modification or waiver in respect of
this Agreement will be effective unless (i) it is in writing and executed
by each of the parties or confirmed by an exchange of telexes or facsimiles
and (ii) except as waived by the Rating Agencies, the Rating Agencies shall
have received at least 5 days prior written notice of such amendment and
have advised in writing that such amendment will not result in a downgrade
or withdrawal of the then-current rating on the Series 1996-1 Certificates.
(i) Termination at the Option of the Trust. Party A may, upon at
least two Business Days' prior written notice, terminate in whole or in
part (which termination shall not be deemed to constitute a default or
Event of Default hereunder) any Transaction, prior to the related
Termination Date, under the Agreement; any amount paid by Party B in
connection with such termination shall be as agreed between the parties
hereto, or if no agreement is reached by 12 noon, New York City time, on
the applicable Early Termination Date, as calculated by Party B on the
basis of Market Quotations and Second Method. For the avoidance of doubt,
Market Quotation shall never be expressed as being an amount payable by
Party A to Party B.
(j) Scheduled Payments by Party A. For the avoidance of doubt,
Party A has no payment obligations under Section 2(a)(i) of the Agreement
other than those specified as the Fixed Amounts in the Confirmations
relating to the Covered Transactions (as defined below), with a Fixed Rate
Payer Payment Date of July 2, 1996.
(k) Transactions. This Agreement and all Transactions relate to the
Trust's Series 1996-1 Certificates, and unless otherwise agreed to in
writing by the parties hereto, the only Transactions governed hereby shall
be the two Transactions evidenced by the Confirmations dated July 2, 1996,
as such Confirmations are modified from time to time (the "Covered
Transactions").
(l) Capitalized Terms. Capitalized terms not otherwise defined
herein or in the Definitions shall have the meanings assigned to them in
the Pooling and Servicing Agreement, dated as of June 1, 1993, by and
between People's Bank as Seller and Servicer, and Party A, as supplemented
by the Series 1996-1 Supplement, dated as of July 1, 1996 (the
"Supplement") and as otherwise amended to date (as so amended and
supplemented, the "Pooling and Servicing Agreement").
(m) Waiver of Jury Trial. Each party hereto hereby irrevocably
waives any and all right to trial by jury in any Proceedings.
(n) Representations and Warranties. Section 3(a) is amended by
adding the following paragraph (vi):
"(vii) Eligible Swap Participant. It is an "eligible swap
participant" as that term is defined by the United States
Commodity Futures Trading Commission in 17 C.F.R. 35.1(b)(2)
and it has entered into this Agreement and it is entering into
each Transaction in connection with its line of business
(including financial intermediation services) or the financing
of its business; and the material terms of this Agreement and
such Transaction have been individually tailored and
negotiated."
(o) No Reliance. This Agreement and each Transaction have been
entered into by each party in reliance only upon its judgment, in order to
accomplish legitimate business needs. Neither party holds itself out as
advising, or any of its employees or agents as having any authority to
advise, the other party as to whether or not it should enter into this
Agreement or any Transaction. Neither party is receiving any compensation
from the other party for providing advice in respect of this Agreement or
any Transaction, and any such advice provided to such other party will not
form the primary basis for an investment decision by such other party.
(p) Consent to Recording. The parties agree that each may
electronically record all telephonic conversations between them and that
any such recordings may be submitted in evidence to any court or in any
Proceedings for the purpose of establishing any matters pertinent to any
Transaction.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
BANKERS TRUST COMPANY, not in SWISS BANK CORPORATION, LONDON
its individual capacity but BRANCH
solely as Trustee for
People's Bank Credit Card
Master Trust
By:_____________________________ By:_______________________________
Name: Name:
Title: Title:
DATE:___________________________ DATE:_____________________________
[Class A]
CONFIRMATION
------------
Date: July 2, 1996
To: Bankers Trust Company,
not in its individual
capacity, but solely as
Trustee for People's Bank
Credit Card Master Trust
Attention:
From: Swiss Bank Corporation,
London Branch
Transaction
Reference Number: 919567
The purpose of this letter agreement is to set forth the terms
and conditions of the Transaction entered into between us on the date
hereof. This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA
Definitions (as published by the International Swap Dealers Association,
Inc.) (the "Definitions") are incorporated into this Confirmation. In the
event of any inconsistency between those definitions and provisions and
this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms a part of, and is subject
to, the Master Agreement dated as of July 2, 1996, as amended or
supplemented from time to time (the "Master Agreement") between you and us.
All provisions contained in the Master Agreement shall govern this
Confirmation except as expressly modified below. Additionally, upon the
due execution and delivery of this Confirmation, the [Class A] Confirmation
dated June 19, 1996, between People's Bank and Swiss Bank Corporation,
London Branch ("SBC"), which supplements the Master Agreement dated as of
June 7, 1996, between People's Bank and SBC shall be deemed cancelled in
its entirety, and all right, title, obligations and interest created
thereunder shall cease to exist, except that this Confirmation shall be
effective.
2. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Type of Transaction: Rate Cap Transaction
Notional Amount: The Notional Amount for the period from
the Effective Date through and including
the Calculation Period commencing on the
Distribution Date in November, 2000 is
U.S.$379,000,000. Thereafter, the
Notional Amount for the applicable
Calculation Period commencing on the
applicable date specified below (or, if
such day is not a Business Day, commencing
on the following Business Day) is set
forth below opposite such date:
Notional
Date Amount
December 15, 2000 $351,928,571
January 15, 2001 $324,857,143
February 15, 2001 $297,785,714
March 15, 2001 $270,714,286
April 15, 2001 $243,642,857
May 15, 2001 $216,571,429
June 15, 2001 $189,500,000
July 15, 2001 $162,428,571
August 15, 2001 $135,357,143
September 15, 2001 $108,285,714
October 15, 2001 $ 81,214,286
November 15, 2001 $ 54,142,857
December 15, 2001 $ 27,071,429
Trade Date: June 19, 19961/<F1>
<F1>
______________________________
1/ This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of July 2, 1996, among People's Bank,
the Trustee and SBC (the "Assignment Agreement"), pursuant to which
People's Bank transferred all of its rights, title, obligations and
interest in and under two confirmations, dated June 19, 1996, between
People's Bank and SBC. Such confirmations had a "Trade Date" of June
19, 1996 and an "Effective Date" of June 21, 1996. </F1>
Effective Date: June 21, 19962/ <F2>
<F2>
- -----------------------
2/ See footnote 1. </F2>
Effective Date
of Assignment: July 2, 1996
Termination Date: The Distribution Date in January,
2002.
Fixed Rate Amounts:
Fixed Rate Payer: Bankers Trust Company, not in its
individual capacity, but solely as
Trustee for People's Bank Credit
Card Master Trust (the "Trustee")
Fixed Rate Payer
Payment Date: Not applicable.
Fixed Amount: Zero.3/ <F3>
<F3>
- ----------------------------
3/ Pursuant to the Assignment Agreement, under the [Class A]
confirmation, dated June 19, 1996, executed by People's Bank
and SBC, relating to this Confirmation, the Fixed Amount was
U.S.$4,053,000.</f3>
Floating Amounts:
Floating Rate Payer: SBC
Cap Rate: 9.0% per annum
Floating Rate Payer
Payment Dates: The third Business Day preceding each
Distribution Date. Early Payment applies.
No adjustment of Floating Rate Payer
Payment Dates, except for any adjustment
of any Distribution Date, as provided in
the definition of "Distribution Dates".
Period End Dates: Each Distribution Date. No adjustment of
Period End Dates, except for any
adjustment of any Distribution Date, as
provided in the definition of
"Distribution Dates".
Floating Rate for Initial
Calculation Period: 5.4375% per annum
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month.
Spread: None.
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: First day of each Calculation Period.
Compounding: Not applicable.
Business Days: New York, and Bridgeport, Connecticut
Calculation Agent: SBC
3. Account Details:
Payments to Bankers Trust
Company, as Trustee
Account for payments: Bankers Trust Company
ABA No.: 021-001-033
Account No.: 01-41-9647
Reference: People's Bank 1996-1
Attention: Corporate Trust and
Agency Group
Payments to SBC
Account for payments: Swiss Bank Corporation,
New York Branch
ABA No.: 026-007-993
Account No.: 101-WA-140007-000
Account Name: SBC London
4. Other Provisions:
Solely for the avoidance of doubt, in the event that the
Reset Date for any Calculation Period shall not be a
London Banking Day and the rate appearing on the Telerate
Page 3750 described in the definition of "USD-LIBOR-BBA"
on the day that is two London Banking Days preceding that
Reset Date indicates that it shall be effective for
deposits commencing on the London Banking Day immediately
succeeding the Reset Date, such rate shall nonetheless be
the Floating Rate for such Calculation Period.
Credit Support Documents:
SBC Credit
Support Documents: See Master Agreement.
Counterparty Credit
Support Documents: None.
Certain Defined Terms:
"Distribution Dates" shall mean July 15, 1996 and the fifteenth day
of each calendar month thereafter, or, if such fifteenth day is not a
Business Day, the next succeeding Business Day.
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing the copy of this Confirmation enclosed for that
purpose and returning it to us.
SWISS BANK CORPORATION,
LONDON BRANCH
By:_________________________
[Name]
[Title]
By:_________________________
[Name]
[Title]
Accepted and confirmed as
of the date first written:
BANKERS TRUST COMPANY, not in
its individual capacity, but
solely as Trustee for
People's Bank Credit Card
Master Trust
By:_______________________________
[Class B]
CONFIRMATION
------------
Date: July 2, 1996
To: Bankers Trust Company,
not in its individual
capacity, but solely as
Trustee for People's Bank
Credit Card Master Trust
Attention:
From: Swiss Bank Corporation,
London Branch
Transaction
Reference Number: 919568
The purpose of this letter agreement is to set forth the terms
and conditions of the Transaction entered into between us on the date
hereof. This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA
Definitions (as published by the International Swap Dealers Association,
Inc.) (the "Definitions") are incorporated into this Confirmation. In the
event of any inconsistency between those definitions and provisions and
this Confirmation, this Confirmation will govern.
5. This Confirmation supplements, forms a part of, and is subject
to, the Master Agreement dated as of July 2, 1996, as amended or
supplemented from time to time (the "Master Agreement") between you and us.
All provisions contained in the Master Agreement shall govern this
Confirmation except as expressly modified below. Additionally, upon the
due execution and delivery of this Confirmation, the [Class B] Confirmation
dated June 19, 1996, between People's Bank and Swiss Bank Corporation,
London Branch ("SBC"), which supplements the Master Agreement dated as of
June 7, 1996, between People's Bank and SBC shall be deemed cancelled in
its entirety, and all right, title, obligations and interest created
thereunder shall cease to exist, except that this Confirmation shall be
effective.
6. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Type of Transaction: Rate Cap Transaction
Notional Amount: U.S.$21,000,000
Trade Date: June 19, 19964/ <F4>
<F4>
- -----------------------
4/ This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of July 2, 1996, among People's Bank,
the Trustee and SBC (the "Assignment Agreement"), pursuant to which
People's Bank transferred all of its rights, title, obligations and
interest in and under two confirmations, dated June 19, 1996, between
People's Bank and SBC. Such confirmations had a Trade Date of June
19, 1996 and an Effective Date of June 21, 1996.</F4>
Effective Date: June 21, 19965/ <F5>
<F5>
- ------------------------
5/ See footnote 1. </F5>
Effective Date
of Assignment: July 2, 1996
Termination Date: The Distribution Date in February,
2002.
Fixed Rate Amounts:
Fixed Rate Payer: Bankers Trust Company, not in its
individual capacity, but solely as
Trustee for People's Bank Credit
Card Master Trust (the "Trustee")
Fixed Rate Payer
Payment Date: Not applicable.
Fixed Amount: Zero.6/ <F6>
<F6>
- ----------------------------
6/ Pursuant to the Assignment Agreement, under the [Class B]
confirmation, dated June 19, 1996, executed by People's Bank
and SBC, relating to this Confirmation, the Fixed Amount
was U.S.$285,000. </F6>
Floating Amounts:
Floating Rate Payer: SBC
Cap Rate: 9.0% per annum
Floating Rate Payer
Payment Dates: The third Business Day preceding
each Distribution Date. Early
Payment applies. No adjustment of
Floating Rate Payer Payment Dates,
except for any adjustment of any
Distribution Date, as provided in
the definition of "Distribution
Dates".
Period End Dates: Each Distribution Date. No
adjustment of Period End Dates,
except for any adjustment of any
Distribution Date, as provided in
the definition of "Distribution
Dates".
Floating Rate for Initial
Calculation Period: 5.4375% per annum
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month.
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: First day of each Calculation
Period.
Compounding: Not applicable.
Business Days: New York, and Bridgeport,
Connecticut
Calculation Agent: SBC
7. Account Details:
Payments to Bankers Trust
Company, as Trustee:
Account for payments: Bankers Trust Company ABA No.:
021-001-033 Account No.: 01-41-9647
Reference: People's Bank 1996-1
Attention: Corporate Trust and
Agency Group
Payments to SBC:
Account for payments: Swiss Bank Corporation,
New York Branch
ABA No.: 026-007-993
Account No.: 101-WA-140007-000
Account Name: SBC London
8. Other Provisions: Solely for the avoidance of doubt,
in the event that the Reset Date for
any Calculation Period shall not be
a London Banking Day and the rate
appearing on the Telerate Page 3750
described in the definition of
"USD-LIBOR-BBA" on the day that is
two London Banking Days preceding
that Reset Date indicates that it
shall be effective for deposits
commencing on the London Banking Day
immediately succeeding the Reset
Date, such rate shall nonetheless be
the Floating Rate for such
Calculation Period.
Credit Support Documents:
SBC Credit
Support Documents: See the Master Agreement.
Counterparty Credit
Support Documents: None.
Certain Defined Terms:
"Distribution Dates" shall mean July 15, 1996 and the fifteenth day of each
calendar month thereafter, or, if such fifteenth day is not a Business Day,
the next succeeding Business Day.
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing the copy of this Confirmation enclosed for that
purpose and returning it to us.
SWISS BANK CORPORATION,
LONDON BRANCH
By: ________________________
[Name]
[Title]
By: ________________________
[Name]
[Title]
Accepted and confirmed as
of the date first written:
BANKERS TRUST COMPANY, not in
its individual capacity, but
solely as Trustee for
People's Bank Credit Card
Master Trust
By:______________________________
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1996-1
MONTHLY SERVICER'S REPORT
# of Months Series in Existence:
Monthly Period Ended June 30, 1996
Distribution Date July 15, 1996
Determination Date July 10, 1996
Number of Days in Period 13
1. Trust Activity Series 1996-1
Beginning of Month - Aggregate Principal Receivables
Principal Collections on the Receivables
Finance Charge Receivables
Receivables in Defaulted Accounts
End of Month - Aggregate Principal Receivables
Investor Interest Series 1993-1
Investor Interest Series 1994-1
Investor Interest Series 1994-2
Investor Interest Series 1995-1
Investor Interest Series 1996-1
Seller Principal Receivables
Total Investor Percentage with respect to...
Finance Charges
Charged-Off Accounts
Principal Receivables
Class A Percentage with respect to...
Finance Charges
Charged-Off Accounts
Principal Receivables
Class B Percentage with respect to...
Finance Charges
Charged-Off Accounts
Principal Receivables
Seller Percentage with respect to ...
Finance Charges
Charged-Off Accounts
Principal Receivables
2. Allocation of Funds in Collection Account
Class A Available Finance Charge Collections
Class A Monthly Cap Interest Payable to Class A Certificateholders
(See ""Calculation of Certificate Interest"" #3)
Unpaid Class A Monthly Cap Interest
Class A Monthly Servicing Fee
(See""Calculation of Monthly Servicing Fee"" #6)
Unpaid Class A Monthly Servicing Fee
Class A Investor Default Amount
Unreimbursed Class A Investor Charge-offs
Excess Spread from Class A Finance Charge Collections
Class A Required Amount
Class B Available Finance Charge Collections
Class B Monthly Cap Interest Payable to Class B Certificateholders
(See ""Calculation of Certificate Interest"" #3)
Unpaid Class B Monthly Cap Interest
Class B Monthly Servicing Fee
(See""Calculation of Monthly Servicing Fee"" #6)
Unpaid Class B Monthly Servicing Fee
Class B Investor Default Amount
Unreimbursed Class B Investor Charge-offs
Excess Spread from Class B Finance Charge Collections
Class B Required Amount
Total Excess Spread
2. Allocation of Funds in Collection Account (con't)
Excess Spread used to Satisfy Class A Required Amount
Excess Spread used to satisfy Unpaid Class A Monthly Cap Interest
Excess Spread used to satisfy Unpaid Class A Monthly Servicing Fee
Excess Spread used to satisfy Unreimbursed Class A Investor Charge-offs
Remaining Class A Required Amount
Excess Spread used to satisfy Class B Required Amount
Excess Spread used to satisfy Unpaid Class B Monthly Cap Interest
Excess Spread used to satisfy Unpaid Class B Monthly Servicing Fee
Excess Spread used to satisfy Unreimbursed Class B Investor Charge-offs
Remaining Class B Required Amount
Shared Finance Charges used to satisfy Remaining Class A Required Amount
Shared Finance Charges used to satisfy Unpaid Class A Monthly Cap Interest
Shared Finance Charges used to satisfy Unpaid Class A Monthly Servicing Fee
Shared Finance Charges used to satisfy Unreimbursed Class A Investor
Charge-offs
Remaining Class A Required Amount
Cash Collateral Withdrawal used to satisfy Remaining Class A Required Amount
Cash Collateral Withdrawal used to satisfy Unpaid Class A Monthly Cap
Interest
Cash Collateral Withdrawal used to satisfy Unpaid Class A Monthly
Servicing Fee
Cash Collateral Withdrawal used to satisfy Unreimbursed Class A Investor
Charge-offs
Remaining Class A Required Amount
Class B Reallocated Amount used to satisfy Remaining Class A Required Amount
Class B Reallocated Amount used to satisfy Unpaid Class A Monthly Cap
Interest
Class B Reallocated Amount used to satisfy Unpaid Class A Monthly
Servicing Fee
Class B Reallocated Amount used to satisfy Unreimbursed Class A Investor
Charge-offs
Remaining Class A Required Amount
Class B Investor Interest used to satisfy Unreimbursed Class A Investor
Charge-offs
Shared Finance Charges used to satisfy Remaining Class B Required Amount
Shared Finance Charges used to satisfy Unpaid Class B Monthly Cap
Interest
Shared Finance Charges used to satisfy Unpaid Class B Monthly Servicing
Fee
Shared Finance Charges used to satisfy Unreimbursed Class B Investor
Charge-offs
Remaining Class B Required Amount
2. Allocation of Funds in Collection Account (con't)
Cash Collateral Withdrawal used to satisfy Remaining Class B Required Amount
Cash Collateral Withdrawal used to satisfy Unpaid Class B Monthly Cap
Interest
Cash Collateral Withdrawal used to satisfy Unpaid Class B Monthly
Servicing Fee
Cash Collateral Withdrawal used to satisfy Unreimbursed Class B Investor
Charge-offs
Remaining Class B Required Amount
Excess Spread used to satisfy interest on overdue Class A
(See ""Calculation of Certificate Interest"" #3)
Excess Spread used to satisfy interest on overdue Class B
(See ""Calculation of Certificate Interest"" #3)
Excess Spread used to satisfy reimbursements of Class B Interest
Excess Spread used to satisfy deposits into Required Cash Collateral Account
Excess Spread used to satisfy shortfalls of the Class A Interest Payments
Excess Spread used to satisfy shortfalls of the Class B Interest Payments
Excess Spread used to satisfy payments per Loan Agreement
Excess Spread used to satisfy Class A Excess Interest
Excess Spread used to satisfy Class B Excess Interest
Remaining Excess Servicing (dollars)
Remaining Excess Servicing (percentage of Investor Interest)
Class A Investor Certificate Interest Shortfall
Class A Charge-offs
Unreimbursed Class A Charge Offs
Unreimbursed Class A Charge Offs per $1,000 Original Investment
Class A Monthly Servicing Fee Shortfall
Class B Investor Certificate Interest Shortfall
2. Allocation of Funds in Collection Account (con't)
Class B Charge-offs
Unreimbursed Class B Charge Offs
Unreimbursed Class B Charge Offs per $1,000 Original Investment
Class B Monthly Servicing Fee Shortfall
Available Principal Collections
Monthly Principal Payable To Class A Certificateholders
(See ""Calculation of Monthly Principal"" #4)
Monthly Principal Payable To Class B Certificateholders
(See ""Calculation of Monthly Principal"" #4)
Monthly Principal Reinvested In Receivables
(See ""Calculation of Monthly Principal" #4)
(Net Deposit)/Draws on Shared Principal Collections
Required Shared Finance Charge Collections from other Series
Draw on Shared Finance Charge Collections from other Series
Withdrawal from Cash Collateral Account
Required Shared Finance Charge Collections for other Series
Deposit of Shared Finance Charge Collections for other Series
Total Distribution to Class A Investors
Total Distribution to Class A Investors per $1,000 Invested
Total Distribution to Class B Investors
Total Distribution to Class B Investors per $1,000 Invested
3. Calculation of Certificate Interest
Class A Certificate Rate
Class A Interest Rate Cap Provider Deposit
Previous Month's Class A Deficiency Amount
Class A Interest at the Certificate Rate + 0.5% on Deficiency Amount
This Month Class A Certificate Interest
Expected Class A Principal
This Month Class A Cap Shortfall
Class A Excess Interest
Total Class A Interest Distributable to Class A Certificateholders
Total Class A Interest Distributable per $1,000 of Class A Original
Investment
Class B Certificate Rate
Class B Interest Rate Cap Provider Deposit
Previous Month's Class B Deficiency Amount
Class B Interest at the Certificate Rate + 0.5% on Deficiency Amount
This Month Class B Certificate Interest
Expected Class B Principal
This Month Class B Cap Shortfall
Class B Excess Interest
Total Class B Interest Distributable to Class B Certificateholders
Total Class B Interest Distributable per $1,000 of Class B Original
Investment
Total Certificate Interest Distributable to Certificateholders
Total Certificate Interest Distributable per $1,000 of Original Investment
4. Calculation of Monthly Principal
Beginning Investor Interest
Beginning Class A Interest
Class A Available Principal Collections
Class A Monthly Unreimbursed Charge-Offs
Total Class A Monthly Principal
Class A Monthly Principal Reinvested in Receivables
Class A Controlled Amortization Amount
Maximum Monthly Principal to Class A Certificateholders
Class A Deficit Controlled Amortization Amount
Monthly Principal Payable to Class A Certificateholders
Class A Monthly Principal Payable per $1,000 of Original Investment
Beginning Class B Interest
Class B Available Principal Collections
Class B Monthly Unreimbursed Charge-Offs
Total Class B Monthly Principal
Class B Reallocated Principal
Prior Month's Cumulative Class B Reallocated Principal
Class B Reduction of Interest
Prior Month's Cumulative Class B Reduction of Interest
Class B Monthly Principal Reinvested in Receivables
Class B Controlled Amortization Amount
Maximum Monthly Principal to Class B Certificateholders
4. Calculation of Monthly Principal (con't)
Required Shared Principal Collections for other Series
Deposit of Shared Principal Collections for other Series
Required Shared Principal Collections from other Series
Draw on Shared Principal Collections from other Series
Class B Deficit Controlled Amortization Amount
Monthly Principal Payable to Class B Certificateholders
Class B Monthly Principal Payable per $1,000 of Original Investment
Ending Investor Interest
Ending Class A Interest
Ending Class B Interest
5. Calculation of Pool Factor
Pool Factor
(Ending Certificate Balance divided by Initial Principal Amount to 7
decimal places)
6. Calculation of Monthly Servicing Fee
Series Servicing Fee Percentage
Beginning Class A Investor Interest
Beginning Class B Investor Interest
Beginning Investor Interest
Class A Monthly Servicing Fee
Class B Monthly Servicing Fee
Total Monthly Servicing Fee
7. Cash Collateral Account Activity
Beginning of Month Balance
Required Cash Collateral Account Amount
Excess Spread used to satisfy payments per Loan Agreement
Cash Collateral Account Deposits
Reinvestment Income Received on Cash Collateral Account
Aggregate Cash Collateral Account Draws
Available Cash Collateral Amount (Dollars)
Available Cash Collateral Amount (Percentage)
8. Past Due Statistics
(past due on a contractual basis)
1-30 days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
31-60 days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
61-90 days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
91-120 days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
121-150 days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
151-180 days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
181 + days past due Dollars
Percent Dollars
Number of Accts
Percent Number of Acct
9. Base Rate Calculation
Base Rate
Portfolio Yield (net of losses) Not Applicable
Excess of Portfolio Yield over Base Rate Not Applicable
10. Number of Accounts in the Trust
Number of Additional Accounts
Number of Removed Accounts
Number of Automatic Additonal Accounts
Ending Number of Accounts
