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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) March 27, 1997
PEOPLE'S BANK
(Exact Name of Registrant as Specified in its Charter)
Connecticut
(State or Other Jurisdiction of Incorporation)
33-99508 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)
Page 1 of 444
Index to Exhibits appears at page 4.
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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 Amended and Restated Pooling and Servicing Agreement
4.2 Series 1997-1 Supplement to the Pooling and Servicing Agreement.
4.3 Interest Rate Caps.
20 Monthly Servicer's Report.
-2-
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PEOPLE'S BANK
Dated: April 11, 1997 By: /s/ George W. Morriss
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George W. Morriss
Executive Vice President
and Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit Sequential
No. Document Description Page No.
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1 Underwriting Agreement.................................. 6
4.1 Amended and Restated Pooling and
Servicing Agreement..................................... 44
4.2 Series 1997-1 Supplement to the
Pooling and Servicing Agreement......................... 232
4.3 Interest Rate Caps...................................... 379
20 Monthly Servicer's Report............................... 432
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EXHIBIT 1
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$425,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1997-1
$33,750,000 Floating Rate Class B
Asset Backed Certificates, Series 1997-1
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
March 21, 1997
Dear Sirs:
People's Structured Finance Corp., a Connecti- cut 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 $425,000,000 principal amount of People's Bank Credit Card Master
Trust Floating Rate Class A Asset Backed Certificates, Series 1997-1 (the "Class
A Certificates") and $33,750,000 Floating Rate Class B Asset Backed
Certificates, Series 1997-1 (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 an Amended
and
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Restated 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 March 18, 1997, as
amended and restated (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"), Assignment No. 3
between the Bank and the Trustee, dated as of May 1, 1996 ("Assignment No. 3")
and Assignment No. 4 between the Bank and the Trustee dated as of October 1,
1996 ("Assignment No. 4"). 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 1997-1 Supplement between People's Bank, as Transferor and
Servicer, and Bankers Trust Company as Trustee, dated as of March 18, 1997 (the
"Series Supplement" and, together with the P&S Agreement, Assignment No. 1,
Assignment No. 2, Assignment No. 3 and Assignment No. 4, 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 certain
bank accounts 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. In addition, the Certificates will have the exclusive
benefit of an interest in the Trust to be issued simultaneously with the
Certificates in the initial principal amount of $41,250,000 (the "Collateral
Interest"), which is subordinate to the Class A Certificates and the Class B
Certificates. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Pooling and Servicing Agreement.
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1. PSFC and the Bank, each only as to itself, represents and warrants
to, and agrees with, the Under- writers 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
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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;
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(e) The Bank has been duly incorporated and is validly existing
as a Connecticut stock savings bank 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 this Agreement, the
Pooling and Servicing Agreement, the Assignment and the Loan 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 Certifi-
cateholders, 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 this Agreement and
the Assignment 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 Certificatehold-
ers 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 autho-
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rized 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, executed and
delivered 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 Loan Agreement has been duly authorized by the Bank and
when executed and delivered by the Bank, the Trustee, the Collateral
Interest Holder and the Agent, 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
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proceeding in equity or at law), and (z) to the further qualification
that certain remedial provisions in the Loan 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 Loan Agreement or pursuant to applicable law
legally adequate remedies for a realization of the principal benefits
purported to be provided thereby) ;
(j) This Agreement has been duly authorized, executed and
delivered by the Bank and PSFC;
(k) 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, this Agreement, the Pooling and Servicing Agreement, the
Assignment and the Loan 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, the Loan 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
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contemplated by this Agreement, the Assignment, the Loan Agreement 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;
(l) 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 in this Agreement, the Pooling and
Servicing Agreement, the Loan Agreement or the Assignment; 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;
(m) 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;
(n) 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;
(o) 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 represen-
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tations 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;
(p) 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 (other than as contemplated in the
Pooling and Servicing Agreement or the Assignment) 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 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,
upon payment of the purchase price of the Certificates, 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);
(q) 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
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or will have been paid by PSFC or the Bank, as applica- ble, at or prior
to the Time of Delivery;
(r) The Receivables pledged by the Bank to the Trustee under the
Pooling and Servicing Agreement have an aggregate outstanding balance
determined as of December 31, 1996 ("the Series Cut-Off Date"), in
accordance with the Pooling and Servicing Agreement of not less than
$2,174,315,242;
(s) 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
(t) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended.
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 99.710% 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,
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New York 10019, at 10:00 a.m. on March 27, 1997, 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;
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(b) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Certificates for
offering I 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;
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(d) To make generally available to the Certif- icateholders, 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 there- under (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. or the rating provided with respect to the
Collateral Interest by Fitch Investors Service, LLP 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.
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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:
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(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 LLP, 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
15
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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) This 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 this 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) 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
16
<PAGE>
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 Loan 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 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), and (z)
to the further qualification that certain remedial provisions in
the Loan 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 Loan Agreement or pursuant to applicable law
legally adequate remedies for
17
<PAGE>
a realization of the principal benefits pur- ported to be
provided thereby);
(vi) 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 this Agreement will not be, required to
register under the 1940 Act;
(vii) 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;
(viii) 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;
(ix) 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 man-
18
<PAGE>
ner 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;
(x) 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 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 and operating data
included therein as to all of which such counsel expresses no
view), contained any untrue statement of a material fact or
omited 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 and operating data included
therein as to which such counsel expresses no view) contained or
contains any untrue statement of a material fact or omitted 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
19
<PAGE>
(xi) 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 Con-
20
<PAGE>
necticut 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 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 this Agreement, the Pooling and Servicing
Agreement, the Loan Agreement and the Assignment 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
unen- forceable by the Bank or the Trust or would have a
material adverse effect on the Certifi- cateholders or any
Enhancement Provider;
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<PAGE>
(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 this 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 Certificatehold- ers or any Enhancement Provider;
(iii) This Agreement, the Pooling and Servicing
Agreement, the Certificates, the Assignment and the Loan
Agreement have been duly authorized, executed and delivered by
the Bank;
(iv) This Agreement and the Assign- ment 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 the Loan Agreement, or (B) the issuance and sale of
the Certificates or of the Collateral Interest, 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 this
Agreement or the Assignment by PSFC and the Bank, or the
Certificates, the Pooling and Servicing Agreement or the Loan
22
<PAGE>
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 this Agreement, the Pooling and Servicing
Agreement or the Loan 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 this Agreement, the Pooling and
Servicing Agreement, the Loan Agreement, the Certificates or the
Assignment, (ii) seeking to prevent the issuance of the
Certificates or of the Collateral Interest or the consummation
of any of the transactions contemplated by this Agreement, the
Pooling and Servicing Agreement, the Loan Agreement, the
Certificates or the Assignment, (iii) seeking
23
<PAGE>
any determination or ruling that would materially and adversely
affect the performance by PSFC or the Bank of their respective
obligations under this Agreement, the Pooling and Servicing
Agreement, the Loan Agreement or the Assignment (iv) seeking any
determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement, the
Pooling and Servicing Agreement, the Loan 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)(vii)
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 and operating data included
therein as to all of which such counsel expresses no view),
contained any untrue statement of a material fact or omitted 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) contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact
required to
24
<PAGE>
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 corpo- ration 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 the Loan Agreement and to carry out
the transactions contemplated by the Pooling and Servicing
Agreement and the Loan Agreement;
(iii) each of the P&S Agreement, the Assignment, the
Series Supplement and the Loan Agreement has been duly
authorized, executed and delivered by the Trustee;
(iv) assuming the due execution and delivery by the Bank
of each of the Pooling and Servicing Agreement and the Loan
Agreement and that each of the Pooling and Servicing Agreement
and the Loan Agreement is the legal, valid
25
<PAGE>
and binding obligation of the Bank, each of the Pooling and
Servicing Agreement and the Loan 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 enforce- ability 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 Loan Agreement or the performance
by the Trustee thereunder; and
(vii) the execution and delivery of the Pooling and
Servicing Agreement and the Loan Agreement 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 the favorable written opinions of German counsel to Bayerische
Vereinsbank AG and of Cadwalader Wickersham & Taft, counsel to
Bayerische Vereinsbank AG, New York branch (the "Collateral Interest
Holder"), as to the due authorization, execution and delivery of the
Loan Agreement by the Collateral
26
<PAGE>
Interest Holder and the enforceability of the Loan Agreement, in each
case in form and substance satisfactory to the Underwriters and their
counsel.
(n) 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 the
Collateral Interest shall have received the rating of BBB from Fitch
Investors Service, L.P. and such ratings shall not have been rescinded
or lowered, or at the Time of Delivery be under surveillance or review;
(o) At the Time of Delivery, the Underwriters shall have
received one or more opinions of counsel to Lehman Brothers Financial
Products Inc. (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, to be dated on or prior to March 27, 1997, 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.
(p) 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;
27
<PAGE>
(q) 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;
(r) 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 or the Collateral
Interest 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;
(s) 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
(t) 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,
28
<PAGE>
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
29
<PAGE>
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
30
<PAGE>
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
31
<PAGE>
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
32
<PAGE>
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
warran- ties 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,
33
<PAGE>
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
34
<PAGE>
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
35
<PAGE>
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 agrees that (a) it has not offered
or sold and will not offer or sell any Certificates to persons in the United
Kingdom prior to the expiration of the period of six months from the issue date
of the Certificates except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (b) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom; and (c) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance 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 1996 or is a
person to whom such document may otherwise lawfully be issued or passed on.
36
<PAGE>
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 among the
Underwriters, the Bank and PSFC.
Very truly yours,
PEOPLE'S STRUCTURED FINANCE CORP.
By: /s/ Dennis Colwell
---------------------
Name: Dennis Colwell
Title: President
PEOPLE'S BANK
By: /s/ Michael J. Ciborowski
-------------------------
Name: Michael J. Ciborowski
Title: Vice President
Accepted as of the date hereof:
/s/ Goldman, Sachs & Co.
- ------------------------
GOLDMAN, SACHS & CO.,
as Representatives on
behalf of the Class A
Underwriters and as
Class B Underwriters
<PAGE>
SCHEDULE A
Aggregate
Principal
Amount of the
Class A
Underwriter Certificates
- ----------- ------------
Goldman, Sachs & Co. $106,250,000
J.P. Morgan Securities Inc. $106,250,000
Morgan Stanley & Co. $106,250,000
Incorporated
Salomon Brothers Inc $106,250,000
------------
$425,000,000
Aggregate
Principal
Amount of the
Class B
Underwriter Certificates
- ----------- ------------
Goldman, Sachs & Co. $33,750,000
38
<PAGE>
EXHIBIT 4.1
[EXECUTION COPY]
- --------------------------------------------------------------------------------
PEOPLE'S BANK
Seller and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Certificateholders
of the People's Bank Credit Card Master Trust
-----------------------------------------------------
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of March 18, 1997
amending and restating in its entirety
the Pooling and Servicing Agreement
Dated as of June 1, 1993
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions......................................... 1
SECTION 1.2 Other Definitional Provisions....................... 23
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
SECTION 2.1 Conveyance of Receivables........................... 25
SECTION 2.2 Acceptance by Trustee............................... 27
SECTION 2.3 Representations and Warranties of the Seller........ 28
SECTION 2.4 Representations and Warranties of the Seller
Relating to the Agreement and the Receivables... 30
SECTION 2.5 Covenants of the Seller............................. 39
SECTION 2.6 Addition of Accounts................................ 44
SECTION 2.7 Removal of Accounts................................. 48
SECTION 2.8 Periodic Removal of Expired Accounts................ 51
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
SECTION 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer........................ 55
SECTION 3.2 Servicing Compensation.............................. 56
SECTION 3.3 Representations and Warranties of the Servicer...... 57
SECTION 3.4 Reports and Records for the Trustee................. 61
SECTION 3.5 Annual Servicer's Certificate....................... 62
SECTION 3.6 Annual Independent Accountants' Servicing
Report.......................................... 62
SECTION 3.7 Tax Treatment....................................... 63
SECTION 3.8 Notices to the Seller............................... 64
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.1 Establishment of Accounts and Allocations with
Respect to the Exchangeable Seller
Certificate..................................... 65
SECTION 4.2 Collection and Allocations.......................... 67
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
SECTION 6.1 The Certificates.................................... 73
SECTION 6.2 Authentication of Certificates...................... 73
SECTION 6.3 Registration of Transfer and Exchange of
Certificates.................................... 74
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates.................................... 79
SECTION 6.5 Persons Deemed Owners............................... 79
SECTION 6.6 Appointment of Paying Agent......................... 80
SECTION 6.7 Access to List of Certificateholders' Names and
Addresses....................................... 81
SECTION 6.8 Authenticating Agent................................ 82
SECTION 6.9 Tender of Exchangeable Seller Certificate........... 83
SECTION 6.10 Global Certificate; Euro-Certificate Exchange
Date............................................ 86
SECTION 6.11 Book-Entry Certificates............................. 87
SECTION 6.12 Notices to Clearing Agency.......................... 87
SECTION 6.13 Definitive Certificates............................. 88
SECTION 6.14 Meetings of Certificateholders...................... 88
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE VII
OTHER MATTERS RELATING TO THE SELLER
SECTION 7.1 Liability of the Seller............................. 90
SECTION 7.2 Merger or Consolidation of, or Assumption of the
Obligation of, the Seller....................... 90
SECTION 7.3 Limitation on Liability of the Seller............... 91
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
SECTION 8.1 Liability of the Servicer........................... 92
SECTION 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer.................... 92
SECTION 8.3 Limitation on Liability of the Servicer and
Others.......................................... 93
SECTION 8.4 Servicer Indemnification of the Trust and the
Trustee......................................... 93
SECTION 8.5 Resignation of the Servicer......................... 94
SECTION 8.6 Access to Certain Documentation and Information
Regarding the Receivables....................... 95
SECTION 8.7 Delegation of Duties................................ 95
SECTION 8.8 Examination of Records.............................. 96
ARTICLE IX
PAY OUT EVENTS
SECTION 9.1 Pay Out Events...................................... 97
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events.......................................... 97
ARTICLE X
SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults...................................100
SECTION 10.2 Trustee to Act; Appointment of Successor............102
SECTION 10.3 Notification to Certificateholders..................105
SECTION 10.4 Waiver of Past Defaults.............................105
-iii-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE XI
THE TRUSTEE
SECTION 11.1 Duties of Trustee...................................106
SECTION 11.2 Certain Matters Affecting the Trustee...............108
SECTION 11.3 Trustee Not Liable for Recitals in Certificates.....109
SECTION 11.4 Trustee May Own Certificates........................110
SECTION 11.5 The Servicer to Pay Trustee's Fees and Expenses.....110
SECTION 11.6 Eligibility Requirements for Trustee................110
SECTION 11.7 Resignation or Removal of Trustee...................111
SECTION 11.8 Successor Trustee...................................112
SECTION 11.9 Merger or Consolidation of Trustee..................112
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee.......112
SECTION 11.11 Tax Returns.........................................114
SECTION 11.12 Trustee May Enforce Claims Without Possession of
Certificates....................................114
SECTION 11.13 Suits for Enforcement...............................114
SECTION 11.14 Rights of Certificateholders to Direct Trustee......115
SECTION 11.15 Representations and Warranties of Trustee...........115
SECTION 11.16 Maintenance of Office or Agency.....................115
ARTICLE XII
TERMINATION
SECTION 12.1 Termination of Trust................................117
SECTION 12.2 Optional Purchase and Final Termination of
Investor Certificates of any Series.............118
SECTION 12.3 Final Payment with Respect to any Series............118
SECTION 12.4 Seller's Termination Rights.........................120
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment...........................................121
SECTION 13.2 Protection of Right, Title and Interest to
Trust...........................................123
SECTION 13.3 Limitation on Rights of Certificateholders..........124
SECTION 13.4 GOVERNING LAW.......................................125
SECTION 13.5 Notices.............................................125
SECTION 13.6 Severability of Provisions..........................126
SECTION 13.7 Certificates Non-Assessable and Fully Paid..........126
SECTION 13.8 Further Assurances..................................126
SECTION 13.9 No Waiver; Cumulative Remedies......................126
-iv-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
SECTION 13.10 Counterparts........................................126
SECTION 13.11 Third-Party Beneficiaries...........................127
SECTION 13.12 Actions by Certificateholders.......................127
SECTION 13.13 Rule 144A Information...............................127
SECTION 13.14 Merger and Integration..............................127
SECTION 13.15 Headings............................................127
Exhibit A Form of Exchangeable Seller Certificate
Exhibit B Form of Assignment of Receivables in Additional
Accounts
Exhibit C Form of Monthly Servicer's Certificate
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Seller Certificate Designating Banks and Agent
Banks the Accounts of which Constitute Automatic
Additional Accounts
Exhibit F Form of Opinion of Counsel Pursuant to Sections
2.6(g)(vi) and 13.2(d)(i)
Exhibit G Form of Annual Security Interest Opinion Pursuant to
Section 13.2(d)(ii)
Exhibit H Form of Depository Agreement
Exhibit I Form of Reassignment of Removed Accounts
Exhibit J Form of Officer's Certificate Pursuant to
Section 2.8(d)(ii)
-v-
<PAGE>
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of March
18, 1997, by and between PEOPLE'S BANK, a Connecticut capital stock savings
bank, as Seller and Servicer, and BANKERS TRUST COMPANY, a banking corporation
organized and existing under the laws of the State of New York, as Trustee.
WHEREAS, People's Bank, as Seller and Servicer, and the Trustee entered
into that certain Pooling and Servicing Agreement, dated as of June 1, 1993 (as
amended by an amendment dated as of December 15, 1995, the "Original Pooling and
Servicing Agreement"); and
WHEREAS, People's Bank, as Seller and Servicer, and the Trustee desire
to amend and restate the Original Pooling and Servicing Agreement in its
entirety;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Original Pooling and Servicing Agreement is hereby amended and
restated in its entirety as follows and each party agrees as follows for the
benefit of the other parties and the Certificateholders:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Account" shall mean each VISA(R)* and MasterCard(R)* credit card
account (or other consumer revolving credit account to the extent provided
herein), which account is governed by a Credit Card Agreement between the Seller
and any Person identified by account number in each computer file or microfiche
list delivered to the Trustee by the Seller pursuant to Section 2.1 or 2.6. The
definition of Account shall include each account into which an Account shall be
transferred (a "Transferred Account"); provided, that (i) such transfer was made
in accordance with the Account Guidelines and (ii) such Transferred Account can
be traced or identified by reference to or by way of the computer files or
microfiche lists delivered to the Trustee pursuant to Section 2.1, 2.6, 2.7 or
3.4(c), as an account into which an Account has been transferred. The term
"Account" shall be deemed to refer to an Additional Account or Automatic
Additional Account only from and after the Addition Date or Automatic Addition
Date,
- ----------
* VISA(R) and MasterCard(R) are registered trademarks of VISA
USA, Inc. and of MasterCard International Incorporated, respectively.
<PAGE>
as the case may be, with respect thereto, and the term "Account" shall be deemed
to refer to any Removed Account only prior to the Removal Date with respect
thereto.
"Account Guidelines" shall mean the Seller's policies and procedures
relating to the operation of its credit card business, including, without
limitation, the policies and procedures for determining the creditworthiness of
credit card customers, the extension of credit to credit card customers, and
relating to the maintenance of credit card accounts and collection of credit
card receivables, as such policies and procedures may be amended from time to
time.
"Account Information" shall have the meaning specified in subsection
2.2(b).
"Accumulation Period" shall have the meaning specified in any applicable
Supplement.
"Addition Date" shall mean each date as of which Additional Accounts
will be included as Accounts pursuant to Section 2.6.
"Addition Notice Date" shall have the meaning specified in subsection
2.6(g)(i).
"Additional Accounts" shall mean additional credit card accounts added
as Accounts pursuant to subsections 2.6(e) and 2.6(f).
"Affiliate" of any Person shall mean any other Person controlling,
controlled by or under common control with such Person except that, for the
purposes of clause (f) of the definition of Eligible Account, "Affiliate" shall
not mean a natural person.
"Affinity Program Account" shall mean an account originated by the
Seller through the solicitation of prospective cardholders from identifiable
groups with a common interest or a common cause, with the assistance of an
organization or the members of such group.
"Agent Bank Account" shall mean an account originated by the Seller
pursuant to an agreement between the Seller and a bank for which the Seller
issues VISA(R) and/or MasterCard(R) credit cards and acts as a sponsor with VISA
USA, Inc. and/or MasterCard International Incorporated.
"Aggregate Finance Charge Receivables" shall mean, as of any date of
determination, the aggregate amount of the Finance Charge Receivables as of the
end of the Monthly Period immediately preceding such date of determination.
-2-
<PAGE>
"Aggregate Investor Interest" shall mean, as of any date of
determination, the sum of the Investor Interests of each Series of Certificates
issued and outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, as the case
may be, shall mean, as of any date of determination, the sum of such Investor
Percentages of each Series of Certificates issued and outstanding on such date
of determination; provided, however, that the Aggregate Investor Percentage
shall not exceed 100%.
"Aggregate Principal Receivables" shall mean, as of any date of
determination, the aggregate amount of Principal Receivables as of the end of
the Monthly Period immediately preceding such date of determination and the
amount on deposit in the Excess Funding Account (exclusive of any investment
earnings on such amount).
"Aggregate Receivables" shall mean, as of any date of determination, the
sum of Aggregate Principal Receivables plus Aggregate Finance Charge
Receivables.
"Agreement" shall mean this Amended and Restated Pooling and Servicing
Agreement and all amendments hereof and supplements hereto, including, with
respect to any Series or Class, the related Supplement.
"Amortization Period" shall mean, with respect to any Series, the period
following the related Revolving Period, which shall be the Accumulation Period,
the Controlled Amortization Period, the early Amortization Period, the Rapid
Amortization Period, or other amortization or accumulation period, in each case
as defined, if applicable, with respect to such Series in the related
Supplement.
"Annual Membership Fee" shall have the meaning specified in the Credit
Card Agreement applicable to an Account.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in Section 9.2.
"Assignment" shall have the meaning specified in subsection 2.6(g)(ii).
"Authorized Newspaper" shall mean a newspaper of general circulation in
the Borough of Manhattan, The City of New York printed in the English language
(and, with respect to any Series,
-3-
<PAGE>
any additional city specified in the Supplement for such Series) and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
and holidays.
"Automatic Addition Date" shall mean the date upon which the Receivables
in an Automatic Additional Account are first designated for addition, and added
to, the Trust.
"Automatic Additional Accounts" shall mean those consumer revolving
credit card accounts coming into existence after the Cut Off Date which meet the
following criteria:
(a) VISA Classic or standard MasterCard account which satisfies
the criteria set forth in the definition of "Eligible Account"
originated through applicant-initiated applications or through the
Seller's branch system:
(i) which is originated during the normal operation of
such Seller's credit card business and is not acquired by the
Seller from another credit card issuer;
(ii) which was in existence and owned by the Seller on
the date on which Receivables generated in such account are to
be added to the Trust and is in existence at the close of
business on the date of its designation for inclusion in the
Trust;
(iii) which is payable in U.S. Dollars; and
(iv) the Receivables in which have not been charged off
prior to the date of their designation for inclusion in the
Trust;
(b) any other consumer revolving credit card account which
satisfies the criteria set forth in the definition of "Eligible Account"
without regard to the requirement that such account be a VISA(R) or
MasterCard(R) credit card account; provided that the Seller shall have
received notice from each Rating Agency that the inclusion of such
accounts as Automatic Additional Accounts pursuant to this paragraph (b)
will not result in the reduction or withdrawal of its then existing
rating of any Series of Investor Certificates then issued and
outstanding and shall have delivered such notice to the Trustee; or
(c) each Visa(R) and MasterCard(R) consumer revolving credit
card account, now existing or hereafter arising, which (i) is included
in a "bank" or "agent bank" of credit card accounts (or other grouping
of credit card accounts, however denominated) maintained by Total
Systems, Inc. (or its successor) or another records processor on behalf
of the
-4-
<PAGE>
Seller, which records processor may be the Seller or an Affiliate of
the Seller, (ii) is not, as of the date of this Agreement, an existing
Account or Additional Account, and (iii) satisfies the following
criteria:
(A) such account is an Eligible Account and an Eligible
Additional Account;
(B) any introductory pricing offer or "teaser rate"
applicable to such account will have expired during or prior to
the Monthly Period in which such account is added as an
Automatic Additional Account;
(C) such account is an account that satisfies the
criteria specified in subclauses (i) through (iv) of clause (a)
hereof;
(D) no selection procedures believed by the Seller to be
materially adverse to the interests of the Investor
Certificateholders (without regard to any Enhancement) were
utilized in selecting the pool of accounts in which such account
arises from the available pools of accounts owned by the Seller;
(E) such account is not originated utilizing
underwriting criteria that (i) are materially different from the
Seller's standard underwriting criteria and (ii) would
materially increase the likelihood, as compared to the average
expected probability of default for an Account in the Trust
portfolio, that such account would become a Defaulted Account;
(F) such account is not originated as a "risk based"
product; and
(G) the bank or agent bank (or other grouping) in which
such account is included has been designated by the Seller to
the Trustee as a bank or agent bank (or other grouping) the
accounts in which constitute Accounts, Additional Accounts, or
Automatic Additional Accounts, by delivery to the Trustee of a
certificate of designation substantially in the form annexed
hereto as Exhibit E hereto or otherwise pursuant hereto.
"Banking Commissioner" shall mean the Banking Commissioner of the State
of Connecticut.
"Base Rate" shall mean, with respect to any Series of Certificates, the
percentage (or formula on the basis of which such rate shall be determined)
stated in the related Supplement.
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"Bearer Certificates" shall have the meaning specified in Section 6.1.
"Bearer Rules" shall mean the provisions of the Internal Revenue Code,
in effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulation
thereunder including, to the extent applicable to any Series, Proposed or
Temporary Regulations.
"Billing Cycle" shall mean, with respect to any Account, the monthly
billing cycle for such Account determined in accordance with the Account
Guidelines.
"Book-Entry Certificates" shall mean certificates evidencing a
beneficial interest in the Investor Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 6.11; provided that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer authorized and Definitive
Certificates are to be issued to the Certificate Owners, such certificates shall
no longer be "Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York or Bridgeport,
Connecticut (or, with respect to any Series, any additional city specified in
the related supplement) are authorized or obligated by law or executive order to
be closed.
"Cash Advance Fees" shall have the meaning specified in the Credit Card
Agreement applicable to an Account.
"Cash Advances" shall have the meaning specified in the Credit Card
Agreement applicable to an Account.
"Certificate" shall mean any one of the Investor Certificates of any
Series or the Exchangeable Seller Certificate.
"Certificate Interest" shall mean interest payable in respect of the
Investor Certificates of any Series pursuant to Article IV of the Supplement for
such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book- Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency).
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"Certificate Principal" shall mean principal payable in respect of the
Investor Certificates of any Series pursuant to Article IV of the Supplement for
such Series.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the related Supplement; provided that, unless otherwise
provided in a Supplement, such rate shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register and, if applicable, the
bearer of any Bearer Certificate or Coupon, as the case may be, and, as to any
Series, such other Person deemed to be a "Certificateholder," "Holder,"
"Investor Certificateholder" or "Investor Holder" in any related Supplement
except as otherwise provided in such Supplement.
"Certificateholders' Interest" shall, with respect to any Series, have
the meaning specified in Article IV of the Supplement for such Series.
"Class" shall mean, with respect to any Series, any one of the classes
of Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of
issuance of such Series of Certificates, as specified in the related Supplement.
"Collection Account" shall have the meaning specified in Section 4.1(a).
"Collections" shall mean all payments (including insurance proceeds on
Accounts that are not Defaulted Accounts and all Recoveries but excluding
drawings on any Enhancement) received by the Servicer in respect of the
Receivables, in the form of cash, checks, wire transfers, ATM transfers or other
form of payment in
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accordance with the Credit Card Agreement in effect from time to time on any
Receivables. A Collection processed on an Account in excess of the aggregate
amount of Receivables in such Account as of the Date of Processing of such
Collection shall be deemed to be a payment in respect of Principal Receivables
to the extent of such excess. Collections with respect to any Monthly Period
shall include the amount of Interchange and Recoveries allocable to the Trust
pursuant to subsections 2.5(k) and (l) with respect to such Monthly Period (to
the extent deposited into the Collection Account or, with respect to any Series,
the applicable Series Account, on the Transfer Date following such Monthly
Period), to be applied as if such Collections were Collections of Finance Charge
Receivables for all purposes.
"Collection Subaccount" shall have the meaning specified in subsection
4.1(a).
"Corporate Trust Office" shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at Four Albany Street, 10th Floor, New York, New York 10006, Attention:
Corporate Trust and Agency Group, Structured Finance Team.
"Coupon" shall have the meaning specified in Section 6.1.
"Credit Adjustment" shall have the meaning specified in subsection
4.2(d)(i).
"Credit Card Agreement" shall mean, with respect to any VISA(R) or
MasterCard(R) credit card account (or other consumer credit accounts, to the
extent provided herein), the agreement between People's Bank and the Obligor
governing the terms and conditions of such account, as such agreement may be
amended, modified or otherwise changed from time to time.
"Cut-Off Date" shall mean, with respect to each Account the Receivables
of which are conveyed to the Trust pursuant to Section 2.1 on the Initial
Closing Date, the close of business on May 31, 1993.
"Date of Processing" shall mean, with respect to any transaction, the
date (but if such date is not a Business Day, then the next Business Day) on
which such transaction is first recorded on the Servicer's computer master file
of VISA(R) and MasterCard(R) accounts or its computer master file of other
consumer revolving accounts, if any, in the Trust (without regard to the
effective date of such recordation.)
"Default Amount" shall mean, with respect to any Defaulted Account, the
amount of Principal Receivables in such Defaulted Account on the day such
Account became a Defaulted Account.
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"Default Percentage" shall mean on any Date of Processing a percentage,
the numerator of which shall be the Seller Percentage of the Default Amount on
such day and the denominator of which shall be the Aggregate Principal
Receivables at the end of the preceding Date of Processing minus the Aggregate
Principal Receivables on the current Date of Processing prior to the deposit of
any amount in the Excess Funding Account.
"Defaulted Account" shall mean each Account with respect to which, in
accordance with the Account Guidelines or the Servicer's customary and usual
servicing procedures for servicing credit card receivables comparable to the
Receivables (which as of the date hereof is more than 211 days delinquent from
the payment due date) the Servicer has charged off the Receivables in such
Account as uncollectible; an Account shall become a Defaulted Account on the day
on which such Receivables are recorded as charged off and as uncollectible on
the Servicer's computer master file of VISA(R) and MasterCard(R) accounts.
"Definitive Bearer Certificate" shall mean any Definitive Certificate
issued in bearer form with Coupons attached.
"Definitive Certificates" shall have the meaning specified in Section
6.11.
"Definitive Euro-Certificate" shall have the meaning specified in
Section 6.10.
"Definitive Registered Certificate" shall mean any Definitive
Certificate issued in registered form.
"Depository Agreement" shall mean, with respect to each Series, the
agreement among the Seller, the Trustee and the Clearing Agency, in the form
attached hereto as Exhibit H, or as otherwise provided in or attached as an
exhibit to the related Supplement.
"Determination Date" shall mean the 8th Business Day of each calendar
month but not later than the tenth calendar day of such month (and if such day
is not a Business Day, the preceding Business Day).
"Distribution Date" shall mean, unless otherwise specified in any
Supplement for the related Series, July 15, 1993 and the fifteenth day of each
calendar month thereafter, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"Eligible Account" shall mean a VISA(R) or MasterCard(R) credit card
account owned by the Seller which, as of the Cut-Off Date:
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(a) is payable in United States dollars;
(b) has not been identified on the computer files of the Seller
by the Seller as relating to a cardholder who has died or commenced
action relating to bankruptcy or who is the subject of an involuntary
bankruptcy, insolvency or similar action;
(c) has not been classified on the Seller's computer files by
the Seller as counterfeit, fraudulent, stolen or lost or as a corporate
business card;
(d) has not been charged off by the Seller in its customary and
usual manner for charging off such Accounts as of the Cut-Off Date;
(e) has not been (and no Receivables in such Account have been)
sold or pledged to any other Person;
(f) is not an Account on which the Seller or an Affiliate of the
Seller is the Obligor; and
(g) as of the date of origination of such Account, the obligor
of which had a billing address in the United States, its territories or
possessions.
"Eligible Additional Account" shall mean as of any Addition Date, (a) a
VISA(R) or MasterCard(R) credit card account owned by the Seller which satisfies
the criteria set forth in clauses (a) through (g) inclusive of the definition of
Eligible Account, or (b) any other consumer revolving credit account (i) which
satisfy the criteria set forth in clauses (a) through (g) inclusive of the
definition of Eligible Account, (ii) the addition of the receivables of which
would not cause the Rating Agency to indicate in writing that such addition
would result in the reduction or withdrawal of its then-existing rating of the
Investor Certificates of any Series of Certificates then issued and outstanding
and (iii) to which, to the extent provided in the related Supplement, the
Enhancement Provider with respect to any Series of Certificates consents, which
consent shall not be unreasonably withheld.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account (in the case of
Accounts conveyed to the Trust on the Initial Closing Date) or an
Eligible Additional Account (in the case of Additional Accounts or
Automatic Additional Accounts);
(b) which was created in compliance, in all material respects,
with all Requirements of Law applicable to the Seller and pursuant to a
Credit Card Agreement which
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complies, in all material respects, with all Requirements of Law
applicable to the Seller;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by the
Seller in connection with the creation of such Receivable or the
execution, delivery and performance by the Seller of the Credit Card
Agreement pursuant to which such Receivable was created, have been duly
obtained, effected or given and are in full force and effect as of such
date of creation of such Receivable;
(d) as to which, at the time of and at all times after the
creation of such Receivable, the Seller or the Trust had good and
marketable title thereto free and clear of all Liens (other than Liens
permitted pursuant to subsection 2.5(b));
(e) which is the legal, valid and binding payment obligation of
the Obligor thereon, enforceable against such Obligor in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity);
(f) which constitutes an "account" or a "general intangible"
under and as defined in Article 9 of the UCC as then in effect in the
State of New York;
(g) as to which, at the time of its transfer to the Trust, the
Seller has satisfied all material obligations on its part with respect
to such Receivable required to be satisfied;
(h) which is not, at the time of its transfer to the Trust,
subject to any right of rescission, setoff, counterclaim or defense
(including the defense of usury), other than a defense arising out of
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general;
and
(i) as to which the Seller has done nothing to impair, or
omitted to take any action the omission of which would impair, the
rights of the Trust or the Certificateholders therein.
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"Eligible Servicer" shall mean the Trustee or an entity which, at the
time of its appointment as Servicer, (a) is servicing a portfolio of consumer
revolving credit card accounts, (b) is legally qualified and has the capacity to
service the Accounts, (c) is qualified to use the software that People's Bank,
in its capacity as Servicer hereunder, is then currently using to service the
Accounts or obtains the right to use or has its own software which is adequate
to perform its duties under this Agreement and (d) has either a net worth on a
consolidated basis of at least $50,000,000 as of the end of its most recent
fiscal quarter or is an Affiliate of the Seller which has a net worth of at
least $20,000,000.
"Enhancement" shall mean, with respect to any Series, the cash
collateral account, collateral interest, surety bond, letter of credit,
guaranteed rate agreement, maturity guaranty facility, tax protection agreement,
interest rate swap or cap or any other contract or agreement for the benefit of
the Certificateholders of such Series, as designated in the related supplement.
"Enhancement Provider" shall mean, with respect to any Series, the
Person, if any, designated as such in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Euro-Certificate Exchange Date" shall mean, with respect to any
Series, the date, if any, specified in the related Supplement.
"Euro-clear Operator" shall have the meaning, if applicable, specified
in the related Supplement.
"Excess Funding Account" shall have the meaning specified in subsection
4.1(b).
"Exchange" shall mean either of the procedures described under Section
6.9.
"Exchangeable Seller Certificate" shall mean the certificate which
represents the Seller Interest executed by the Seller and authenticated by the
Trustee, substantially in the form of Exhibit A and exchangeable as provided in
Section 6.9; provided that at any time there shall be only one Exchangeable
Seller Certificate.
"Exchange Date" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in Section 6.9.
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"Exchange Notice" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in Section 6.9.
"Expired Accounts" shall mean, with respect to any Expired Accounts
Removal Date, the Accounts listed in a computer file, microfiche list or printed
copy delivered by the Seller to the Trustee, pursuant to Section 2.8(b), not
later than five Business Days (or as soon as is reasonably practicable) after
such Expired Accounts Removal Date as Accounts that (i) have zero Receivables
balances as of such Expired Accounts Removal Date, (ii) have expired as of such
Expired Accounts Removal Date according to the records maintained by the
Seller's records processor (which may be the Seller or an Affiliate of the
Seller), and (iii) have been deleted from the records maintained by the Seller's
records processor and therefore cannot be reactivated.
"Expired Accounts Removal Date" shall mean each date occurring not less
than five Business Days after the date of this Agreement and designated as a
date on which the Receivables from Expired Accounts shall be deleted and removed
from the Trust and reassigned to the Seller pursuant to Section 2.8.
"Extended Trust Termination Date" shall have the meaning specified in
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Finance Charge Receivables" shall mean Receivables created in respect
of the Periodic Finance Charges, Annual Membership Fees, Cash Advance Fees, Late
Fees, Returned Check Fees, Overlimit Fees, other fees and charges that are
treated as Finance Charge Receivables in the most recent monthly Servicer's
certificate forwarded to the Trustee pursuant to Section 3.4(b) hereof,
investment earnings on the Excess Funding Account and Recoveries and Interchange
allocable to the Trust.
"Foreign Clearing Agency" shall have the meaning specified in the
applicable Supplement.
"Fractional Undivided Interest" shall mean the fractional undivided
interest in the Certificateholders' Interest evidenced by an Investor
Certificate.
"Global Certificate" shall have the meaning specified in subsection
6.10(a).
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"Ineligible Receivable" shall have the meaning specified in subsection
2.4(d).
"Initial Closing Date" shall mean July 9, 1993.
"Initial Investor Interest" shall mean, with respect to any Series of
Certificates, the amount stated in the related Supplement.
"Interchange" shall mean interchange fees or interchange reimbursement
fees, paid or payable to the Seller, in its capacity as credit card issuer,
through VISA USA, Inc. and MasterCard International Incorporated in connection
with cardholder purchases for merchandise and services, minus, fees paid by the
Seller to third parties in respect of interchange fees.
"Interest Accrual Period" shall mean, unless otherwise specified in any
Supplement for the related Series, each Monthly Period.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time.
"Investor Certificate" shall mean any one of the certificates
(including, without limitation, the Bearer Certificates, the Registered
Certificates or the Global Certificates) executed by the Seller and
authenticated by the Trustee substantially in the form (or forms in the case of
Series with multiple Classes) of investor certificate attached to the related
Supplement and such other interest in the Trust deemed to be an "Investor
Certificate" in any related Supplement except as otherwise provided in such
Supplement.
"Investor Certificateholder" shall mean the holder of record of an
Investor Certificate.
"Investor Default Amount" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Interest" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Percentage" shall have, with respect to Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted Accounts,
and any Series of Certificates, the meaning
stated in the related Supplement.
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"Late Fees" shall have the meaning specified in the Credit Card
Agreement applicable to an Account.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement, encumbrance,
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.2 shall not be deemed to
constitute a Lien.
"Minimum Aggregate Principal Receivables" shall mean, as of any date of
determination, the largest "Minimum Aggregate Principal Receivables" specified
in the Supplement with respect to any Series of Certificates issued and
outstanding at such date of determination.
"Minimum Seller Interest" shall mean on any date of determination, 7%
or such higher percentage as may be specified in any Supplement of the average
Aggregate Principal Receivables for such date of determination.
"Monthly Investor Servicing Fee" shall have the meaning specified in
Section 3.2.
"Monthly Period" shall mean the period beginning on and including the
first day of a calendar month to and including the last day of a calendar month.
The first Monthly Period shall begin on and include June 1, 1993, and shall end
on and include June 30, 1993.
"Monthly Seller Servicing Fee" shall have the meaning specified in
Section 3.2.
"Monthly Servicing Fee" shall have the meaning specified in Section 3.2.
"Moody's" shall mean Moody's Investors Service, Inc.
"Obligor" shall mean, with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Officer's Certificate" shall mean a certificate signed by any Vice
President of the Seller or Servicer and delivered to the Trustee.
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"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for or an employee of the Person providing the opinion and who shall
be reasonably acceptable to the Trustee.
"Overlimit Fees" shall have the meaning specified in the Credit Card
Agreement applicable to an Account.
"Paying Agent" shall have the meaning specified in Section 6.6 and
shall initially be the Trustee.
"Pay Out Commencement Date" shall mean, with respect to each Series,
(a) the date on which a Trust Pay Out Event is deemed to occur pursuant to
Section 9.1 or (b) a Series Pay Out Event is deemed to occur pursuant to the
Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay
Out Event or a Series Pay Out Event.
"People's Bank" shall mean People's Bank, a Connecticut capital stock
savings bank.
"Periodic Finance Charges" shall have the meaning specified in the
Credit Card Agreement applicable to an Account for finance charges (monthly
periodic rate) or any similar term.
"Permitted Investments" shall mean, unless otherwise provided in the
Supplement with respect to any Series (a) negotiable instruments or securities
represented by instruments in book-entry, bearer or registered form which
evidence (i) obligations of or fully guaranteed with respect to timely payment
by 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, or
long-term unsecured debt obligations (other than such obligations whose rating
is based on collateral or on the credit of a Person other than such institution
or trust company) of such depositary institution or trust company shall have a
credit rating from Moody's and Standard & Poor's of P-1 and A-1+, respectively,
in the case of the certificates of deposit or short-term deposits, or a rating
from Moody's of at least Aa3, and from Standard & Poor's of AAA, in the case of
the long-term unsecured debt obligations, and the amount of such time deposits,
demand deposits or certificate of deposit are fully insured within the limits of
insurance set by the FDIC; (iii) certificates of deposit having, at the time of
the Trust's investment or
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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 and certain open end diversified investment
companies rated AAA-m or AAA-mG by Standard & Poor's and Aaa by Moody's, or
otherwise approved in writing by the Rating Agency; (b) demand deposits in the
name of the Trust or the Trustee in any depositary institution or trust company
referred to in clause (a)(ii) above; and (c) securities not represented by an
instrument, which are registered in the name of the Trustee, on behalf of the
Trust, 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 consisting of
shares of an open end diversified investment company which is registered under
the Investment Company Act and which (i) invests its assets exclusively in
obligations of or guaranteed by the United States of America or any
instrumentality or agency thereof having in each instance a final maturity date
of less than one year from their date of purchase or other Permitted
Investments, (ii) seeks to maintain a constant net asset value per share, (iii)
has aggregate net assets of not less than $100,000,000 on the date of purchase
of such shares, (iv) which is acceptable to the Rating Agency without causing a
reduction in its rating of any Series of Certificates then outstanding (as
confirmed in writing by such rating agency) and (v) which, to the extent
provided in any Supplement, is acceptable to the related Enhancement Provider.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Pool Amount" shall have, with respect to any Series, the meaning
specified in the related Supplement.
"Pool Factor" shall mean, unless any Series is issued in more than one
Class as stated in any related Supplement, with respect to any Series and with
respect to any Record Date, a number carried out to seven decimals representing
the ratio of the applicable Investor Interest as of the end of the last day of
the preceding Monthly Period to the Initial Investor Interest.
"Portfolio Yield" shall mean, unless otherwise provided with respect to
any Series as specified in the related Supplement, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction the numerator of
which is the Finance Charge Receivables billed during such Monthly Period and
allocable to the Aggregate Investor Interest or the Investor
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Interest with respect to any Series, as the case may be, during such Monthly
Period to be calculated on a cash basis after subtracting an amount equal to the
sum of the Investor Default Amount with respect to each Series then issued and
outstanding or the Investor Default Amount with respect to the applicable
Series, as the case may be, for such Monthly Period, and the denominator of
which is the Aggregate Investor Interest or the Investor Interest with respect
to any Series, as the case may be, as of the last day of the preceding Monthly
Period.
"Principal Receivable" shall mean each Receivable other than (i)
Finance Charge Receivables and (ii) Receivables in Defaulted Accounts. A
Receivable shall be deemed to have been created at the end of the day on the
Date of Processing of such receivable. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such day.
Any Receivables which the Seller is unable to transfer as provided in subsection
2.5(e) shall not be included in calculating the aggregate amount of Principal
Receivables.
"Principal Shortfalls" shall mean, with respect to a Distribution Date,
the aggregate amount for all outstanding Series which the related Supplements
specify are "Principal Shortfalls" for such Distribution Date.
"Principal Terms" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in Section 6.9.
"Qualified Institution" shall have the meaning specified in subsection
4.1(a).
"Qualified Trust Institution" shall mean a depository institution
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.
"Rating Agency" shall mean, with respect to each Series, the rating
agency or agencies, if any, specified in the related Supplement.
"Reassignment" shall have the meaning set forth in subsection 2.7(b).
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"Receivable" shall mean any amount owing in respect of the Accounts
including both Principal Receivables and Finance Charge Receivables.
"Record Date" shall mean, with respect to any Distribution Date, (i) so
long as the Trust has not issued Definitive Certificates, the last Business Day
preceding such Distribution Date and (ii) after the issuance of Definitive
Certificates, the last day of the calendar month preceding such Distribution
Date.
"Recoveries" shall mean all net amounts received by the Servicer with
respect to charged-off credit card receivables in the Seller's portfolio of VISA
and MasterCard accounts.
"Registered Certificates" shall have the meaning specified in Section
6.1.
"Removal Date" shall have the meaning specified in subsection 2.7(a).
"Removal Notice Date" shall have the meaning specified in subsection
2.7(a).
"Removed Accounts" shall have the meaning specified in subsection
2.7(a).
"Repurchase Terms" shall mean, with respect to any Series, the terms and
conditions under which the Seller may repurchase such Series of Certificates
pursuant to Section 12.2(a) as provided in the related Supplement.
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether federal, state or local (including, without limitation, usury laws, the
federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer within the Corporate Trust
Office (or any successor group of the Trustee), including any Vice President,
any Assistant Vice President, any Assistant Secretary, any Assistant Treasurer,
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
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"Returned Check Fees" shall have the meaning specified in the Credit
Card Agreement applicable to an Account.
"Revolving Period" shall have, with respect to each Series, the meaning
specified in the related Supplement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Seller" shall mean People's Bank, and any entity which purchases or
otherwise acquires the Accounts or any of them in accordance with the provisions
of Sections 7.2 and 13.1(a)(ii).
"Seller Exchange" shall have the meaning specified in subsection 6.9(b).
"Seller Interest" shall mean, on any date of determination, the
Aggregate Principal Receivables at the end of the day immediately prior to such
date of determination, minus the Aggregate Investor Interest at the end of such
day.
"Seller Percentage" shall mean, on any date of determination, when used
with respect to Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts, a percentage equal to 100% minus the
Aggregate Investor Percentage with respect to such categories of Receivables.
"Series" shall mean any series of Investor Certificates.
"Series Account" shall mean any account established pursuant to a
Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series, the
meaning specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to any
Series, the amount specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series of
Certificates, the date stated in the related Supplement.
"Servicer" shall mean initially People's Bank, and its permitted
successors and assigns and thereafter any Person appointed as successor as
herein provided to service the Receivables.
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"Servicer Default" shall have the meaning specified in Section 10.1.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Shared Finance Charge Collections" shall mean, with respect to any
Business Day, the aggregate amount of Finance Charge Collections allocable to
each Series in excess of the amounts necessary to make required payments
specified in the applicable Supplement with respect to each such Series, if any,
and available to cover shortfalls with respect to other Series.
"Shared Principal Collections" shall mean, with respect to a
Distribution Date, the aggregate amount of Collections of Principal Receivables
for all outstanding Series which the related Supplements specify are to be
treated as "Shared Principal Collections" for such Distribution Date.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc.
"Subject Certificate" shall have the meaning specified in subsection
6.3(e).
"Successor Servicer" shall have the meaning specified in subsection
10.2(a).
"Supplement" shall mean, with respect to any Series, a supplement to
this Agreement complying with the terms of Section 6.9 of this Agreement,
executed in conjunction with any issuance of such Series of Certificates.
"Termination Notice" shall have the meaning specified in subsection
10.1(d).
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.3 and shall initially be the Trustee.
"Transfer Date" shall mean, with respect to any Series, the Business Day
immediately prior to each Distribution Date.
"Transferred Account" shall have the meaning specified in the definition
of "Account".
"Trust" shall mean the People's Bank Credit Card Master Trust created by
this Agreement.
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"Trust Assets" shall have the meaning specified in Section 2.1.
"Trust Extension" shall have the meaning specified in subsection
12.1(a).
"Trust Pay Out Event" shall have, with respect to each Series, the
meaning specified in Section 9.1.
"Trust Termination Date" shall mean the earlier to occur of (i) unless
a Trust Extension shall have occurred, the day after the Distribution Date with
respect to any Series following the date on which funds shall have been
deposited in the Collection Account or the applicable Series Account for the
payment of (a) Investor Certificateholders of each Series then issued and
outstanding in an amount sufficient to pay the Aggregate Investor Interest plus
interest accrued at the applicable Certificate Rate through the end of the
related Interest Accrual Period prior to the Distribution Date with respect to
each such Series in full and (b) each Enhancement Provider with respect to all
amounts owed to such Enhancement Provider as provided herein or in any
Supplement, (ii) if a Trust Extension shall have occurred, the Extended Trust
Termination Date, and (iii) the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the father of the late
President of the United States, living on the date of this Agreement.
"Trustee" shall mean the institution executing this Agreement as
Trustee, or its successor in interest, or any successor trustee appointed as
herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
"Undivided Interest" shall mean the undivided interest in
the Trust of any Certificateholder.
SECTION 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting practices, as
applicable. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms
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under generally accepted accounting principles or regulatory accounting
practices, the definitions contained herein shall control.
(c) The agreements, representations and warranties of People's Bank in
this Agreement and in any Supplement in each of its capacities as Seller and
Servicer shall be deemed to be the agreements, representations and warranties of
People's Bank solely in each such capacity for so long as People's Bank acts in
each such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of this Agreement or
any Supplement; and Section, subsection, Schedule and Exhibit references
contained in this Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement or any Supplement
unless otherwise specified. The monthly Servicer certificate shall be in
substantially the form of Exhibit C hereto, 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 the Agreement or any
Supplement. 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 the related Exhibit, as so changed. Upon the delivery of such
Officer's Certificate to the Trustee, the related Exhibit, as so changed, shall
for all purposes of this Agreement constitute such Exhibit. The Trustee may
conclusively rely upon such Officer's Certificate as to such changes conforming
to the requirements of this Agreement.
[End of Article I]
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ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
SECTION 2.1 Conveyance of Receivables. By execution of this Agreement,
the Seller does hereby transfer, assign, set- over, and otherwise convey
(collectively the "Conveyance") to the Trust for the benefit of the
Certificateholders as of the close of business on the Cut-Off Date, without
recourse, all of its right, title and interest in and to (i) the Receivables now
existing and hereafter created and arising in connection with the Accounts and
in connection with any accounts that meet the definition of Automatic Additional
Accounts (other than Receivables in Additional Accounts), (ii) all monies and
investments due or to become due with respect thereto (including all Finance
Charge Receivables), (iii) all proceeds of such Receivables, (iv) Recoveries
allocated to the Trust pursuant to subsection 2.5(l), (v) all funds deposited
from time to time in any Series Account now existing or hereafter established,
including any reserve account, principal funding account, cash collateral
account or spread account, and (vi) Interchange allocable to the Trust pursuant
to subsection 2.5(k) and all proceeds thereof, which shall initially constitute
the assets of the Trust. Such property, together with all monies and investments
on deposit, from time to time, in the Collection Account, the Excess Funding
Account, the Series Accounts maintained for the benefit of the
Certificateholders of any Series of Certificates, any Enhancement and all monies
available under any Enhancement, to be provided for any Series for payment to
the Certificateholders of such Series, shall constitute the assets of the Trust
(collectively, the "Trust Assets").
In connection with such transfer, assignment, set-over and conveyance,
the Seller agrees to record and file, at its own expense, a financing statement
(including any continuation statements with respect to such financing statements
when applicable) with respect to the Receivables now existing and hereafter
created for the transfer of accounts (as defined in Section 9-106 of the UCC as
in effect in the State of New York or Connecticut, whichever is applicable)
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the assignment of the Receivables to
the Trust, and to deliver a file-stamped copy of such financing statement or
continuation statement or other evidence of such filing (which may, for purposes
of this Section 2.1, consist of telephone confirmation of such filing with the
file-stamped copy to be provided to the Trustee as soon as practicable after
receipt thereof by the Seller) to the Trustee on or prior to the date of
issuance of the Certificates and in the case of any continuation statements
filed pursuant to this Section 2.1, as soon as practicable after receipt thereof
by the Seller. The
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foregoing transfer, assignment, set-over and conveyance to the Trust shall be
made to the Trustee, on behalf of the Trust, and each reference in this
Agreement to such transfer, assignment, set-over and conveyance shall be
construed accordingly. The Trustee, except when acting as Servicer, shall be
under no obligation whatsoever to file the financing statements or continuation
statements referred to herein, or to make any other filing under the UCC in
connection with the foregoing transfer, assignment, set-over and conveyance.
In connection with such transfer, the Seller agrees, at its own
expense, on or prior to the Initial Closing Date (i) to clearly mark its
computer files to indicate that Receivables created in connection with the
Accounts (other than any Additional Accounts) have been transferred to the Trust
pursuant to this Agreement for the benefit of the Certificateholders and (ii) to
deliver to the Trustee a computer file or microfiche list containing a true and
complete list of all such Accounts, identified by account number and setting
forth the Principal Receivable and Receivable balance as of the related Cut Off
Date. Such file or list shall be marked as Schedule 1 to this Agreement,
delivered to the Trustee as confidential and proprietary, and is hereby
incorporated into and made a part of this Agreement. The Seller further agrees
not to alter the code referenced in clause (i) of this paragraph with respect to
any Account during the term of this Agreement unless and until such Account
becomes a Removed Account.
The Seller intends that the transfer and assignment of Receivables
hereunder constitutes either a sale of such Receivables from the Seller to the
Trust or the grant of a security interest in the Trust Assets to the Trust. The
Seller, therefore, transfers and grants to the Trustee, on behalf of the Trust,
a first priority security interest in all of the Seller's right, title and
interest in, to and under the Trust Assets for the purpose of securing a loan in
an amount equal to the unpaid principal amount of the Investor Certificates
issued hereunder and pursuant to a Supplement and the interest accrued at the
related certificate rate and to secure all of the Seller's and the Servicer's
obligations hereunder, including without limitation, the Seller's obligation to
sell or transfer Receivables hereafter created to the Trust. This Agreement
shall constitute a security agreement (as defined in the UCC as in effect in the
State of New York).
Pursuant to the request of the Seller, the Trustee has caused
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the Seller
pursuant to Section 6.2.
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SECTION 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf of the
Trust, of all right, title and interest previously held by the Seller in and to
(i) the Receivables now existing and hereafter created and arising in connection
with the Accounts and in connection with any accounts that meet the definition
of Automatic Additional Accounts (other than Receivables in Additional
Accounts), (ii) all monies due or to become due with respect thereto (including
all Finance Charge Receivables), (iii) all proceeds of such Receivables, (iv)
Recoveries allocable to the Trust pursuant to subsection 2.5(l) and (v)
Interchange allocable to the Trust pursuant to subsection 2.5(k) and the
proceeds thereof, and declares that it shall maintain such right, title and
interest, upon the Trust herein set forth, for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Seller
delivered to the Trustee the computer file or microfiche list described in the
third paragraph of Section 2.1.
(b) The Trustee hereby agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files, microfiche
lists or notices delivered to the Trustee by the Seller pursuant to Sections
2.1, 2.6, 2.7 and 3.4(c) (the "Account Information") except as is required in
connection with the performance of its duties hereunder or in enforcing the
rights of the Certificateholders or to a Successor Servicer appointed pursuant
to Section 10.2 and except as otherwise provided in this subsection 2.2(b). The
Trustee agrees to take such measures as shall be reasonably requested by the
Seller to protect and maintain the security and confidentiality of such
information, and, in connection therewith, shall allow the Seller to inspect the
Trustee's security and confidentiality arrangements from time to time during
normal business hours. In the event that the Trustee is required by law to
disclose any Account Information, the Trustee shall provide the Seller with
prompt written notice, unless such notice is prohibited by law, of any such
request or requirement so that the Seller may request a protective order or
other appropriate remedy. In the event that such protective order or other
remedy is not obtained the Trustee may disclose such information and will
exercise its reasonable best efforts to obtain assurance that confidential
treatment will be afforded such information. The Trustee shall use its
reasonable best efforts to provide the Seller with written notice five days
prior to any disclosure permitted by this subsection 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
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SECTION 2.3 Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Trust and the Trustee as of the Initial
Closing Date:
(a) Organization and Good Standing. The Seller is a
Connecticut capital stock savings bank duly organized and validly
existing in good standing under the laws of the State of Connecticut
and has full power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform
its obligations under this Agreement and to execute and deliver to the
Trustee the Certificates pursuant hereto.
(b) Due Qualification. The Seller is duly qualified to do
business and is in good standing (or is exempt from such requirement)
in any state required in order to conduct business, and has obtained
all necessary licenses and approvals with respect to the Seller
required under federal and state law; provided, however, that no
representation or warranty is made with respect to any qualifications,
licenses or approvals which the Trustee would have to obtain to do
business in any state in which the Trustee seeks to enforce any
Receivable.
(c) Due Authorization. The execution and delivery of this
Agreement and the execution and delivery to the Trustee of the
Certificates by the Seller and the consummation of the transactions
provided for in this Agreement have been duly authorized by the Seller
by all necessary corporate action on its part, including due
authorization and approval thereof by the board of directors of the
Seller, and this Agreement will remain, from the time of its execution,
an official record of the Seller.
(d) No Conflict. The execution and delivery of this Agreement
and the Certificates, the performance of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof will not
conflict with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Seller is a
party or by which it or any of its properties are bound.
(e) No Violation. The execution and delivery of this Agreement
and the Certificates, the performance of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof will not
conflict with or violate any Requirements of Law applicable to the
Seller.
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(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Seller, threatened against the
Seller, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement or the Certificates, (ii) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by this Agreement or the Certificates,
(iii) seeking any determination or ruling that, in the reasonable
judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Agreement, (iv)
seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement or the
Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut-Off Date, each
Account was an Eligible Account.
(h) Seller's Deposit Accounts. As of the Initial Closing Date,
deposits in the Seller's deposit accounts were insured to the limits
provided by law and as required by the FDIC.
(i) All Consents Required. All appraisals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
of this Agreement and the Certificates, the performance of the
transactions contemplated by this Agreement and the fulfillment of the
terms hereof, have been obtained.
(j) Account Selection. As of the Cut-Off Date, the Accounts
represented Eligible Accounts owned by the Seller that are VISA Classic
or standard MasterCard Accounts. No such selection that will have an
adverse effect on the Certificateholders was used.
(k) Solvency. The Seller is not insolvent as of the Initial
Closing Date and will not be insolvent following the consummation on the
Closing Date of the transactions contemplated by this Agreement,
including the transfer by the Seller to the Trust of the property
specified in Section 2.1.
For the purposes of the representations and warranties contained in
this Section 2.3 and made by the Seller on the Initial Closing Date,
"Certificates" shall mean the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall survive
the transfer and assignment of the Trust Assets to the Trust, and
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termination of the rights and obligations of the Servicer pursuant to Section
10.1. The Seller hereby represents and warrants to the Trust and the Trustee,
with respect to any Series of Certificates, as of its Closing Date, unless
otherwise stated in such Supplement, that the representations and warranties of
the Seller set forth in this Section 2.3 other than as set forth in subsections
2.3(g), 2.3(h) and 2.3(j) are true and correct as of such date (for the purposes
of such representations and warranties, "Certificates" shall mean the
Certificates issued on the related Closing Date). Upon discovery by the Seller,
the Servicer or the Trustee of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the others, including the related Enhancement Provider. The Trustee's
obligations with respect to such breach are limited as provided in subsection
11.2(g).
SECTION 2.4 Representations and Warranties of the Seller Relating to
the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. The Seller hereby
represents and warrants to the Trust and the Trustee that, as of the Initial
Closing Date:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms, except (A) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and the rights of creditors of Connecticut
capital stock savings banks, (B) as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or
in equity), (C) subject to the unenforceability of provisions
indemnifying a party against liability where such indemnification is
contrary to public policy, (D) the effect of judicial decisions which
have held that, subject to certain covenants and provisions of
agreements, such agreements are unenforceable where (y) the breach of
such covenants or provisions imposes restrictions or burdens where it
cannot be demonstrated that such breach is a material breach of a
material covenant or provisions, or (z) the creditor's enforcement of
such covenants or provisions under the circumstances would violate the
creditor's implied covenant of good faith and fair dealing, and (E)
subject to the unenforceability of provisions herein to the effect that
the failure to exercise or delay in exercising rights or remedies will
not operate as a waiver of any such rights or remedies, or to the
effect that provisions therein may only be waived in writing to the
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extent that an oral agreement modifying such provisions has been
entered into.
(ii) This Agreement constitutes either (A) a valid transfer,
assignment, set-over and conveyance to the Trust of all right, title
and interest of the Seller in and to (i) the Receivables now existing
and hereafter created and arising in connection with the Accounts
(other than Receivables in Additional Accounts), (ii) all monies due or
to become due with respect thereto (including all Finance Charge
Receivables), (iii) all proceeds of such Receivables, (iv) Recoveries
allocable to the Trust pursuant to subsection 2.5(l), (v) all funds
deposited from time to time in any Series Account, including any
reserve account, cash collateral account or spread account, and (vi)
Interchange allocable to the Trust pursuant to subsection 2.5(k) and
all proceeds thereof, which will be held by the Trust free and clear of
any Lien of any Person except for (w) the interests of the Trustee and
the Certificateholders, (x) Liens permitted under subsection 2.5(b) and
subject to Section 9-306 of the UCC as in effect in the State of
Connecticut or New York, whichever is applicable, (y) the interest of
the Seller as Holder of the Exchangeable Seller Certificate and (z) the
Seller's right, if any, to interest accruing on, and investment
earnings, if any, in respect of the Collection Account, or any Series
Account, as provided in this Agreement or the related Supplement, or
(B) a grant of a security interest (as defined in the UCC as in effect
in the State of New York) in such property to the Trust, which is
enforceable with respect to the (i) Receivables now existing and
hereafter created and arising in connection with the Accounts and in
connection with any accounts that meet the definition of Automatic
Additional Accounts (other than Receivables in Additional Accounts),
(ii) all monies due or to become due with respect thereto (including
all Finance Charge Receivables), (iii) all proceeds of such
Receivables, (iv) Recoveries allocable to the Trust pursuant to
subsection 2.5(l), (v) all funds deposited from time to time in any
Series Account, including any reserve account, cash collateral account
or spread account and (vi) Interchange allocable to the Trust pursuant
to subsection 2.5(k) and the proceeds thereof upon execution and
delivery of this Agreement, and which will be enforceable with respect
to such Receivables hereafter created, the proceeds thereof,
Recoveries, funds deposited in a Series Account and Interchange
allocable to the Trust pursuant to subsections 2.5(k) and (l), upon
such creation. If this Agreement constitutes the grant of a security
interest to the Trust in such property, upon the filing of the
financing statement described in Section 2.1 and in the case of the
Receivables hereafter created and proceeds thereof, Recoveries and
Interchange allocable to the Trust pursuant to subsections
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2.5(k) and (l), upon such creation, the Trustee, on behalf of the
Trust, shall have a first priority perfected security interest in such
property, except for Liens permitted under subsection 2.5(b) and
subject to Section 9-306 of the UCC as in effect in the State of
Connecticut or New York, whichever is applicable. Neither the Seller
nor any Person (other than the Trustee and the Certificateholders)
claiming through or under the Seller shall have any claim to or
interest in the Collection Account, the Excess Funding Account or any
Series Account, and, if this Agreement constitutes the grant of a
security interest in such property, the Seller will have an interest in
such property as a debtor for purposes of the UCC as in effect in State
of New York.
(b) Eligibility of Receivables. The Seller hereby represents and
warrants to the Trust and the Trustee as of the Initial Closing Date and as of
each Addition Date and Automatic Addition Date that:
(i) Each Receivable is an Eligible Receivable as of the
Cut-Off Date, the Automatic Addition Date or the end of the related
Monthly Period immediately preceding the Addition Date, as applicable.
(ii) Each Receivable then existing has been conveyed to the
Trust free and clear of any Lien of any Person other than the Trustee
and the Certificateholders (other than Liens permitted under subsection
2.5(b)) and in compliance, in all material respects, with all
Requirements of Law applicable to the Seller.
(iii) With respect to each Receivable then existing, all
consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Seller in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given
and are in full force and effect.
(iv) On each day on which any new Receivable is created, the
Seller shall be deemed to represent and warrant to the Trust and the
Trustee that (A) each Receivable created on such day is an Eligible
Receivable, (B) each Receivable created on such day has been conveyed
to the Trust in compliance, in all material respects, with all
Requirements of Law applicable to the Seller, (C) with respect to each
such Receivable, all consents, licenses, approvals or authorizations of
or registrations or declarations with, any Governmental Authority
required to be obtained, effected or given by the Seller in connection
with the conveyance of such Receivable to the Trust have been
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duly obtained, effected or given and are in full force and effect and
(D) the representations and warranties set forth in subsection 2.4(a)
are true and correct with respect to each Receivable created on such
day as if made on such day.
(v) As of the Initial Closing Date, Schedule 1 to this
Agreement and, as of the last day of each Monthly Period during which
Automatic Additional Accounts were added to the Trust or as of the
applicable Addition Date with respect to Additional Accounts, as the
case may be, added pursuant to Section 2.6, the related computer file
or microfiche list referred to in Section 2.6, is an accurate and
complete listing in all material respects of all the Accounts as of the
Cut-Off Date, the end of the applicable Monthly Period or the end of
the Monthly Period immediately preceding the applicable Addition Date
and the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and
correct in all material respects as of the Cut-Off Date, the end of the
applicable Monthly Period or such applicable Addition Date; as of the
Cut-Off Date, the aggregate amount of Receivables in all the Accounts
was $604,049,628.21.
(c) Notice of Breach. The representations and warranties set forth in
this Section 2.4 shall survive the transfer and assignment of the respective
Receivables to the Trust. Upon discovery by the Seller, the Servicer or the
Trustee of a breach of any of the representations and warranties set forth in
this Section 2.4, the party discovering such breach shall give prompt written
notice to the others. The Seller agrees to cooperate with the Servicer and the
Trustee in attempting to cure any such breach. The Seller hereby acknowledges
that the Trustee intends to rely on the representations hereunder in connection
with representations made by the Trustee to secured parties, assignees or
subsequent transferees. The Trustee's obligations with respect to the breach of
any of the representations and warranties contained in this Section 2.4 are
limited as provided in subsection 11.2(g).
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with respect
to a Receivable of any representations and warranties set forth in
subsection 2.4(b)(ii), or in the event that a Receivable is not an
Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (b) or (d) of the definition of Eligible
Receivable; then, upon the earlier to occur of the discovery of such
breach or event by the Seller or the Servicer or receipt by the Seller
of written notice of such breach or event given by the Trustee, each
such Receivable shall be automatically
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removed from the Trust on the terms and conditions set forth in
subsection 2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a breach of any
of the representations and warranties set forth in subsection 2.4(b)
other than a breach or event as set forth in clause (d)(i) above, and as
a result of such breach the related Account becomes a Defaulted Account
or the Trust's rights in, to or under the Receivable or its proceeds are
impaired or the ability of the Servicer to collect such Ineligible
Receivable is impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien, then,
upon the expiration of 60 days (or such longer period as may be agreed
to by the Trustee but in no event longer than 120 days), from the
earlier to occur of the discovery of any such event by either of the
Seller or the Servicer, or receipt by the Seller of written notice of
any such event given by the Trustee or the related Enhancement Provider,
or, with respect to breaches relating to prior Liens, immediately upon
the earlier to occur of such discovery or notice, each such Receivable
shall be removed from the Trust on the terms and conditions set forth in
subsection 2.4(d)(iii); provided, however, that no such removal shall be
required to be made if, on any day within such applicable period, such
representations and warranties with respect to such Receivable shall
then be true and correct in all material respects as if such Receivable
had been created on such day and provided, further, that if a defect in
any list of Accounts referred to subsection 2.4(b)(v) results in the
balance of Receivables in the Accounts being less than the amount
specified in such subsection, the deficiency shall be deemed to be an
Ineligible Receivable for purposes of this subsection 2.4(d).
(iii) Procedures for Removal. When the provisions of subsection
2.4(d)(i) or subsection 2.4(d)(ii) above require removal of a
Receivable, the Seller shall accept reassignment of the portion of such
Receivable that is a Principal Receivable (an "Ineligible Receivable")
by (i) directing the Servicer to deduct the portion of such Receivable
that is a Principal Receivable from the aggregate amount of Principal
Receivables in the Trust and to decrease the Seller Interest by such
amount and (ii) depositing into the Collection Account an amount equal
to the Finance Charge Receivables collected in respect of such
Receivable through the date of such removal; provided, however, that if
the exclusion of an Ineligible Receivable from the calculation of the
Seller Interest would cause the Seller Interest to be less than the
Minimum Seller Interest or would otherwise not be permitted by law, such
Ineligible Receivable shall not be automatically removed from the Trust,
but shall be removed
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from the Trust only upon the making of the deposit to the Excess
Funding Account referred to in the second following sentence. On and
after the date of such removal, each Ineligible Receivable shall be
deducted from the aggregate amount of Principal Receivables used in the
calculation of any Investor Percentage, the Seller Percentage or the
Seller Interest; provided, however, that for the purposes of subsection
2.6(a) and the calculation of the Seller Interest, each Ineligible
Receivable shall, notwithstanding the proviso to the immediately
preceding sentence, be deemed to have been automatically removed from
the Trust. In the event that the exclusion of an Ineligible Receivable
from the calculation of the Seller Interest would cause the Seller
Interest to be reduced below the Minimum Seller Interest, or would
otherwise not be permitted by law, the Seller shall immediately, but in
no event later than 10 days after such event, make a deposit in the
Excess Funding Account (for allocation as a Principal Receivable
pursuant to Article IV) in immediately available funds in an amount
equal to the amount by which the Seller Interest (as determined above)
would be reduced below the Minimum Seller Interest. The portion of such
deposit allocated to Investor Certificates of each Series shall be
distributed to the Investor Certificateholders of each such Series in
the manner specified in Article IV, if applicable, on the related
Distribution Date in the Monthly Period following the Monthly Period in
which such deposit is made. Upon the reassignment to the Seller of an
Ineligible Receivable, the Trust shall automatically and without
further action be deemed to transfer, assign, set-over and otherwise
convey to the Seller, without recourse, representation or warranty, all
the right, title and interest of the Trust in and to such Ineligible
Receivable, all monies due or to become due with respect thereto and
all proceeds thereof, Recoveries and Interchange allocated to such
Ineligible Receivable pursuant to subsections 2.5(k) and (l). The
Trustee shall execute such documents and instruments of transfer or
assignment, on behalf of the Trust, and take other actions as shall
reasonably be requested by the Seller to evidence the conveyance of
such Ineligible Receivable pursuant to this subsection 2.4(d)(iii). In
the event that on any day within 60 days of the date on which the
removal of an Ineligible Receivable from the Trust pursuant to this
Section 2.4 is effected, the applicable representations and warranties
shall be true and correct in all material respects on such date, the
Seller may, but shall not be required to, direct the Servicer to
include such Receivable in the Trust by adding the portion of such
Receivable which is a Principal Receivable to the Principal Receivables
in the Trust. Upon the addition of a Receivable to the Trust pursuant
to this subsection 2.4(d)(iii), the Seller shall be deemed to have made
the applicable representations and
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warranties in subsection 2.4(b) as of the date of such addition, as if
the Receivable had been created on such date, and shall execute all
such necessary documents and instruments of transfer or assignment and
take such other actions as shall be necessary to effect and perfect the
reconveyance of such Receivable to the Trust. The obligation of the
Seller set forth in this subsection 2.4(d)(iii), or the automatic
removal of such Receivable from the Trust, as the case may be, shall
constitute the sole remedy respecting any breach of the representations
and warranties set forth in the above-referenced subsections with
respect to such Receivable available to Certificateholders or the
Trustee on behalf of Certificateholders.
(iv) For the purposes of subsections 2.4(d)(i) and 2.4(d)(ii)
above, proceeds of a Receivable shall not be deemed to be impaired
hereunder solely because such proceeds are held by the Servicer (if the
Servicer is the Seller) for more than the applicable period under
Section 9-306(3) of the UCC as in effect in the State of Connecticut or
New York, whichever is applicable.
(e) Reassignment of Trust Portfolio. In the event of a breach of any of
the representations and warranties set forth in subsection 2.4(a), either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Interest, by notice then
given in writing to the Seller (and to the Trustee and the Servicer, if given by
the Investor Certificateholders), may direct the Seller to accept reassignment
of an amount of Principal Receivables (as specified below) within 60 days of
such notice (or within such longer period as may be specified in such notice but
in no event later than 120 days), and the Seller shall be obligated to accept
reassignment of such Principal Receivables on a Distribution Date specified by
the Seller (such Distribution Date, the "Reassignment Date") occurring within
such applicable period on the terms and conditions set forth below; provided,
however, that no such reassignment shall be required to be made if, at any time
during such applicable period, the representations and warranties contained in
subsection 2.4(a) shall then be true and correct in all material respects. The
Seller shall deposit on the Transfer Date (in New York Clearing House, next day
funds) for the Reassignment Date an amount equal to the reassignment deposit
amount for such Receivables in the Collection Account or Series Account, as
provided in the related Supplement, for distribution to the Investor
Certificateholders pursuant to Article XII. The reassignment deposit amount with
respect to each Series for such reassignment, unless otherwise stated in the
related Supplement, shall be equal to (i) the Investor Interest of such Series
at the end of the day on the last day of the Monthly Period preceding the date
on which the reassignment is scheduled to be made, less
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the amount, if any, previously allocated (and on deposit in the applicable
Series Account) for payment of principal to such Certificateholders on the
related Distribution Date in the Monthly Period in which the date of
reassignment occurs, plus (ii) an amount equal to all interest accrued but
unpaid on the Investor Certificates of such Series at the applicable Certificate
Rate for the related Interest Accrual Period through the last day of such
Interest Accrual Period, less the amount, if any previously allocated for
payment of interest to the Certificateholders of such Series on the related
Distribution Date in the Monthly Period in which the date of reassignment occurs
plus (iii) an amount sufficient to pay all unreimbursed amounts owing to each
Enhancement Provider (to the extent set forth in the applicable Supplement). The
reassignment deposit amount with respect to each Series shall be deposited in
the Collection Account or any Series Account, as provided in the related
Supplement, for distribution to the Investor Certificateholders of such Series
pursuant to Section 12.3. Payment of the reassignment deposit amount with
respect to each Series, and all other amounts in the Collection Account or the
applicable Series Account in respect of the preceding Monthly Period shall be
considered a prepayment in full of the Receivables represented by the Investor
Certificates. On the Distribution Date following the Transfer Date on which such
amount has been deposited in full into the Collection Account or the applicable
Series Account, the Receivables and all monies due or to become due with respect
thereto and all proceeds of the Receivables, Recoveries and Interchange
allocated to the Trust pursuant to subsections 2.5(k) and (l) shall be released
to the Seller, or its designee or assignee, and the Trustee shall execute and
deliver such instruments of transfer or assignment, on behalf of the Trust, in
each case without recourse, representation or warranty, as shall be reasonably
requested by the Seller to vest in the Seller, or its designee or assignee, all
right, title and interest of the Trust in and to the Receivables, all monies due
or to become due with respect thereto and all proceeds of the Receivables,
Recoveries and Interchange allocated to the Trust pursuant to subsections 2.5(k)
and (l). If the Trustee or the Investor Certificateholders give notice directing
the Seller to accept reassignment as provided above, the obligation of the
Seller to accept reassignment of the Receivables and pay the reassignment
deposit amount pursuant to this subsection 2.4(e) shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
subsection 2.4(a) available to the Investor Certificateholders or the Trustee on
behalf of the Investor Certificateholders.
(f) Reassignment of Receivables in Additional Accounts. In the event of
a breach of any of the representations and warranties set forth in subsection
6(a) or 6(e) of any Assignment of Receivables in Additional Accounts, in the
form attached
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hereto as Exhibit B, either the Trustee or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Aggregate
Investor Interest, by notice then given in writing to the Seller (and to the
Trustee and the Servicer, if given by the Investor Certificateholders), may
direct the Seller to remove from the Trust each Receivable then existing in an
Account, the Receivables of which were conveyed to the Trust pursuant to such
Assignment of Additional Receivables, on the terms and conditions set forth
herein, on or prior to the first Distribution Date next succeeding 60 days after
such notice, and the Seller shall be obligated to remove such Receivables on a
Distribution Date occurring within such applicable period on the terms and
conditions set forth below; provided, however, that no such reassignment shall
be required to be made if, at any time during such applicable period the
representations and warranties contained in subsection 6(a) or 6(e), as the case
may be, of such Assignment of Additional Receivables shall then be true and
correct in all material respects. When the provisions of the preceding sentence
require removal of a Receivable, the Seller shall accept reassignment of the
portion of such Receivable that is a Principal Receivable by (i) directing the
Servicer to deduct the portion of such Receivable that is a Principal Receivable
of each such Ineligible Receivable from the aggregate amount of Principal
Receivables in the Trust and to decrease the Seller Interest by such amount and
(ii) depositing into the Collection Account an amount equal to the Finance
Charge Receivables collected through the date of such removal; provided,
however, that if the exclusion of any Receivable from the calculation of the
Seller Interest would cause the Seller Interest to be less than the Minimum
Seller Interest or would otherwise not be permitted by law, such Receivable
shall not be automatically removed from the Trust, but shall be removed from the
Trust only upon the making of the deposit to the Excess Funding Account referred
to in the second following sentence. On and after the date of such removal, each
such Receivable shall be deducted from the aggregate amount of Principal
Receivables used in the calculation of any Investor Percentage, the Seller
percentage or the Seller Interest; provided, however, that for the purposes of
subsection 2.6(a) and the calculation of the Seller Interest, each Ineligible
Receivable shall, notwithstanding the proviso to the immediately preceding
sentence, be deemed to have been automatically removed from the Trust. In the
event that the exclusion of such Receivable from the calculation of the Seller
Interest would cause the Seller Interest to be reduced below the Minimum Seller
Interest, or would otherwise not be permitted by law, the Seller shall
immediately, but in no event later than 10 days after such event, make a deposit
in the Excess Funding Account (for allocation as a Principal Receivable pursuant
to Article IV) in immediately available funds in an amount equal to the amount
by which the Seller Interest (as determined above) would be reduced below the
Minimum Seller Interest. The portion of such deposit
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allocated to Investor Certificates of each Series shall be distributed to the
Investor Certificateholders of each such Series in the manner specified in
Article IV, if applicable, on the related Distribution Date in the Monthly
Period following the Monthly Period in which such deposit is made. Upon the
reassignment to the Seller of any such Receivable, the Trust shall automatically
and without further action be deemed to transfer, assign, set-over and otherwise
convey to the Seller, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to such Ineligible Receivable, all
monies due or to become due with respect thereto and all proceeds thereof,
Recoveries and Interchange allocated to such Ineligible Receivable pursuant to
subsections 2.5(k) and (l). The Trustee shall execute such documents and
instruments of transfer or assignment, on behalf of the Trust, and take other
actions as shall reasonably be requested by the Seller to evidence the
conveyance of such Ineligible Receivable pursuant to this subsection 2.4(f).
If the Trustee or the Investor Certificateholders give notice directing
the Seller to accept reassignment as provided above, the obligation of the
Seller to accept reassignment of the Receivables and pay the reassignment
deposit amount pursuant to this subsection 2.4(f) shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
subsection 6(a) or 6(e) of any Assignment of Receivables in Additional Accounts
available to the Investor Certificateholders or the Trustee on behalf of the
Investor Certificateholders.
SECTION 2.5 Covenants of the Seller. The Seller hereby covenants that:
(a) Receivables to be Accounts. The Seller will take no action
to cause any Receivable to be evidenced by any instrument (as defined
in the UCC as in effect in the States of Connecticut and New York)
except in connection with the enforcement or collection of an Account
in which event such Receivable shall be an Ineligible Receivable
subject to repurchase in accordance with Section 2.4(d)(ii). Each
Receivable shall be payable pursuant to a contract which does not
create a Lien on any goods purchased thereunder. The Seller will take
no action to cause any Receivable to be anything other than an
"account" or a "general intangible" (as defined in the UCC as in effect
in the States of Connecticut and New York).
(b) Security Interests. Except for the conveyances hereunder,
the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on
any Receivable, whether now existing or hereafter created, or any
interest
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therein; the Seller will immediately notify the Trustee of the
existence of any Lien on any Receivable; and the Seller shall defend
the right, title and interest of the Trust in, to and under the
Receivables, whether now existing or hereafter created, against all
claims of third parties (other than the Trustee and the
Certificateholders); provided, however, that nothing in this subsection
2.5(b) shall prevent or be deemed to prohibit the Seller from suffering
to exist upon any of the Receivables any Liens for municipal or other
local taxes if such taxes shall not at the time be due and payable or
if the Seller shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
(c) Periodic Finance Charges and Other Fees. The Seller hereby
agrees that, except as otherwise required by any Requirement of Law, or
as is deemed by the Seller to be necessary in order for the Seller to
maintain its credit card business, based upon a good faith assessment
by the Seller, in its sole discretion, of the nature of the competition
in the credit card business, it shall not at any time reduce the
Periodic Finance Charges assessed on any Receivable or other fees on
any Account if, as a result of such reduction, the Seller's reasonable
expectation of the Portfolio Yield as of such date would be less than
the weighted average of the Base Rates for all Series; provided,
however, that the Seller shall not, unless required by any Requirement
of Law, reduce such Periodic Finance Charge if its reasonable
expectation is that the Portfolio Yield would be less than the highest
Certificate Rate with respect to any Series then issued and
outstanding.
(d) Credit Card Agreements and Account Guidelines. The Seller
shall comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts and the Account Guidelines and all
applicable rules and regulations of VISA USA, Inc. and MasterCard
International Incorporated except insofar as any failure so to comply
or perform would not materially and adversely affect the rights of the
Trustee, on behalf of the Trust, or the Certificateholders hereunder or
under the Certificates. The Seller may change the terms and provisions
of the Credit Card Agreements or the Account Guidelines in any respect
(including, without limitation, the reduction of the required minimum
monthly payment, the calculation of the amount, or the timing, of
charge offs and the Periodic Finance Charges and other fees to be
assessed thereon) with respect to the Accounts only (i) if the Seller
has a comparable segment of consumer revolving credit card accounts (or
consumer revolving accounts), if such change is made applicable to the
comparable segment of the consumer
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revolving credit card accounts (or consumer revolving accounts) owned
and serviced by the Seller which have characteristics the same as, or
substantially similar to, the Accounts which are the subject of such
change or (ii) if the Seller does not own such a comparable segment of
consumer revolving credit card accounts (or consumer revolving
accounts), if the Seller shall not make such change with the intent to
materially benefit the Seller over the Certificateholders; provided,
however, that the Seller will not increase the timing of charge offs
beyond the time which the Seller deems to be necessary to maintain its
credit card business, based upon a good faith assessment of the Seller,
in its sole discretion, of the nature of the competition of the credit
card business (provided, further, that accounts purchased by the Seller
from other credit card issuers, or other consumer revolving credit
accounts, shall not be considered to be a comparable segment of
revolving credit card accounts for the purposes of this subsection
2.5(d) until such time as any of the accounts purchased by the Seller
from such issuer or consumer revolving credit accounts, as the case may
be, become Accounts pursuant to the provisions of Section 2.6), except
as otherwise restricted by the terms of the Credit Card Agreements.
(e) Account Allocations.
(i) In the event that the Seller is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of the
application of the provisions of Section 9.2 or an order by any federal
or state governmental agency having regulatory authority over the Seller
or any court of competent jurisdiction that the Seller not transfer any
additional Principal Receivables to the Trust) then, in any such event,
(A) the Seller agrees to allocate and pay to the Trust, after the date
of such inability, all Collections with respect to Principal
Receivables, and all amounts which would have constituted Collections
with respect to Principal Receivables but for the Seller's inability to
transfer such Receivables (up to an amount equal to the Aggregate
Principal Receivables in the Trust on such date); (B) the Seller agrees
to have such amounts applied as Collections in accordance with Article
IV; and (C) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in
accordance with clauses (A) and (B) above, Principal Receivables (and
all amounts which would have constituted Principal Receivables but for
the Seller's inability to transfer Receivables to the Trust) which are
written off as uncollectible in
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accordance with this Agreement shall continue to be allocated in
accordance with Article IV, and all amounts which would have constituted
Principal Receivables but for the Seller's inability to transfer
Receivables to the Trust shall be deemed to be Principal Receivables for
the purpose of calculating (i) the applicable Investor Percentage with
respect to any Series and (ii) the Aggregate Investor Percentage
thereunder. If the Seller is unable pursuant to any Requirement of Law
to allocate Collections as described above, the Seller agrees that,
solely for purposes of payments under this Agreement, it shall in any
such event allocate, after the occurrence of such event, payments on
each Account with respect to the principal balance of such Account first
to the oldest principal balance of such Account (it being understood
that the foregoing allocation does not affect, with respect to any
Obligor, the priority of application of cardholder payments provided for
in the related Credit Card Agreement(s)) and to have such payments
applied as Collections in accordance with Article IV. The parties hereto
agree that Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables which have been conveyed to the Trust,
or which would have been conveyed to the Trust but for the above
described inability to transfer such Receivables, shall continue to be a
part of the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables to the Trust and Collections with
respect thereto shall continue to be allocated and paid in accordance
with Article IV.
(ii) In the event that, pursuant to subsection 2.4(d), the
Seller accepts reassignment of an Ineligible Receivable as a result of a
breach of the representations and warranties in subsection 2.4(b)
relating to such Receivable, then, in any such event, the Seller agrees
to account for payments received with respect to such Ineligible
Receivable separately from its accounting for Collections on Principal
Receivables retained by the Trust. If payments received from or on
behalf of an Obligor are not specifically applicable either to an
Ineligible Receivable of such Obligor reassigned to the Seller or to the
Receivables of such Obligor retained in the Trust, then the Seller
agrees to allocate payments proportionately based on the total amount of
Principal Receivables of such Obligor retained in the Trust and the
total amount owing by such Obligor on any Ineligible Receivables
reassigned to the Seller, and the portion allocable to any Principal
Receivables retained in the Trust shall be
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treated as Collections and deposited in accordance with the provisions
of Article IV.
(f) Delivery of Collections or Recoveries. The Seller agrees to
pay to the Servicer all payments received by the Seller in respect of
the Receivables as soon as practicable after receipt thereof by the
Seller, but in no event later than the second Business Day after the
Date of Processing of such payment.
(g) Conveyance of Accounts. The Seller covenants and agrees that
it will not convey, assign, exchange or otherwise transfer the Accounts
to any Person prior to the termination of this Agreement pursuant to
Article XII; provided, however, that the Seller shall not be prohibited
hereby from conveying, assigning, exchanging or otherwise transferring
the Accounts in connection with a transaction complying with the
provisions of Section 7.2.
(h) Notice of Liens. The Seller shall notify the Trustee
promptly after becoming aware of any Lien on any Receivable other than
the conveyances hereunder and Liens permitted under subsection 2.5(b)
hereof.
(i) Status of Accounts and Receivables. The Seller agrees to
comply in all respects with all Requirements of Law applicable to the
Seller, the failure to comply with which would have a material adverse
effect on the Investor Certificateholders.
(j) VISA USA and MasterCard International. The Seller shall use
its best efforts to remain, either directly or indirectly, a member in
good standing of both the VISA USA, Inc. and the MasterCard
International Incorporated systems.
(k) Interchange. On each Business Day, the Seller shall pay to
the Servicer and the Servicer shall deposit into the Collection Account,
for allocation as collections of Finance Charge Receivables in the
manner provided in Article IV (in immediately available funds) the
amount of Interchange received with respect to the Accounts to be so
included as Collections of Finance Charge Receivables.
(l) Recoveries. On or prior to each Determination Date, the
Seller shall notify the Servicer of the amount of Recoveries to be
included as collections of Finance Charge Receivables with respect to
the preceding Monthly Period, which shall be equal to the product of (y)
the total amount of Recoveries received by the Seller in the preceding
Monthly Period, and (z) a fraction, the numerator of which is the
Aggregate Principal Receivables and the denominator of which is the
aggregate principal amount of the credit
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card receivables owned by the Seller with respect to such Monthly
Period. On each Transfer Date, the Seller shall pay to the Servicer and
the Servicer shall deposit into the Collection Account, for allocation
as collections of Finance Charge Receivables in the manner provided in
Article IV (in immediately available funds) the amount of Recoveries to
be so included as Collections of Finance Charge Receivables with
respect to the preceding Monthly Period.
SECTION 2.6 Addition of Accounts.
(a) All Accounts which meet the definition of Automatic Additional
Accounts which are Eligible Accounts shall be included as Accounts from and
after the date upon which such eligible Automatic Additional Accounts are
created and all Receivables in such Automatic Additional Accounts, whether such
Receivables are then existing or thereafter created, shall be transferred
automatically to the Trust upon origination by the Seller. The Seller, at its
option, may, by providing written notice to the Trustee and the Servicer,
terminate or suspend the inclusion of Automatic Additional Accounts at any time.
For all purposes of this Agreement, all receivables of such Automatic Additional
Accounts shall be treated as Receivables upon their creation and shall be
subject to the eligibility criteria specified in the definitions of "Eligible
Receivable" and "Eligible Account."
(b) On any day Receivables in Automatic Additional Accounts are
created, the Seller will be deemed to have made the representations in Section
2.4.
(c) Receivables in Automatic Additional Accounts shall be transferred
to the Trust, as Accounts if, in addition to satisfying the requirements of
clauses (a) through (g) of the definition of Eligible Accounts, the following
conditions are met: the number of Accounts the Receivables of which are
designated to be added to the Trust pursuant to subsection 2.6(a) since (i) the
opening of business on the first day of the eleventh preceding Monthly Period
(or, in the case of any date on which eligible Automatic Additional Accounts are
to be added to the Trust which occurs on or before May 31, 1994, the Cut-Off
Date) minus the number of Accounts of the type described in clauses (b) and (c)
of the definition of "Automatic Additional Accounts" which have been added on
the initial day of the addition of such type of Account pursuant to such clauses
(b) and (c) since the opening of business on the first day of such eleventh
preceding Monthly Period (or the Cut-Off Date, as the case may be) plus the
number of Accounts, if any, the Receivables of which have been designated to be
added to the Trust since the opening of business on the first day of such
eleventh preceding Monthly Period (or the Cut-Off Date, as the case may be)
pursuant to subsection 2.6(e) minus any Removed Accounts removed since the
opening of business on the first day of such eleventh preceding
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Monthly Period (or the Cut-Off Date, as the case may be) shall not exceed 15% of
the number of Accounts at the opening of business on the first day of such
eleventh preceding Monthly Period (or the Cut-Off Date, as the case may be), and
(ii) the opening of business on the first day of the second preceding Monthly
Period (or, in the case of any date on which eligible Automatic Additional
Accounts are to be added to the Trust which occurs on or before August 31, 1993,
the Cut-Off Date) minus the number of Accounts of the type described in clauses
(b) and (c) of the definition of "Automatic Additional Accounts" have been added
on the initial day of the addition of such type of Account pursuant to such
clauses (b) and (c) since the opening of business on the first day of such
second preceding Monthly Period (or the Cut-Off Date, as the case may be) plus
the number of Accounts, if any, the Receivables of which have been designated to
be added to the Trust since the opening of business on the first day of such
second preceding Monthly Period (or the Cut-Off Date, as the case may be)
pursuant to subsection 2.6(e) minus any Removed Accounts removed since the first
day of such second preceding Monthly Period (or the Cut-Off Date, as the case
may be) shall not exceed 10% of the number of Accounts at the opening of
business on the first day of such second preceding Monthly Period (or the
Cut-Off Date, as the case may be).
(d) The Seller shall provide to the Trustee on each Determination Date,
a list of Automatic Additional Accounts, identified by account number, added
during the preceding Monthly Period.
(e) If (i) on any Transfer Date the Seller Interest as of the last day
of the related Monthly Period (after giving effect to any deposits, withdrawals
or payments to be made on the following Distribution Date), is less than the
Minimum Seller Interest, the Seller shall designate additional credit card
accounts ("Additional Accounts") to be included as Accounts in a sufficient
amount such that the Seller Interest as a percentage of the Aggregate Principal
Receivables for such Monthly Period after giving effect to such addition is at
least equal to the Minimum Seller Interest, or (ii) on any date of determination
the Aggregate Principal Receivables is less than the Minimum Aggregate Principal
Receivables, the Seller shall designate Additional Accounts to be included as
Accounts in a sufficient amount such that the aggregate amount of Principal
Receivables will be equal to or greater than the Minimum Aggregate Principal
Receivables. Receivables from such Additional Accounts shall be transferred to
the Trust on or before the tenth Business Day following such Transfer Date.
(f) In addition to its obligation under subsection 2.6(e), the Seller
may upon twenty Business Days' notice to the Trustee, any Enhancement Provider
if so provided in the applicable Supplement and each Rating Agency, but shall
not be obligated to,
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designate from time to time Additional Accounts of the Seller to be included as
Accounts.
(g) The Seller agrees that any such transfer of Receivables from
Additional Accounts, under subsection 2.6(e) or (f), shall satisfy the following
conditions (to the extent provided below):
(i) on or before (A) the twentieth Business Day prior to the
Addition Date for Additional Accounts to be included as Accounts
pursuant to subsection 2.6(f) or (B) the fifth Business Day prior to the
Addition Date for Additional Accounts to be included as Accounts
pursuant to subsection 2.6(e) (the "Addition Notice Date"), the Seller
shall give the Trustee, the Rating Agency, any Enhancement Provider if
so provided in the applicable Supplement and the Servicer written notice
that such Additional Accounts will be included and specifying the
approximate aggregate amount of the Receivables to be transferred;
(ii) on or before the Addition Date the Seller shall have
delivered to the Trustee a written assignment (including an acceptance
by the Trustee on behalf of the Trust for the benefit of the Investor
Certificateholders) in substantially the form of Exhibit B (each such
assignment, an "Assignment") and shall record and file a financing
statement in accordance with the provisions for such filing set forth in
Section 2.1 (a copy of which shall be delivered to the Trustee) and the
Seller shall have indicated in its computer files that the Receivables
created in connection with the Additional Accounts, have been
transferred to the Trust and, within five Business Days (or as soon as
is reasonably practicable) thereafter, the Seller shall have delivered
to the Trustee a computer file or microfiche list containing a true and
complete list of all Additional Accounts, identified by account number,
which computer file or microfiche list shall be as of the date of such
Assignment incorporated into and made a part of such Assignment and this
Agreement;
(iii) the Seller shall represent and warrant that (x) each
Additional Account is, as of the end of the day immediately preceding
the Addition Date, an Eligible Additional Account, (y) no selection
procedures believed by the Seller to be materially adverse to the
interests of the Investor Certificateholders (without regard to any
Enhancement) were utilized in selecting the Additional Accounts from the
available Eligible Additional Accounts, and (z) as of the Addition Date,
the Seller is not insolvent;
(iv) the Seller shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either
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(x) a valid transfer and assignment to the Trustee, on behalf of the
Trust, of all right, title and interest of the Seller in and to (A) the
Receivables then existing and thereafter created in the Additional
Accounts, (B) all monies due or to become due with respect thereto
(including all Finance Charge Receivables), (C) all proceeds of such
Receivables (as defined in the UCC as in effect in the State of New
York), (D) Recoveries relating to such Receivables, (E) all funds
deposited from time to time in any Series Account then existing,
including any reserve account, cash collateral account or spread
account, and (F) Interchange allocated to the Trust pursuant to
subsection 2.5(k) and proceeds thereof, Recoveries and Interchange
allocated to the Trust pursuant to subsections 2.5(k) and (l) will be
held by the Trust (other than the Trustee and the Certificateholders)
free and clear of any Lien of any Person, except for (i) Liens permitted
under subsection 2.5(b) and subject to Section 9-306 of the UCC as in
effect in the States of Connecticut or New York, whichever is
applicable, (ii) the interest of the Seller as Holder of the
Exchangeable Seller Certificate and (iii) the Seller's right to receive
interest accruing on, and investment earnings in respect of, the
Collection Account, or any Series Account as provided in this Agreement
and any related Supplement; or (y) the grant of a security interest (as
defined in the UCC as in effect in the State of New York) in such
property to the Trust, which is enforceable with respect to then
existing Receivables of the Additional Accounts, the proceeds (as
defined in the UCC as in effect in the State of New York) thereof,
Recoveries and Interchange allocated to the Trust pursuant to
subsections 2.5(k) and (l) upon the conveyance of such Receivables to
the Trust, and which will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts conveyed on such
Addition Date, the proceeds (as defined in the UCC as in effect in the
State of New York) thereof, Recoveries and Interchange allocated to the
Trust pursuant to subsections 2.5(k) and (l), upon such creation; and
(z) if the Assignment constitutes the grant of a security interest to
the Trust in such property, upon the filing of a financing statement as
described in Section 2.1 with respect to such Additional Accounts and,
in the case of the Receivables thereafter created in such Additional
Accounts and the proceeds (as defined in the UCC as in effect in the
State of New York) thereof, Recoveries and Interchange allocated to the
Trust pursuant to subsections 2.5(k) and (l), upon such creation, the
Trust shall have a first priority perfected security interest in such
property, except for Liens permitted under subsection 2.5(b) and subject
to Section 9-306 of the UCC as in effect on the States of Connecticut or
New York, whichever is applicable;
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(v) the Seller shall deliver a certificate of a Vice President
or more senior officer to the Trustee confirming the items set forth in
paragraphs (iii) and (iv) above and clause 6 of the Assignment;
(vi) the Seller shall deliver an Opinion of Counsel with
respect to the Receivables in the Additional Accounts to the Trustee
with a copy to the Rating Agency substantially in the form of Exhibit
F; and
(vii) Standard & Poor's shall have confirmed in writing that
the inclusion of such accounts as Additional Accounts pursuant to
subsection 2.6(e) or (f), as the case may be, and Moody's shall have
confirmed in writing that the inclusion of such accounts as Additional
Accounts pursuant to subsection 2.6(f) will not result in the reduction
or withdrawal of its then existing rating of any Series of Investor
Certificates then issued and outstanding and the Seller shall have
delivered such confirmation to the Trustee and the related Enhancement
Provider to the extent so provided in the applicable Supplement.
SECTION 2.7 Removal of Accounts.
(a) If on any Determination Date the Seller Interest exceeds 10% of the
Aggregate Principal Receivables on such Determination Date, the Seller may, but
shall not be obligated to, designate Receivables from Accounts for deletion and
removal ("Removed Accounts") from the Trust, including Expired Accounts
designated pursuant to Section 2.8; provided, however, that the Seller shall not
make more than one such designation in any Monthly Period in addition to any
such designation pursuant to Section 2.8. On or before the fifth Business Day
(the "Removal Notice Date") prior to the date on which the designated Removed
Accounts will be reassigned by the Trustee to the Seller, including any
reassignment pursuant to Section 2.8 (the "Removal Date"), the Seller shall give
the Trustee and the Servicer written notice that the Receivables from such
Removed Accounts are to be reassigned to the Seller and specifying the
approximate aggregate amount of the Receivables to be reassigned; provided,
however, that the provisions set forth in Section 2.8 shall constitute the
notice to the Trustee required by this Section 2.7(a) with respect to
Receivables from Expired Accounts to be designated from time to time for
deletion and removal from the Trust and for reassignment to the Seller on each
Expired Account Removal Date.
(b) The Seller shall be permitted to designate and require reassignment
to it of the Receivables from Removed Accounts, including any reassignment
pursuant to Section 2.8, only upon satisfaction of the following conditions:
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(i) [reserved];
(ii) [reserved];
(iii) the removal of any Receivables of any Removed Accounts
on any Removal Date shall not, in the reasonable belief of the Seller,
(a) cause a Pay Out Event to occur; provided, however, that for the
purposes of this subsection 2.7(b)(iii), the Receivables of each
Removed Account shall be considered to have been removed as of the
Removal Date, (b) cause the Seller Interest as a percentage of
Aggregate Principal Receivables to be less than 10% on such Removal
Date or (c) result in the failure to make any payment specified in the
related Supplement with respect to any Series;
(iv) (A) on or prior to the Removal Date, the Seller shall
have delivered to the Trustee for execution a written assignment in
substantially the form of Exhibit I (the "Reassignment"); provided,
however, that the provisions set forth in Section 2.8 shall constitute
such a "Reassignment" with respect to Receivables from Expired Accounts
to be designated from time to time for deletion and removal from the
Trust and for reassignment to the Seller on each Expired Accounts
Removal Date; and (B) within five Business Days thereafter (or as soon
as is reasonably practicable) or, with respect to any removal and
reassignment of Expired Receivables pursuant to Section 2.8, after the
applicable Expired Accounts Removal Date, the Seller shall have
delivered to the Trustee a computer file or microfiche list or, in the
case of a list delivered pursuant to Section 2.8(b), a printed copy
containing a true and complete list of all Removed Accounts identified
by account number and the aggregate amount of the Principal Receivables
in such Removed Accounts as of the Removal Date, which computer file or
microfiche list shall as of the Removal Date modify and amend and be
made a part of this Agreement;
(v) the Seller shall represent and warrant that no selection
procedures believed by the Seller to be materially adverse to the
interests of the Investor Certificateholders without regard to any
Enhancement were utilized in selecting the Removed Accounts to be
removed from the Trust;
(vi) the Seller shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses (iii),
(iv), (v) above and (vii) and (viii) below (which certificate may, in
the case of a removal and reassignment pursuant to Section 2.8, be
substantially in the form of Exhibit J hereto). The Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to
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make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying;
(vii) on or before the twentieth Business Day prior to the
Removal Date the Rating Agency shall have received notice of such
proposed removal of Accounts (which notice may, in the case of each
removal and reassignment pursuant to Section 2.8, be in the form of a
single notice in respect of all removals and reassignments of Expired
Accounts under Section 2.8);
(viii) the Seller and the Trustee shall have received notice
from the Rating Agency that such proposed removal of Accounts will not
result in the reduction or withdrawal of its then existing rating of any
Series of Certificates then issued and outstanding (which notice may, in
the case of each removal and reassignment pursuant to Section 2.8, be in
the form of a single notice from the Rating Agency addressing all
removals and reassignments of Expired Accounts under Section 2.8); and
(ix) the Seller, the Trustee and the Rating Agencies shall have
received an Opinion of Counsel that the proposed removal (or, in the
case of removals pursuant to Section 2.8, all removals and reassignments
under Section 2.8) shall not adversely effect the federal income tax
characterization of the Trust.
Upon satisfaction of the above conditions with respect to any removal
and reassignment of Receivables other than a removal and reassignment pursuant
to Section 2.8, the Trustee shall execute and deliver the Reassignment, on
behalf of the Trust, to the Seller, and the Receivables from the Removed
Accounts shall no longer constitute a part of the Trust as of the Removal Date.
Upon satisfaction of the above conditions, as applicable, with respect to any
removal and reassignment of Receivables pursuant to Section 2.8, the Receivables
from the Removed Accounts shall no longer constitute a part of the Trust as of
the related Expired Accounts Removal Date.
SECTION 2.8 Periodic Removal of Expired Accounts.
(a) Reassignment of Expired Accounts; Notice; Release of Liens.
(i) The Trustee hereby transfers, assigns, sets-over and
otherwise conveys to the Seller, without recourse, representation or
warranty, on each Expired Accounts Removal Date, all right, title and
interest of the Trust in and to the Receivables from Expired Accounts
now existing and hereafter designated as Expired Accounts, all monies
and investments due or to become due with respect thereto
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(including all Finance Charge Receivables and Recoveries), and all
proceeds of such Receivables, and the right to receive amounts paid as
Interchange with respect to such Expired Accounts, which Receivables
shall have zero Receivables balances and which monies, investments,
proceeds and rights to receive amounts paid shall be zero in aggregate
amount.
(ii) In connection with the transfer described in Section
2.8(a)(i), the Trustee agrees to execute and deliver to the Seller such
UCC termination statements with respect to the Receivables now existing
and hereafter created in the Expired Accounts as the Seller may
reasonably request from time to time, evidencing the release by the
Trust of its Lien on the Receivables then existing and thereafter
created in any such Removed Accounts, in such manner and such
jurisdictions as are necessary or advisable to remove any such Lien,
provided that such UCC termination statements shall be prepared by the
Servicer.
(b) Designation of Expired Accounts. The Seller shall, in accordance
with Section 2.7(b)(iv)(B), deliver or cause to be delivered to the Trustee, not
later than five Business days (or as soon as reasonably practicable) after each
Expired Accounts Removal Date, a computer file, microfiche list or printed copy
containing a true and complete list of all Accounts constituting Expired
Accounts with respect to such Expired Accounts Removal Date, identified by
Account number, and containing the aggregate amount of the Principal Receivables
in such Expired Accounts as of such Removal Date, which aggregate amount shall
be zero.
(c) Representations and Warranties of the Seller Relating to the
Expired Accounts. The Seller hereby represents and warrants to the Trustee and
the Trust as of the date hereof and as of each Expired Accounts Removal Date as
follows:
(i) Absence of Pay Out Event or Certain Other Events. The
removal of any Receivables from any Expired Account on any Expired
Accounts Removal Date will not, in the reasonable belief of the Seller
(1) cause a Pay Out Event to occur (for which purposes the Receivables
of each Expired Account shall be considered to have been removed as of
the corresponding Expired Accounts Removal Date), (2) cause the Seller
Interest as a percentage of the Aggregate Principal Receivables to be
less than 10% on any such Expired Accounts Removal Date, or (3) result
in the failure to make any payment in the related Supplement with
respect to any Series.
(ii) Selection Procedures. No selection procedures believed by
the Seller to be materially adverse to the interests of the Investor
Certificateholders without regard
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to any Enhancement were utilized or will be utilized in selecting the
Expired Accounts to be removed from the Trust.
(iii) Notice to Moody's and Standard and Poor's. The Seller
has provided notice to each of Moody's and Standard and Poor's of the
proposed deletion and removal from the Trust of Receivables from the
Expired Accounts under this Section 2.8, such notice being provided on
or before the twentieth Business Day prior to any of the Expired
Accounts Removal Dates on which such Receivables will be deleted and
removed from the Trust and reassigned to the Seller.
(d) Conditions to Reassignment. The reassignment by the Trustee set
forth in Section 2.8(a) hereof with respect to any Expired Accounts Removal Date
(and, with respect to clause (i) below, each portion thereof, as applicable) is
subject to the satisfaction, on or prior to such Expired Accounts Removal Date
(or, in the case of Sections 2.7(b)(iv)(B) and 2.8(b), within five Business Days
after such Removal Date), of the conditions set forth in Section 2.7(b) and of
the following conditions:
(i) No Notice of Cancellation. The Seller shall not have
notified the Trustee on or prior to such Expired Accounts Removal Date
that the deletion and removal of Receivables from the related Expired
Accounts as of such date (or any portion thereof) has been cancelled or
designated to occur on a subsequent date set forth in such notice or to
be set forth in a subsequent notice by the Seller to the Trustee.
(ii) Officer's Certificate. The Seller shall have delivered to
the Trustee within five (5) Business Days after such Expired Accounts
Removal Date an Officer's Certificate substantially in the form of
Exhibit J hereto, certifying that (1) all requirements set forth in
Section 2.7(a) for the designation of Expired Accounts and the deletion
and removal from the Trust and reassignment to the Seller of
Receivables from Expired Accounts have been satisfied as of such
Expired Accounts Removal Date, (2) each of the representations and
warranties made by the Seller in Section 2.8(c) is true and correct as
of such Expired Accounts Removal Date, and (3) each of the conditions
to the deletion and removal from the Trust and reassignment to the
Seller of Receivables from the related Expired Accounts as of such
Expired Accounts Removal Date, set forth in Section 2.7(b) and this
Section 2.8(d), have been satisfied as of such Expired Accounts Removal
Date. 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.
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(iii) Rating Agency Confirmation On or Prior to Expired
Accounts Removal Dates. Each of the Seller and the Trustee shall have
received notice (in addition to the notice specified in Section
2.7(b)(viii)) from each Rating Agency on or prior to such Expired
Accounts Removal Date that the proposed deletion and removal from the
Trust of Receivables from Expired Accounts on such Expired Accounts
Removal Date pursuant to this Section 2.8 will not result in the
reduction or withdrawal of its then existing rating of any Series of
Certificates then issued and outstanding; provided, however, that such
additional notice shall be required solely with respect to Expired
Accounts Removal Dates on which (1) the sum of (x) the number of
Expired Accounts the Receivables of which are proposed to be deleted
and removed from the Trust on such Expired Accounts Removal Date
pursuant to this Section 2.8 and (y) the number of Expired Accounts the
Receivables of which have been deleted and removed from the Trust
pursuant to this Section 2.8 since the last day of the quarterly period
immediately preceding the quarterly period in which such Expired
Accounts Removal Date occurs (any such quarterly period being, for
purposes of this Section 2.8, January through March, April through
June, July through September or October through December, as
applicable, of the corresponding calendar year) exceeds 15% of the
number of Accounts as of such last day of such immediately preceding
quarterly period or (2) the sum of (x) the number of Expired Accounts
the Receivables of which are proposed to be deleted and removed from
the Trust on such Expired Accounts Removal Date pursuant to this
Section 2.8 and (y) the number of Expired Accounts the Receivables of
which have been deleted and removed from the Trust pursuant to this
Section 2.8 since the last day of the calendar year immediately
preceding the calendar year in which such Expired Accounts Removal Date
occurs exceeds 20% of the number of Accounts as of such last day of the
immediately preceding calendar year.
(e) Reassignment Agreement Superseded. On and after the first Expired
Accounts Removal Date, the provisions of this Section 2.8 shall supersede the
Omnibus Reassignment of Receivables Agreement, dated as of December 12, 1996,
between People's Bank and the Trustee, whereupon such agreement shall be of no
further force and effect with respect to all removals and reassignments of
Expired Accounts occurring on and after such Expired Accounts Removal Date.
[End of Article II]
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
SECTION 3.1 Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) The Seller agrees to act as the Servicer under this Agreement. The
Investor Certificateholders by their acceptance of the Certificates consent to
the Seller acting as Servicer.
(b) The Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables in accordance with its customary and
usual servicing procedures for servicing credit card receivables comparable to
the Receivables and in accordance with the Account Guidelines and the covenants
of the Seller set forth in Section 2.5, including the covenants set forth in
Sections 2.5(e)(i) and (ii) (which the Servicer hereby agrees to perform in
full), and the Servicer shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all things
in connection with such servicing and administration which it may deem necessary
or desirable. Without limiting the generality of the foregoing and subject to
Section 10.1, the Servicer is hereby authorized and empowered, (i) unless such
power and authority is revoked by the Trustee on account of the occurrence of a
Servicer Default pursuant to Section 10.1, to make withdrawals and payments, or
to instruct the Trustee to make withdrawals and payments, from the Collection
Account, the Excess Funding Account and any Series Account, in accordance with
such instructions as set forth in this Agreement, (ii) unless such power and
authority is revoked by the Trustee on account of the occurrence of a Servicer
Default pursuant to Section 10.1, to instruct the Trustee in writing, as set
forth in this Agreement, (iii) to execute and deliver, on behalf of the Trust
for the benefit of the Certificateholders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (iv) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements laws. The
Trustee agrees that it shall promptly follow the instructions of the Servicer to
withdraw funds from the Collection Account, the Excess Funding Account or any
Series Account and to take any action required under any Enhancement at such
time as required
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under this Agreement. The Trustee shall furnish the Servicer with any documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(c) [Reserved]
(d) [Reserved]
(e) The Servicer shall not be obligated to use servicing procedures,
offices, employees or accounts for servicing the Receivables which are separate
from the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other credit card receivables.
(f) The Servicer shall maintain blanket bond coverage insuring against
losses through wrongdoing of its officers and employees who are involved in the
servicing of credit card receivables covering such actions and in such amounts
as the Servicer believes to be reasonable from time to time.
SECTION 3.2 Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Monthly Period prior to the termination
of the Trust pursuant to Section 12.1 (with respect to each Monthly Period, the
"Monthly Servicing Fee"). The share of the Monthly Servicing Fee allocable to
each Series of Investor Certificateholders with respect to any Monthly Period
(or portion thereof) shall be payable on the related Transfer Date and, with
respect to each Series (unless otherwise provided in the related Supplement),
shall be equal to one-twelfth of the product of (A) the applicable Series
Servicing Fee Percentage per annum and (B) the Investor Interest of such Series
as of the last day of the Monthly Period preceding such Transfer Date (the
"Monthly Investor Servicing Fee") and shall be paid to the Servicer pursuant to
Article IV. The servicing fee payable by the Holder of the Exchangeable Seller
Certificate shall be equal to the product of one-twelfth of the product of (A)
the Seller Interest and (B) the lesser of 2% and the weighted average Series
Servicing Fee Percentage with respect to any Series of Investor Certificates
then outstanding (the "Monthly Seller Servicing Fee"). The Monthly Servicing Fee
shall equal the sum of (x) the aggregate amount of Monthly Investor Servicing
Fees with respect to each Series then outstanding and (y) the Monthly Seller
Servicing Fee. The Monthly Investor Servicing Fee with respect to any Series is
payable in arrears on the related Transfer Date (unless otherwise provided in
the related Supplement) and the Monthly Seller Servicing Fee is payable in
arrears no later than the last Transfer Date with respect to any Series
occurring in a Monthly Period. The Monthly Seller Servicing Fee and, unless
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otherwise provided in a Supplement, each Monthly Investor Servicing Fee shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The Servicer's expenses include the amounts due to the Trustee pursuant
to Section 11.5 and of the Paying Agent, Transfer Agent and Registrar and the
reasonable fees and disbursements of independent public accountants and all
other expenses incurred by the Servicer in connection with its activities
hereunder; provided, that the Servicer shall not be liable for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including without limitation any
federal, state or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith). The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment therefor
other than the Monthly Servicing Fee.
SECTION 3.3 Representations and Warranties of the Servicer. People's
Bank, as initial Servicer, hereby makes, and any Successor Servicer by its
appointment hereunder shall make, the following representations and warranties
on which the Trustee has relied in accepting the Receivables in trust and in
authenticating the Certificates issued on the Closing Date:
(a) Organization and Good Standing. The Servicer is duly
organized, validly existing and in good standing under the laws of the
State of its organization and has full power, authority and legal right
to own its properties and conduct its credit card business as such
properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under
this Agreement.
(b) Due Qualification. The Servicer is not required to qualify
nor register as a foreign corporation in any state in order to service
the Receivables as required by this Agreement and has obtained all
licenses and approvals necessary in order to so service the Receivables
as required under federal law and the law of the State of its
organization. If the Servicer shall be required by any Requirement of
Law to so qualify or register or obtain such license or approval, then
it shall do so.
(c) Due Authorization. The execution, delivery, and
performance of this Agreement have been duly authorized by the
Servicer, by all necessary corporate action on the part of the
Servicer, and this Agreement will remain, from the time of its
execution, an official record of the Servicer.
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(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general.
(e) No Violation. The execution and delivery of this Agreement
by the Servicer, and the performance of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof applicable to
the Servicer, will not conflict with, violate, result in any breach of
any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, any
Requirement of Law applicable to the Servicer or any indenture,
contract, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer threatened against
the Servicer before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality seeking to prevent
the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, seeking any determination
or ruling that, in the reasonable judgment of the Servicer, would
materially and adversely affect the performance by the Servicer of its
obligations under this Agreement, or seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement.
(g) Compliance with Requirements of Law. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Account, will maintain
in effect all qualifications required under Requirements of Law in
order to properly service each Receivable and the related Account and
will comply in all material respects with all other Requirements of Law
in connection with servicing each Receivable and the related Account
the failure to comply with which would have a material adverse effect
on the Certificateholders.
(h) Servicer's Deposit Accounts. As of the Initial Closing
Date, deposits in the Servicer's deposit accounts were insured to the
limits provided by law and as required by the FDIC.
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(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority or official required in connection with the execution and
delivery of this Agreement, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
have been obtained.
(j) Status of Accounts and Receivables. The Servicer hereby
agrees to comply in all material respects with all Requirements of Law
applicable to the Servicer the failure to comply with which would have
a material adverse effect on the Investor Certificateholders.
(k) No Rescission or Cancellation. The Servicer shall not
permit any rescission or cancellation of any Receivable except in
accordance with the Account Guidelines or as ordered by a court of
competent jurisdiction or other Governmental Authority.
(l) Protection of Certificateholder's Rights. The Servicer
shall take no action which, nor omit to take any action the omission of
which, would impair the rights of Certificateholders in any Receivable
or the related Account, nor shall it reschedule, revise or defer
payments due on any Receivable except in accordance with the Account
Guidelines.
(m) Receivables Not To Be Evidenced by Promissory Notes. The
Servicer will take no action to cause any Receivable to be evidenced by
any instrument (as defined in the UCC as in effect in the State of New
York) except in connection with its enforcement or collection of an
Account, in which event such Receivable shall be reassigned or assigned
and transferred to the Servicer as provided in the following paragraph.
In the event (x) any of the representations and warranties or covenants
of the Servicer contained in subsections (g), (j), (k), (l) and (m) with respect
to any Receivable or the related Account is breached, and such breach has a
material adverse effect on the Certificateholders' interest in such Receivable
and is not cured within 60 days (or such longer period, not in excess of 120
days, as may be agreed to by the Trustee) of the earlier to occur of the
discovery of such event by the Servicer, or receipt by the Servicer of written
notice of such event given by the Trustee or any Enhancement Provider (to the
extent so provided in the applicable Supplement), or (y) it is so provided in
subsection 3.3(m) with respect to any Receivable, all Receivables in the Account
or Accounts as to which such event relates shall be reassigned to the Seller (if
the Seller is the Servicer) or assigned and transferred (if the Seller is not
the
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Servicer) to the Servicer on the terms and conditions set forth below.
If the Holder of the Exchangeable Seller Certificate is the Servicer,
such assignment or reassignment shall be accomplished in the manner set forth in
subsection 2.4(d)(iii) as if the reassigned or assigned Receivables were
Ineligible Receivables (including the requirement, if applicable, to reduce the
Seller Interest, the Seller Percentage or the Investor Percentage and to make
deposits into the Excess Funding Account) and any amounts deposited in the
Excess Funding Account to be applied in accordance with Section 4.2(e).
If the Holder of the Exchangeable Seller Certificate is not the
Servicer, the Servicer shall effect such assignment and transfer by making a
deposit into the Collection Account for allocation pursuant to Article IV in
immediately available funds no later than the Transfer Date following the
Monthly Period in which such assignment and transfer obligation arises in an
amount equal to the amount of such Receivable.
Upon each such reassignment or assignment and transfer to the Servicer
of an Ineligible Receivable, the Trust shall automatically and without further
action be deemed to transfer, assign, set over and otherwise convey to the
Servicer, without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivable, all monies due or to
become due with respect thereto and all proceeds thereof, Recoveries and
Interchange allocated to such Ineligible Receivable pursuant to subsections
2.5(k) and (l). The Trustee shall execute such documents and instruments of
transfer or assignment, on behalf of the Trust, and take other actions as shall
reasonably be requested by the Seller to evidence the conveyance of such
Ineligible Receivable pursuant to this Section 3.3. Notwithstanding any other
provision of this Section 3.3, a reassignment of an Ineligible Receivable to the
Seller in excess of the amount that would cause the Seller Interest to be less
than the Minimum Seller Interest shall not occur if the Seller fails to make any
deposit required by this Section 3.3 with respect to such Ineligible Receivable.
The obligation of the Servicer set forth in this Section 3.3 to accept
reassignment or assignment and transfer of such Ineligible Receivable, as the
case may be, shall constitute the sole remedy respecting any breach of the
representations and warranties set forth in the above-referenced subsections
with respect to such Receivable available to Certificateholders or the Trustee
on behalf of Certificateholders.
SECTION 3.4 Reports and Records for the Trustee.
(a) Daily Reports. On each Business Day, the Servicer, with prior
notice, shall prepare and make available at the office
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of the Servicer for inspection by the Trustee a record setting forth (i) the
aggregate amount of Collections processed by the Servicer on the preceding
Business Day, (ii) the Aggregate Receivables as of the close of business on the
second preceding Business Day, and (iii) in the event Additional Accounts or
Automatic Additional Accounts were added during the Monthly Period immediately
preceding the day such Collections were processed, the aggregate amount of
Principal Receivables in such Additional Accounts or Automatic Additional
Accounts. The Servicer shall at all times maintain its computer files with
respect to the Accounts in such a manner so that the Accounts may be
specifically identified and, upon prior request of the Trustee, shall make
available to the Trustee at the servicing center of the Servicer selected by the
Servicer on any Business Day during the Servicer's normal business hours any
computer programs necessary to make such identification.
(b) Monthly Servicer's Certificate. Unless otherwise stated in the
related Supplement with respect to any Series, on each Determination Date the
Servicer shall forward, as provided in Section 13.5, to the Trustee, the Paying
Agent, and the Rating Agency, a certificate of a Servicing Officer in the form
of Exhibit C (which includes the Schedule thereto specified as such in each
Supplement) setting forth (i) the aggregate amount of Collections processed
during the preceding Monthly Period, (ii) the aggregate amount of the applicable
Investor Percentage of Collections of Principal Receivables processed by the
Servicer pursuant to Article IV during the preceding Monthly Period with respect
to each Series then outstanding, (iii) the aggregate amount of the applicable
Investor Percentage of Collections allocated to Finance Charge Receivables
processed by the Servicer pursuant to Article IV during the preceding Monthly
Period with respect to each Series then outstanding, (iv) the aggregate amount
of Receivables as of the end of the last day of the preceding Monthly Period,
(v) the balance on deposit in the Collection Account (or Collection Subaccount)
or any Series Account applicable to any Series then outstanding with respect to
collections processed, as of the end of the last day of the preceding Monthly
Period, (vi) the aggregate amount, if any, of withdrawals, drawings or payments
under any Enhancement, if any, for each Series then outstanding required to be
made with respect to the previous Monthly Period in the manner provided in the
related Supplement, (vii) the statement required by Article V in the form
indicated in the Supplement for each Series then outstanding, (viii) the sum of
all amounts payable to the Certificateholders of each Series on the succeeding
Distribution Date with respect to each Series in respect of certificate interest
and certificate principal, (ix) the excess, if any, of the Aggregate Principal
Receivables over the Aggregate Principal Receivables required to be maintained
pursuant to this Agreement and any Supplement as of such Determination Date, (x)
whether, with respect to each Series then outstanding, a Series Pay Out
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Event or a Trust Pay Out Event has occurred or other similar event is deemed to
have occurred and (xi) such other matters as are set forth in Exhibit C.
(c) Transferred Accounts. The Servicer covenants and agrees hereby to
deliver to the Trustee, within a reasonable time period after any Transferred
Account is created, but in any event not later than thirty (30) days after the
end of the Monthly Period within which the Transferred Account is created, a
notice specifying the new account number for any Transferred Account and the
replaced account number.
SECTION 3.5 Annual Servicer's Certificate. On or before March 31 of
each calendar year, beginning with March 31, 1994 the Servicer will deliver, as
provided in Section 13.5, to the Trustee, the Rating Agency, and any Certificate
Owner, upon the written request of such Certificate Owner, an Officer's
Certificate substantially in the form of Exhibit D stating that (a) a review of
the activities of the Servicer during the twelve-month period ending on December
31 of such year, or for the initial period, from the Closing Date until December
31, 1993, and of its performance under this Agreement was made under the
supervision of the officer signing such certificate and (b) to the best of such
officer's knowledge, based on such review, the Servicer has fully performed all
its obligations under this Agreement throughout such period, or, if there has
been a default in the performance of any such obligation, specifying each such
default known to such officer and the nature and status thereof. A copy of such
certificate may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
SECTION 3.6 Annual Independent Accountants' Servicing Report.
(a) On or before March 31 of each calendar year, beginning with March
31, 1994, the Servicer shall cause a firm of nationally recognized independent
accountants (who may also render other services to the Servicer or the Seller)
to furnish, as provided in Section 13.5, a report to the Trustee, the Servicer,
the Rating Agency, and any Certificate Owner, upon the written request of such
Certificate Owner, to the effect that such firm has made a study and evaluation
of the Servicer's internal accounting controls relative to the servicing of
Accounts under this Agreement, and that, on the basis of such study and
evaluation, such firm is of the opinion (assuming the accuracy of any reports
generated by the Servicer's third party agents) that the system of internal
accounting controls in effect on the date set forth in such report, relating to
servicing procedures performed by the Servicer pursuant to Article IV of this
Agreement, taken as a whole, was sufficient for the prevention and detection of
errors and irregularities in amounts
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that would be material to the financial statements of the Servicer and that such
servicing was conducted in compliance with Article IV of this Agreement, except
for such exceptions, errors or irregularities as such firm shall believe to be
immaterial to the financial statements of the Servicer and such other
exceptions, errors or irregularities as shall be set forth in such report.
Unless otherwise provided with respect to any Series in the related Supplement,
a copy of such report may be obtained by any Investor Certificateholder by a
request in writing to the Trustee addressed to the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with March
31, 1994, the Servicer shall cause a firm of nationally recognized independent
accountants (who may also render other services to the Servicer or the Seller)
to furnish, as provided in Section 13.5, a report to the Trustee, Servicer, the
Rating Agency and any Certificate Owner, upon the written request of such
Certificate Owner, to the effect that they have compared the amounts set forth
in the monthly statements and certificates forwarded by the Servicer pursuant to
subsection 3.4(b) during the period covered by such report (which shall be the
period from January 1 of the preceding calendar year to and including December
31 of such calendar year, or for the initial period, from the Closing Date until
December 31, 1993) with the Servicer's computer reports and statements of any
agents engaged by the Servicer to perform servicing activities which were the
source of such amounts and that on the basis of such comparison, such amounts
are in agreement, except for such exceptions as it believes to be immaterial to
the financial statements of the Servicer and such other exceptions as shall be
set forth in such report. A copy of such report may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
SECTION 3.7 Tax Treatment. The Seller has structured this Agreement and
the Certificates with the intention that the Investor Certificates will qualify
under applicable federal, state, local and foreign tax law as indebtedness
secured by the Receivables. The Seller, the Servicer, the Trustee, the Holder of
the Exchangeable Seller Certificate, each Investor Certificateholder, and each
Certificate Owner, agrees to treat and to take no action inconsistent with the
treatment of the Investor Certificates (or beneficial interest therein) as
indebtedness for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income. Each
Investor Certificateholder and the Holder of the Exchangeable Seller
Certificate, by acceptance of its Certificate, and each Certificate Owner, by
acquisition of a beneficial interest in a Certificate, agrees to be bound by the
provisions of this Section 3.7. Each Certificateholder agrees that it will cause
any Certificate Owner acquiring an interest in a Certificate through it to
comply with this Agreement as to
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treatment as indebtedness under applicable tax law, as described in this Section
3.7.
SECTION 3.8 Notices to the Seller. In the event that the Seller is no
longer acting as Servicer, any Successor Servicer appointed pursuant to Section
10.2 shall deliver or make available to the Seller each certificate and report
required to be prepared, forwarded or delivered thereafter pursuant to Sections
3.4, 3.5 and 3.6.
[End of Article III]
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.1 Establishment of Accounts and Allocations with Respect to
the Exchangeable Seller Certificate.
(a) The Collection Account. The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee, on
behalf of the Trust, or cause to be established and maintained, a non-interest
bearing segregated trust account (the "Collection Account") bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Certificateholders, with an office or branch
located in the State of Connecticut or New York, of (i) the corporate trust
department of a Qualified Trust Institution or (ii) a depository institution or
trust company (which may include the Servicer, the Trustee or an Affiliate of
the Servicer) 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 at all times
the certificates of deposit, short-term deposits or commercial paper or 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 P-1 and A-1+, respectively,
in the case of the certificates of deposit, or a rating from Moody's, of at
least Aa3 and from Standard & Poor's of at least AAA in the case of the
long-term unsecured debt obligations and the deposits in whose accounts are
insured to the limits provided by law and by the FDIC (each entity referred to
in clauses (i) and (ii) a "Qualified Institution"); provided further, that upon
the insolvency of the Servicer, the Collection Account shall not be permitted to
be maintained with the Servicer. The Supplement for a Series may require the
Trustee to establish and maintain a subaccount of the Collection Account for
such a Series (such subaccount, a "Collection Subaccount") bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Certificateholders of such Series with a depository institution
or trust company meeting the criteria provided in the related Supplement. The
Collection Account or any Collection Subaccount may not be invested except as
provided in the related Supplement. The funds on deposit in such Collection
Subaccount may be invested in the manner provided in the related Supplement, and
any earnings resulting from such investment shall be applied as provided in such
Supplement. Pursuant to authority granted to it pursuant to subsection 3.1(b),
the Servicer shall have the power, revocable by the Trustee, to withdraw funds
from the Collection
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Account or any Collection Subaccount for the purposes of carrying out its duties
hereunder.
Each Series of Investor Certificates shall represent interests in the
Trust, including the benefits of any Enhancement to be provided by an
Enhancement Provider issued with respect to such Series as indicated in the
Supplement relating to such Series, and the right to receive Collections and
other amounts at the times and in the amounts specified in this Article IV to be
deposited in the Collection Account and any Series Accounts maintained for the
benefit of the Certificateholders of such Series or paid to the
Certificateholders of such Series. The Exchangeable Seller Certificate shall
represent the interest in the Trust not represented by any Series of Investor
Certificates then outstanding, including the right to receive Collections and
other amounts at the time and in the amounts specified in this Article IV to be
paid to the Seller (the "Seller Interest"); provided, however, that such
certificate shall not represent any interest in the Collection Account or any
Series Accounts maintained for the benefit of the Certificateholders of any
Series or the benefits of any Enhancement to be provided by an Enhancement
Provider issued with respect to any Series, except as specifically provided in
this Article IV.
(b) Establishment of the Excess Funding Account. The Servicer, for the
benefit of the Investor Certificateholders and the Holder of the Exchangeable
Seller Certificate, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, with a Qualified
Institution and held in trust by such Qualified Institution designated by the
Servicer, a segregated trust account within the corporate trust department of
such Qualified Institution (the "Excess Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Investor Certificateholders and the holder of the Exchangeable
Seller Certificate. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Excess Funding Account and in all
proceeds thereof. 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 Excess Funding
Account for the purposes of carrying out its duties hereunder.
(c) (i) If the entity with which any of the accounts established
pursuant to this Section 4.1 ceases to be a "Qualified Institution", then (i)
such entity shall provide the Trustee, each Enhancement Provider and the
Servicer with prompt written notice that it is no longer a "Qualified
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 Institution".
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(ii) The Collection Account, the Excess Funding Account and each Series
Account shall be established at a depository institution which agrees in writing
as follows: (i) all money, securities, instruments and other property credited
to such account shall be treated as "financial assets" within the meaning of
Section 8-102(a)(9) of the 1994 Official Text of the Uniform Commercial Code and
(ii) such depository institution will comply with "entitlement orders" (within
the meaning of Section 8- 102(a)(8) of the 1994 Official Text of the Uniform
Commercial Code) issued by the Trustee and relating to such account without
further consent by the Seller or any other person.
(d) Allocations for the Exchangeable Seller Certificate. Throughout the
existence of the Trust, the Servicer shall, prior to the close of business on
the day any Collections are deposited in the Collection Account, allocate to the
Holder of the Exchangeable Seller Certificate an amount equal to the product of
(A) the Seller Percentage for the current Monthly Period and (B) the aggregate
amount of such Collections allocated to Principal Receivables and Finance Charge
Receivables, respectively. The Servicer need not deposit this amount, and other
amounts so allocated to the Exchangeable Seller Certificate pursuant to any
Supplement, into the Collection Account, and shall pay, or be deemed to pay, to
the extent the Servicer is the holder of the Exchangeable Seller Certificate,
such amounts as collected to the Holder of the Exchangeable Seller Certificate;
provided, however, that such payments shall not be made to the Holder of the
Exchangeable Seller Certificate if the Seller Interest is less than the Minimum
Seller Interest or if and to the extent that such payment would cause the Seller
Interest to be less than the Minimum Seller Interest but such amounts shall be
treated as Shared Principal Collections.
SECTION 4.2 Collection and Allocations.
(a) Collections. The Servicer shall, subject to subsection 4.1(d),
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. In the event of the
insolvency of the Servicer, then, immediately upon the occurrence of such event
and thereafter the Servicer shall deposit all Collections into the Collection
Account which shall be established and maintained with a Qualified Institution
other than the Servicer in accordance with subsection 4.1(a), and in no such
event shall the Servicer deposit any Collections thereafter into any account
established, held or maintained with the Servicer.
Interchange shall be allocated, and deposited or paid, on the second
Business Day following the Business Day on which the Servicer receives the same
in the manner provided in subsection
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2.5(k). Recoveries shall be allocated and deposited or paid, on each Transfer
Date in the manner provided in subsection 2.5(1). The Servicer shall notify the
Trustee as to the amount of Recoveries allocable to the Trust on each
Determination Date and transfer such amount into the Collection Account on the
Transfer Date.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Exchangeable Seller Certificate in
accordance with Article IV and shall withdraw the required amounts from the
Collection Account or pay such amounts to the Holder of the Exchangeable Seller
Certificate in accordance with Article IV. The Servicer shall make such deposits
or payments on the date indicated therein by wire transfer or as otherwise
provided in the Supplement for any Series of Certificates with respect to such
Series.
Notwithstanding anything in this 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 and the Trustee
shall have received a notice from the Rating Agency that such letter of credit
or other arrangement would not result in the lowering or withdrawal of such
Rating Agency's then-existing rating of any Series of Investor Certificates then
outstanding or (b) the Servicer, or for so long as the Seller is the Servicer
and an Affiliate of People's Bank, People's Bank (unless Moody's or Standard &
Poor's shall have notified the Servicer that making monthly deposits will result
in the reduction or withdrawal of its then-existing rating of the Certificates)
shall have and maintain a certificate of deposit or short-term deposit rating of
P-1 by Moody's and of at least A-1 by Standard & Poor's and deposit insurance as
required by law and by the FDIC, the Servicer need not deposit Collections to
the Collection Account in the manner provided in this Article IV 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
as provided in Article IV, but may make such deposits, payments and withdrawals
on the Transfer Date in the Monthly Period following the Monthly Period in which
such amounts were collected 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.
(b) Allocation of Collections Between Finance Charge Receivables and
Principal Receivables. On each Business Day, the Servicer shall allocate
Collections processed on the Accounts to Finance Charge Receivables to the
extent of the sum of (i) the amount of Finance Charge Receivables billed on such
Accounts on
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such day and (ii) the amount of any Finance Charge Receivables for prior days
which were not covered by Collections for such prior days or by Collections
thereafter allocated to Finance Charge Receivables; provided, however, that all
Collections which constitute Recoveries and Interchange shall be allocated to
Finance Charge Receivables as shall investment earnings with respect to amounts
on deposit in the Excess Funding Account. The balance of the Collections
processed on any Account for any Monthly Period shall be allocated to Principal
Receivables.
(c) Allocation of Collections of Recoveries and Defaulted Accounts.
(i) On the date on which an Account becomes a Defaulted
Account, the Trust shall automatically and without further action or
consideration be deemed to transfer, set over, and otherwise convey to
the Seller, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to the Receivables in
such Defaulted Account, all monies due or to become due with respect
thereto, all proceeds of such Receivables and Interchange allocable to
the Trust with respect to such Receivables, excluding Recoveries
relating to such Defaulted Account, which shall remain a part of the
Trust Assets.
(ii) On each Determination Date, the Servicer shall calculate
the Investor Default Amount for the preceding Monthly Period with
respect to each Series.
(d) Adjustments for Miscellaneous Credits and Fraudulent Charges.
(i) The Servicer shall be obligated to reduce or adjust, as
the case may be, on a net basis the aggregate amount of Principal
Receivables as provided in this subsection 4.2(d) (a "Credit
Adjustment") with respect to any Principal Receivable (A) which was
created in respect of merchandise refused or returned by the Obligor
thereunder or as to which the Obligor thereunder has asserted a
counterclaim or defense, (B) which is reduced by the Servicer by any
charge-back or adjustment, (C) which was created as a result of a
fraudulent or counterfeit charge, (D) which is reduced by adjustments
relating to returned or dishonored checks, or (E) which results from
Servicer error.
(ii) In the event that the exclusion of the amount of a Credit
Adjustment from the calculation of the Seller Interest would cause the
Seller Interest to be an amount less than the Minimum Seller Interest,
the Holder of the Exchangeable Seller Certificate shall make a deposit,
no later than the Business Day following the Date of Processing of such
Credit Adjustment, in the Excess Funding Account
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(for allocation as a Principal Receivable pursuant to Article IV) in
immediately available funds in an amount equal to the amount by which
such Credit Adjustment would have reduced the Seller Interest below the
Minimum Seller Interest.
(e) Unallocated Principal Collections; Excess Funding Account. On each
Business Day, Shared Principal Collections shall be allocated to outstanding
Series pro rata based on the Principal Shortfall, if any, for each such Series.
The Servicer shall pay any remaining Shared Principal Collections on such
Business Day to the Holder of the Exchangeable Seller Certificate; provided that
to the extent that the Seller Interest as determined on such Business Day does
not exceed the Minimum Seller Interest, such Shared Principal Collections shall
be deposited in the Excess Funding Account, or, on and after the first day of
the Amortization Period with respect to any Series, such Shared Principal
Collections shall be deposited in the principal account, principal funding
account or distribution account of such Series as and to the extent specified in
the related Supplement until the principal funding account of such Series (as
applicable) has been funded in full with respect to each Class of such Series or
the Holders of the Investor Certificates of such Series have been paid in full;
provided, further, that if an Amortization Period has commenced and is
continuing with respect to more than one outstanding Series, such Shared
Principal Collections shall be allocated to such Series pro rata based on the
Investor Percentage for Principal Receivables applicable for such Series.
(f) Amounts in Excess Funding Account. Amounts on deposit in the Excess
Funding Account on any Business Day will be invested by the Seller (or, at the
direction of the Seller, by the Servicer or the Trustee on behalf of the Seller)
in Permitted Investments maturing on the next Business Day. Earnings from such
investments received shall be deposited in the Collection Account and treated as
Collections of Finance Charge Receivables. Any investment instructions to the
Trustee shall be in writing and shall include a certification that the proposed
investment is a Permitted Investment that matures at or prior to the date
required by this Agreement. If on any Business Day the Seller Interest is
greater than the Minimum Seller Interest, amounts on deposit in the Excess
Funding Account shall be released to the Holder of the Exchangeable Seller
Certificate. On each Business Day, amounts on deposit in the Excess Funding
Account (other than investment earnings thereon) shall be allocated to each
outstanding series in an Amortization Period pro rata based on the aggregate
outstanding principal amount of such series on the last day of the applicable
Revolving Period.
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[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
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ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
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ARTICLE VI
THE CERTIFICATES
SECTION 6.1 The Certificates. Subject to Sections 6.10 and 6.11, the
Investor Certificates of each Series and any class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and a
special coupon (collectively, the "Coupons") or in fully registered form (the
"Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the related Supplement. The
Exchangeable Seller Certificate shall be substantially in the form of Exhibit A.
The Investor Certificates and the Exchangeable Seller Certificate shall, upon
issuance pursuant hereto or to Section 6.9 or Section 6.11, be executed and
delivered by the Seller to the Trustee for authentication and redelivery as
provided in Section 6.2. The Investor Certificates shall be issuable in a
minimum denomination of $1,000 and integral multiples thereof unless otherwise
specified in any Supplement. If specified in the related Supplement for any
Series, the Investor Certificates shall be issued upon initial issuance as a
single certificate in an original principal amount equal to the Initial Investor
Interest as described in Section 6.10. The Exchangeable Seller Certificate shall
also be issued as a single certificate. Each Certificate shall be executed by
manual or facsimile signature on behalf of the Seller by its President or any
Vice President. Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Seller or the Trustee shall not be rendered invalid,
notwithstanding that such individual has ceased to be so authorized prior to the
authentication and delivery of such Certificates or does not hold such office at
the date of such Certificates. Unless otherwise provided in the related
Supplement, no Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein,
executed by or on behalf of the Trustee by the manual signature of a Responsible
Officer of the Trustee, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication (as applicable) except Bearer Certificates which shall
be dated the applicable Issuance Date as provided in the related Supplement.
SECTION 6.2 Authentication of Certificates. Contemporaneously with the
initial assignment and transfer of the Receivables, whether now existing or
hereafter created and the other components of the Trust Assets to the Trust, the
Trustee shall authenticate and deliver the initial Series of Investor
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Certificates, upon the order of the Seller, to the underwriters for the sale of
the Book-Entry Certificates evidenced by such Investor Certificates, and against
payment to the Seller of the Initial Investor Interest (net of any purchase
discount or underwriting discounts). Upon the receipt of such payment and the
issuance of the Investor Certificates, such Investor Certificates shall be fully
paid and non-assessable. The Trustee shall authenticate and deliver the
Exchangeable Seller Certificate to the Seller simultaneously with its delivery
to the Seller of the initial Series of Investor Certificates. Upon an Exchange
as provided in Section 6.9 and the satisfaction of certain other conditions
specified therein, the Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation provided in the related
Supplement), upon the order of the Seller, to the persons designated in such
Supplement. Upon the order of the Seller, the Certificates of any Series shall
be duly authenticated by or on behalf of the Trustee, in authorized
denominations equal to (in the aggregate) the Initial Investor Interest of such
Series of Investor Certificates. If specified in the related Supplement for any
Series, the Trustee shall authenticate and deliver outside the United States the
Global Certificate that is issued upon original issuance thereof, upon the
written order of the Seller, to the Depository as provided in Section 6.10
against payment of the purchase price therefor. If specified in the related
Supplement for any Series, the Trustee shall authenticate Book-Entry
Certificates that are issued upon original issuance thereof, upon the written
order of the Seller, to a Clearing Agency or its nominee as provided in Section
6.11 against payment of the purchase price thereof.
SECTION 6.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar"), in accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Bankers Trust Company is hereby
initially appointed Transfer Agent and Registrar for the purposes of registering
the Investor Certificates and transfers and exchanges of the Investor
Certificates as herein provided. In the event that Bankers Trust Company shall
no longer be the Transfer Agent and Registrar, the Trustee shall appoint a
successor Transfer Agent and Registrar reasonably acceptable to the Seller and
the Servicer.
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The Trustee may revoke such appointment and remove Bankers Trust
Company as Transfer Agent and Registrar if the Trustee determines in its sole
discretion that Bankers Trust Company failed to perform its obligations under
this Agreement in any material respect. Bankers Trust Company shall be permitted
to resign as Transfer Agent and Registrar upon 30 days' written notice to the
Seller and the Servicer; provided, however, that such resignation shall not be
effective and Bankers Trust Company shall continue to perform its duties as
Transfer Agent and Registrar until the Trustee has appointed a successor
Transfer Agent and Registrar reasonably acceptable to the Seller and the
Servicer.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar, the Seller shall execute
subject to the provisions of subsection 6.3(d), and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate fractional Undivided Interests; provided, however, that the provisions
of this paragraph shall not apply to Bearer Certificates.
At the option of an Investor Certificateholder, Investor Certificates
may be exchanged for other Investor Certificates of the same Series in
authorized denominations of like aggregate fractional Undivided Interests, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency. At the option of any Registered Certificateholder, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Register maintained for such purpose.
At the option of a Bearer Certificateholder, subject to applicable laws and
regulations, Bearer Certificates may be exchanged for other Bearer Certificates
or Registered Certificates of the same Series in authorized denominations of
like aggregate Undivided Interests in the Trust, in the manner specified in the
Supplement for such Series upon surrender of the Bearer Certificates to be
exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered pursuant to this
Section 6.3 shall have attached thereto (or be accompanied by) all unmatured
coupons, provided that any Bearer Certificate so surrendered after the close of
business on the Record Date preceding the relevant Distribution Date after the
related Series Termination Date need not have attached the Coupons related to
such Distribution Date.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar,
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as the case may be, shall not be required to register the transfer of or
exchange any Investor Certificate of any Series for a period of 15 days
preceding the due date for any payment with respect to the Investor Certificate
of such Series.
Whenever any Investor Certificates of any Series are so surrendered for
exchange, the Seller shall execute, and the Trustee shall authenticate and
(unless the Transfer Agent and Registrar is different than the Trustee, in which
case the Transfer Agent and Registrar shall) deliver, the Investor Certificates
of such Series which the Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Certificateholder thereof or his attorney-in-fact duly
authorized in writing.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Investor
Certificates, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Investor Certificates.
All Investor Certificates (together with any Coupons attached to Bearer
Certificates) surrendered for registration of transfer or exchange shall be
cancelled by the Transfer Agent and Registrar and disposed of in the Trustee's
normal and customary manner. The Trustee shall cancel and destroy the Global
Certificate upon its exchange in full for Definitive Certificates and shall
deliver a certificate of destruction to the Seller. Such certificates shall also
state that a certificate or certificates of each Foreign Clearing Agency was
received with respect to each portion of the Global Certificate exchanged for
Definitive Certificates.
The Seller shall execute and deliver to the Trustee or the Transfer
Agent and Registrar as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or 7.2, in no event shall the
Exchangeable Seller Certificate or any interest therein be transferred
hereunder, in whole or in part, unless the Seller shall have consented in
writing to such transfer and unless the Trustee shall have received (i) a
Supplement specifying the Principal Terms of such Series, if applicable, (ii) if
required by the Supplement (if any), the form of Enhancement, (iii) if an
Enhancement is required by the Supplement (if any), an appropriate Enhancement
Agreement, (iv) the existing Exchangeable
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Seller Certificate and, if applicable, the certificates representing the Series
to be exchanged, (v) an Officer's Certificate of the Seller that on the date the
Exchange or transfer occurs, after giving effect to such Exchange or transfer,
the Seller Interest will be at least equal to the Minimum Seller Interest, (vi)
confirmation in writing from the Rating Agency that such transfer will not
result in a reduction or withdrawal of its then-existing rating of any Series of
Investor Certificates then outstanding, (vii) an Opinion of Counsel that such
transfer (x) does not adversely affect the Federal or state income tax
characterization of any class of Investor Certificates as indebtedness secured
by the Receivables, (y) will not result in the Trust being classified as an
association taxable as a corporation for Federal income tax purposes, or as a
taxable entity for applicable state income tax purposes and (z) will not for
Federal income tax purposes be treated as a taxable exchange, or otherwise
affect the amount, timing, character or source of income, gain or loss in
respect of, any outstanding class of Investor Certificateholders, and (viii) in
the case of the transfer of the Exchangeable Seller Certificate as a whole, an
agreement supplemental hereto, executed and delivered to the Trustee in form
satisfactory to the Trustee, in which the transferee of the Exchangeable Seller
Certificate expressly assumes the performance of every covenant and obligation
of the Seller, as Holder of the Exchangeable Seller Certificate, as applicable
hereunder, and pursuant to which such transferee shall benefit from all the
rights granted to the Seller, as Holder of the Exchangeable Seller Certificate,
applicable hereunder; provided that a transfer of the Exchangeable Seller
Certificate shall not release the Seller from any of its obligations under this
Agreement unless effected pursuant to Section 7.2(b).
The Holder of the Exchangeable Seller Certificate, by its acceptance of
the Exchangeable Seller Certificate, acknowledges that its obligation to make
the payments required by Section 4.2(d)(ii) is a full recourse obligation.
(c) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, the City of New York (and subject to Section 6.3, if
specified in the related Supplement for any Series, any other city designated in
such Supplement) an office or offices or an agency or agencies where Investor
Certificates of such Series may be surrendered for registration of transfer or
exchange (except that Bearer Certificates may not be surrendered for exchange at
any such office or agency in the United States).
(d) Unless otherwise provided in the related Supplement, registration
of transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the
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Supplement relating to such Investor Certificates) shall be effected only if the
conditions set forth in such related Supplement are satisfied.
Whenever a Registered Certificate containing the legend set forth in
the related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the Servicer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive written instructions
signed by a Servicing Officer prior to registering any such transfer or
authenticating new Registered Certificates, as the case may be. The Servicer
hereby agrees to indemnify the Transfer Agent and Registrar and the Trustee and
to hold each of them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on any such written
instructions furnished pursuant to subsection 6.3(d).
(e) Notwithstanding any other provision of this Agreement, any
Certificate for which an Opinion of Counsel has not been issued to the effect
that such Certificate constitutes debt for Federal income tax purposes (each, a
"Subject Certificate") shall be subject to the limitations of this subsection
6.3(e). No Subject Certificates shall be issued in a transaction (or
transactions) that is required to be registered under the Securities Act or, to
the extent any such offering or sale of Subject Certificates is not required to
be registered under the Securities Act by reason of Regulation S (17 CFR 230.901
through 230.904) or any successor thereto, that would be required to be
registered under the Securities Act if the interests so offered or sold were
offered and sold within the United States of America. No transfer (or purported
transfer) of all or any part of a Subject Certificate (or any economic interest
therein), whether to another Certificateholder or to a Person that is not a
Certificateholder, shall be effective, and any such transfer (or purported
transfer) shall be void ab initio, and no Person shall otherwise become a Holder
of a Subject Certificate if (i) at the time of such transfer (or purported
transfer) any Subject Certificates or interests therein are traded on an
established securities market or (ii) after such transfer (or purported
transfer) the Trust would have more than 100 Holders of Subject Certificates.
For purposes of clause (i) of the immediately preceding sentence, an established
securities market is (A) a national securities exchange that is either
registered under Section 6 of the Exchange Act or exempt from registration
because of the limited volume of transactions, (B) a foreign securities exchange
that, under the law of the jurisdiction where it is organized, satisfies
regulatory requirements that are analogous to the regulatory requirements of the
Exchange Act, (C) a regional or local exchange, or (D) an interdealer quotation
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system that regularly disseminates firm buy or sell quotations by identified
brokers or dealers by electronic means or otherwise. For purposes of determining
whether the Trust will have more than 100 Holders of Subject Certificates, each
Person indirectly owning an interest in a Subject Certificate through a
partnership (including any entity treated as a partnership for federal income
tax purposes), a grantor trust or an S corporation (each such entity a
"flow-through entity") shall be treated as a Holder of a Subject Certificate
unless the Servicer determines in its sole discretion, after consulting with
qualified tax counsel, or in the documentation relating to any Series, that less
than substantially all of the value of the beneficial owner's interest in the
flow-through entity is attributable to the flow-through entity's interest
(direct or indirect) in the Trust.
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate (together, in the case of Bearer Certificates, with
all unmatured Coupons, if any, pertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of a bona fide purchaser, the Seller
shall execute and the Trustee shall authenticate and (unless the Transfer Agent
and Registrar is different from the Trustee, in which case the Transfer Agent
and Registrar shall) deliver (in compliance with applicable law), in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor and aggregate Undivided Interest. In connection
with the issuance of any new Certificate under this Section 6.4, the Trustee or
the Transfer Agent and Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and the Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate (other than a Bearer Certificate) for registration of transfer, the
Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent of any
of them may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Article V and for all other purposes whatsoever, and none of the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall
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be affected by any notice to the contrary; provided, however, that in
determining whether the holders of Investor Certificates evidencing the
requisite Undivided Interests have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Investor Certificates owned by
the Seller, the Servicer or any Affiliate thereof shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Investor Certificates which a
Responsible Officer in the Corporate Trust Office of the Trustee knows to be so
owned shall be so disregarded.
In the case of a Bearer Certificate, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the bearer
of a Bearer Certificate or Coupon as the owner of such Bearer Certificate or
Coupon for the purpose of receiving distributions pursuant to Article IV and
Article XII and for all other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary. Certificates so owned which
have been pledged in good faith shall not be disregarded and may be regarded as
outstanding, if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Investor Certificates and that
the pledgee is not the Seller, the Servicer or an Affiliate thereof.
SECTION 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in the related Supplement for any
Series pursuant to Articles IV and V hereof. Any Paying Agent shall have the
revocable power to withdraw funds from such appropriate account or accounts for
the purpose of making distributions referred to above. The Trustee may revoke
such power and remove the Paying Agent, if the Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Agreement in any material respect or for other than good cause. The
Paying Agent, unless the Supplement with respect to any Series states otherwise,
shall initially be Bankers Trust Company. Bankers Trust Company shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Servicer
effective only upon the appointment of another Paying Agent. In the event that
Bankers Trust Company shall no longer be the Paying Agent, the Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company). The Trustee shall cause such successor Paying Agent or any additional
Paying Agent appointed by the Trustee to execute and deliver to the Trustee an
instrument in which such successor Paying Agent or additional Paying Agent
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shall agree with the Trustee that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Investor Certificateholders in trust for the benefit of the Investor
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Collection Account or such other Series Account established pursuant to the
Supplement with respect to any Series in the manner provided in the related
Supplement and upon removal of a Paying Agent, such Paying Agent shall return
all funds in its possession to the Collection Account or such other account
established pursuant to the Supplement with respect to any Series in the manner
provided in the related Supplement. The provisions of Sections 11.1, 11.2 and
11.3 shall apply to the Trustee also in its role as Paying Agent for so long as
the Trustee shall act as Paying Agent. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding, the Seller shall maintain
a co-paying agent in New York City (for Registered Certificates only) or any
other city designated in such Supplement which, if and so long as any Series of
Investor Certificates is listed on the Luxembourg Stock Exchange or other stock
exchange and such exchange so requires, shall be in Luxembourg or the location
required by such other stock exchange.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding by the Trustee of payments in respect of
federal income taxes due from Certificate Owners.
SECTION 6.7 Access to List of Certificateholders' Names and Addresses.
The Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent, within five Business Days after
receipt by the Trustee of a request therefor from the Servicer or the Paying
Agent, respectively, in writing, a list of the names and addresses of the
Investor Certificateholders (other than Bearer Certificateholders) as of the
most recent Record Date for payment of distributions to Investor
Certificateholders. Unless otherwise provided in the related Supplement, if
holders of Investor Certificates evidencing Undivided Interests aggregating not
less than 10% of the Investor Interest of the Investor
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Certificates of any Series then outstanding (the "Applicants") apply in writing
to the Trustee, and such application states that the Applicants desire to
communicate with other Investor Certificateholders of any Series with respect to
their rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford such Applicants access during normal business
hours to the most recent list of Certificateholders (other than Bearer
Certificateholders) held by the Trustee and shall give the Servicer notice that
such request has been made, within a reasonable time but in any event not to
exceed ten Business Days after the receipt of such application. Such list shall
be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Trustee that neither the Trustee, the Transfer
Agent and Registrar, nor any of their respective agents shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was obtained.
SECTION 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Seller.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Seller. The Trustee may at any
time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Seller. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
authenticating agent shall cease to be acceptable to
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the Trustee or the Seller, the Trustee promptly may appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Trustee and the Seller.
(d) The Trustee agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 6.8, and the
Trustee shall be entitled to be reimbursed and the Servicer shall reimburse the
Trustee for such reasonable payments actually made, subject to the provisions of
Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable
to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the certificates described in the Pooling and Servicing
Agreement.
-----------------------------
as Authenticating Agent
for the Trustee,
By: _____________________________
Authorized Officer
SECTION 6.9 Tender of Exchangeable Seller Certificate.
(a) Upon any Exchange, the Trustee shall issue to the Holder of the
Exchangeable Seller Certificate under Section 6.1, for execution and redelivery
to the Trustee for authentication under Section 6.2, one or more new Series of
Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the related Supplement and shall bear,
upon its face, the designation for such Series to which it belongs so selected
by the Seller. Except as specified in any Supplement for a related Series, all
Investor Certificates of any Series shall be equally and ratably entitled as
provided herein to the benefits hereof (except that the Enhancement provided for
any Series shall not be available for any other Series) without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Agreement
and the related Supplement.
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(b) The Holder of the Exchangeable Seller Certificate may tender the
Exchangeable Seller Certificate to the Trustee in exchange for (i) one or more
newly issued Series of Investor Certificates and (ii) a reissued Exchangeable
Seller Certificate (any such tender, a "Seller Exchange"). In addition, to the
extent permitted for any Series of Investor Certificates as specified in the
related Supplement, the Seller may tender Investor Certificates of such Series
and the Holder of the Exchangeable Seller Certificate may tender the
Exchangeable Seller Certificate to the Trustee pursuant to the terms and
conditions set forth in such Supplement in exchange for (i) one or more newly
issued Series of Investor Certificates and (ii) a reissued Exchangeable Seller
Certificate (an "Investor Exchange"). The Seller Exchange and Investor Exchange
are referred to collectively herein as an "Exchange." The Holder of the
Exchangeable Seller Certificate may perform an Exchange by notifying the
Trustee, in writing at least three days in advance (an "Exchange Notice") of the
date upon which the Exchange is to occur (an "Exchange Date"). Any Exchange
Notice shall state the designation of any Series to be issued on the Exchange
Date and, with respect to each such Series: (a) its Initial Investor Interest
(or the method for calculating such Initial Investor Interest), which at any
time, may not be greater than the current principal amount of the Exchangeable
Seller Certificate at such time (or in the case of an Investor Exchange, the sum
of the portion of the Investor Interest of the Series of Investor Certificates
to be exchanged plus the current principal amount of the Exchangeable Seller
Certificate), (b) its Certificate Rate (or the method for allocating interest
payments or other cash flow to such Series), if any, and (c) the provider or
providers of the Enhancement, if any, with respect to such Series. On the
Exchange Date, the Trustee shall only authenticate and deliver any such Series
of Investor Certificates upon delivery to it of the following: (a) a Supplement
satisfying the criteria set forth in subsection 6.9(c) executed by the Seller
and specifying the Principal Terms of such Series, (b) the applicable
Enhancement, if any, (c) the agreement, if any, pursuant to which the
Enhancement Provider agrees to provide the Enhancement, if any, (d) an Opinion
of Counsel to the effect that, unless otherwise stated in the related
Supplement, the newly issued Series of Investor Certificates will be treated as
debt secured by the Receivables for Federal, New York and Connecticut income tax
purposes, that the issuance of the newly issued Series of Investor Certificates
will not adversely affect the Federal, New York and Connecticut income tax
characterization of the Holder of any outstanding Series of Investor
Certificates or any Certificate Owner or result in the trust being subject to
Federal, New York or Connecticut tax at the entity level, (e) written
confirmation from the Rating Agency that the Exchange will not result in the
Rating Agency's reducing or withdrawing its rating on any then outstanding
Series rated by it, (f) an Officer's Certificate signed by a Vice President (or
any more
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senior officer) of the Seller, that on the Exchange Date (i) the Seller, after
giving effect to such Exchange, would not be required to add Additional Accounts
pursuant to subsection 2.6(e) and (ii) after giving effect to such Exchange, the
Seller Interest would be at least equal to the Minimum Seller Interest, and (g)
the existing Exchangeable Seller Certificate or applicable Investor
Certificates, as the case may be. Upon satisfaction of such conditions, the
Trustee shall cancel the existing Exchangeable Seller Certificate or applicable
Investor Certificates, as the case may be, and issue, as provided above, such
Series of Investor Certificates and a new Exchangeable Seller Certificate, dated
the Exchange Date. There is no limit to the number of Exchanges that may be
performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall execute a
Supplement, which shall specify the relevant terms with respect to any Series of
Investor Certificates, which may include without limitation: (i) its name or
designation, (ii) an Initial Investor Interest or the method of calculating the
Initial Investor Interest, (iii) the Certificate Rate (or formula for the
determination thereof), (iv) the Closing Date, (v) the rating agency or agencies
rating such Series, (vi) the interest payment date or dates and the date or
dates from which interest shall accrue, including the Interest Accrual Period,
(vii) the name of the Clearing Agency, if any, (viii) the rights, if any, of the
Holder of the Exchangeable Seller Certificate that have been transferred to the
Holders of such Series pursuant to such Exchange (including any rights to
allocations of Collections of Finance Charge Receivables and Principal
Receivables), (ix) the method of allocating Collections with respect to
Principal Receivables for such Series and, if applicable, with respect to other
Series and the method by which the principal amount of Investor Certificates of
such Series shall amortize or accrete and the method for allocating Collections
with respect to Finance Charge Receivables and Receivables in Defaulted
Accounts, (x) the names of any accounts to be used by such Series and the terms
governing the operation of any such account, (xi) the Series Servicing Fee
Percentage, (xii) the Minimum Seller Interest, (xiii) the Minimum Aggregate
Principal Receivables, (xiv) the Series Termination Date, (xv) the terms or any
Enhancement with respect to such Series, (xvi) the Enhancement Provider, if
applicable, (xvii) the Base Rate applicable to such Series, (xviii) the
Repurchase Terms or the terms on which the Certificates of such Series may be
remarketed to other investors, (xix) any deposit into any account maintained for
the benefit of the Certificateholders of such Series, (xx) the number of Classes
of such Series, and if more than one Class, the rights and priorities of each
such Class, (xxi) the extent to which the Investor Certificates will be issuable
in temporary or permanent global form, and in such case, the depositary for such
global certificate or certificates, the terms and conditions, if any,
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upon which such global certificate may be exchanged in whole or in part for
Definitive Certificates, and the manner in which any interest payable on a
temporary or global certificate will be paid, (xxii) whether the Certificates
may be issued in bearer form and any limitations imposed thereon, (xxiii)
whether Interchange or other fees will be included in the funds available to be
paid for such Series, (xxiv) the priority of any Series with respect to any
other Series, (xxv) the Pool Factor, (xxvi) the Pool Amount and (xxvii) any
other relevant terms of such Series (all such terms, the "Principal Terms" of
such Series). If on the date of the issuance of such Series there is issued and
outstanding one or more Series of Investor Certificates and no Series of
Investor Certificates then outstanding is currently rated by a Rating Agency,
then as a condition to such Exchange a nationally recognized investment banking
firm or commercial bank shall also deliver to the Trustee an officer's
certificate stating, in substance, that the Exchange will not have an adverse
effect on the timing or distribution of payments to such other Series of
Investor Certificates then issued and outstanding.
SECTION 6.10 Global Certificate; Euro-Certificate Exchange Date. If
specified in the related Supplement for any Series, the Investor Certificates
may be initially issued in the form of a single temporary Global Certificate
(the "Global Certificate") in bearer form, without interest coupons, in the
denomination of the Initial Investor Interest and substantially in the form
attached to the related Supplement. Unless otherwise specified in the related
Supplement, the provisions of this Section 6.10 shall apply to such Global
Certificate. The Global Certificate will be authenticated by the Trustee upon
the same conditions, in substantially the same manner and with the same effect
as the Definitive Certificates. The Global Certificate may be exchanged in the
manner described in the related Supplement for Registered and/or Bearer
Certificates in definitive form (the "Definitive Euro-Certificates").
SECTION 6.11 Book-Entry Certificates. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depository specified in such Supplement
(the "Depository") which shall be the Clearing Agency, by or on behalf of such
Series. The Investor Certificates of each Series shall unless otherwise provided
in the related Supplement initially be registered on the Certificate Register in
the name of the nominee of the Clearing Agency. No Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the related Series of Investor Certificates, except as provided in Section
6.13. Unless and until definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to Certificate Owners
pursuant to Section 6.13:
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(i) the provision of this Section 6.11 shall be in full force
and effect with respect to each such Series;
(ii) the Seller, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency
and the Clearing Agency Participants for all purposes (including the
making of distributions on the Investor Certificates of each such
Series) as the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.11
conflict with any other provisions of this Agreement, the provisions of
this Section 6.11 shall control with respect to each such Series; and
(iv) the rights of Certificate Owners of each such Series
shall be exercised only through the Clearing Agency and the applicable
Clearing Agency Participants and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement applicable to a Series, unless and until
Definitive Certificates of such Series are issued pursuant to Section
6.13, the initial Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit distributions
of principal and interest on the Investor Certificates to such Clearing
Agency Participants.
SECTION 6.12 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.13, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency for distribution to Holders of Investor
Certificates.
SECTION 6.13 Definitive Certificates. If (i) (A) the Seller advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the applicable Depository
Agreement, and (B) the Trustee or the Seller is unable to locate a qualified
successor, (ii) the Seller, at its option, advises the Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency with
respect to any Series of Certificates or (iii) after the occurrence of a
Servicer Default, Certificate Owners of a Series representing beneficial
interests aggregating not less than 50% of the Investor Interest of such Series
advise the Trustee and the applicable Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system through the applicable
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Clearing Agency is no longer in the best interests of the Certificate Owners,
the Clearing Agency shall notify all Certificate Owners of such Series, through
the applicable Clearing Agency Participants, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners of such
Series requesting the same. Upon surrender to the Trustee of the Investor
Certificates of such Series by the applicable Clearing Agency, accompanied by
written registration instructions from the applicable Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates of such
Series. Neither the Seller nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates of such Series all references herein to obligations imposed upon or
to be performed by the applicable Clearing Agency shall be deemed to be imposed
upon and performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of the
Definitive Certificates of such Series as Certificateholders of such Series
hereunder.
SECTION 6.14 Meetings of Certificateholders. To the extent provided by
the Supplement for any Series issued in whole or in part in Bearer Certificates,
the Servicer or the Trustee may at any time call a meeting of the
Certificateholders of such Series, to be held at such time and at such place as
the Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver
of, any covenant or condition set forth in this Agreement with respect to such
Series or in the Certificates of such Series, subject to Section 13.1 of the
Agreement.
[End of Article VI]
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ARTICLE VII
OTHER MATTERS RELATING TO THE SELLER
SECTION 7.1 Liability of the Seller. The Seller shall be liable in
accordance herewith to the extent of the obligations specifically undertaken by
the Seller.
SECTION 7.2 Merger or Consolidation of, or Assumption of the Obligation
of, the Seller.
(a) The Seller shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which
the Seller is merged or the Person which acquires by conveyance or
transfers the properties and assets of the Seller substantially as an
entirety shall be, if the Seller is not the surviving entity, organized
and existing under the laws of the United States of America or any
State or the District of Columbia, and shall be a state or national
banking association that is not subject to the Bankruptcy Code of 1978,
as amended from time to time, or to any successor statute, if the
Seller is not the surviving entity, and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trustee
and the Enhancement Provider, to the extent so provided in the
applicable Supplement, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Seller, as
applicable hereunder and shall benefit from all the rights granted to
the Seller, as applicable hereunder (to the extent that any right,
covenant or obligation of the Seller, as applicable hereunder, is
inapplicable to the successor entity (because such successor entity is
not a Connecticut capital stock savings bank), such successor entity
shall be subject to such covenant or obligation, or benefit from such
right, as would apply, to the extent practicable, to such successor
entity); and
(ii) the Seller has delivered to the Trustee and the Rating
Agencies an Officer's Certificate signed by a Vice President (or any
more senior officer) of the Seller stating that such consolidation,
merger, conveyance or transfer and such supplemental agreement comply
with this Section 7.2 and that all conditions precedent herein provided
for relating to such transaction have been complied with and an Opinion
of Counsel that such supplemental agreement is legal, valid and
binding.
(b) The obligations of the Seller hereunder shall not be assignable nor
shall any Person succeed to the obligations of the
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Seller hereunder except (i) for mergers, consolidations, assumptions or
transfers in accordance with the provisions of the foregoing paragraph or (ii)
other sales, transfers, or pledges including transfers of the Accounts, or other
mergers, assumptions or consolidations other than those permitted by subsection
7.2(a) (A) which the Seller and the Servicer determine will not be adverse to
the Interests of the Certificateholders of any Series, (B) which the Rating
Agency has advised the Seller and the Trustee in writing will not result in the
reduction or withdrawal of its then-existing rating of the Certificates of any
Series then outstanding, (C) for which such purchaser, transferee, pledgee or
entity shall expressly assume, in an agreement supplemental hereto, executed and
delivered to the Trustee in writing in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Seller, as applicable
hereunder, and shall benefit from all the rights granted to the Seller, as
applicable hereunder, and (D) for which the Enhancement Provider, if provided in
the related Supplement, has given its consent, which consent shall not be
unreasonably withheld.
SECTION 7.3 Limitation on Liability of the Seller. Subject to Section
7.1, neither the Seller nor any of its directors, officers, employees or agents
shall be under any liability to the Trust, the Trustee, the Certificateholders
or any other Person for any action taken or for refraining from the taking of
any action pursuant to this Agreement whether arising from express or implied
duties under this Agreement; provided, however, that this provision shall not
protect the Seller or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Seller and any director, officer, employee
or agent may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
[End of Article VII]
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ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
SECTION 8.1 Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
SECTION 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer.
(a) The Servicer shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which
the Servicer is merged or the Person which acquires by conveyance or
transfers the properties and assets of the Servicer substantially as an
entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall be a state or national banking association that is
not subject to the Bankruptcy Code of 1978, as amended from time to
time, or to any successor statute or other entity which is not subject
to the bankruptcy laws of the United States of America and shall be an
Eligible Servicer, and, if the Servicer is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee and the Enhancement Provider, to the
extent so provided in the applicable Supplement, in form satisfactory
to the Trustee, the performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right, covenant or
obligation of the Servicer, as applicable hereunder, is inapplicable
(because such successor entity is not a Connecticut capital stock
savings bank corporation) to the successor entity, such successor
entity shall be subject to such covenant or obligation, or benefit from
such right, as would apply, to the extent practicable, to such
successor entity); and
(ii) the Servicer has delivered to the Trustee and the Rating
Agencies (A) an Officer's Certificate stating that such consolidation,
merger, conveyance or transfer and such supplemental agreement comply
with this Section 8.2 and that all conditions precedent herein provided
for relating to such transaction have been complied with and (B) an
Opinion of Counsel that such supplemental agreement is legal, valid and
binding.
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(b) the obligations or duties of the Servicer hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Servicer
hereunder except for (i) mergers, consolidations, assumptions or transfers in
accordance with the foregoing paragraph; (ii) transfers pursuant to Section 8.5
and delegations pursuant to Section 8.7; (iii) the appointment of a Successor
Servicer pursuant to Section 10.2; and (iv) other sales, transfers, pledges or
other mergers, assumptions or consolidations (A) which the Seller and the
Servicer determine will not be adverse to the interests of the
Certificateholders of any Series, (B) which the Rating Agency has advised the
Servicer and the Trustee in writing will not result in the reduction or
withdrawal of its then-existing rating of the Certificates of any Series then
outstanding, (C) for which such purchaser, transferee, pledgee or entity shall
expressly assume, in an agreement supplemental hereto, executed and delivered to
the Trustee in writing in form satisfactory to the Trustee, the performance of
every covenant and obligation of the Servicer, as applicable to it hereunder,
and shall benefit from all rights granted to the Servicer, as applicable
hereunder and (D) for which the Enhancement Provider, if so provided in the
related Supplement has given its consent, which consent shall not be
unreasonably withheld.
SECTION 8.3 Limitation on Liability of the Servicer and Others. Except
as provided in Section 8.4 with respect to the Trust and the Trustee, neither
the Servicer nor any of its directors, officers, employees or agents shall be
under any liability to the Trust, the Trustee, the Certificateholders or any
other Person for any action taken or for refraining from the taking of any
action in its capacity as Servicer pursuant to this Agreement; provided,
however, that this provision shall not protect the Servicer or any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of its reckless disregard of its obligations and duties hereunder. The
Servicer and any director, officer, employee or agent of the Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Receivables in
accordance with this Agreement which in its reasonable opinion may involve it in
any expense or liability.
SECTION 8.4 Servicer Indemnification of the Trust and the Trustee. The
Servicer shall indemnify and hold harmless the Trust from and against any
reasonable loss, liability, expense, damage or injury suffered or sustained by
reason of any acts or omissions or alleged acts or omissions of the Servicer
with respect to activities of the Trust pursuant to this Agreement
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and, with respect to the Trustee, from and against any reasonable loss,
liability, expense, damage or injury suffered or sustained by the Trustee in
connection with the transactions contemplated herein and/or the Trustee's
administration of the Trust, including, but not limited to any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that the Servicer shall not indemnify the Trustee for
any acts, omissions or alleged acts or omissions which constitute or are caused
by fraud, negligence, breach of fiduciary duty or willful misconduct by the
Trustee; provided further, that the Servicer shall not indemnify the Trust, the
Investor Certificateholders or the Certificate Owners for any liabilities, costs
or expenses of the Trust with respect to any action taken by the Trustee at the
request of the Investor Certificateholders; provided further, that the Servicer
shall not indemnify the Trust, the Investor Certificateholders or the
Certificate Owners as to any losses, claims or damages incurred by any of them
in their capacities as investors, including without limitation losses incurred
as a result of Defaulted Accounts or Receivables which are written off as
uncollectible; and provided further, that the Servicer shall not indemnify the
Trust, the Investor Certificateholders or the Certificate Owners for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation
any Federal, state, local or foreign income or franchise taxes or any other tax
imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith) required to be paid by
the Trust, the Investor Certificateholders or the Certificate Owners in
connection herewith to any taxing authority (except to the extent that such
liabilities, taxes or expenses arose as a result of the breach by the Servicer
of its obligations under Section 11.11). Any such indemnification shall not be
payable from the assets of the Trust. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof. The obligations of the Servicer under this Section 8.4 shall survive the
termination of the Trust and the resignation or removal of the Trustee.
SECTION 8.5 Resignation of the Servicer. The Servicer shall not resign
from the obligations and duties hereby imposed on it except (a) upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law or (b) upon the assumption, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, of the obligations and duties of the Servicer hereunder by any
of its Affiliates that is a wholly owned subsidiary of People's Bank or any
other
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entity as to which (i) the Rating Agency has given written notice that such
substitution will not result in a reduction or withdrawal of the then existing
ratings of the Investor Certificates then outstanding and (ii) the Enhancement
Provider, where applicable, has given its consent which consent shall not be
unreasonably withheld and, in either case, that qualifies as an Eligible
Servicer. Any determination permitting the resignation of the Servicer shall be
evidenced as to clause (a) above by an Opinion of Counsel to such effect
delivered to the Trustee. No resignation shall become effective until the
Trustee or a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.2 hereof. If within
120 days of the date of the determination that the Servicer may no longer act as
Servicer hereunder under clause (a) above the Trustee is unable to appoint a
Successor Servicer, the Trustee shall serve as Successor Servicer hereunder.
Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
institution qualifying as an Eligible Servicer as the Successor Servicer
hereunder. The Trustee shall give prompt notice to the Rating Agency and the
Enhancement Provider, if so provided in the related Supplement upon the
appointment of a Successor Servicer.
SECTION 8.6 Access to Certain Documentation and Information Regarding
the Receivables. The Servicer shall provide to the Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where the
Trustee is required in connection with the enforcement of the rights of the
Investor Certificateholders, or by applicable statutes or regulations to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and (iv) at offices
designated by the Servicer. Nothing in this Section 8.6 shall derogate from the
obligation of the Seller, the Trustee or the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access as provided in this Section 8.6 as a result of
such obligations shall not constitute a breach of this Section 8.6.
SECTION 8.7 Delegation of Duties. It is understood and agreed by the
parties hereto that the Servicer may delegate certain of its duties hereunder to
any Affiliate of People's Bank. In the ordinary course of business, the Servicer
may at any time delegate any duties hereunder to any Person who agrees to
conduct such duties in accordance with the Account Guidelines. Any such
delegations shall not relieve the Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a resignation within the
meaning of Section 8.5 hereof. If any such delegation is to a party other than
an
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Affiliate of People's Bank, notification thereof shall be given to the Rating
Agency.
SECTION 8.8 Examination of Records. The Servicer shall clearly and
unambiguously identify each Account (including any Additional Account or
Automatic Additional Account designated pursuant to Section 2.6) in its computer
or other records to reflect that the Receivables arising in such Account have
been conveyed to the Trust pursuant to this Agreement. The Servicer shall, prior
to the sale or transfer to a third party of any receivable held in its custody,
examine its computer and other records to determine that such receivable is not
a Receivable.
[End of Article VIII]
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ARTICLE IX
PAY OUT EVENTS
SECTION 9.1 Pay Out Events. If any one of the following events shall
occur:
(a) the Seller shall consent to the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of
or relating to all or substantially all of its property, or a decree or
order of a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Seller;
or the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or the Seller shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of
this Agreement; or
(b) the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company" within
the meaning of the Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates (each, a "Trust
Pay Out Event") shall occur without any notice or other action on the part of
the Trustee or the Investor Certificateholders immediately upon the occurrence
of such event and notice of such Trust Pay Out Event shall be sent by the
Servicer to the Rating Agencies.
SECTION 9.2 Additional Rights Upon the Occurrence of Certain Events.
(a) If the Seller shall consent to the appointment of a conservator,
receiver or liquidator for the winding-up or liquidation of its affairs, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator for the winding-up or liquidation of its affairs shall have been
entered against the Seller (an "Insolvency Event"), the Seller shall on the day
of such Insolvency Event (the "Appointment Day") immediately cease to transfer
Principal Receivables to the Trust and shall promptly give notice to the Trustee
of such appointment or voluntary liquidation.
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Notwithstanding any cessation of the transfer to the Trust of additional
Principal Receivables, Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables which have been transferred to the Trust shall
continue to be a part of the Trust, and Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV. Within 15 days
of the Appointment Day, the Trustee shall (i) publish a notice in an Authorized
Newspaper that an Insolvency Event has occurred and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables in a commercially
reasonable manner and (ii) send written notice to the Investor
Certificateholders describing the provisions of this Section 9.2 and requesting
instructions from such Holders. Unless within 90 days from the day notice
pursuant to clause (i) above is first published (the "Publication Date"), the
Trustee shall have received written instructions of Holders of Investor
Certificates representing Undivided Interests aggregating in excess of 50% of
the related Invested Amount of each Series (or in the case of a Series having
more than one Class, each Class of such Series) to the effect that the Trustee
shall not instruct the Servicer to sell, dispose of, or otherwise liquidate the
Receivables, the Trustee shall instruct the Servicer to proceed to sell, dispose
of, or otherwise liquidate the portion of Receivables allocable to any Series
that did not vote to disapprove of the liquidation of the Receivables in
accordance with this Agreement in a commercially reasonable manner and on
commercially reasonable terms, which shall include the solicitation of
competitive bids and the Servicer shall proceed to consummate the sale,
liquidation or disposition of the Receivables allocable to any outstanding
Series, unless the holders of more than 50% of the principal amount of each
Class of such Series instruct the Trustee not to sell the portion of the
Receivables allocable to such Series, in which case the Trust shall continue
with respect to such Series pursuant to the terms of the Agreement and the
Supplement. The portion of the Receivables allocable to any Series shall be
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 for all Series
outstanding and (2) the Investor Interest of such Series. The Seller or any of
its Affiliates shall be permitted to bid for the Receivables. In addition, the
Seller 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. The Trustee may obtain a prior determination from any such bankruptcy
trustee, receiver or liquidator that the terms and manner of any proposed sale,
disposition or liquidation are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually exclusive.
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(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided, however that the proceeds for any such sale,
disposition or liquidation of Receivables with respect to a Series but not all
of the outstanding Series shall be applied solely to make payments to such
Series; provided, further that the Trustee shall determine conclusively the
amount of such proceeds which are allocable to Finance Charge Receivables and
the amount of such proceeds which are allocable to Principal Receivables. On the
day following the last Distribution Date in the Monthly Period during which such
proceeds are distributed to the Investor Certificateholders of each Series, the
Trust shall terminate.
[End of Article IX]
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ARTICLE X
SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer
or deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing,
withdrawal, or payment under any Enhancement on or before the date
occurring five Business Days after the date such payment, transfer,
deposit withdrawal or drawing or such instruction or notice is required
to be made or given, as the case may be, under the terms of this
Agreement;
(b) failure on the part of the Servicer duly to observe or
perform in any respect any other covenants or agreements of the
Servicer set forth in this Agreement, which has a material adverse
effect on the Certificateholders of any Series (which determination
shall be made without regard to whether funds are available to the
Certificateholders of any Series under any applicable Enhancement) 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 Servicer by the Trustee, or to
the Servicer and the Trustee by (i) the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
50% of the Investor Interest of any Series adversely affected thereby
or (ii) to the extent provided in any Supplement by the related
Enhancement Provider, and continues to materially adversely affect such
Investor Certificateholders for such period; or the Servicer shall
delegate its duties under this Agreement, except as permitted by
Section 8.7;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been incorrect when made, which has
a material adverse effect on the Certificateholders of any Series
(which determination shall be made without regard to whether funds are
available to the Certificateholders of any Series under any applicable
Enhancement) and which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Trustee, or to the Servicer and the
Trustee by (i) the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 50%
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of the Investor Interest of any Series adversely affected thereby or
(ii) to the extent provided in any Supplement by the related
Enhancement Provider, and continues to materially adversely affect such
Investor Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer, and such decree
or order shall have remained in force undischarged or unstayed for a
period of 60 days; or the Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
any assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; then, so long as such Servicer Default
shall not have been remedied, either the Trustee, or the Holders of
Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Interest, by notice then given in
writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the
rights and obligations of the Servicer as Servicer under this
Agreement. After receipt by the Servicer of such Termination Notice,
and on the date that a Successor Servicer shall have been appointed by
the Trustee pursuant to Section 10.2, all authority and power of the
Servicer under this Agreement shall pass to and be vested in a
Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to
cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon
the failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer of
servicing rights and obligations. The Servicer agrees to cooperate with
the Trustee and such Successor Servicer in effecting the termination of
the responsibilities and rights of the Servicer to conduct servicing
hereunder including, without limitation, the transfer to such Successor
Servicer of all authority of the Servicer to service the Receivables
provided for under this
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Agreement, including, without limitation, all authority over all
Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the
Collection Account, the Excess Funding Account, and any Series Account,
or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer and in enforcing all rights to
Recoveries and Interchange allocable to the Trust. The Servicer shall
promptly transfer its electronic records relating to the Receivables to
the Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents
necessary for the continued servicing of the Receivables in the manner
and at such times as the Successor Servicer shall reasonably request.
To the extent that compliance with this Section 10.1 shall require the
Servicer to disclose to the Successor Servicer information of any kind
which the Servicer reasonably deems to be confidential, the Successor
Servicer shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to
protect its interests. Subject to the immediately preceding sentence,
the Servicer agrees to grant to the Successor Servicer an exclusive,
non- transferrable, non-assignable license to utilize the software
which is owned by the Servicer and which is used by the Servicer in
connection with the servicing of the Accounts and the Receivables;
provided, however, that such software shall be used by the Successor
Servicer solely for the purposes of servicing the Accounts and the
Receivables. The Servicer shall, on the date of any servicing transfer,
transfer all of its rights and obligations under the Enhancement with
respect to any Series to the Successor Servicer.
SECTION 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee shall
notify the Rating Agency of such removal of the Servicer. The Trustee shall, as
promptly as possible after the giving of a Termination Notice appoint an
Eligible Servicer as successor servicer (the "Successor Servicer"), and such
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the Trustee. The Trustee may obtain bids from any potential
successor servicer. If the Trustee is unable to obtain any bids
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from any potential successor servicer and the Servicer delivers an Officer's
Certificate to the effect that they cannot in good faith cure the Servicer
Default which gave rise to a transfer of servicing, and if the Trustee is
legally unable to act as Successor Servicer then the Trustee shall offer the
Servicer, for so long as People's Bank is the Servicer, the right to accept
reassignment of all of the Receivables and the Seller may accept reassignment of
all the Receivables on a date designated by the Seller (the "Reassignment
Date"); provided, however, that if the short-term deposits or long-term
unsecured debt obligations of the Seller are not rated at the time of such
purchase at least P-3 or Baa-3, respectively, by Moody's, no such purchase by
the Seller shall occur unless the Seller shall deliver an Opinion of Counsel
reasonably acceptable to the Trustee that such purchase would not constitute a
fraudulent conveyance of the Seller. The reassignment deposit amount with
respect to each Series for such reassignment shall be equal to the sum of (A)
the higher of (x) the sum of (i) the Investor Interest of such Series as of the
end of the Monthly Period preceding the Reassignment Date less the amount, if
any, previously accumulated for the payment of principal with respect to such
Series as provided in the related Supplement on the related Transfer Date
following the date of such reassignment, plus (ii) an amount equal to all
interest accrued but unpaid on the Investor Certificates less the amount, if
any, accumulated to pay interest with respect to such Series as provided in the
related Supplement on the Transfer Date following the date of such reassignment,
accrued at the applicable Certificate Rate through the date of reassignment and
(y) the average bid price quoted by two recognized dealers for a security
similar to the Investor Certificates of each such Series and rated in the
highest rating category by the Rating Agency and having a remaining maturity
approximately equal to the remaining maturity of such Series and (B) if, as
provided in the related Supplement, certain unpaid amounts to the Enhancement
Provider with respect to such Series. The reassignment deposit amount with
respect to each Series shall be deposited in the Collection Subaccount or any
Series Account, as provided in the related Supplement, for distribution to the
Investor Certificateholders of such Series pursuant to Section 12.3 of the
Agreement. Any payment with respect to the Enhancement Provider of any Series
shall be made in the manner provided in the Supplement with respect to such
Series. In the event that a Successor Servicer has not been appointed or has not
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Trustee without further action shall automatically be appointed
the Successor Servicer. The Trustee may delegate any of its servicing
obligations to an agent in accordance with the provisions of subsection 3.1(b).
Notwithstanding the above, the Trustee shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint any established financial
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicer of
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VISA or MasterCard credit card receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the successor
in all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer; provided, however, that the references to
Servicer contained in Sections 8.4 and 11.5 shall be deemed to refer to the
Servicer with respect to responsibilities, duties and liabilities arising during
or with respect to such time that the Servicer was Servicer under this Agreement
and shall be deemed to refer to the Successor Servicer with respect to
responsibilities, duties and liabilities arising during or with respect to such
time that the Successor Servicer acts as Servicer under this Agreement. Any
Successor Servicer, by its acceptance of its appointment, will automatically
agree to be bound by the terms and provisions of each Enhancement.
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Monthly Servicing Fee permitted to the Servicer
pursuant to Section 3.2. The Seller agrees that if the Servicer is terminated
hereunder, it will agree, at the request of the Trustee or any Successor
Servicer, to deposit a portion of the Collections in respect of Finance Charge
Receivables that it is entitled to receive pursuant to Article IV to pay its
share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be vested in the Seller
and, without limitation, the Seller is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Seller in effecting the termination of the responsibilities and rights of
the Successor Servicer to conduct servicing on the Receivables. The Successor
Servicer shall transfer its electronic records relating to the Receivables to
the Seller in such electronic form as the Seller may reasonably request and
shall transfer all other records, correspondence and documents to the Seller in
the manner and at such times as the Seller shall reasonably request. To the
extent that compliance
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with this Section 10.2 shall require the Successor Servicer to disclose to the
Seller information of any kind which the Successor Servicer deems to be
confidential, the Seller shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
SECTION 10.3 Notification to Certificateholders. Within three Business
Days after the Servicer becomes aware of any Servicer Default, the Servicer
shall give prompt written notice thereof to the Trustee and the Trustee shall
give notice to the Investor Certificateholders (other than Bearer
Certificateholders) at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor Servicer pursuant
to this Article X, the Trustee shall give prompt written notice thereof to
Investor Certificateholders (other than Bearer Certificateholders) at their
respective addresses appearing in the Certificate Register.
SECTION 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50% of the
Investor Interest of each Series adversely affected by any default by the
Servicer may, on behalf of all Holders of Certificates of such Series, waive any
default by the Servicer or Seller in the performance of its obligations
hereunder and its consequences, except a default in the failure to make any
required deposits or payments of interest or principal relating to such Series
pursuant to Article IV which default does not result from the failure of the
Paying Agent to perform its obligations to make any required deposits or
payments of interest and principal in accordance with Article IV. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied to every purpose of this
Agreement and the Rating Agencies shall be sent notice of any such waiver. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
[End of Article X]
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ARTICLE XI
THE TRUSTEE
SECTION 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer Default of
which a Responsible Officer of the Trustee has actual knowledge and after the
curing of all Servicer Defaults which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. If a Servicer Default of which a Responsible Officer of the Trustee
has actual knowledge has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement. The Trustee shall
give prompt written notice to any Enhancement Provider affected thereby and the
Certificateholders (or, in the case of the Holders of Bearer Certificates,
notice by publication in the manner described in the related Supplement) of any
material lack of conformity of any such instrument to the applicable
requirements of this Agreement discovered by the Trustee which would entitle
such Enhancement Provider or a specified percentage of the Certificateholders,
as the case may be, to take any action pursuant to this Agreement.
(c) Subject to subsection 11.1(a), no provision of this Agreement shall
be construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct; provided,
however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50%
of the Investor Interest of any Series relating to the time, method and
place of
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conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in clauses (a) and (b) of Section
10.1 unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure or the Trustee receives written notice of
such failure from the Servicer, any Enhancement Provider or any Holders
of Investor Certificates evidencing Undivided Interests aggregating not
less than 10% of the Investor Interest of any Series adversely affected
thereby; and
(iv) in the event that the Trustee is acting as Successor
Servicer, its liability as Servicer shall be limited as specified in
Section 8.3.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the interests of the
Trust in any Receivable now existing or hereafter created or to impair the value
of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), the Trustee shall
have no power to vary the corpus of the Trust including, without limitation, the
power to (i) accept any substitute obligation for a Receivable initially
assigned to the Trust under Section 2.1 or 2.6 hereof, (ii) add any other
investment, obligation or security to the Trust, except for an addition
permitted under Section 2.6 or (iii) withdraw from the Trust any Receivables,
except for withdrawal permitted under Section 2.7, 9.2, 10.2, 12.1 or 12.2 or
subsection 2.4(d) or 2.4(e) or Article IV.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by
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the Paying Agent or the Transfer Agent and Registrar, as the case may be, under
this Agreement, the Trustee shall be obligated promptly upon a Responsible
Officer's obtaining actual knowledge thereof to perform such obligation, duty or
agreement in the manner so required.
(h) If the Seller has agreed to transfer any of its credit card
receivables (other than the Receivables) to another Person, upon the written
request of the Seller, the Trustee will enter into such intercreditor agreements
(which shall be in form and substance satisfactory to the Trustee) with the
transferee of such receivables as are customary and necessary to separately
identify the rights, if any, of the Trustee, the Trust and such other Person in
the Seller's credit card receivables; provided that the Trustee, on behalf of
the Trust, shall not enter into any intercreditor agreement which could
adversely affect the interests of the Certificateholders, any Enhancement
Provider or the Trustee and, upon the request of the Trustee, the Seller will
deliver an Opinion of Counsel on any matters relating to such intercreditor
agreement reasonably requested by the Trustee.
SECTION 11.2 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.1:
(a) the Trustee may conclusively rely on and shall be
protected in acting on, or in refraining from acting in accord with,
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented to it
pursuant to this Agreement by the proper party or parties;
(b) the Trustee may consult with counsel, and any Opinion of
Counsel or written advice of counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel or written advice of counsel;
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any
Enhancement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence
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of any Servicer Default of which a Responsible Officer has actual
knowledge (which has not been cured), to exercise such of the rights
and powers vested in it by this Agreement or any Enhancement, and to
use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of
his own affairs;
(d) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(e) the Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing so to do by (i) any Enhancement Provider who, or (ii) Holders
of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Investor Interest of any Series which, could be
adversely affected if the Trustee does not perform such acts; provided,
however, that the Enhancement Provider shall reimburse the Trustee for
any reasonable out-of-pocket expenses resulting from any such
investigation requested by it;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the part
of any such agent, nominee, custodian or attorney appointed with due
care by it hereunder; and
(g) except as may be required by subsection 11.1(a) hereof,
the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or
the Accounts for the purpose of establishing the presence or absence of
defects, the compliance by the Seller or the Servicer with its
respective representations and warranties or for any other purpose.
SECTION 11.3 Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificates of authentication on the Certificates)
or of any Receivable or related document. The Trustee shall not be
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accountable for the use or application by the Seller of any of the Certificates
or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Seller in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Excess Funding Account, or any Series
Account by the Servicer.
SECTION 11.4 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
SECTION 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay the Trustee from time to time, and the
Trustee shall be entitled to receive reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the Trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Servicer will pay or reimburse the
Trustee (without reimbursement from the Collection Account, the Excess Funding
Account, any Series Account or otherwise) upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable fees and expenses of its agents, any co-Trustees and counsel) except
any such expense, disbursement or advance as may arise from its own negligence
or bad faith and except as provided in the following sentence. If the Trustee is
appointed Successor Servicer pursuant to Section 10.2, the provisions of this
Section 11.5 shall not apply to expenses, disbursements and advances made or
incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.5 shall survive
the termination of the Trust and the resignation or removal of the Trustee.
SECTION 11.6 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority and rated at least Baa-3. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 11.6, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be
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eligible in accordance with the provisions of this Section 11.6, the Trustee
shall resign immediately in the manner and with the effect specified in Section
11.7.
SECTION 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Servicer with a copy to
the Enhancement Provider. Upon receiving such notice of resignation, the
Servicer shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee, subject to the consent of the
Enhancement Provider of any Series (if the Supplement relating to such Series so
requires) which shall not be unreasonably withheld. In addition, the Servicer
shall notify the Rating Agency of the removal or discharge of the Trustee. If no
successor trustee shall have been so appointed and have accepted within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.6 hereof and shall fail to resign after
written request therefor by the Seller, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Seller may remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee. Notice of any
action under this Section 11.7 shall be sent to the Rating Agencies.
SECTION 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Seller and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal
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of the predecessor Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as Trustee herein. The predecessor
Trustee shall deliver to the successor trustee all documents and statements held
by it hereunder, and the Seller and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders at their addresses as shown in
the Certificate Register. Notice to Bearer Certificateholders shall be given in
the manner provided in the related Supplement.
SECTION 11.9 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section 11.6
hereof, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, or all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 11.6 and no
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notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all
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of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.11 Tax Returns. In the event the Trust shall be required to
file tax returns, the Servicer, as soon as practicable after it is made aware of
such requirement, shall prepare or cause to be prepared any tax returns required
to be filed by the Trust and, to the extent possible, shall remit such returns
to the Trustee for a signature at least five days before such returns are due to
be filed. The Servicer shall prepare or shall cause to be prepared all tax
information required by law to be distributed to Certificateholders and shall
deliver such information to the Trustee at least five days prior to the date it
is required by law to be distributed to Certificateholders. The Trustee, upon
request, will furnish the Servicer with all such information known to the
Trustee as may be reasonably required in connection with the preparation of all
tax returns of the Trust and shall, upon request, execute such returns. In no
event shall the Trustee or the Servicer be liable for any liabilities, costs or
expenses of the Trust, the Investor Certificateholders or the Certificate Owners
arising under any tax law, including without limitation federal, state, local or
foreign income or excise taxes or any other tax imposed on or measured by income
(or any interest or penalty with respect thereto or arising from a failure to
comply therewith).
SECTION 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any Series
of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificateholders in respect of which such
judgment has been obtained.
SECTION 11.13 Suits for Enforcement. If a Servicer Default shall occur
and be continuing, the Trustee, in its discretion may, subject to the provisions
of Section 10.1, proceed to protect and enforce its rights and the rights of any
Series of Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or any Series of Certificateholders.
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SECTION 11.14 Rights of Certificateholders to Direct Trustee. Holders
of Investor Certificates evidencing Undivided Interests evidencing more than 50%
of the Aggregate Investor Interest (or, with respect to any remedy, trust or
power that does not relate to all Series, 50% of the aggregate unpaid principal
amount of the Investor Certificates of all Series to which such remedy, trust or
power relates) shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that, subject to
Section 11.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Investor
Certificates.
SECTION 11.15 Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(a) the Trustee is a banking corporation organized, existing and in
good standing under the laws of the State of New York;
(b) the Trustee has full power and authority to execute, deliver and
perform this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement; and
(c) this Agreement has been duly executed and delivered by the Trustee.
SECTION 11.16 Maintenance of Office or Agency. The Trustee will
maintain at its expense in the Borough of Manhattan, the City of New York, an
office or offices or agency or agencies where notices and demands to or upon the
Trustee in respect of the Certificates and this Agreement may be served. The
Trustee initially appoints its Corporate Trust Office as its office for such
purposes in New York. The Trustee will give prompt written notice to the
Servicer, each Enhancement Provider and to Certificateholders (or in the case of
Bearer Certificates, in the manner provided in the related Supplement) of any
change in the location of the Certificate Register or any such office or agency.
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[End of Article XI]
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ARTICLE XII
TERMINATION
SECTION 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of the Seller, the
Servicer and the Trustee created hereby (other than the obligation of the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate, except with respect to the duties described in Section 11.5 and
subsection 12.3(b), on the Trust Termination Date; provided, however, that the
Trust shall not terminate on the date specified in clause (i) of the definition
of "Trust Termination Date" if each of the Servicer and the Holder of the
Exchangeable Seller Certificate notify the Trustee in writing, not later than
five Business Days preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a "Trust Extension") shall
specify the date on which the Trust shall terminate (such date, the "Extended
Trust Termination Date"); provided, however, that the Extended Trust Termination
Date shall be not later than the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the father of the late
President of the United States, living on the date of the Agreement. The
Servicer and the Holder of the Seller Certificate may, on any date following the
Trust Extension, so long as no Series of Certificates is outstanding, deliver a
notice in writing to the Trustee changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated by the last
Distribution Date occurring in the second month preceding the Trust Termination
Date, and (ii) the Investor Interest of any Series (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on such date and the
payment of principal on any Series of Certificates to be made on the related
Distribution Date during such month pursuant to Article IV) would be greater
than zero, the Servicer shall sell within 30 days after such Transfer Date all
the Receivables. The Seller shall have the right of first refusal to purchase
the Receivables on terms equivalent to the best purchase offer as determined by
the Trustee. The proceeds of any such sale shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with Article
IV; provided, however, that the Trustee shall determine conclusively the amount
of such proceeds which are allocable to Finance Charge Receivables and the
amount of such proceeds which are allocable to Principal Receivables. During
such period, the Servicer shall continue to collect payments on the Receivables
and allocate and deposit such payments in accordance with the provisions of
Article IV.
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SECTION 12.2 Optional Purchase and Final Termination of Investor
Certificates of any Series.
(a) If so provided in any Supplement, the Seller may, but shall not be
obligated to, cause a final distribution to be made in respect of the related
Series of Certificates on a Distribution Date specified in such Supplement by
depositing into the Collection Account or the applicable Series Account, not
later than the Transfer Date preceding such Distribution Date, for application
in accordance with Article IV, the amount specified in such Supplement;
provided, however, that if the short-term deposits or long-term unsecured debt
obligations of the Seller are not rated at the time of such purchase of
Receivables at least P-3 or Baa-3, respectively, by Moody's, no such event shall
occur unless the Seller shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee that such deposit into the Collection Account or any
Series Account as provided in the related Supplement would not constitute a
fraudulent conveyance of the Seller.
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid
to the Investor Certificateholders of the related Series (and the Enhancement
Provider if so provided in the related Supplement) pursuant to Article IV on the
related Distribution Date following the date of such deposit. All Certificates
of a Series which are purchased by the Seller pursuant to subsection 12.2(a)
shall be delivered by the Seller upon such purchase to, and be cancelled by, the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Seller. The Investor Interest of each Series which is purchased
by the Seller pursuant to subsection 12.2(a) shall, for the purposes of the
definition of "Seller Interest", be deemed to be equal to zero on the
Distribution Date following the making of the deposit, and the Seller Interest
shall thereupon be deemed to have been increased by the Investor Interest of
such Series.
SECTION 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the Distribution Date
upon which the Investor Certificateholders of any Series may surrender their
Certificates for payment of the final distribution with respect to such Series
and cancellation, shall be given (subject to at least 2 Business Days' prior
notice from the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series (and the Enhancement Provider if so provided
in the related Supplement) mailed not later than the fifth day of the month of
such final distribution (or in the manner provided by the Supplement relating to
such Series) specifying (a) the Distribution Date (which shall be the
Distribution Date in the month (x) in which the deposit is made pursuant to
Section 3.4(e), 9.2, 10.2, or, if applicable,
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subsection 12.2(a) of the Agreement or such other section as may be specified in
the related Supplement, or (y) in which the related Series Termination Date
occurs) upon which final payment of such Investor Certificates will be made upon
presentation and surrender of such Investor Certificates at the office or
offices therein designated (which, in the case of Bearer Certificates, shall be
outside the United States), (b) the amount of any such final payment and (c)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Investor Certificates at the office or offices therein specified. The Servicer's
notice to the Trustee in accordance with the preceding sentence shall be
accompanied by an Officer's Certificate setting forth the information specified
in Article V of the Agreement covering the period during the then current
calendar year through the date of such notice and setting forth the date of such
final distribution. The Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to subsection
12.1(a) or the occurrence of the Series Termination Date with respect to any
Series, all funds then on deposit in the Collection Account or any Series
Account shall continue to be held in trust for the benefit of the
Certificateholders of the related Series and the Paying Agent or the Trustee
shall pay such funds to the Certificateholders of the related Series upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the event
that all of the Investor Certificateholders of any Series shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned notice, the Trustee shall give a second written notice
(in the case of Bearer Certificates, publication notice) to the remaining
Investor Certificateholders of such Series upon receipt of the appropriate
records from the Transfer Agent and Registrar to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within one and one-half years after the second notice with respect to a Series,
all the Investor Certificates of such Series shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Investor Certificateholders of
such Series concerning surrender of their Certificates, and the cost thereof
shall be paid out of the funds in the Collection Account or any Series Account
held for the benefit of such Investor Certificateholders. The Trustee and the
Paying Agent shall pay to the Seller upon request any monies held by them for
the payment of the principal or interest which remains unclaimed for two years.
After payment to the Seller, Investor Certificateholders entitled to the money
must look
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solely to the Seller for payment as general creditors unless an applicable
abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Seller.
SECTION 12.4 Seller's Termination Rights. Upon the termination of the
Trust pursuant to Section 12.1 of the Agreement and the surrender of the
Exchangeable Seller Certificate, the Trustee shall return 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, all monies due or to become due with respect
thereto and all proceeds thereof and Recoveries and the Interchange allocable to
the Trust pursuant to subsections 2.5(k) and (l) except for amounts held by the
Trustee pursuant to subsection 12.3(b) of the Agreement. The Trustee shall
execute and deliver such instruments of transfer and assignment, on behalf of
the Trust, in each case without recourse, as shall be reasonably requested by
the Holder of the Exchangeable Seller Certificate to vest in the Holder of the
Exchangeable Seller Certificate all right, title and interest which the Trust
had in the Receivables.
[End of Article XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment.
(a) (i) This Agreement may be amended from time to time by the
Servicer, the Seller and the Trustee, without the consent of any holder
of any outstanding Certificate, to cure any ambiguity, to correct or
supplement any provisions herein which may be inconsistent with any
other provisions herein, to add any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however,
that such action shall not adversely affect in any material respect the
interests of any Investor Certificateholders. The Trustee may request
an Officer's Certificate and/or an Opinion of Counsel on these matters,
prior to executing an amendment. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's
rights, duties or immunities under this Agreement or otherwise.
(ii) This Agreement may be amended from time to time by the
Seller, the Servicer and the Trustee, with the consent of the Trustee
(and the Enhancement Provider, if so provided in the related
Supplement) 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 Section 7.2
hereof, (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 thereafter for the treatment of Collections of
Principal Receivables, in an amount up to the aggregate amount by which
the purchase price of Principal Receivables 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; further
provided that the Servicer and the Trustee shall have received notice
from the Rating Agency that such amendment pursuant to this Section
13.1(a)(ii) will not result in the reduction or withdrawal of its
then-existing rating of the Certificates of any Series.
(b) This Agreement and any Supplement may also be amended from time to
time by the Servicer, the Seller and the Trustee with the consent of the Holders
of Investor Certificates evidencing Undivided Interests aggregating not less
than 66-2/3% of the Investor Interest of each outstanding Series adversely
affected by such amendment (and, to the extent provided in any
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Supplement, with the consent of the related Enhancement Provider, which consent
shall not be unreasonably withheld) for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or modifying in any manner the rights of holders of any Series then issued and
outstanding (provided, however, that the right of any Enhancement Provider to
consent pursuant to any Supplement to any such amendment shall be limited to
matters involving (i) the provisions of this Agreement which affect such
Enhancement Provider, (ii) the provisions of the related Supplement, and (iii)
the rights of holders of the related Series); provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate without
the consent of each Investor Certificateholder of such Series, (ii) change the
definition of or the manner of calculating the Undivided Interest of any
Investor Certificateholder of such Series without the consent of each Investor
Certificateholder of such Series, (iii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of each Investor
Certificateholder of all Series adversely affected (and, to the extent provided
in any Supplement, with the consent of the related Enhancement Provider, which
consent shall not be unreasonably withheld) or (iv) result in any withdrawal or
downgrade of the rating of the Certificates.
(c) Notwithstanding anything in this Section 13.1 to the contrary the
Series Supplement with respect to any Series may be amended on the items and in
accordance with the procedures provided in such Series Supplement.
(d) Promptly after the execution of any amendment the Trustee shall
furnish such amendment to any related Enhancement Provider and to the Rating
Agency; provided, however, that the Trustee shall furnish a copy of each such
amendment pursuant to subsection 13.1(a)(ii) to the Rating Agency prior to the
execution of such amendment.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
SECTION 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation
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statements and any other necessary documents covering the Certificateholders
and, the Trustee's right, title and interest to the Trust to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Certificateholders
or the Trustee, as the case may be, hereunder to all property comprising the
Trust. The Servicer shall deliver to the Trustee file-stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing.
The Seller shall cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this subsection 13.2(a).
(b) Within 30 days after the Seller makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above materially
misleading within the meaning of Section 9-402(7) of the UCC as in effect in the
State of New York, the Seller shall give the Trustee notice of any such change
and shall file such financing statements or amendments as may be necessary to
continue the perfection of the Trust's security interest in the Receivables and
the proceeds thereof.
(c) Each of the Seller and the Servicer will give the Trustee prompt
written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables (including the
establishment of any office from which it services the Receivables or keeps
records concerning the Receivables) or of its principal executive office and
whether, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables and the proceeds
thereof. Each of the Seller and the Servicer will at all times maintain each
office from which it services Receivables and its principal executive office
within the United States of America.
(d) The Servicer will deliver to the Trustee: (i) upon the execution
and delivery of each amendment of Article I, II, III or IV hereto (or, with
respect to Article IV, as incorporated in the related Supplement; provided,
however, that the adoption of a Supplement pursuant to Section 6.9 of the
Agreement which supplements or modifies Article IV for a particular new Series
shall not be considered an amendment), other than amendments pursuant to
subsection 13.1(a), and upon each date that any Additional Accounts or Automatic
Additional Accounts are to be included in the Accounts pursuant to Section 2.6
hereof, an
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Opinion of Counsel substantially in the form of Exhibit F; and (ii) on or before
March 31 of each year, beginning with March 31, 1994 an Opinion of Counsel,
substantially in the form of Exhibit G.
SECTION 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust, nor shall such death or incapacity
entitle such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except with
respect to the Investor Certificateholders as provided in Section 13.1 hereof)
or in any manner otherwise control the operation and management of the Trust, or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given to the Trustee, and unless the
Holders of Certificates evidencing Undivided Interests aggregating more than 50%
of the Investor Interest of any Series which may be adversely affected but for
the institution of such suit, action or proceeding, shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Certificateholders shall
have the right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Certificateholders of any other of the Certificates, or to
obtain or seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable
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and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 13.3, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 13.4 GOVERNING LAW. THIS AGREEMENT 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 13.5 Notices. All demands, notices, instructions and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at or sent by first class mail, facsimile or
courier to (a) in the case of the Seller and the Servicer, to People's Bank, 850
Main Street, Bridgeport, Connecticut 06604, Attention: William T. Kosturko,
Esq., (b) in the case of the Trustee, Four Albany Street, 10th Floor, New York,
New York 10006, Attention: Corporate Trust and Agency Group, Structured Finance
Team and (c) in the case of the Enhancement Provider for a particular Series,
the address, if any, specified in the Supplement relating to such Series; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party. Unless otherwise provided with respect to
any Series in the related Supplement any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register or, with respect to any notice required or permitted to be made to the
Holders of Bearer Certificates, by publication in the manner provided in the
related Supplement. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice. Any notice required to be delivered
hereunder to Certificateholders, any report delivered by Servicer or independent
certified public accountants under Article III, any amendment or supplement
delivered pursuant to Section 13.1, and any opinion delivered hereunder shall be
given by first class mail, postage prepaid, to Moody's at Moody's Investors
Service, Inc., 99 Church Street, New York, New York 10007, Attention: ABS
Monitoring Department, 4th Floor and to Standard & Poor's at Standard and Poor's
Corporation, 26 Broadway, New York, New York 10004, Attention: Asset-Backed
Surveillance Group or with respect to any other Rating Agency, the address
supplied by such Rating Agency in writing to the Servicer. The Seller and the
Servicer, as the case may be, shall provide 60 days' prior written notice to the
Investor Certificateholders of any sale of Accounts pursuant to Section 7.2(b)
or any transfer of Servicing pursuant to Section 8.2(b) or 8.5.
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SECTION 13.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
SECTION 13.7 Certificates Non-Assessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the Undivided Interests
represented by the Certificates shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever, and that Certificates upon
authentication thereof by the Trustee pursuant to Sections 2.1 and 6.2 are and
shall be deemed fully paid.
SECTION 13.8 Further Assurances. The Seller and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 13.9 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trustee, any Enhancement Provider or
the Investor Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 13.10 Counterparts. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 13.11 Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders
and, to the extent provided in the related Supplement, the Enhancement Provider
named therein, and their respective successors and permitted assigns. Except as
otherwise provided in this Article XIII, no other Person will have any right or
obligation hereunder.
SECTION 13.12 Actions by Certificateholders.
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(a) Wherever in this Agreement a provision is made that an action may
be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder, unless such provision requires a specific
percentage of Investor Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
SECTION 13.13 Rule 144A Information. For so long as any of the Investor
Certificates of any Series or any Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act of 1933 each of the Seller,
the Servicer, the Trustee and the Enhancement Provider for such Series agrees to
cooperate with the others to provide to any Investor Certificateholders of such
Series or Class and to any prospective purchaser of Certificates designated by
such an Investor Certificateholder upon the request of such Investor
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144 A(d)(4) under the Act.
SECTION 13.14 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 13.15 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[End of Article XIII]
-124-
<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
PEOPLE'S BANK,
Seller and Servicer
By: /s/ Michael J. Ciborowski
- -----------------------------
Name: Michael J. Ciborowski
Title: Vice President
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: /s/ Louis Bodi
- ----------------------------
Name: Louis Bodi
Title: Vice President
-125-
<PAGE>
EXHIBIT A
FORM OF EXCHANGEABLE SELLER CERTIFICATE
No. 7 One Unit
PEOPLE'S BANK CREDIT CARD MASTER TRUST
EXCHANGEABLE SELLER CERTIFICATE
THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE
AGREEMENT REFERRED TO HEREIN. A COPY OF THE AGREEMENT WILL BE FURNISHED TO THE
HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN REQUEST.
This Certificate represents Seller Interest in
People's Bank Credit Card Master Trust
Evidencing an interest in a trust, the Corpus of which consists of a portfolio
of VISA* and MasterCard1 credit card receivables generated or to be generated by
People's Bank.
(Not an interest in or an obligation of
People's Bank or any Affiliate
thereof.)
This certifies that PEOPLE'S STRUCTURED FINANCE CORP. (the "Holder") is
the registered owner of an undivided interest in People's Bank Credit Card
Master Trust (the "Trust") not represented by any Series of Investor
Certificates issued pursuant to the Amended and Restated Pooling and Servicing
Agreement, dated as of March 18, 1997 and the Series 1997-1 Supplement dated as
of March 18, 1997 or any other Supplement (the "Agreement", such term to include
any Supplement thereto), by and among the Holder, as seller and servicer, and
Bankers Trust Company, as Trustee (the "Trustee"). The corpus of the Trust (a)
as of December 31, 1996 consists of (i) a portfolio of receivables (the
"Receivables") (other than Receivables in Additional Accounts) then existing or
thereafter created under certain VISA and MasterCard credit card accounts (the
"Accounts") of People's Bank (the "Seller"), a Connecticut stock savings bank,
(ii) all monies due or to become due with respect thereto (including all Finance
Charge Receivables), (iii) all proceeds of such Receivables, (iv) Recoveries
allocable to the trust, (v) Interchange relating to the Receivables and all
proceeds thereof, (vi) all monies and investments on deposit in certain accounts
of the Trust, and (b) will from time to time consist of (vii) the
- --------
* VISA and Mastercard are registered trademarks of VISA USA, Inc. and
MasterCard International Incor- porated, respectively.
A-1
<PAGE>
Series Accounts maintained for the benefit of the Certificate- holders of any
Series of Investor Certificates, (viii) any Enhancement and all monies available
under any Enhancement, to be provided for any Series of Certificates for payment
to the Certificateholders of such Series (collectively, the "Trust Assets").
Although a summary of certain provisions of the Agreement is set forth
below, this Certificate does not purport to summarize the Agreement and
reference is made to that Agreement for information with respect to the
interests, rights, benefits, obligations, and duties evidenced hereby. A copy of
the Agreement, may be requested from the Trustee by writing to the Trustee at
Four Albany Street, New York, New York 10006; Attention: Corporate Trust Office.
To the extent not defined herein, capitalized terms used herein have the
meanings assigned thereto 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 Holder by virtue of the acceptance
hereof assents and by which the Holder is bound.
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.
This Certificate has not been registered or qualified under the
Securities Act of 1933, as amended, and any state securities law. No sale,
transfer or other disposition of this Certificate shall be permitted other than
in accordance with the provisions of Sections 6.3 or 6.9 of the Agreement.
The Receivables consist of Principal Receivables which arise generally
from the purchase of goods, services and cash advances and of Finance Charge
Receivables and other fees and charges, as more fully specified in the
Agreement.
This Certificate is the Exchangeable Seller Certificate (the
"Certificate"), which represents an interest in the Trust, including the right
to receive the Collections and other amounts at the times and in the amounts
specified in the Agreement to be paid to the Holder of the Exchangeable Seller
Certificate. The aggregate interest represented by this Certificate at any time
in the Receivables in the Trust shall not exceed the Seller Interest at such
time. In addition to this Certificate, Investor Certificates will be issued to
investors from time to time pursuant to the Agreement, each of which will
represent the interests of Investor Certificateholders of a specific Series in
the Trust. This Certificate shall not represent any interest in the Collection
Account, any Series Account, or any Enhancement.
A-2
<PAGE>
The Seller Interest on any date of determination will generally be an amount
equal to the aggregate amount of Principal Receivables at the end of the day
immediately prior to such date of determination plus the amount on deposit in
the Excess Funding Account minus the Aggregate Investor Interest at the end of
such day.
This Certificate does not represent an obligation of, or any interest
in, the Seller or the Servicer or any Affiliate thereof, and neither the
Certificates nor the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Certificate has a limited right of payment to certain Collections respecting the
Receivables, all as more specifically set forth hereinabove and in the
Agreement.
Subject to prior termination of the Trust, the Agreement, the
obligations created by the Agreement and the Trust shall terminate on the
earlier to occur of (i) the day after the Distribution Date with respect to any
Series following the date on which funds shall have been deposited in the
Collection Account or the applicable Series Account for (among other things) the
payment of Investor Certificateholders of each Series then issued and
outstanding sufficient to pay in full the Aggregate Investor Interest plus
interest accrued at the applicable Certificate Rate through the end of the
related Interest Accrual Period prior to the Distribution Date with respect to
each such Series (unless a Trust Extension shall have occurred pursuant to
Section 12.1 of the Agreement), (ii) if a Trust Extension shall have occurred,
the Extended Trust Termination Date, and (iii) the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the
father of the late President of the United States, living on the date of the
Agreement. Upon the termination of the Trust pursuant to Section 12.1 of the
Agreement and the surrender of the Exchangeable Seller Certificate, the Trustee
shall 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
all proceeds thereof and Interchange relating thereto and Recoveries allocable
to the Trust and the proceeds thereof. The Trustee shall execute and deliver
such instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Holder of the Exchangeable Seller
Certificate to vest in such Holder all right, title and interest which the Trust
had in the Receivables.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-3
<PAGE>
IN WITNESS WHEREOF, People's Bank, has caused this Certificate to be
duly executed by its duly authorized officer.
PEOPLE'S BANK
By:____________________________
Dated March 27, 1997
A-4
<PAGE>
Form of Trustee's Certificate of Authentication
This is the Seller Certificate referred to in the within-mentioned
Pooling and Servicing Agreement.
BANKERS TRUST COMPANY
By:__________________________
Authorized Officer
A-5
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN
ADDITIONAL ACCOUNTS
ASSIGNMENT No. ____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as of
_____________, __________ by and between PEOPLE'S BANK, a Connecticut stock
savings bank (the "Seller"), to Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Seller and the Trustee are parties to the Amended and
Restated Pooling and Servicing Agreement, dated as of March 18, 1997 (as
heretofore amended, supplemented or otherwise modified, the "Pooling and
Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement the Seller
wishes to designate Additional Accounts of the Seller to be included as Accounts
and to convey the Receivables of such Additional Accounts, whether now existing
hereinafter created, to the Trust as part of the corpus of the Trust (as each
such term is defined in the "Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and the Trustee hereby agree as follows:
SECTION 1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, ____________________, _________________.
"Addition Notice Date" shall mean, with respect the Additional Accounts
designated hereby, ________________, (which shall be a date on or prior to the
fifth Business Day with respect to Accounts added pursuant to Section 2.6(a)
prior to the twentieth Business Day pursuant to Section 2.6(a)(i) prior to the
Addition Date.)
B-1
<PAGE>
SECTION 2. Designation of Additional Accounts. The Seller shall deliver
to the Trustee, on behalf of the Trust, not later than three Business Days after
the Addition Date, a computer file or microfiche list containing a true and
complete list of each VISA and MasterCard account which, as of the Addition Date
shall be deemed to be an Additional Account (such accounts being identified by
account number as of the close of business on the Additional Date by including
in such computer file or microfiche list code "____" with respect to the first
addition of Accounts; "____________________" with respect to the second addition
of Accounts, and so on in sequence, in the dependent number field. Such list
shall be marked as Schedule I to this Agreement and, as of the Addition Date,
shall be incorporated into and made a part of this Assignment.]
SECTION 3. Deposits into the Collection Account.
(a) Not later than the second Business Day following the completion of
each Billing Cycle in which the Addition Date occurs, the Servicer shall deposit
into the Collection Account any amounts received from the Obligors relating to
the Additional Accounts to which such Billing Cycle relates during such Billing
Cycle to the extent not so deposited pursuant to subsection 3(b) below and
Article IV of the Agreement.
(b) On or before the second Business Day following the end of each
Billing Cycle which occurs during the 30-days immediately following such
Addition Date, the Seller shall deposit into the Collection Account an amount
equal to, with respect to Receivables in the Additional Accounts in each Billing
Cycle in which the Addition Date occurs, the Collections of Finance Charge
Receivables and Principal Receivables processed on each Date of Processing from
and including the first Date of Processing in such Billing Cycle through and
including the Date of Processing immediately preceding the Addition Date.
SECTION 4. Conveyance of Receivables.
(a) The Seller does hereby transfer, assign, set-over and otherwise
convey to the Trustee, on behalf of the Trust, for the benefit of the
Certificateholders, without recourse on and after the Addition Date, all right,
title and interest of the Transferor in and to (i) the Receivables now existing
and hereafter created in the Additional Accounts designated hereby, (ii) all
monies due or to become due with respect thereto (including all Finance Charge
Receivables), (iii) all proceeds of such Receivables, (iv) Insurance proceeds
relating to the Receivables, (v) Recoveries allocable to the Trust and (vi)
Interchange related to such Receivables pursuant to Subsection 2.5(k) of the
Pooling and Servicing Agreement.
B-2
<PAGE>
(b) In connection with such transfer, the Seller agrees to record and
file, at its own expense, a financing statement with respect to the Receivables
now existing and hereafter created in the Automatic Additional Accounts
designated hereby (which may be a single financing statement with respect to all
such Receivables) for the transfer of accounts as defined in Section 9-106 of
the UCC as in effect in the State of New York meeting the requirements of
applicable state law in such manner and such jurisdictions as are necessary to
perfect the assignment of such Receivables to the Trust, and to deliver a
file-stamped copy of such financing statement or other evidence of such filing
(which may, for purposes of this Section 4. consist of telephone confirmation of
such filing) to the Trustee on or prior to the date of this Assignment.
(c) In connection with such transfer, the Seller further agrees, at its
own expense, on or prior to the date of this Assignment to indicate in its
computer files by including in such computer file or microfiche list the code
"____" with respect to the first addition of Accounts, "____" with respect to
the second addition of Accounts, and so on in sequence, in the dependent number
field that Receivables created in connection with the Additional Accounts
designated hereby have been transferred to the Trust pursuant to this Assignment
for the benefit of the Certificateholders.
SECTION 5. Acceptance by Trustee. The Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest previously
held by the Seller in and to (i) the Receivables now existing and hereafter
created in the Additional Accounts designated hereby, (ii) all monies to be due
with respect thereto (including all Finance Charge Receivables), (iii) all
proceeds of such Receivables, (iv) Insurance Proceeds relating to the
Receivables, (v) Recoveries allocated to the Trust and (vi) Interchange relating
to such Receivables pursuant to Subsection 2.5(k) of the Pooling and Servicing
Agreement, and declares that it shall maintain such right, title and interest,
upon the trust set forth in the Pooling and Servicing Agreement, for the benefit
of all Certificateholders.
SECTION 6. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Trustee and the Trust as of the Addition
Date:
(a) Legal Valid and Binding Obligation. This Assignment
constitutes a legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except (i)
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of Connecticut
B-3
<PAGE>
stock savings banks, (ii) as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity), (iii) subject to the unenforceability of provisions
indemnifying a party against liability where such indemnification is
contrary to public policy, (iv) subject to the effect of judicial
decisions which have held that certain covenants and provisions of
agreements are unenforceable where (y) the breach of such covenants or
provisions imposes restrictions or burdens where it cannot be
demonstrated that such breach is a material breach of a material
covenant or provision, or (z) the creditor's enforcement of such
covenants or provisions under the circumstances would violate the
creditor's implied covenant of good faith and fair dealing, and (v)
subject to the unenforceability of provisions herein to the effect that
the failure to exercise or delay in exercising rights or remedies will
not operate as a waiver of any such rights or remedies, or to the
effect that provisions therein may only be waived in writing to the
extent that an oral agreement modifying such provisions has been
entered into.
(b) Eligibility of Accounts. Each Additional Account
designated hereby is, as of the end of the related Billing Cycle
immediately preceding the Addition Date, an Eligible Additional
Account.
(c) Selection Procedures. No selection procedures believed by
the Seller to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts
designated hereby from the available Eligible Additional Accounts owned
by the Seller.
(d) Insolvency. As of the Addition Date, the Seller is not
insolvent and, after giving effect to the conveyance set forth in
Section 4 of this Assignment, will not be insolvent.
(e) Security Interest. This Assignment constitutes either (i)
a valid transfer and assignment to the Trust of all right, title and
interest of the Seller in and to Receivables now existing and hereafter
created in the Additional Accounts designated hereby, and all proceeds
(as defined in the UCC as in effect in the State of New York) of such
Receivables and Insurance Proceeds and Recoveries relating thereto, and
such Receivables and any proceeds thereof and Recoveries allocable to
the Trust and the Interchange relating to such Receivables pursuant to
Section 2.5(k) of the Agreement will be held by the Trust free and
clear of any Lien of any Person claiming through or under Seller or any
of its Affiliates except for (x) Liens permitted under subsection
2.3(b) of the Pooling and
B-4
<PAGE>
Servicing Agreement and subject to Section 9.306 of the UCC in effect
in the State of New York, (y) the interest of the Holder of the Seller
Certificate and (z) the Seller's right to interest accruing on, and
investment earnings in respect of, the Collection Account, the
Retention Account or any Series Account as provided in the Pooling and
Servicing Agreement; or (ii) it constitutes a grant of a security
interest (as defined in the UCC as in effect in the State of New York)
in such property to the Trust, which is enforceable with respect to the
existing Receivables of the [Additional Accounts] [Automatic Additional
Accounts] designated hereby, the proceeds (as defined in the UCC as in
effect in the State of New York) thereof and Insurance Proceeds
relating thereto upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts designated hereby,
the proceeds (as defined in the UCC as in effect in the State of New
York) thereof, Recoveries allocable to the Trust and Interchange with
respect to such Receivables pursuant to subsection 2.5(k) of the
Pooling and Servicing Agreement upon such creation; and (iii) if this
Assignment constitutes the grant of a security interest to the Trust in
such property, upon the filing of a financing statement described in
Section 4 of this Assignment with respect to the Additional Accounts
designated hereby and, in the case of Receivables hereafter created in
such Additional Accounts and the proceeds (as defined in the UCC as in
effect in the State of New York) thereof, Insurance Proceeds relating
to such Receivables, Recoveries allocable to the Trust and Interchange
with respect to such Receivables pursuant to subsection 2.5(k) of the
Pooling and Servicing Agreement, upon such creation, the Trust shall
have a first priority perfected security interest in such property,
except for Liens permitted under subsection 2.5(b) of the Pooling and
Servicing Agreement or as provided in Section 9-306 of the UCC as in
effect in the State of Connecticut or New York, whichever is
applicable.
SECTION 7. Conditions Precedent. The acceptance of the Trustee set
forth in Section 5 and the amendment of the Pooling and Servicing Agreement set
forth in Section 8 are subject to the satisfaction, on or prior to the Addition
Date, of the following conditions precedent:
(1) Officer's Certificate. The Seller shall have delivered to
the Trustee a certificate of a Vice President or more senior officer,
certifying that (i) all requirements set forth in Section 2.6 of the
Pooling and Servicing Agreement for designating Additional Accounts and
conveying the Principal Receivables of such Accounts, whether now
existing or hereafter created, have been satisfied and (ii) each of the
representations and warranties made by the
B-5
<PAGE>
Seller in Section 6 is true and correct as of the Addition Date. 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.
(2) Opinion of Counsel. The Seller shall have delivered to the
Trustee an opinion of Counsel with respect to the Additional Accounts
designated hereby substantially in the form of Exhibit F to the Pooling
and Servicing Agreement.
(3) Additional Information. The Seller shall have delivered to
the Trustee such information as was reasonably requested by the Trustee
to satisfy itself as to the accuracy of the representation and warranty
set forth in subsection 6(d) to this Agreement.
(4) Notice of Addition of Accounts. The Seller (i) shall have
provided the Rating Agency, the Servicer and the Enhancement Provider,
if so provided in the Supplement with respect to any Series, with the
notice specified provided in subsections 2.6(f) of the Pooling and
Servicing Agreement, at the time specified therein.
SECTION 8. Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provided that all
references therein to the "Pooling and Servicing Agreement," to "this Agreement"
and "herein" shall be deemed from and after the Addition Date to be a dual
reference to the Pooling a Servicing Agreement as supplemented by this
Assignment. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Pooling and Servicing
Agreement shall remain unamended and shall continue to be, and shall remain, in
full force and effect in accordance with its terms and except as expressly
provided herein shall not constitute or be deemed to constitute a waiver of
compliance with or a consent to noncompliance with any term or provision of the
Pooling and Servicing Agreement.
SECTION 9. Counterparts. This Assignment may be executed in two or more
counterparts (and by different parties or separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-6
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
PEOPLE'S BANK
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity, but solely
as Trustee
By: ___________________________
Name:
Title:
B-7
<PAGE>
Schedule 1
to Assignment of
Receivables in
Additional Accounts
ADDITIONAL ACCOUNTS
[Deemed Incorporated]
B-8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT C
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- -------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Trust Activity Series 1997-1
Beginning of Month - Aggregate Principal Receivables 0.00
Principal Collections on the Receivables 0.00
Finance Charge Collections 0.00
Receivables in Defaulted Accounts 0.00
End of Month - Aggregate Principal Receivables 0.00
Investor Interest Series 1994-1 0.00
Investor Interest Series 1994-2 0.00
Investor Interest Series 1995-1 0.00
Investor Interest Series 1996-1 0.00
Investor Interest Series 1997-1 0.00
Seller Principal Receivables 0.00
Total Investor Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
Adjusted Investor Interest 0.00
Class A Adjusted Investor Interest 0.00
Class B Investor Interest 0.00
Collateral Interest 0.00
Class A Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
Class B Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
- -------------------------------------------------------------------------------------------------------------------------
C-1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Trust Activity Series 1997-1 (con't)
Collateral Interest Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
Seller Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
2. Allocation of Funds in Collection Account
Class A Available Funds 0.00
Class A Monthly Cap Interest Payable to Class A Certificateholders
(See "Calculation of Certificate Interest" #4) 0.00
Unpaid Class A Monthly Cap Interest 0.00
Class A Monthly Servicing Fee
(See "Calculation of Monthly Servicing Fee" #7) 0.00
Unpaid Class A Monthly Servicing Fee 0.00
Class A Investor Default Amount
Class A Investor Charge-Offs 0.00
0.00
Excess Spread from Class A Finance Charge Collections 0.00
Class A Required Amount 0.00
Class B Available Funds 0.00
Class B Monthly Cap Interest Payable to Class B Certificateholders
(See "Calculation of Certificate Interest" #4) 0.00
Unpaid Class B Monthly Cap Interest 0.00
Class B Monthly Servicing Fee
(See "Calculation of Monthly Servicing Fee" #7) 0.00
Unpaid Class B Monthly Servicing Fee 0.00
Class B Investor Default Amount 0.00
Class B Investor Charge-Offs 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
C-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- -------------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Excess Spread from Class B Finance Charge Collections 0.00
Class B Required Amount 0.00
Collateral Available Funds 0.00
Collateral Interest Monthly Servicing Fee
(See "Calculation of Monthly Servicing Fee" #7) 0.00
Unpaid Collateral Interest Monthly Servicing Fee 0.00
Excess Spread from Collateral Interest Finance Charge Collections 0.00
Total Excess Spread 0.00
Excess Spread used to satisfy Class A Required Amount 0.00
Excess Spread used to satisfy remaining Class A Monthly Cap Interest 0.00
Excess Spread used to satisfy remaining Class A Monthly Servicing Fee 0.00
Excess Spread used to satisfy remaining Class A Investor Default Amount 0.00
Excess Spread used to satisfy Unreimbursed Class A Investor Charge-Offs 0.00
Remaining Class A Required Amount 0.00
Excess Spread used to satisfy Class B Required Amount 0.00
Excess Spread used to satisfy remaining Class B Monthly Cap Interest 0.00
Excess Spread used to satisfy remaining Class B Monthly Servicing Fee 0.00
Excess Spread used to satisfy remaining Class B Investor Default Amount 0.00
Excess Spread used to satisfy Unreimbursed Class B Investor Charge-Offs 0.00
Remaining Class B Required Amount 0.00
Shared Finance Charges used to satisfy Remaining Class A Required Amount 0.00
Shared Finance Charges used to satisfy remaining Class A Monthly Cap Interest 0.00
Shared Finance Charges used to satisfy remaining Class A Monthly Servicing Fee 0.00
Shared Finance Charges used to satisfy remaining Class A Investor Default Amount 0.00
Shared Finance Charges used to satisfy Unreimbursed Class A Investor Charge-Offs 0.00
Remaining Class A Required Amount 0.00
- -------------------------------------------------------------------------------------------------------------------------------
C-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ----------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Reallocated Collateral Principal used to satisfy Remaining Class A
Required Amount 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class A
Monthly Cap Interest 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class A
Monthly Servicing Fee 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class A
Investor Default Amount 0.00
Reallocated Collateral Principal Collections used to satisfy Unreimbursed
Class A Charge-Offs 0.00
Remaining Class A Required Amount 0.00
Reallocated Class B Principal Collections used to satisfy remaining
Class A Required Amount 0.00
Reallocated Class B Principal Collections used to satisfy remaining
Class A Monthly Cap Interest 0.00
Reallocated Class B Principal Collections sued to satisfy remaining
Class A Monthly Servicing Fee 0.00
Reallocated Class B Principal Collections used to satisfy remaining
Class A Investor Default Amount 0.00
Reallocated Class B Principal Collections used to satisfy Unreimbursed
Class A Investor Charge-Offs 0.00
Remaining Class A Required Amount 0.00
Collateral Interest used to satisfy Unreimbursed Class A
Investor Charge-Offs 0.00
Class B Investor Interest used to satisfy Unreimbursed Class A
Investor Charge-Offs 0.00
Shared Finance Charges used to satisfy Remaining Class B Required Amount 0.00
Shared Finance Charges used to satisfy remaining Class B Monthly
Cap Interest 0.00
Shared Finance Charges used to satisfy remaining Class B Monthly
Servicing Fee 0.00
Shared Finance Charges used to satisfy remaining Class B Investor
Default Amount 0.00
Shared Finance Charges used to satisfy Unreimbursed Class B Investor
Charge-Offs 0.00
Remaining Class B Required Amount 0.00
- ----------------------------------------------------------------------------------------------------------------------
C-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Reallocated Collateral Principal used to satisfy Remaining Class B
Required Amount 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class B
Monthly Cap Interest 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class B
Monthly Servicing Fee 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class B
Investor Default Amount 0.00
Reallocated Collateral Principal Collections used to satisfy Unreimbursed Class B
Charge-Offs 0.00
Remaining Class B Required Amount 0.00
Collateral Interest used to satisfy Unreimbursed Class B Investor Charge-Offs 0.00
Excess Spread used to satisfy interest on overdue Class A
(See "Calculation of Certificate Interest" #4) 0.00
Excess Spread used to satisfy interest on overdue Class B
(See "Calculation of Certificate Interest" #4) 0.00
Excess Spread used to satisfy unreimbursed reductions to Class B
Investor Interest from prior periods 0.00
Excess Spread used to pay Collateral Monthly Interest 0.00
Excess Spread used to satisfy excess of Class A Monthly Interest
over Class A Monthly Cap Rate (other than Class A Excess Interest) 0.00
Excess Spread used to satisfy excess of Class B Monthly Interest
over Class B Monthly Cap Rate (other than Class B Excess Interest) 0.00
Excess Spread used to satisfy Aggregate Collateral Default Amount from previous
periods 0.00
Excess Spread used to satisfy Unreimbursed Reductions to Collateral Invested
Amount 0.00
- ------------------------------------------------------------------------------------------------------------------------
C-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Excess Spread used to fund Reserve Account up to Required Reserve Account 0.00
Excess Spread used to satisfy payments per Loan Agreement 0.00
Excess Spread used to satisfy Class A Excess Interest 0.00
Excess Spread used to satisfy Class B Excess Interest 0.00
Excess Spread used for Shared Finance Charge Collections for Other Series 0.00
Excess Spread used to pay other accrued and unpaid expenses of the Trust 0.00
Excess Spread paid to Holder of Exchangeable Seller Certificate (dollars) 0.00
Excess Spread paid to Holder of Exchangeable Seller
Certificate (percentage of Investor Interest) 0.0000%
Unreimbursed Class A Charge-Offs 0.00
Unreimbursed Class A Charge-Offs per $1,000 Original Investment 0.00
Unreimbursed Class B Charge-Offs 0.00
Unreimbursed Class B Charge-Offs per $1,000 Original Investment 0.00
Available Principal Collections 0.00
Monthly Principal Payable To Class A Certificateholders
(See "Calculation of Monthly Principal" #5) 0.00
Monthly Principal Payable To Class B Certificateholders
(See "Calculation of Monthly Principal" #5) 0.00
Monthly Principal Payable To Collateral Interest Holders
(See "Collateral Interest Amount Activity" #8) 0.00
Monthly Principal Reinvested In Receivables
(See "Calculation of Monthly Principal" #5) 0.00
- ------------------------------------------------------------------------------------------------------------------------
C-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. Allocation of Funds in Collection Account (con't)
(Net Deposit)/Draws on Shared Principal Collections 0.00
Required Shared Finance Charge Collections from other Series 0.00
Draw on Shared Finance Charge Collections from other Series 0.00
Required Shared Finance Charge Collections for other Series 0.00
Deposit of Shared Finance Charge Collections for other Series 0.00
Total Distribution to Class A Investors 0.00
Total Distribution to Class A Investors per $1,000 Invested 0.00
Total Distributions to Class B Investors 0.00
Total Distribution to Class B Investors per $1,000 Invested 0.00
Total Distribution to Collateral Interest Holders 0.00
Total Distribution to Collateral Interest Holders per $1,000 Invested 0.00
3. Principal Funding Account and Reserve Account
Beginning Balance of Principal Funding Account 0.00
Deposits into Principal Funding Account 0.00
Withdrawals from Principal Funding Account 0.00
Ending Balance of Principal Funding Account 0.00
Accumulation Shortfall 0.00
Principal Funding Investment Proceeds 0.00
Principal Funding Investment Shortfall 0.00
Beginning Balance of Reserve Account 0.00
Available Reserve Account Amount 0.00
Required Reserve Account Amount 0.00
Reserve Account Investment Proceeds 0.00
Deposits from Excess Spread into Reserve Account 0.00
Reserve Account Draws 0.00
Ending Balance of Reserve Account 0.00
4. Calculation of Certificate Interest
Class A Certificate Rate 0.00000%
Previous Month's Class A Deficiency Amount 0.00
- ------------------------------------------------------------------------------------------------------------------------
C-7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4. Calculation of Certificate Interest (con't)
Class A Interest at the Certificate Rate + 0.5% on Deficiency Amount 0.00
Covered Amount 0.00
Principal Funding Investment Proceeds 0.00
Principal Funding Investment Shortfall 0.00
Reserve Account Draws 0.00
Class A Investor Certificate Interest Shortfall
(Deficiency Amounts) 0.00
This Month Class A Certificate Interest 0.00
Expected Class A Principal 0.00
This Month Class A Cap Shortfall 0.00
Class A Excess Interest 0.00
Total Class A Interest Distributable to Class A Certificateholders 0.00
Total Class A Interest Distributable per $1,000 of Class A Original Investment 0.00
Class B Certificate Rate 0.00000%
Previous Month's Class B Deficiency Amount 0.00
Class B Interest at the Certificate Rate + 0.5% on Deficiency Amount 0.00
Class B Investor Certificate Interest Shortfall 0.00
This Month Class B Certificate Interest 0.00
Expected Class B Principal 0.00
This Month Class B Cap Shortfall 0.00
Class B Excess Interest 0.00
Total Class B Interest Distributable to Class B Certificateholders 0.00
Total Class B Interest Distributable per $1,000 of Class B Original Investment 0.00
Total Certificate Interest Distributable to Class A and Class B Certificateholders 0.00
Total Interest Distributable per $1,000 of Original Investment to Class A
and Class B Certificateholders 0.00
- ------------------------------------------------------------------------------------------------------------------------
C-8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Calculation of Monthly Principal
Beginning Investor Interest 0.00
Beginning Class A Investor Interest 0.00
Class A Available Principal Collections 0.00
Maximum Monthly Principal to Class A Certificateholders 0.00
Monthly Principal Payable to Class A Certificateholders 0.00
Class A Controlled Deposit Amount 0.00
Class A Controlled Accumulation Amount 0.00
Class A Monthly Unreimbursed Charge-Offs 0.00
Total Class A Monthly Principal 0.00
Ending Class A Investor Interest 0.00
Class A Monthly Principal Payable per $1,000 of Original Investment 0.00
Class A Monthly Principal Reinvested in Receivables 0.00
Beginning Class B Investor Interest 0.00
Class B Available Principal Collections 0.00
Maximum Monthly Principal to Class B Certificateholders 0.00
Class B Monthly Principal 0.00
Monthly Principal Payable to Class B Certificateholders 0.00
Class B Monthly Unreimbursed Charge-Offs 0.00
Total Class B Monthly Principal 0.00
Ending Class B Investor Interest 0.00
Class B Monthly Principal Payable per $1,000 of Original Investment 0.00
Class B Monthly Principal Reinvested in Receivables 0.00
Class B Reallocated Principal 0.00
Prior Month's Cumulative Class B Reallocated Principal 0.00
Class B Investor Interest used to satisfy Unreimbursed Class A
Investor Charge-Offs 0.00
Prior Month's Cumulative Class B Investor Interest used to satisfy
Unreimbursed Class A Investor Charge-Offs 0.00
Required Shared Principal Collections for other Series 0.00
Deposit of Shared Principal Collections for other Series 0.00
Required Shared Principal Collections from other Series 0.00
Draw on Shared Principal Collections from other Series 0.00
Ending Investor Interest 0.00
- ------------------------------------------------------------------------------------------------------------------------
C-9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6. Calculation of Pool Factor
(Ending Certificate Balance divided by Initial Principal Amount to 7 decimal places) 0.000000
7. Calculation of Monthly Servicing Fee
Class A Servicing Fee Percentage 0.00%
Class B Servicing Fee Percentage 0.00%
Collateral Interest Amount Servicing Fee Percentage 0.00%
Beginning Class A Investor Interest 0.00
Beginning Class B Investor Interest 0.00
Beginning Collateral Investor Interest 0.00
Beginning Investor Interest 0.00
Class A Monthly Servicing Fee 0.00
Class B Monthly Servicing Fee 0.00
Collateral Interest Monthly Servicing Fee 0.00
Total Monthly Servicing Fee 0.00
Class A Monthly Servicing Fee Shortfall 0.00
Class B Monthly Servicing Fee Shortfall
Collateral Interest Amount Monthly Servicing Fee Shortfall 0.00
8. Collateral Interest Amount Activity
Beginning of Month Balance 0.00
Required Collateral Interest Amount 0.00
Collateral Interest Amount Monthly Interest 0.00
Collateral Interest Amount Certificate Interest Shortfall 0.00
Collateral Monthly Principal 0.00
Collateral Monthly Principal Payable per $1,000 of Original Investment 0.00
Collateral Interest Monthly Interest Payable per $1,000 of Original Investment 0.00
Excess Spread used to satisfy payments per Loan Agreement 0.00
Collateral Interest Amount Deposits 0.00
End of Month Balance 0.00
Reinvestment Income Received on Collateral Interest Amount 0.00
Aggregate Collateral Interest Amount Draws 0.00
Available Collateral Interest Amount (Dollars) 0.00
Available Collateral Interest Amount (Percentage) 0.00%
Ratio of Collateral Interest to Investor Interest 0.00%
- ------------------------------------------------------------------------------------------------------------------------
C-10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9. Past Due Statistics
(past due on a contractual basis)
1-30 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
31-60 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
61-90 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
91-120 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
121-150 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
151-180 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
181 + days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
10. Base Rate Calculation
Base Rate 0.00%
Portfolio Yield (net of losses) 0.00%
Excess of Portfolio Yield over Base Rate 0.00%
- ------------------------------------------------------------------------------------------------------------------------
C-11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
11. Number of Accounts in the Trust
Number of Additional Accounts 0
Number of Removed Accounts 0
Number of Automatic Additional Accounts 0
Ending Number of Accounts 0
- ------------------------------------------------------------------------------------------------------------------------
C-12
</TABLE>
<PAGE>
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
PEOPLE'S BANK
----------------------------------
People's Bank Credit Card Master Trust Series
----------------------------------
The undersigned, a duly authorized representative of People's Bank, as
Servicer pursuant to the Amended and Restated Pooling and Servicing Agreement
dated as of March 18, 1997 (as heretofore amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement") by and between People's Bank
and Bankers Trust Company, as trustee (the "Trustee"), does hereby certify that:
1. People's Bank is Servicer under the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to the Pooling
and Servicing Agreement to execute and deliver this Certificate to the
Trustee.
3. This Certificate is delivered pursuant to Section 3.5 of
the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during [the
period from the Closing Date until] [the calendar year ended] December
31, ____ was conducted under my supervision.
5. Based on such review, the Servicer has, to the best of my
knowledge, fully performed all its obligations under the Pooling and
Servicing Agreement throughout such [period] [calendar year] and no
default in the performance of such obligations has occurred or is
continuing except as set forth in paragraph 6 below.
6. The following is a description of each default in the
performance of the Servicer's obligations under the provisions of the
Pooling and Servicing Agreement including any Supplement known to me to
have been made during [such period] [the calendar year ended
____________, _________,] which sets forth in detail (i) the nature of
such default, (ii) the action taken by the Servicer, if any, to remedy
each such default and (iii) the current status of each such default:
[If applicable, insert "None."]
D-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this ____ day of _______________,
- -------.
PEOPLE'S BANK
By:____________________________
Name:
Title:
D-2
<PAGE>
EXHIBIT E
FORM OF
SELLER CERTIFICATE DESIGNATING BANKS AND
AGENT BANKS THE ACCOUNTS OF WHICH
CONSTITUTE AUTOMATIC ADDITIONAL ACCOUNTS
This Certificate is delivered pursuant to that certain Amended and
Restated Pooling and Servicing Agreement dated as of March 18, 1997 (as
heretofore amended, supplemented or otherwise modified, the "Pooling and
Servicing Agreement") by and between People's Bank, a Connecticut stock savings
bank, as seller and servicer (the "Seller"), and Bankers Trust Company, a
banking corporation organized and existing under the laws of the State of New
York, as trustee (the "Trustee"). Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in the Pooling and
Servicing Agreement.
Pursuant to the Pooling and Servicing Agreement, the Seller is hereby
designating to the Trustee the following ["banks" and "agent banks"] [insert
name of other applicable grouping] of credit card accounts maintained by [Total
Systems, Inc. (or its successor)] [insert name of other records processor] on
behalf of the Seller as [banks and agent banks] [name of other grouping] the
accounts in which (other than existing Accounts or Additional Accounts)
constitute Automatic Additional Accounts:
[insert bank and agent bank (or other grouping)
identification codes]
E-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this __ day of _____.
PEOPLE'S BANK
By:_________________________
Name:
Title:
Acknowledged by:
BANKERS TRUST COMPANY,
as Trustee under the
Pooling and Servicing
Agreement
By:__________________________
Name:
Title:
E-2
<PAGE>
EXHIBIT F
FORM OF
OPINION OF COUNSEL PURSUANT TO
SECTIONS 2.6(G)(VI) AND 13.2(D)(I)
OF THE POOLING AND SERVICING AGREEMENT
[on letterhead of Pullman & Comley, LLC]
Reply to: Bridgeport
Telephone: (203) 330-2000
Bankers Trust Company Moody's Investors Service,
Four Albany Street Inc.
New York, New York 10006 99 Church Street
New York, New York 10004
Standard & Poor's Ratings Services, Goldman, Sachs & Co.
a division of the McGraw-Hill 85 Broad Street
Companies, Inc. New York, New York 10004
25 Broadway
New York, New York 10004
Re: People's Bank Credit Card Master Trust
Ladies and Gentlemen:
We have been asked, in our capacity as special Connecticut counsel for
People's Bank, a Connecticut capital stock savings bank ("Seller"), to provide
an opinion to you pursuant to Section 2.6(g)(vi) of the Pooling and Servicing
Agreement dated as of June 1, 1993, between the Seller, as seller and servicer,
and Bankers Trust Company, as Trustee on behalf of the Certificate holders of
the Trust (the "Pooling and Servicing Agreement").
In connection with this opinion, we have examined the following
documents:
(a) the Pooling and Servicing Agreement;
(b) Assignment No. 4 of Receivables in Additional Accounts, dated as of
October 1, 1996 (the "Assignment"); and
(c) a UCC-1 financing statement and Annex I thereto, copies of which
are attached hereto as Exhibit A (the "Financing
F-1
<PAGE>
Statement"). (All of the documents listed or described in this paragraph are
referred to collectively, sometimes, as the "Operative Documents".) Unless
otherwise specified, capitalized terms used herein shall have the same meanings
as set forth in the
Pooling and Servicing Agreement.
We have also examined and are relying upon opinions of Mayer, Brown &
Platt, dated the date of this opinion letter and addressed to you, as to certain
matters including, but not limited to, the authorization, creation, validity,
binding effect, and enforceability of the security interest in Seller's rights
in the Receivables from Additional Accounts (the "New Receivables") granted
pursuant to the Assignment and the Pooling and Servicing Agreement. Our opinions
are subject to the assumptions, limitations and qualifications set forth
therein.
References to the validity of the Operative Documents are made on the
assumption, without investigation, that the transactions and documents, where
applicable, have been duly authorized and executed by and are binding upon the
Trustee, and that the Trustee will act in a commercially reasonable manner and
deal fairly in enforcing the Operative Documents.
This opinion is provided as of the date above first set forth. We
disclaim any obligation to advise you as to changes in the status of any of the
matters set forth herein. We express no opinion as to prospective events
anticipated or contemplated by the Operative Documents. We have relied
exclusively upon the representations made in the Operative Documents, and we
have no reason to believe that any of such representations are not complete and
accurate (although we have not conducted any review of documents or inquiry of
any persons with respect thereto). We have not conducted an audit or
investigation of the assets, liabilities, operations or affairs of Seller and
thus do not assume responsibility for any event, occurrence or circumstance
relating to Seller or to any of such assets, liabilities, operations or affairs,
or for the inaccuracy of or other deficiency affecting any information provided
by or on behalf of Seller.
We express no opinion, directly or impliedly, as to any provisions of
any of the Operative Documents that: (a) purport to govern choice of applicable
law; (b) provide for severability of terms or conditions; (c) purport to govern
venue or jurisdiction of the person or subject matter; or (d) provide for any
restriction of remedies, establishment of remedies or waivers of substantive
rights to the extent that the same are held by a court of competent jurisdiction
to contravene public policy or to be inequitable in the context of the facts
presented to such court.
In rendering the opinions expressed herein, we have assumed that: (a)
each person authorizing such execution, delivery, performance and consummation
of such transactions did not violate
F-2
<PAGE>
any fiduciary or other duty owed by such person; (b) no event has taken place
after such authorization, execution, delivery or performance, or will take place
before, in the course of, or after consummation of, the transactions
contemplated by the Operative Documents that would cause any such execution,
delivery, performance or consummation of such transactions not to comply with
any law, statute, ordinance, rule, regulation, award, order, decree, judgment or
duty, or that would permit any party to such transactions at any time thereafter
to cancel, rescind or otherwise avoid any such execution, delivery, performance
consummation or any document or instrument made the subject thereof; (c) at the
time thereof and at all times thereafter, such execution, delivery, performance
and consummation by any party thereto did not, does not now, and shall not
violate, result in a breach of, or constitute a default under, any indenture,
agreement, contract or other instrument to which such other party is or becomes
a party, or by which it or any of its assets are or shall be bound; (d) there
was no misrepresentation or omission of a material fact by Seller or any other
person or entity in connection with such execution, delivery, performance or
consummation; and (e) the interpretation, application and enforceability of the
Operative Documents would be identical in all material respects if the laws of
the State of Connecticut rather than the laws of the State of New York were to
govern the Operative Documents.
All of the opinions expressed herein with regard to enforceability of
Seller's security interest are subject to (a) the limitations of federal and
state bankruptcy, insolvency, reorgani zation, receivership, conservatorship,
fraudulent conveyance, moratorium or other similar laws now or hereafter in
effect, affecting the rights or remedies of creditors or obligees in general, or
(except as to the opinions expressed in paragraphs 3 and 4 hereof) the rights of
creditors or obligees of banks, the deposits of which are insured by the Federal
Deposit Insurance Corporation; (b) the availability of equitable remedies or
other forms of equitable relief; and (c) the discretion of any court before
which any proceeding for such equitable relief may be brought (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Based upon the foregoing and subject to the qualifications set forth in
this letter, we are of the opinion that:
1. Assuming that the transfer and assignment on the date hereof of the
New Receivables under the Assignment and the Pooling and Servicing Agreement
constitutes a grant of a security interest in such of the New Receivables as
constitute "accounts" or "general intangibles" (as defined in the UCC (defined
below)) or a sale of "accounts", filing a UCC-1 financing statement in the
Office of the Secretary of State of the State of Connecticut, Uniform Commercial
Code Division (the "Filing Office"), in the form of the Financing Statement,
executed by Seller, is required and sufficient to
F-3
<PAGE>
perfect the status of the Trust's security interest in such of the New
Receivables and the proceeds thereof as constitute "accounts" or "general
intangibles", other than any part of the New Receivables (a) that is maintained
in any account in the name of the Trustee or any other person, (b) that is
determined to constitute an interest or claim in or under a policy of insurance,
or (c) that is determined to constitute an interest in a deposit account.
2. Based solely upon searches conducted of the Filing Office by Data
Reporting Corp., index dates June 24, 1996 as to form UCC-1 financing statements
and May 10, 1996 as to forms UCC-3, no other currently effective financing
statement covering the New Receivables and the proceeds thereof is on file in
the Filing Office. Assuming that the transfer and assignment of the New
Receivables, and the proceeds thereof, under the Assignment and the Pooling and
Servicing Agreement constitutes a grant of a security interest in such of the
New Receivables as constitute "accounts" or "general intangibles", and the
proceeds thereof, the Trust has a perfected first priority security interest in
such of the New Receivables as constitute "accounts" or "general intangibles" as
defined in the UCC, and the proceeds thereof, except for: (a) Liens permitted
under Section 2.5(b) of the Pooling and Servicing Agreement; (b) the interest of
the Seller and its assignees as permitted under the Pooling and Servicing
Agreement in the New Receivables as the holder of the Exchangeable Seller
Certificate; and (c) the right of the Seller and its assignees as permitted
under the Pooling and Servicing Agreement to receive interest accruing on and
investment earnings in respect of the Collection Account.
3. If a receiver (a "Receiver") or conservator (a "Conservator") were
to be appointed for the Seller pursuant to the provisions of the Banking Law of
Connecticut (the "Banking Law"), the Receiver would have the powers and duties
conferred upon it by Chapter 664c of the Banking Law. A Receiver or Conservator
is specifically empowered to sell (subject to judicial approval) any and all
real and personal property of the bank for which he acts as Receiver or
Conservator, and a Receiver is further specifically empowered to "make all
proper conveyances" of the bank's assets. The Banking Law does not explicitly
grant a Receiver or Conservator the general power to avoid valid perfected
security interests, and does not otherwise address the manner in which a
Receiver or Conservator is to resolve the claims of persons holding security
interests in assets of the bank in receivership or conservatorship. Although we
have found no case law on point, we are of the view that under Connecticut law,
a Receiver or Conservator would be bound by the provisions of the Connecticut
Uniform Commercial Code (the "UCC") and, except as noted in paragraph 4 below,
could not avoid a valid perfected security interest in assets of the bank for
which he serves as Receiver or Conservator.
F-4
<PAGE>
4. Section 36a-235 of the Banking Law declares as void all payments or
conveyances made in contemplation of insolvency by a Connecticut bank to or for
the use of the bank's creditors, with the fraudulent intent to prevent the
application of the bank's assets in the manner prescribed upon the winding up of
the bank's affairs by a Receiver. We have assumed based upon representations
made to us by the Seller that the grant of an interest in the New Receivables to
the Trustee pursuant to the Assignment and the Pooling and Servicing Agreement
is not being made in contemplation of Seller's insolvency or with any fraudulent
intent. On that basis, we are of the opinion that a Receiver could not avoid the
effect of the transactions contemplated by the Assignment and by the Pooling and
Servicing Agreement by application of Section 36a- 235 of the Banking Law.
Our opinions with respect to the perfection of the Trust's security
interest in paragraphs 1 and 2 above is subject to the following:
(a) The limitations contained in Section 9-103a of the UCC with respect
to perfection of a security interest in collateral that is removed from a
jurisdiction in which a financing statement has been filed;
(b) The limitations in Sections 9-302(1), 9-302(3) and 9-302(4) of the
UCC relating to situations in which filing is not required to perfect a security
interest and in which filing is not effective to perfect a security interest;
(c) The limitations in Section 9-304 of the UCC on perfection of a
security interest in money or instruments that do not constitute part of chattel
paper;
(d) The limitations in Section 9-306 of the UCC on the continuation of
a perfected security interest in proceeds under certain circumstances;
(e) The limitations contained in Section 9-402(7) of the UCC regarding
the effect of a change in name, identity or corporate structure that results in
a filed financing statement's becoming misleading;
(f) The requirement that a continuation statement be filed within the
time limits prescribed by Section 9-403 of the UCC;
(g) As used herein, the term "security interest" means "security
interest" as defined in Section 1-201(37) of the UCC, and we express no opinion
as to whether the transfer pursuant to the Assignment or the Pooling and
Servicing Agreement should or would be characterized as a sale or a financing
transaction;
F-5
<PAGE>
(h) The Trust's security interest may be subject to the rights of
account debtors, claims and defenses of the account debtors against the original
assignor and the terms of each agreement with respect to such New Receivables;
and
(i) The effect of a "purchase money security interest," as defined in
Section 9-107 of the UCC.
Our opinion with respect to the priority of the Trust's security
interest in paragraph 2 above is subject to the following:
(i) We have assumed that no financing statements have been
improperly filed, indexed or recorded, that the search by Data
Reporting Corp. has been accurately conducted and reported to us, and
that no financing statements have been filed in the Filing Office
covering any portion of the New Receivables and naming the Seller as
"debtor," after the index date of the search conducted by Data
Reporting Corp.;
(ii) The rights of a lien creditor who attached or levied
before the perfection of the security interest or to the extent set
forth in Section 9-301(4) of the UCC;
(iii) The effect of Section 9-306 of the UCC with respect to
"proceeds," as such term is defined in the UCC;
(iv) The rights set forth in Section 9-308 of the UCC of
certain purchasers of chattel paper and instruments;
(v) The rights set forth in Section 9-309 of the UCC with
respect to certain holders in due course and purchasers of instruments,
documents and securities;
(vi) The rights of another secured creditor with respect to
future advances to the extent set forth in Section 9-312 of the UCC;
(vii) Liens that could be perfected by methods other than
filing a financing statement in the Filing Office; and
F-6
<PAGE>
(viii) Liens or claims that arise by the operation of law that
do not require filing of a financing statement in the Filing Office or
possession for perfection.
We have expressed no opinion as to:
(1) the description of, title to, or the rights or interest of
Seller in the New Receivables, noting that the liens, rights, and
security interests granted under the Assignment and the Pooling and
Servicing Agreement are valid and attachable only to the extent of
Seller's rights in the New Receivables;
(2) the validity, binding effect or enforceability of any
provision in the Assignment or the Pooling and Servicing Agreement that
purports to allow the Trustee or any other person (a) to sell, dispose
of, or enforce any other remedy except as such complies with the UCC,
applicable federal laws of the United States of America, and other
state and local laws; (b) to allow for perfection of a security
interest in the proceeds of the New Receivables other than in
compliance with and subject to the limitations to provisions in the
Connecticut General Statutes; or (c) to in any way limit Seller's
ability to transfer its right, title, or interest in or to the New
Receivables;
(3) the validity, binding effect or enforceability of any
purported waiver under the Assignment or the Pooling and Servicing
Agreement relating to the rights of the Seller that exist as a matter
of law; and
(4) the validity, binding effect or enforceability of any
provision of the Assignment or the Pooling and Servicing Agreement that
in general restricts access to legal or equitable redress, waives
access to rights or otherwise elects any right, remedy, or option under
the Assignment or the Pooling and Servicing Agreement.
The opinions expressed herein are qualified to the extent that the
undersigned is only licensed to practice law in the State of Connecticut and
that no opinion is expressed on the laws of any other jurisdiction, and the
opinions expressed herein are accordingly based solely on our knowledge of
Connecticut law and, except as to the opinions expressed in paragraphs 3 and 4
above which pertain exclusively to Connecticut law, the federal laws of the
United States. The opinions expressed herein are therefore subject to the effect
of the laws of any other jurisdiction on the
F-7
<PAGE>
transactions contemplated by the Operative Documents or upon the opinions set
forth herein. To the extent that provisions of the Assignment or the Pooling and
Servicing Agreement pertain to matters of the law of, or are governed by the
laws of, the State of New York, we understand that you have relied on the
opinion of Mayer, Brown & Platt of even date herewith, and we express no opinion
with respect thereto.
This opinion is rendered to you in compliance with Section 2.6(g)(vi)
of the Pooling and Servicing Agreement, is intended solely for your benefit, and
is not intended for the use, benefit or reliance of any other person, and may
not be relied upon by you or any other person for any other purpose. Your
acceptance of or reliance on this opinion, or any part thereof, will be presumed
conclusively to evidence Seller's compliance with the provisions of Section
2.6(g)(vi) of the Pooling and Servicing Agreement and the satisfaction of you
and your counsel with the form, scope and substance of this letter.
This opinion constitutes a single integrated document, and no portion
hereof may be relied upon without reference to the entirety of this opinion and
each other part.
Very truly yours,
PULLMAN & COMLEY, LLC
cc: William T. Kosturko, Esq.
Executive Vice President
People's Bank
850 Main Street
Bridgeport, Connecticut 06604
F-8
<PAGE>
EXHIBIT G
FORM OF
ANNUAL SECURITY INTEREST OPINION PURSUANT TO
SECTIONS 13.2(D)(II) OF THE
POOLING AND SERVICING AGREEMENT
[on letterhead of Pullman & Comley, LLC)
Reply to: Bridgeport
Telephone: (203) 330-2000
[date]
Bankers Trust Company
Four Albany Street
New York, NY 10006
Re: People's Bank Credit Card Master Trust (the "Trust")
Ladies and Gentlemen:
We have been asked, in our capacity as special Connecticut counsel for
People's Bank, a Connecticut capital stock savings bank (the "Servicer"), to
provide an opinion to you pursuant to Section 13.2(d)(ii) of an Amended and
Restated Pooling and Servicing Agreement dated as of March 18, 1997 (the
"Pooling and Servicing Agreement") by and between you, as Trustee, and the
Servicer.
In connection with this opinion, we have had reference to: our opinion
dated July 9, 1993 delivered to you in connection with the issuance by the Trust
of its 4.80% Asset Backed Certificates, Series 1993-1; our opinion dated
February 16, 1994 delivered to you in connection with the issuance by the Trust
of its 5.10% Asset Backed Certificates, Series 1994-1; our opinion dated October
4, 1994 delivered to you in connection with the transfer and assignment of New
Receivables to the Trust; our opinion dated October 27, 1994 delivered to you in
connection with the issuance by the Trust of its Floating Rate Class A Asset
Backed Certificates, Series 1994-2 and its Floating Rate Class B Asset Backed
Certificates, Series 1994-2; our opinion dated March 28, 1995 delivered to you
in connection with the issuance by the Trust
G-1
<PAGE>
of its Floating Rate Class A Asset Backed Certificates, Series 1995-1 and its
Floating Rate Class B Asset Backed Certificates, Series 1995-1; our opinion
dated July 14, 1995 delivered to you in connection with the transfer and
assignment of additional New Receivables to the Trust; our opinion dated July 2,
1996 delivered to you in connection with the issuance by the Trust of its
Floating Rate Class A Asset Backed Certificates, Series 1996-1 and Floating Rate
Class B Asset Backed Certificates, Series 1996-1; our opinion dated October 1,
1996 delivered to you in connection with the transfer and assignment of
additional New Receivables to the Trust; [insert any relevant subsequent
opinions] (collectively, the "Prior Opinions"). Copies of the Prior Opinions are
attached hereto.
We have also had reference to copies of (i) a Form UCC-1 filed with the
Office of the Secretary of State of the State of Connecticut, UCC Division (the
"Connecticut Secretary of State") on July 9, 1993 in connection with the initial
transfer and assignment of Receivables to the Trust, (ii) a Form UCC-1 filed
with the Connecticut Secretary of State on October 4, 1994 in connection with
the transfer and assignment of certain New Receivables to the Trust, (iii) a
Form UCC-3 filed with the Connecticut Secretary of State on October 28, 1994,
amending the Form UCC-1 filed with the Connecticut Secretary of State on October
4, 1994, (iv) a Form UCC- 1 filed with the Connecticut Secretary of State on
July 13, 1995, in connection with the transfer and assignment of certain
additional New Receivables to the Trust, and (v) a Form UCC-1 filed with the
Connecticut Secretary of State on September 23, 1996, in connection with the
transfer and assignment of certain additional New Receivables [insert any
relevant subsequent filings] (collectively, the "UCC Financing Statements").
Copies of the UCC Financing Statements described in the immediately preceding
sentence are also attached hereto.
Unless otherwise specified, capitalized terms used herein shall have
the same meanings as set forth in the Prior Opinions, and capitalized terms
defined differently in one or more of the Prior Opinions shall have the meanings
set forth in the Prior Opinion bearing the most recent date. This opinion is
rendered subject to all of the qualifications, assumptions, limitations and
exceptions taken or made in the Prior Opinions, whether expressly stated or
incorporated by reference therein.
This opinion is provided as of the date above first set forth. We
disclaim any obligation to advise you as to subsequent changes of facts,
circumstances, or applicable law or regulation that might affect the validity of
the opinion set forth herein.
Based upon the foregoing, we are of the opinion that no filing or other
action is necessary from the date hereof through March 1, 1998 to continue the
perfected status of the interest of the Trust in such of the Receivables and the
proceeds thereof as constitute "accounts" or "general intangibles". This opinion
is subject to
G-2
<PAGE>
the limitations noted in the Prior Opinions as to Receivables and the proceeds
thereof generally, and as to Receivables that are generated in connection with
Automatic Additional Accounts.
This opinion is rendered to you in compliance with Section 13.2(d)(ii)
of the Pooling and Servicing Agreement, is intended solely for your benefit, and
is not intended for the use, benefit or reliance of any other person, and may
not be relied upon by you or any other person for any other purpose. Your
acceptance of this letter or reliance on this opinion, or any part thereof, will
be presumed conclusively to evidence the Servicer's compliance with the
provisions of Section 13.2(d)(ii) of the Pooling and Servicing Agreement and the
satisfaction of you and your counsel with the form, scope and substance of this
letter.
This letter, together with each of the Prior Opinions, constitutes a
single integrated document, and no portion hereof may be relied upon without
reference to the entirety of this letter and each of the Prior Opinions, and
each other part hereof and thereof.
Very truly yours,
PULLMAN & COMLEY, LLC
P&C/nadh:dc
cc: William T. Kosturko, Esquire
Laura DeFelice, Esquire
G-3
<PAGE>
EXHIBIT H
FORM OF DEPOSITORY AGREEMENT
H-1
<PAGE>
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/ AND PASS-THROUGH CERTIFICATES
Letter of Representations
[To be Completed by Issuer and Trustee]
People's Bank Credit Card Master Trust
[Name of Issuer]
Banker Trust Company
[Name of Trustee]
March 27, 1997
[Date]
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: $425,000,000 Floating Rate Class A Asset Backed Certificates, Series
1997-1 $33,750,000 Floating Rate Class B Asset Backed Certificates,
Series 1997-1
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee will
act as trustee with respect to the Securities pursuant to an Amended and
Restated Pooling and Servicing Agreement dated March 18, 1997, (the "Document").
Goldman, Sachs & Co. is distributing the Securities through The Depository Trust
Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities, Issuer
and Trustee make the following representations to DTC:
H-2
<PAGE>
1. Prior to closing on the Securities on March 27, 1997, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each stated maturity of the Securities in the face
amounts set forth on Schedule A hereto, the total of which represents 100% of
the principal amount of such Securities. If, however, the aggregate principal
amount of any maturity exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
Issuer or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of
DTC and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC). ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC not less
than 15 calender days in advance of such record date. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Reorganization Department at
(212) 709-6896 or (212) 709-6897, and receipt of such notices shall be confirmed
by telephoning (212) 709-6870. Notices to DTC pursuant to this Paragraph by mail
or by any other means shall be sent to DTC's Reorganization Department as
indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to DTC
by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designated to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer or
Trustee shall forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow. Notices to DTC pursuant to the Paragraph by
telecopy shall be sent to DTC's Call Notification Department at (516) 227-4039
or (516) 227-4190. If the party sending the notice does not receive a telecopy
receipt from DTC confirming that the notice
H-3
<PAGE>
has been received, such party shall telephone (516) 227-4070. Notices to DTC
pursuant to this Paragraph by mail or by any other means shall be sent to:
Manager: Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trustee
to Security holders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notice to DTC pursuant to this Paragraph and notices of
other corporate actions by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-1093 or 212 709-1094 and receipt of such notices shall
be confirmed by telephoning 212 709-6554. Notices to DTC pursuant to the above
by mail or by any other means shall be sent to:
Manager: Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized denomination
if less than $1,000 face value; payable on each payment date allocated as to the
interest and principal portions thereof preferably 5 but not less than 2
business days prior to such payment date. Such notices, which shall also contain
the current pool factor, any special adjustments to principal/interest rates
(e.g. adjustments due to deferred interest or shortfall), and Trustee contact's
name and telephone number, shall be sent by telecopy to DTC's Dividend
Department at (212) 709-1723, or if by mail or by any other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. [Note: Issuer must represent one of the following, and cross out the
other:] [The interest accrual period is payment date to payment date.]
H-4
<PAGE>
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent, as
well as the dollar amount of the payment for each issue. Notification of payment
details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and- interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between Issuer
or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Trustee and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or 212 709-1666 and
receipt of such notices shall be confirmed by telephoning 212 709-1270. Notices
to DTC pursuant to the above by mail or by any other means shall be sent to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between Trustee and DTC, such
payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Trustee.
H-5
<PAGE>
The Security certificate(s) shall remain in Agent's custody as a
"Balance Certificate" subject to the provisions of the Balance Certificate
Agreement between Agent and DTC currently in effect.
11. DTC shall receive all reorganization payment and CUSIP-level detail
resulting from corporate actions (such as tender officer, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address
as the number or address to which notices or payments of interest or principal
may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Trustee's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Trustee to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Trustee prior to payment, if
required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
15. DTC may discontinue providing its services as securities depositary
with respect to the Securities at any time by giving reasonable notice to Issuer
or Trustee (at which time DTC will confirm with Issuer or Trustee the aggregate
principal amount of Securities outstanding). Under such circumstances, at DTC's
request Issuer and Trustee shall cooperate fully with DTC by taking appropriate
action to make valuable one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
H-6
<PAGE>
17. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES --
to be included in DTC Letter of Representations
Issuer and Agent recognize that DTC does not in any way undertake to,
and shall not have any responsibility to, monitor or ascertain whether a
transfer of Securities could give rise to a transaction prohibited or not
otherwise permissible under the Employee Retirement Income Security Act of 1974
or under Section 4975 of the Internal Revenue Code of 1986. Issuer and Agent
acknowledge that: a) so long as Cede & Co. is the sole record owner of the
Securities, it shall be entitled to all voting rights in respect thereof and to
receive the full amount of all principal, premium, if any, and interest payable
with respect thereto; and b) DTC shall treat any DTC Participant having
Securities credited to its DTC accounts as entitled to the full benefits of
ownership of such Securities even if the crediting of such Securities to the DTC
accounts of such Participant results from transfers or failures to transfer in
violation of such laws. (The treatment by DTC of the effects of the crediting by
it of Securities to the accounts of DTC Participants shall not affect the rights
of Issuer or purchasers, sellers, or holders of Securities against any DTC
Participant.)
Notes:
A. If there is a Trustee (as defined in this Letter of Representations).
Trustee as well as Issuer must sign this Letter. If there is no Trustee
in signing this Letter Issuer itself undertakes to perform all of the
obligations set forth herein.
B. Schedule B contains statements that DTC believes accurately describe
DTC, the method of effecting book-entry transfers of securities
distributed through DTC, and certain related matters.
Very truly yours,
People's Bank Credit Card Master Trust
--------------------------------------
(Issuer)
By:
(Authorized Officer's Signature)
Bankers Trust Company
--------------------------------------
(Trustee)
By:___________________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:_________________________
cc: Underwriter
Underwriter's Counsel
SCHEDULE A
$425,000,000 Floating Rate Class A Asset Backed Certificates, Series 1997-1
---------------------------------------------------------------------------
$33,750,000 Floating Rate Class B Asset Backed Certificates, Series 1997-1
--------------------------------------------------------------------------
H-7
<PAGE>
<TABLE>
<CAPTION>
CUSIP Number Principal Amount Maturity Date Interest Rate
- ------------ ---------------- ------------- -------------
<S> <C> <C> <C>
710318AJ5 $150,000,000 February 2002 5.745% from March 27,
Class A Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.12%
thereafter
710318AJ5 $150,000,000 February 2002 5.745% from March 27,
Class A Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.12%
thereafter
710318AJ5 $125,000,000 February 2002 5.745% from March 27,
Class A Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.12%
thereafter
710318AK2 $33,750,000 March 2002 5.945% from March 27,
Class B Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.32% thereafter
</TABLE>
H-8
<PAGE>
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to certain issues)
1. The Depository Trust Company "DTC", New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Security certificate will be
issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
H-9
<PAGE>
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date identified in a listing attached to
the Omnibus Proxy.
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC. Trustee, or Issuer, subject
to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest to DTC is the responsibility of Issuer
or Trustee, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee [or
Tender/Remarketing Agent], and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee [or Tender/Remarketing Agent]. The
requirement for physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's records
and followed by a book-entry credit of tendered Securities to Trustee [or
Tender/Remarketing Agent's] DTC account.]
H-10
<PAGE>
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
H-11
<PAGE>
EXHIBIT I
FORM OF REASSIGNMENT OF REMOVED ACCOUNTS
REASSIGNMENT No. ___ of RECEIVABLES, dated as of ______________, ___
(this "Reassignment"), by and between PEOPLE'S BANK, a Connecticut capital stock
savings bank (the "Transferor"), and BANKERS TRUST COMPANY, a banking
corporation organized and existing under the laws of the State of New York (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
WHEREAS, the Transferor and the Trustee are parties to the Amended and
Restated Pooling and Servicing Agreement, dated as of March 18, 1997
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to remove all Receivables (such term and other capitalized
terms used herein without definition being defined in Section 1 hereof) from the
Accounts designated pursuant to Section 3 hereof (the "Removed Accounts") and to
cause the Trustee to reconvey the Receivables of such Removed Accounts, whether
now existing or hereafter created, from the Trust to the Transferor; and
WHEREAS, the Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Pooling and
Servicing Agreement.
"Removal Date" shall mean, with respect to the Removed Accounts
designated hereby, _____________, 19___.
"Removal Notice Date" shall mean, with respect to the Removed Accounts
designated hereby, _____________, 19___, which shall be a date on or prior to
the fifth Business Day prior to the Removal Date).
2. Conveyance of Receivables. (a) The Trustee does hereby transfer,
assign, set-over and otherwise convey to the Transferor without recourse, on and
after the Removal Date, all right, title and interest of the Trust in and to the
Receivables now existing and hereafter created in the Removed Accounts
designated hereby,
I-1
<PAGE>
all monies due or to become due with respect thereto (including all Finance
Charge Receivables), all proceeds (as defined in Section 9-306 of the UCC as in
effect in the State of Connecticut or New York) of such Receivables and the
right to receive amounts paid as Interchange with respect to such Removed
Accounts pursuant to the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor of the Removed Accounts, on or prior to the date of
this Reassignment, a termination statement with respect to the Receivables now
existing and hereafter created in the Removed Accounts designated hereby (which
may be a single termination statement with respect to all such Receivables)
evidencing the release by the Trust of its lien on the Receivables in the
Removed Accounts, and meeting the requirements of applicable state law, in such
manner and such jurisdictions as are necessary to remove such lien, provided
that such termination statement shall be prepared by the Transferor.
3. Designation of Removed Accounts. The Transferor of the Removed
Accounts shall deliver to the Trustee, not later than five Business Days (or as
soon as reasonably practicable) after the Removal Date, a computer file or
microfiche list containing a true and complete list of each Account which as of
the Removal Date shall be deemed to be a Removed Account, such Accounts being
identified by account number and by the aggregate amount of Principal
Receivables in such Accounts as of the close of business on the Removal Date.
Such list shall be marked as Schedule 1 to this Reassignment and shall be
incorporated into and made a part of this Reassignment as of the Removal Date.
4. Acceptance by Trustee. The Trustee hereby acknowledges and agrees
that, prior to or simultaneously with the execution and delivery of this
Reassignment, the Transferor delivered to the Trustee the computer file or
microfiche list described in Section 2 of this Reassignment.
5. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trust as of the Removal Date as follows:
(a) Legal Valid and Binding Obligation. This Reassignment constitutes a
legal, valid and binding obligation of such Transferor enforceable against the
Transferor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and the rights of creditors of state-chartered
banking associations and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
I-2
<PAGE>
(b) Absence of Pay Out Event or Certain Other Events. The
removal of any Receivables of any Removed Accounts on any Removal Date will not,
in the reasonable belief of the Transferor, (i) cause a Pay Out Event to occur
(for which determination the Receivables of each Removed Account shall be
considered to have been removed as of the Removal Date), (ii) cause the Seller
Interest as a percentage of Aggregate Principal Receivables to be less than 10%
on such Removal Date or (iii) result in the failure to make any payment
specified in the related Supplement with respect to any Series.
(c) Selection Procedures. No selection procedures believed by the
Transferor to be materially adverse to the interests of the Investor
Certificateholders without regard to any Enhancement were utilized in selecting
the Removed Accounts designated hereby.
6. Conditions to Reassignment. The removal from the Trust and
reassignment to the Transferor of the Receivables in the Removed Accounts as of
the Removal Date is subject to the satisfaction, on or prior to the date hereof,
of the following conditions:
(a) Notice Designating Removed Accounts. Within five Business Days (or
as soon as is reasonably practicable) after the Removal Date, the Transferor
shall have delivered or caused to be delivered to the Trustee, pursuant to
Section 3 hereof, a computer file or microfiche list containing a true and
complete list of all Removed Accounts identified by account number and the
aggregate amount of the Principal Receivables in such Removed Accounts as of the
Removal Date.
(b) Officer's Certificate. The Transferor shall have delivered to the
Trustee an Officer's Certificate certifying that (i) as of the Removal Date, all
requirements set forth in Section 2.7 of the Pooling and Servicing Agreement for
designating Removed Accounts and reconveying the Receivables of such Removed
Accounts, whether now existing or hereafter created, have been satisfied, other
than the delivery by the Transferor to the Trustee within five Business Days
after the Removal Date of a computer file or microfiche list of the Removed
Accounts, and (ii) each of the representations and warranties made by the
Transferor of the Removed Accounts in Section 5 hereof is true and correct as of
the Removal Date. 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.
(c) Notice to Rating Agency. On or before the twentieth Business Day
prior to the Removal Date, the Rating Agency shall have received notice of such
proposed removal of Accounts.
I-3
<PAGE>
(d) Rating Agency Confirmation. The Transferor and the Trustee shall
have received notice from the Rating Agency that such proposed removal of
Accounts will not result in the reduction or withdrawal of its then exiting
rating of any Series of Certificates then issued and outstanding.
(e) Opinion of Counsel The Transferor, the Trustee and the Rating
Agencies shall have received an Opinion of Counsel that the proposed removal
shall not adversely effect the federal income tax characterization of the Trust.
7. Counterparts. This Reassignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
PEOPLE'S BANK,
as Transferor
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Trustee
By: ___________________________
Name:
Title:
I-4
<PAGE>
EXHIBIT J
FORM OF
OFFICER'S CERTIFICATE PURSUANT TO
SECTION 2.8(d)(ii) OF THE
POOLING AND SERVICING AGREEMENT
The undersigned, _________________, a duly authorized officer of
People's Bank, a Connecticut stock savings bank, hereby certifies, not in
[his][her] individual capacity, but solely as a duly authorized officer of
People's Bank, as follows:
(i) This Certificate is delivered pursuant to Section
2.8(d)(ii) of the Amended and Restated Pooling and Servicing Agreement
dated as of March 18, 1997 (as heretofore amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement") by and
between People's Bank, a Connecticut stock savings bank, as seller and
servicer (the "Seller"), and Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee") of the People's Bank Credit Card Master Trust pursuant to
the Pooling and Servicing Agreement. Capitalized terms used herein and
not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
(ii) The undersigned is duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this
Certificate.
(iii) All requirements set forth in Sections 2.7(a) of the
Pooling and Servicing Agreement for the designation of Expired Accounts
and the deletion and removal from the Trust and reassignment to the
Seller of Receivables from Expired Accounts have been satisfied as of
the date hereof.
(iv) Each of the representations and warranties made by the
Seller in Section 2.8(c) of the Pooling and Servicing Agreement is true
and correct as of the Expired Account Removal Date occurring on
____________, ____; and
(v) Each of the conditions to the deletion and removal from
the Trust and reassignment to the Seller of Receivables from Removed
Accounts set forth in Sections 2.7(b) and 2.8(d) of the Pooling and
Servicing Agreement have been satisfied as of the Expired Account
Removal Date.
J-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this ___ day of ________, ____.
PEOPLE'S BANK
By:
Name:
Title:
J-2
<PAGE>
EXHIBIT 4.2
[EXECUTION COPY]
- --------------------------------------------------------------------------------
PEOPLE'S BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1997-1 Investor Certificateholders
- --------------------------------------------------------------------------------
SERIES 1997-1 SUPPLEMENT
Dated as of March 18, 1997
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of March 18, 1997
- --------------------------------------------------------------------------------
$500,000,000
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$425,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1997-1
$33,750,000 Floating Rate Class B
Asset Backed Certificates, Series 1997-1
$41,250,000 Collateral Interest, Series 1997-1
- --------------------------------------------------------------------------------
<PAGE>
Page
TABLE OF CONTENTS
Page
RECITALS .........................................................1
SECTION 1. Designation........................................1
SECTION 2. Definitions........................................2
SECTION 2.1 Other Definitional Provisions.....................27
SECTION 3. Conveyance of Interest in Series Accounts.........27
SECTION 4. Minimum Seller Interest, Minimum Aggregate
Principal Receivables and Removal of
Accounts......................................27
SECTION 5. Reassignment and Transfer Terms...................28
SECTION 6. Delivery and Payment for the Series 1997-1
Certificates..................................28
SECTION 7. Depositary; Form of Delivery of Series 1997-1
Certificates..................................28
SECTION 8. Enhancement.......................................29
SECTION 9. Article IV of Agreement...........................29
SECTION 9.A Series 1997-1 Pay Out Events......................73
SECTION 10. Series 1997-1 Termination.........................76
SECTION 11. Ratification and Reaffirmation of Pooling
and Servicing Agreement.......................76
SECTION 12. Ratification and Reaffirmation of
Representations and Warranties................77
SECTION 13. [RESERVED]........................................77
SECTION 14. No Subordination..................................77
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<PAGE>
Page
SECTION 15. Repurchase of the Series 1997-1
Certificates..................................77
SECTION 16. Counterparts......................................78
SECTION 17. Additional Covenants of Transferor................78
SECTION 18. Series 1997-1 Investor Exchange...................79
SECTION 19. Governing Law.....................................79
SECTION 20. Notification to Luxembourg Stock Exchange.........79
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
- ii -
<PAGE>
SERIES 1997-1 SUPPLEMENT, dated as of March 18, 1997 (as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with the Pooling and Servicing Agreement referenced below, 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 Amended and Restated
Pooling and Servicing Agreement dated as of March 18, 1997 between People's Bank
and the Trustee (as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, 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 Investor 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. (a) The Series 1997-1 Investor Certificates
shall be issued in two Classes, which shall be designated generally as the
Floating Rate Class A Asset Backed Certificates, Series 1997-1 and the Floating
Rate Class B Asset Backed Certificates, Series 1997-1. In addition, there is
hereby authorized a third Class which constitutes an uncertificated interest in
the Trust, which shall be deemed to be an "Investor Certificate" for all
purposes under the Pooling and Servicing Agreement and this Series Supplement,
except as expressly provided herein, and shall be known as the Collateral
Interest, Series 1997-1 and have the rights assigned to the Collateral Interest
in this Series Supplement.
(b) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Pooling and Servicing Agreement, shall be entitled to the
benefits of the Pooling and Servicing
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<PAGE>
Agreement and this Series Supplement upon payment by the Collateral Interest
Holder of amounts owing on the Closing Date pursuant to the Loan Agreement.
Notwithstanding the foregoing, except as expressly provided herein, (i) the
provisions of Article VI and Article XII of the Pooling and Servicing Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates shall not be applicable to
the Collateral Interest and (ii) the Opinion of Counsel specified in clause (d)
of the sixth sentence of subsection 6.9(h) of the Agreement shall not be
required with respect to the Collateral Interest.
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 1997-1
Investor Certificates and to no other Series of Certificates issued by the
Trust.
"Accumulation Shortfall" shall mean (a) with respect to the Transfer
Date occurring immediately prior to the Initial Class A Accumulation Date, zero,
and (b) with respect to each Transfer Date thereafter during the Controlled
Accumulation Period occurring prior to the Class A Scheduled Payment Date, the
excess, if any, of the applicable Controlled Deposit Amount for the immediately
preceding Transfer Date over the amount deposited into the Principal Funding
Account pursuant to subsection 4.8(a)(ii)(A) on such preceding Transfer Date.
"Adjusted Investor Interest" shall mean, on any date of determination,
an amount equal to the sum of (a) the Class A Adjusted Investor Interest, (b)
the Class B Investor Interest and (c) the Collateral Interest, in each case as
of such date of determination.
"Agent" shall have the meaning specified in the Loan Agreement.
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<PAGE>
"Agreement" shall mean the Pooling and Servicing Agreement, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms, including by this Series Supplement thereto.
"Available Investor Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to (a) Principal Collections 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(c)(ii), 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) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 4.4(c)(ii),
4.4(d)(ii) or 4.4(e)(ii) as if they had been deposited in the Collection Account
during such Monthly Period), plus (b) the sum of the amounts allocated on such
related Transfer Date to Investor Default Amounts and Investor Charge-Offs
pursuant to subsections 4.6(a)(iii), 4.6(a)(iv), 4.6(b)(iii), 4.6(b)(iv),
4.6(d)(i), 4.6(d)(ii), 4.6(d)(ix), 4.6(d)(x) and 4.12, as applicable, minus (c)
the amount of Reallocated Principal Collections with respect to such Monthly
Period which pursuant to Section 4.12 are required to fund the Class A Required
Amount and the Class B Required Amount (other than any portions thereof that are
applied pursuant to (x) subsection 4.6(a)(iii), 4.6(a)(iv), 4.6(b)(iii) or
4.6(b)(iv) and (y) subsection 4.6(d)(i) or 4.6(d)(ii) (to the extent such
portions pursuant to subsection 4.6(d)(i) or 4.6(d)(ii) are available to pay
Investor Default Amounts or Investor Charge-Offs), which shall, without
duplication, be included as Available Investor Principal Collections pursuant to
clause (b) above), plus (d) Available Shared Principal Collections with respect
to such Monthly Period.
"Available Reserve Account Amount" shall mean, as to any Transfer Date,
the lesser of (a) the amount on deposit in the Reserve Account on such date
(after taking into account any interest and earnings retained in the Reserve
Account pursuant to subsection 4.9(b) on such date, but before giving effect to
any deposit made or to be made pursuant to subsection 4.6(d)(xi) to the Reserve
Account on such date) and (b) the Required Reserve Account Amount.
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<PAGE>
"Available Shared Principal Collections" shall mean, with respect to
any Monthly Period, Shared Principal Collections available to be allocated to
the Series 1997-1 Investor
Certificates from each other Series.
"Base Rate" shall mean, with respect to any Monthly Period, the
Certificate Rate plus 2.00% per annum.
"Calculation Period" shall have the meaning specified in the applicable
Interest Rate Cap.
"Certificate Rate" shall mean, with respect to the Series 1997-1
Investor Certificates and any Monthly Period, the weighted average of (i) the
lesser of the Class A Certificate Rate and the Class A Cap Rate, (ii) the lesser
of the Class B Certificate Rate and the Class B Cap Rate and (iii) the
Collateral Rate (weighted based on the Class A Investor Interest, the Class B
Investor Interest and the Collateral Interest, respectively, as of the last day
of the preceding Monthly Period).
"Class A Adjusted Investor Interest" shall mean, on any date of
determination, an amount equal to the Class A Investor Interest minus the
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class A Floating Allocation of
Finance Charge Collections (other than the proceeds of the sale of any Interest
Rate Cap pursuant to Section 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) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 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), (b) the Principal Funding Investment Proceeds, if
any, arising pursuant to subsection 4.3(c) with respect to the related Transfer
Date which are to be applied as Class A Available Funds pursuant to such
subsection (or which will be required to be deposited in the Finance Charge
Account pursuant to such subsections on the
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<PAGE>
related Transfer Date), (c) amounts, if any, to be withdrawn from the Reserve
Account which will be deposited into the Finance Charge Account on the related
Transfer Date pursuant to subsections 4.9(b) and 4.9(d) and (d) the proceeds
from the sale of all or any portion of the Class A Interest Rate Cap deposited
into the Collection Account during such Monthly Period pursuant to subsection
4.11(g).
"Class A Cap Rate" shall mean 10.12% per annum.
"Class A Certificate Rate" shall mean, with respect to the period from
and including the Closing Date through and including April 14, 1997, 5.745% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to 0.12% 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 Certificates" shall mean any of the Floating Rate Class A
Asset Backed Certificates, Series 1997-1, executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit 1-A hereto.
"Class A Covered Amount" shall mean an amount determined as of each
Transfer Date with respect to any Interest Accrual Period as the product of (a)
a fraction, the numerator of which is the actual number of days in such Interest
Accrual Period and the denominator of which is 360, (b) the Class A Certificate
Rate in effect with respect to such Interest Accrual Period, and (c) the
Principal Funding Account Balance as of the Distribution Date preceding such
Transfer Date after giving effect to all payments, deposits and withdrawals on
such Distribution Date.
"Class A Excess Interest" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the amount by which the Class A
Certificate Rate exceeds the Class A Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class A Excess Principal, if any, as
of the preceding Distribution Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date),
- 5 -
<PAGE>
and (c) the actual number of days in such 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 Floating Allocation" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class A Adjusted Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class A Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean, on any date of
determination, the aggregate initial principal amount of the Class A
Certificates on the Closing Date, which is $425,000,000, less the portion of
such amount represented by Class A Certificates tendered and canceled pursuant
to any Series 1997-1 Investor Exchange occurring prior to such date of
determination.
"Class A Interest Rate Cap" shall mean the master agreement dated as of
March 27, 1997 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated March
27, 1997 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 (unless context requires otherwise) any Replacement
Interest Rate Cap or Qualified Substitute Arrangement with respect thereto, as
the same may in each case be amended, supplemented or otherwise modified from
time to time in accordance with its terms upon ratings confirmation by the
Rating Agency.
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.5(a).
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<PAGE>
"Class A Investor Default Amount" shall mean, (i) with respect to the
period from and including the Closing Date through and including March 31, 1997,
an amount equal to the Class A Investor Default Amount (calculated pursuant to
clause (ii) of this definition) for the full March 1997 Monthly Period,
multiplied by 5/31, and (ii) with respect to each Monthly Period thereafter, an
amount equal to the product of (a) the Investor Default Amount for such Monthly
Period and (b) the Class A Floating Allocation for such Monthly Period.
"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(d)(i) and 4.6(e) prior to such date of determination; provided, however,
that upon the tender and cancellation of any Class A Certificates pursuant to a
Series 1997-1 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 1997-1 Investor Exchange; provided further, however,
that such Class A Investor Interest may not be reduced below zero.
"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 with respect to the immediately
preceding Interest Accrual Period, (b) the Class A Adjusted 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 such 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 with respect to the immediately preceding Interest Accrual
Period and (ii) the lesser of the Class A Adjusted Investor Interest as of the
preceding Distribution Date (after giving effect to all payments, deposits
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and withdrawals on such Distribution Date) and the Expected Class A Principal as
of the preceding Distribution Date, or, for the first Distribution Date, the
Class A Initial Investor Interest, and (iii) the actual number of days in such
Interest Accrual Period divided by 360, (b) the Class A Covered Amount for such
Interest Accrual Period, and (c) the product of (i) the Class A Excess Principal
as of such preceding Distribution Date, (ii) the lesser of the Class A
Certificate Rate and Class A Cap Rate with respect to such Interest Accrual
Period and (iii) the actual number of days in such Interest Accrual Period
divided by 360.
"Class A Monthly Principal" shall mean, with respect to each Transfer
Date relating to the Controlled Accumulation Period or the Rapid Amortization
Period, prior to the payment in full of the Class A Investor Interest, an amount
equal the least of (i) Available Investor Principal Collections on deposit in
the Principal Account with respect to such Transfer Date, (ii) for each Transfer
Date with respect to the Controlled Accumulation Period, prior to the Class A
Scheduled Payment Date, the applicable Controlled Deposit Amount for such
Transfer Date, and (iii) the Class A Adjusted Investor Interest prior to any
deposits on such Transfer Date.
"Class A Monthly Servicing Fee" shall mean (a) with respect to the
first Transfer Date, an amount equal to the Class A Monthly Servicing Fee
(calculated pursuant to clause (b) of this definition) for the full March 1997
Monthly Period, multiplied by 5/31, and (b) with respect to any subsequent
Transfer Date, one-twelfth of the product of 2.00% and the Class A Adjusted
Investor Interest on the last day of the preceding Monthly Period.
"Class A Notional Amount" shall mean, on any date of determination, the
notional amount of the Class A Interest Rate Cap on such date, which shall be an
amount equal to the Expected Class A Principal with respect to such date of
determination, calculated based upon a Controlled Accumulation Period commencing
October 1, 2001 (with a Controlled Accumulation Period Length of four months),
less the aggregate notional amount of any portions of the Class A Interest Rate
Cap sold on or prior to such date pursuant to Section 4.11(g).
"Class A Required Amount" shall have the meaning specified in
subsection 4.6(e).
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<PAGE>
"Class A Scheduled Payment Date" shall mean the February 2002
Distribution Date.
"Class B Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class B Floating Allocation of
Finance Charge Collections (other than the proceeds of the sale of any Interest
Rate Cap pursuant to Section 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) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 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) and (b) the proceeds from the sale of all or any
portion of the Class B Interest Rate Cap deposited into the Collection Account
during such Monthly Period pursuant to subsection 4.11(g).
"Class B Cap Rate" shall mean 10.32% per annum.
"Class B Certificate Rate" shall mean, with respect to the period from
and including the Closing Date through and including April 14, 1997, 5.945% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to 0.32% 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 Certificates" shall mean any of the Floating Rate Class B
Asset Backed Certificates, Series 1997-1, executed by the Transferor and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit 1-B hereto.
"Class B Excess Interest" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the amount by which the Class B
Certificate Rate exceeds the Class B Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class B Excess Principal, if any, as
of
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<PAGE>
the preceding Distribution Date (after giving effect to all payments, deposits
and withdrawals on such Distribution Date), and (c) the actual number of days in
such 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 Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the Investor Interest
as of the close of business on such day.
"Class B Floating Allocation" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class B Investor Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class B Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Class B Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean, on any date of
determination, the aggregate initial principal amount of the Class B
Certificates on the Closing Date, which is $33,750,000, less the portion of such
amount represented by Class B Certificates tendered and canceled pursuant to any
Series 1997-1 Investor Exchange occurring prior to such date of determination.
"Class B Interest Rate Cap" shall mean the master agreement dated as of
March 27, 1997 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated March
27, 1997 between the Trustee and the Interest Rate Cap Provider, relating to the
Class B Certificates and for the exclusive benefit of the Class B
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Certificateholders, or (unless context requires otherwise) any Replacement
Interest Rate Cap or Qualified Substitute Arrangement with respect thereto, as
the same may in each case be amended, supplemented or otherwise modified from
time to time in accordance with its terms upon ratings confirmation by the
Rating
Agency.
"Class B Investor Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables during the Revolving Period, the Class B
Floating Allocation, and (b) with respect to the Principal Receivables during
the Controlled Accumulation Period or Rapid Amortization Period, the Class B
Fixed Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.5(b).
"Class B Investor Default Amount" shall mean, (i) with respect to the
period from and including the Closing Date through and including March 31, 1997,
an amount equal to the Class B Investor Default Amount (calculated pursuant to
clause (ii) of this definition) for the full March 1997 Monthly Period,
multiplied by 5/31, and (ii) with respect to each Monthly Period thereafter, an
amount equal to the product of (a) the Investor Default Amount for such Monthly
Period and (b) the Class B Floating Allocation for such Monthly Period.
"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
aggregate amount of Reallocated Class B Principal Collections allocated on all
prior Transfer Dates pursuant to Section 4.12 with respect to which the
Collateral Interest was not reduced pursuant to such Section 4.12, minus (d) the
aggregate amount of Class B Investor Charge-Offs with respect to all prior
Transfer Dates, minus (e) the amount by which the Class B Investor Interest has
been reduced on all prior Transfer Dates pursuant to the third sentence of
subsection 4.5(a) plus (f) the aggregate amount allocated and available on all
prior Transfer Dates for the purpose of reimbursing amounts deducted pursuant to
the
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<PAGE>
foregoing clauses (c), (d) and (e); provided, however, that upon the tender and
cancellation of any Class B Certificates pursuant to a Series 1997-1 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 1997-1 Investor Exchange; provided further, however,
that such Class B Investor Interest may not be reduced below zero.
"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 with respect to the immediately
preceding Interest Accrual Period, (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 such preceding 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 with respect to the immediately preceding Interest Accrual
Period, (ii) the lesser of the Class B Investor Interest as of the preceding
Distribution 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, for the first Distribution Date, the Class B
Initial Investor Interest, and (iii) the actual number of days in such Interest
Accrual Period divided by 360 and (b) the product of (i) the Class B Excess
Principal as of such preceding Distribution Date,(ii) the lesser of the Class B
Certificate Rate and the Class B Cap Rate with respect to such Interest Accrual
Period and (iii) the actual number of days in such Interest Accrual Period
divided by 360.
"Class B Monthly Principal" shall mean, with respect to each Transfer
Date relating to the Controlled Accumulation Period immediately following the
Class A Scheduled Payment Date, or with respect to any Transfer Date relating to
the Rapid Amortization Period, beginning with the Transfer Date on which the
Class A Investor Interest has been paid in full (after taking into account
payments to be made on the related Distribution Date), an
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amount equal to the lesser of (i) Available Investor Principal Collections on
deposit in the Principal Account (minus the portion of such Available Investor
Principal Collections applied to Class A Monthly Principal on such Transfer
Date) and (ii) the Class B Investor Interest for such Transfer Date.
"Class B Monthly Servicing Fee" shall mean (a) with respect to the
first Transfer Date, an amount equal to the Class B Monthly Servicing Fee
(calculated pursuant to clause (b) of this definition) for the full March 1997
Monthly Period, multiplied by 5/31, and (b) with respect to any subsequent
Transfer 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, the
notional amount of the Class B Interest Rate Cap on such date, which shall be an
amount equal to the Expected Class B Principal with respect to such date of
determination, less the aggregate notional amount of any portions of the Class B
Interest Rate Cap sold on or prior to such date pursuant to Section 4.11(g).
"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 Scheduled Payment Date and
the Rapid Amortization Period has not commenced, the Distribution Date following
the Class A Scheduled Payment Distribution Date.
"Class B Required Amount" shall have the meaning specified in
subsection 4.6(f).
"Class B Scheduled Payment Date" shall mean the March 2002 Distribution
Date.
"Closing Date" shall mean March 27, 1997.
"Collateral Allocation" shall mean, with respect to any Monthly Period,
(a) with respect to Default Amounts and Finance Charge Receivables at any time
and Principal Receivables during the Revolving Period, the Collateral Floating
Allocation, and (b) with respect to Principal Receivables during the Controlled
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<PAGE>
Accumulation Period or Rapid Amortization Period, the Collateral Fixed
Allocation.
"Collateral Available Funds" shall mean, with respect to any Monthly
Period, the Collateral Floating Allocation of Finance Charge Collections
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) of the Agreement and will be allocated to the Investor
Interest pursuant to subsection 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).
"Collateral Default Amount" shall mean, (i) with respect to the period
from and including the Closing Date through and including March 31, 1997, an
amount equal to the Collateral Default Amount (calculated pursuant to clause
(ii) of this definition) for the full March 1997 Monthly Period, multiplied by
5/31, and (ii) for each Monthly Period thereafter, an amount equal to the
product of (a) the Investor Default Amount for such Monthly Period and (b) the
Collateral Floating Allocation for such Monthly Period.
"Collateral Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on such day.
"Collateral Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Collateral Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Collateral Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is
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<PAGE>
the Initial Collateral Interest and the denominator of which is the Initial
Investor Interest.
"Collateral Interest" shall mean, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the right to
receive, to the extent necessary to make the required payments to the Collateral
Interest Holder under this Series Supplement, the portion of Collections
allocable thereto under the Agreement and this Series Supplement, and funds on
deposit in the Collection Account allocable thereto pursuant to the Agreement
and this Series Supplement. On any date of determination, for purposes of all
calculations in the Agreement and this Series Supplement, the amount of the
Collateral Interest shall be an amount equal to (a) the Initial Collateral
Interest, minus (b) the aggregate amount of payments of principal paid to the
Collateral Interest Holder pursuant to Section 4.8 prior to such date of
determination, minus (c) the aggregate amount of Reallocated Principal
Collections allocated on all prior Transfer Dates pursuant to Section 4.12,
minus (d) the aggregate amount of Collateral Interest Charge-Offs with respect
to all prior Transfer Dates, minus (e) the amount by which the Collateral
Interest has been reduced on all prior Transfer Dates pursuant to the second
sentence of subsection 4.5(a) plus (f) the aggregate amount allocated and
available on all prior Transfer Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
that such Collateral Interest may not be reduced below zero.
"Collateral Interest Charge-Offs" shall have the meaning specified in
subsection 4.5(c).
"Collateral Interest Holder" shall mean the entity so designated in the
Loan Agreement.
"Collateral Interest Monthly Servicing Fee" shall mean (a) with respect
to the first Transfer Date, an amount equal to the Collateral Interest Monthly
Servicing Fee (calculated pursuant to clause (b) of this definition) for the
full March 1997 Monthly Period, multiplied by 5/31, and (b) with respect to any
subsequent Transfer Date, one-twelfth of the product of 2.00% and the Collateral
Interest on the last day of the preceding Monthly Period.
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<PAGE>
"Collateral Interest Surplus" shall mean, with respect to any date of
determination, the amount, if any, by which the Collateral Interest as of such
date (after giving effect to reductions in the Collateral Interest for any
Collateral Interest Charge-Offs and Reallocated Principal Collections and any
further adjustments to the Collateral Interest for the benefit of the Class A
Certificateholders and the Class B Certificateholders as of such date) exceeds
the Required Collateral Interest as of such date.
"Collateral Monthly Interest" shall mean, with respect to any Transfer
Date, an amount equal to the product of (i) the Collateral Rate with respect to
the related Interest Accrual Period, (ii) the Collateral Interest as of the
preceding Distribution Date (after giving effect to all payments, deposits and
withdrawals on such Distribution Date) or, for the first Distribution Date, the
Initial Collateral Interest, and (iii) the actual number of days in the related
Interest Accrual Period divided by 360.
"Collateral Monthly Principal" shall mean (a) with respect to any
Transfer Date relating to the Revolving Period, following any reduction of the
Required Collateral Interest effected as described in clause (z) of the proviso
of the definition of "Required Collateral Interest", an amount equal to the
lesser of (x) the Collateral Interest Surplus as of such Transfer Date and (y)
the Available Investor Principal Collections on such Transfer Date, (b) with
respect to any Transfer Date relating to the Controlled Accumulation Period or
the Rapid Amortization Period, as the case may be, an amount equal to the lesser
of (x) the Collateral Interest Surplus as of such Transfer Date and (y) the
excess, if any of (i) the Available Investor Principal Collections over (ii) the
sum of the Class A Monthly Principal and the Class B Monthly Principal on such
Transfer Date.
"Collateral Rate" shall mean for any Interest Accrual Period, the rate
specified in the Loan Agreement.
"Controlled Accumulation Amount" shall mean (a) for any Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest, $30,357,142.86; provided that if the
Controlled Accumulation Period Length is modified pursuant to subsection 4.8(d),
(i) the
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Controlled Accumulation Amount for each Transfer Date with respect to the
Controlled Accumulation Period shall mean the amount determined in accordance
with subsection 4.8(d) on the date on which the Controlled Accumulation Period
has most recently been modified and (ii) the sum of the Controlled Accumulation
Amounts for all Transfer Dates with respect to the modified Controlled
Accumulation Period shall not be less than the Class A Investor Interest, and
(b) for any Transfer Date with respect to the Controlled Accumulation Period
after the payment in full of the Class A Investor Interest, an amount equal to
the Class B Investor Interest on such Transfer Date.
"Controlled Accumulation Date" shall mean December 1, 2000.
"Controlled Accumulation Period" shall mean, unless a Pay Out Event has
occurred prior to such date, a period commencing on the Controlled Accumulation
Date or such later day as is determined in accordance with subsection 4.8(d) 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 1997-1 Termination Date.
"Controlled Accumulation Period Length" shall have the meaning
specified in subsection 4.8(d).
"Controlled Deposit Amount" shall mean, with respect to any Transfer
Date, the sum of (a) the Controlled Accumulation Amount for such Transfer Date
and (b) the Accumulation Shortfall, if any, as of such date.
"Definitive Certificates" shall have the meaning specified in Section
6.11 of the Agreement.
"Discount Option" shall have the meaning specified in Section 4.14.
"Discounted Percentage" shall have the meaning specified in Section
4.14.
"Distribution Account" shall have the meaning specified in subsection
4.3(b).
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<PAGE>
"Distribution Date" shall mean April 15, 1997 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 1997-1
Termination Date.
"Enhancement" shall mean, with respect to the Series 1997-1 Investor
Certificates, the subordination of the Collateral Interest to the extent
provided herein, the Interest Rate Caps and, with respect to the Class A
Certificates, the funds and securities on deposit in the Reserve Account, up to
the Available Reserve Account Amount, and the subordination of the Class B
Certificates to the extent provided herein.
"Enhancement Provider" shall mean, with respect to the Series 1997-1
Certificates, the Collateral Interest Holder, and with respect to any other
Series, the applicable provider of
credit enhancement, if any.
"Excess Principal Funding Investment Proceeds" shall mean, with respect
to each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" shall mean the sum of the amounts specified pursuant to
subsections 4.6(a)(v), 4.6(b)(v) and 4.6(c)(ii).
"Expected Class A Principal" shall mean, with respect to any date of
determination, (a) on each date to but excluding the Initial Class A
Accumulation Date, the Class A Initial Investor Interest, (b) on each date
thereafter to but not including the Class A Scheduled Payment Date, the Class A
Initial Investor Interest less the product of (i) the Controlled Accumulation
Amount and (ii) the number of Distribution Dates that have occurred from and
including the Initial Class A Accumulation Date, and (c) on each date
thereafter, zero.
"Expected Class B Principal" shall mean, with respect to any date of
determination, (a) on each date to but excluding the
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Class B Scheduled Payment Date, the Class B Initial Investor Interest, 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.
"Fitch" shall mean Fitch Investors Service, L.P.
"Fixed Investor Percentage" shall mean, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of which
is the Investor Interest as of the close of business on the last day of the
Revolving Period (or, if there has been an Investor Exchange with respect to the
Certificates after the end of the Revolving Period, the Investor Interest as of
the end of the Revolving Period will be reduced ratably to reflect the amount of
Certificates tendered and canceled pursuant to any Investor Exchange) and the
denominator of which is the greater of (a) the Aggregate Principal Receivables
as of such date of determination and (b) the sum of the numerators used to
calculate the Investor Percentages for all outstanding Series with respect to
Principal Receivables on such date of determination.
"Floating Investor Percentage" shall mean, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of which
is the Adjusted Investor Interest determined as of the close of business on the
last day of the Monthly Period immediately preceding such date of determination
(or with respect to the first Monthly Period, the Initial Investor Interest) and
the denominator of which is the greater of (a) the Aggregate Principal
Receivables as of such date of determination (or with respect to the first
Monthly Period, the aggregate amount of Principal Receivables in the Trust as of
the beginning of the day on the Closing Date), and (b) the sum of the numerators
used to calculate the Investor Percentages for all outstanding Series on such
date of determination with respect to Finance Charge Receivables, Default
Amounts or Principal Receivables, as applicable, on such date of determination.
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<PAGE>
"Initial Class A Accumulation Date" shall mean the first Distribution
Date occurring after the Monthly Period in which the Controlled Accumulation
Period commences.
"Initial Collateral Interest" shall mean the aggregate initial
principal amount of the Collateral Interest on the Closing Date, which is
$41,250,000.
"Initial Investor Interest" shall mean the sum of the Class A Initial
Investor Interest, the Class B Initial Investor Interest and the Initial
Collateral 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) through 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 the 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 Lehman Brothers Financial
Products Inc. 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 Caps" shall mean, collectively, the Class A Interest
Rate Cap and the Class B Interest Rate Cap.
"Investor Accounts" shall mean the Series 1997-1 Collection Subaccount
established under Section 4.2B, the Principal Account, the Principal Funding
Account and the Finance Charge Account established under subsection 4.3(a), the
Distribution Account established under subsection 4.3(b) and the Reserve Account
established under subsection 4.9(a).
"Investor Charge-Offs" shall mean, with respect to any Transfer Date,
the sum of the Class A Investor Charge-Offs, the
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Class B Investor Charge-Offs and the Collateral Interest Charge- Offs, in each
case with respect to such Transfer Date.
"Investor Default Amount" shall mean, with respect to any Monthly
Period, an amount equal to the product of (a) the sum of the Default Amounts for
all Defaulted Accounts during such Monthly Period and (b) the Floating Investor
Percentage for such Monthly Period.
"Investor Interest" shall mean for any date of determination, the sum
of the Class A Investor Interest, the Class B Investor Interest and the
Collateral Interest, each as of such date.
"Investor Percentage" shall mean, for any date of determination, (a)
with respect to Finance Charge Receivables and Default Amounts at any time and
Principal Receivables during the Revolving Period, the Floating Investor
Percentage and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or the Rapid Amortization Period, the Fixed Investor
Percentage.
"LIBOR" shall mean, for any Interest Accrual Period, the London
interbank offered quotations rate 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 (a) for the initial Interest
Period, March 21, 1997 (for the period from and including the Closing Date
through and including April 14, 1997) and (b) for each subsequent Interest
Accrual Period, the second London Banking Day preceding the first day of such
Interest Accrual Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee, the Agent and the other financial institutions party
thereto, dated as of March 27, 1997, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"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.
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"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 (a) with respect to the
first Monthly Period, an amount equal to the Monthly Investor Servicing Fee
(calculated pursuant to clause (b) of this definition) for the full March 1997
Monthly Period, multiplied by 5/31, and (b) with respect to each subsequent
Monthly Period, an amount equal to one twelfth of the product of 2.00% and the
Adjusted 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 any Monthly Period, 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.
"Pay Out Commencement Date" shall mean, with respect to the Series
1997-1 Investor 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 1997-1
Pay Out Event is deemed to occur or occurs pursuant to Section 9A hereof.
"Permitted Investments" shall mean with respect to the Investor
Accounts, (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
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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 from Fitch (if rated by Fitch) of F-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, Standard & Poor's and Fitch (if rated by Fitch) of P-1 and A-1+ and
F-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,
Standard & Poor's and Fitch (if rated by Fitch) of P-1, A-1+ and F-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, Moody's and Fitch (if rated by Fitch), 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
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in and to such Permitted Investment for the benefit of the Series 1997-1
Investor 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 Series 1997-1
Investor Certificates is not Standard & Poor's, Moody's or Fitch, any
investments specified in this definition of "Permitted Investments" as requiring
a specific credit rating from Standard & Poor's, Moody's or Fitch (if rated by
Fitch) must also have a comparable credit rating from, or otherwise be
acceptable to, the Rating Agency rating the Series 1997-1 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, Moody's or Fitch must also receive
written approval from such other Rating Agency.
"Pool Amount" shall mean, with respect to any Monthly Period, the
aggregate amount of Principal Receivables as of the close of business on the
last day of such Monthly Period.
"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.
"Pooling and Servicing Agreement" shall have the meaning specified in
the preamble to this document.
"Portfolio Yield" shall mean, with respect to the Series 1997-1
Investor Certificates and any Monthly Period, the annualized percentage
equivalent of a fraction the numerator of which is equal to the sum of (i) 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, (ii) the Principal Funding Investment Proceeds deposited into
the Finance
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Charge Account on the Transfer Date related to such Monthly Period, (iii) the
amount of the Reserve Draw Amount (up to the Available Reserve Account Amount),
if any, with respect to such Monthly Period, and (iv) any amounts of interest
and earnings described in Section 4.9, each deposited or required to be
deposited into the Finance Charge Account on the Transfer Date relating to such
Monthly Period (without duplication of amounts referenced in clauses (i), (ii)
and (iii) above), 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 Collections" shall mean Collections in respect of Principal
Receivables.
"Principal Funding Account" shall have the meaning specified in
subsection 4.3(a).
"Principal Funding Account Balance" shall mean, with respect to any
date of determination, the amount of funds, if any, on deposit in the Principal
Funding Account on such date of determination (other than Principal Funding
Investment Proceeds).
"Principal Funding Investment Proceeds" shall mean, with respect to
each Transfer Date, the investment earnings on funds in the Principal Funding
Account (net of investment expenses and losses) for the period from and
including the immediately preceding Transfer Date to but excluding such Transfer
Date.
"Principal Funding Investment Shortfall" shall mean, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such Transfer
Date are less than the Class A Covered Amount determined as of such Transfer
Date.
"Principal Shortfall" shall mean (i) on any Date of Processing for the
Series 1997-1 Investor Certificates, the excess of (x) an amount equal to the
sum of (A) during the
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Controlled Accumulation Period, the Controlled Deposit Amount, and during the
Rapid Amortization Period, the Investor Interest, in each case with respect to
the related Monthly Period, and (B) at any time, the Collateral Interest Surplus
with respect to the related Monthly Period over (y) the Monthly Total Principal
Allocation for such Date of Processing, or (ii) 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, Standard & Poor's and Fitch (if rated by Fitch) of
at least Baa3, BBB- 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 1997-1 Termination Date.
"Rating Agency" shall mean, with respect to the Series 1997-1
Certificates, each of Moody's, Standard & Poor's and Fitch, and with respect to
the Collateral Interest means Fitch.
"Reallocated Class B Principal Collections" shall mean, with respect to
any Transfer Date, Principal Collections (including amounts specified pursuant
to subsections 4.6(b)(iii) and (iv), 4.6(d)(ii) and 4.6(f) to be treated as
Available Investor Principal Collections) applied in accordance with subsection
4.12(a) in an amount not to exceed the product of (a) the Class B Investor
Allocation for the Monthly Period relating to such
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Transfer Date, (b) the Investor Percentage for the Monthly Period relating to
such Transfer Date and (c) the amount of Principal Collections for the Monthly
Period relating to such Transfer Date; provided, that such amount shall not
exceed the Class B Investor Interest after giving effect to any Class B Investor
Charge-Offs for such Transfer Date.
"Reallocated Collateral Principal Collections" shall mean, with respect
to any Transfer Date, Principal Collections (including amounts specified
pursuant to subsections 4.6(d)(ix) and (x) to be treated as Available Investor
Principal Collections) applied in accordance with subsections 4.12(a) and (b) in
an amount not to exceed the product of (a) the Collateral Allocation for the
Monthly Period relating to such Transfer Date, (b) the Investor Percentage for
the Monthly Period relating to such Transfer Date and (c) the amount of
Principal Collections for the Monthly Period relating to such Transfer Date;
provided, that such amount shall not exceed the Collateral Interest after giving
effect to any Collateral Interest Charge-Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean, with respect to any
Transfer Date, the sum of (a) the Reallocated Class B Principal Collections and
(b) the Reallocated Collateral Principal Collections with respect to such
Transfer Date.
"Reference Banks" shall mean four major banks in the London interbank
market selected by the Trustee.
"Replacement Interest Rate Cap" shall mean, with respect to the Class A
Interest Rate Cap or the Class B Interest Rate Cap, any substitute interest rate
cap having substantially the same terms and conditions as such Interest Rate Cap
and with respect to which the Interest Rate Cap Provider party thereto (a) is
reasonably acceptable to the Trustee, (b) has either (i) a counterparty rating
of at least Aa3 by Moody's and AAA by Standard & Poor's, or (ii) if not a
counterparty rating, a long term unsecured debt or long term certificate of
deposit rating of at least Aa3 by Moody's and a short term unsecured debt or
short term certificate of deposit rating of A-1+ by Standard & Poor's, and (c)
is acceptable to Moody's and Standard & Poor's.
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"Required Collateral Interest" shall mean, (a) with respect to the
Closing Date, the Initial Collateral Interest and (b) with respect to any
Transfer Date thereafter, an amount equal to the product of (1) the Required
Collateral Percentage and (2) the Adjusted Investor Interest on such Transfer
Date after taking into account all deposits in the Principal Funding Account on
such date and payments to be made on the related Distribution Date, but not less
than $15,000,000; provided that (x) if either (i) there is a reduction in the
Collateral Interest pursuant to clause (c), (d) or (e) of the definition of such
term or (ii) a Pay Out Event with respect to the Series 1997-1 Investor
Certificates has occurred, the Required Collateral Interest for any Transfer
Date shall (subject to clause (y) below) equal the Required Collateral Interest
for the Transfer Date immediately preceding such reduction or Pay Out Event and
(y) in no event shall the Required Collateral Interest exceed the sum of the
outstanding principal amounts of (i) the Class A Certificates and (ii) the Class
B Certificates, each as of the last day of the Monthly Period preceding such
Transfer Date, less cash held in the Principal Funding Account as of such
Transfer Date, in each case after taking into account deposits, withdrawals and
payments to be made on the related Distribution Date.
"Required Collateral Percentage" shall mean, with respect to any
Transfer Date, 8.25% or, at the Transferor's option, a lesser percentage if on
or prior to such Transfer Date the Transferor, the Servicer, the Agent and the
Trustee shall each have received a copy of a written notice from the Rating
Agency to the effect that such action will not result in such Rating Agency
reducing or withdrawing its then existing rating of the Class A Certificates or
the Class B Certificates.
"Required Reserve Account Amount" shall mean, with respect to any
Transfer Date on or after the Reserve Account Funding Date, an amount equal to
(a) 0.50% of the Class A Investor Interest or (b) any other amount designated by
the Transferor; provided that if such designation is less than the amount
determined pursuant to clause (a), Transferor shall (i) provide the Servicer,
the Collateral Interest Holder and the Trustee with notification in writing by
the Rating Agency addressed to the Transferor, the Servicer and the Trustee that
such action will not result in such Rating Agency reducing or withdrawing its
then existing rating of the Class A Certificates or the Class B
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Certificates and (ii) deliver to the Trustee a certificate of an authorized
officer to the effect that, based on the facts known to such officer at such
time, in the reasonable belief of the Transferor, such designation will not
cause a Pay Out Event or an event that, after the giving of notice or the lapse
of time, would cause a Pay Out Event to occur with respect to the Series 1997-1
Investor Certificates.
"Reserve Account" shall have the meaning specified in subsection
4.9(a).
"Reserve Account Funding Date" shall mean the Transfer Date which
occurs not later than the earliest of (a) the Transfer Date with respect to the
Monthly Period which commences no later than three months prior to the
commencement of the Controlled Accumulation Period, or such earlier date as the
Servicer may determine, (b) the first Transfer Date for which the Portfolio
Yield is less than 2.00%, but in such event the Reserve Account Funding Date
shall not be required to occur earlier than the Transfer Date with respect to
the Monthly Period which commences twelve months prior to the commencement of
the Controlled Accumulation Period, (c) the first Transfer Date for which the
Portfolio Yield is less than 3.00%, but in such event the Reserve Account
Funding Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period which commences six months prior to the
commencement of the Controlled Accumulation Period and (d) the first Transfer
Date for which the Portfolio Yield is less than 4.00%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier than the
Transfer Date with respect to the Monthly Period which commences four months
prior to the commencement of the Controlled Accumulation Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date following
the Reserve Account Funding Date, the amount, if any, by which the amount on
deposit in the Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
4.9(c).
"Revolving Period" shall mean the period from and including the Closing
Date to, but not including, the earlier of (a) the
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day the Controlled Accumulation Period commences and (b) the Pay Out
Commencement Date.
"Scheduled Series 1997-1 Termination Date" shall mean the October 2004
Distribution Date.
"Series 1997-1" shall mean the Series represented by the Series 1997-1
Investor Certificates.
"Series 1997-1 Certificates" shall mean the Class A Certificates and
the Class B Certificates.
"Series 1997-1 Collection Subaccount" shall have the meaning specified
in Section 4.2B.
"Series 1997-1 Investor Certificateholders" shall mean the Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder.
"Series 1997-1 Investor Certificates" shall mean the Class A
Certificates, the Class B Certificates and the Collateral Interest.
"Series 1997-1 Investor Exchange" shall mean an Investor Exchange
pursuant to Section 6.9(b) of the Agreement and Section 18 hereof.
"Series 1997-1 Pay Out Event" shall have the meaning specified in
Section 9A hereof.
"Series 1997-1 Termination Date" shall mean the earlier to occur of (i)
the day after the Distribution Date on which the Series 1997-1 Investor
Certificates are paid in full or (ii) the Scheduled Series 1997-1 Termination
Date.
"Series Servicing Fee Percentage" shall mean 2.0%.
"Series Supplement" shall have the meaning specified in the preamble to
this document.
"Shared Finance Charge Collections" shall mean, with respect to any
Transfer Date, as the context requires, either (a) the amount described in
subsection 4.6(d)(xv) allocated to the Series
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1997-1 Investor Certificates but available to cover shortfalls, if any, in
amounts paid from Finance Charge Collections for other Series, or (b) the
aggregate amount allocated to Investor Certificates of all other Series which
the related Supplements specify are to be treated as "Shared Finance Charge
Collections" and which are available for application pursuant to subsections
4.6(e), 4.6(f) and 4.6(g) on such Transfer Date.
"Shared Principal Collections" shall mean, as the context requires,
either (a) the amounts allocated to the Series 1997-1 Investor 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 1997-1
Investor 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 Series 1997-1 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 Series Accounts. (a) The
Transferor and the Trustee intend that the Series Accounts and all property
credited thereto be the property of the Trust for the benefit of the
Certificateholders. If and to the extent the Series Accounts and the property
credited thereto are characterized as property of the Transferor, the Transferor
hereby assigns, sets-over, conveys, pledges and grants a security
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interest and lien (free and clear of all other Liens) to the Trustee for the
benefit of the Certificateholders, in all of the Transferor's right, title and
interest (if any) in and to the Series Accounts and the amounts on deposit in
the Series Accounts 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 Certificateholders.
(b) The Series Accounts shall be established at a depository
institution which agrees in writing as follows: (i) all money, securities,
instruments and other property credited to any such account shall be treated as
"financial assets" within the meaning of Section 8-102(a)(9) of the 1994
Official Text of the Uniform Commercial Code and (ii) such depository
institution will comply with "entitlement orders" (within the meaning of Section
8-102(a)(8) of the 1994 Official Text of the Uniform Commercial Code) issued by
the Trustee and relating to such account without further consent by the
Transferor or any other person.
SECTION 4. Minimum Seller Interest, Minimum Aggregate Principal
Receivables and Removal of Accounts. (a) The Minimum Seller Interest applicable
to the Series 1997-1 Investor Certificates on any date of determination shall be
7% of the average Aggregate Principal Receivables for such date of
determination. 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 1997-1 Investor 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 deposit of a Controlled Deposit
Amount or a payment of Collateral Monthly Principal.
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SECTION 5. Reassignment and Transfer Terms. The Series 1997-1 Investor
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 1997-1 Investor 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 1997-1 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) of the
Agreement 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 1997-1 Investor Certificates through and
including the day preceding the day on which such purchase occurs, plus (c) all
additional amounts then due and payable to the Collateral Interest Holder under
the Loan Agreement, 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 1997-1 Certificates. The
Transferor shall execute and deliver the Series 1997-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1997-1 Certificates when authenticated in
accordance with Section 6.2 of the Agreement.
SECTION 7. Depositary; Form of Delivery of Series 1997-1 Certificates.
(a) The Series 1997-1 Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1, 6.2, 6.9 and 6.11 of the Agreement.
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(b) The depositary for the Series 1997-1 Certificates 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 1997-1 Investor Certificates, Class A Certificates or Class B
Certificates having Undivided Interests aggregating a specified percentage, such
direction or consent, with respect to the Class A Certificates and the Class B
Certificates, may be given by Certificate Owners having interests in the
requisite percentage of Series 1997-1 Certificates, Class A Certificates or
Class B Certificates, as the case may be, acting through the Clearing Agency and
the Clearing Agency Participants; provided, however, that so long as the Class A
Certificates and Class B Certificates are in book-entry form, 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 1997-1 Certificates
shall be the subordination of the Collateral Interest to the extent provided
herein, the Interest Rate Caps 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 1997-1 Investor 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 1997-1 Investor Certificates:
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ARTICLE IV
RIGHTS OF SERIES 1997-1 INVESTOR CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Series 1997-1 Investor
Certificateholders. The Series 1997-1 Investor 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 1997-1 Investor 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 1997-1 Investor
Certificates, (c) funds and securities on deposit in the Finance Charge
Account, the Principal Account, the Distribution Account and the Series
1997-1 Collection Subaccount, (d) with respect to the Class A
Certificates only, funds and securities on deposit in the Reserve
Account, up to the Available Reserve Account Amount, and the Principal
Funding Account and (e) with respect to the Class A Certificates and
the Class B Certificates only, the right to receive payments pursuant
to the Interest Rate Caps in accordance with Section 4.11. The
Collateral Interest shall be subordinate to the Class A Certificates
and the Class B Certificates to the extent described herein. The Class
B Certificates shall be subordinate to the Class A Certificates to the
extent described herein. The Exchangeable Seller Certificate shall
represent the ownership interest in the Trust Assets not allocated to
the Series 1997-1 Investor 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 1997-1 Collection
Subaccount, the Principal Funding Account, the Reserve Account or the
Interest Rate Caps, except as specifically provided in this Article IV.
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SECTION 4.2B The Series 1997-1 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
1997-1 Investor Certificateholders, bearing a designation clearly
indicating that the funds therein are held in trust for the benefit of
the Series 1997-1 Investor Certificateholders (the "Series 1997-1
Collection Subaccount"). Funds allocable to the Series 1997-1 Investor
Certificates which are deposited into the Collection Account will be
transferred to the Series 1997-1 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
1997-1 Collection Subaccount and that funds held therein shall at all
times be held in trust for the benefit of the Series 1997-1 Investor
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 1997-1 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 1997-1 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
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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 1997-1
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 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 1997-1 Investor
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
Finance Charge Collections allocable to the Series 1997-1 Investor
Certificateholders. The Qualified Trust Institution shall maintain,
either on its own or through its nominee or custodian for the benefit
of the Series 1997-1 Investor 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 1997-1 Collection Subaccount. For purposes of
determining the availability of funds or the balances in the Series
1997-1 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.
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SECTION 4.3 Establishment of Series 1997-1 Investor Accounts.
(a) The Finance Charge Account, the Principal Account and the Principal
Funding Account. The Servicer, for the benefit of the Series 1997-1
Investor 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, three 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",
and the "Principal Funding Account", respectively), bearing a
designation clearly indicating that the funds therein are held in trust
for the benefit of the Series 1997-1 Investor Certificateholders. The
Servicer, on behalf of the Trustee (or the Trustee so long as the
Finance Charge Account, the Principal Account or the Principal Funding
Account, are established with the Trustee) at all times shall maintain
accurate records reflecting each transaction in the Principal Account,
the Finance Charge Account and the Principal Funding Account, and that
funds held therein shall at all times be held in trust for the benefit
of the Series 1997-1 Investor 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, Principal Account and the Principal Funding 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 1997-1 Investor 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
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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 1997-1 Investor
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, Principal
Account and Principal Funding Account.
(i) Funds on deposit in the Finance Charge Account,
the Principal Account and the Principal Funding 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 Finance Charge
Account, the Principal Account and the Principal Funding
Account shall maintain either on its own or through its
nominee or custodian for the benefit of the Series 1997-1
Investor 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, the
Finance Charge Account or the Principal Funding 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. Subject to the restrictions set forth above,
the Servicer, or a Person designated in writing by the
Servicer,
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shall instruct the Qualified Trust Institution which holds the
Finance Charge Account, the Principal Account and the
Principal Funding Account in writing with respect to the
investment of funds on deposit in the Finance Charge Account
and the Principal Account. 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.
(ii) At the end of each month, all interest and
earnings (net of losses and investment expenses) on funds on
deposit in the Finance Charge Account and the Principal
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. For purposes of
determining the availability of funds or the balances in the
Finance Charge Account or the Principal 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.
(iii) On the Transfer Date occurring in the month
following the commencement of the Controlled Accumulation
Period and on each Transfer Date thereafter with respect to
the Controlled Accumulation Period, prior to the Class A
Scheduled Payment Date, the Trustee, acting at the Servicer's
direction given on or before such Transfer Date, shall
transfer from the Principal Funding Account to the Finance
Charge Account the Principal Funding Investment Proceeds on
deposit in the Principal Funding Account, but not in excess of
the Class A Covered Amount, for application as Class A
Available Funds applied pursuant to subsection 4.6(a). Any
Excess Principal Funding Investment Proceeds shall be
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paid to the Holder of the Exchangeable Seller Certificate on
each Transfer Date. An amount equal to any Principal Funding
Investment Shortfall will be deposited in the Finance Charge
Account on each Transfer Date from the Reserve Account to the
extent funds are available pursuant to subsection 4.9. Except
as otherwise provided in this subsection 4.3(c)(iii),
Principal Funding Investment Proceeds (including reinvested
interest) shall not be considered part of the amounts on
deposit in the Principal Funding Account for purposes of this
Agreement.
(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 such entity shall (i) 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
or the Principal Funding Account) the following amounts as set
forth below:
(i) Deposit in the Finance Charge Account an
amount equal to the sum of (x) the
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product of (A) the Floating Investor Percentage on
the Date of Processing of such Collections and (B)
the aggregate amount of Finance Charge Collections
processed 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; provided, however, that with respect to
the initial Interest Accrual Period an additional
amount of $1,394,530.73 shall be deposited in the
Finance Charge Account from proceeds of the sale of
the Series 1997-1 Investor Certificates, and such
deposit shall be deemed to have been made pursuant to
subsection 4.4(c)(i)(x) for all purposes under this
Agreement.
(ii) Deposit in the Principal Account an amount
equal to the product of (A) the Floating Investor
Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of such
Principal Collections processed on such Date of
Processing; provided, however, that if the amount
deposited into the Principal Account pursuant to this
subsection 4.4(c)(ii) exceeds the Collateral Interest
Surplus, if any, as of such Date of Processing, then
such excess shall not be treated as a Principal
Allocation and 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 aggregate amount of Collections deposited in the
Principal Account on such Date of Processing pursuant
to this subsection 4.4(c)(ii) is less than an amount
equal to the Collateral Interest Surplus, then Shared
Principal Collections from other Series, if any,
allocable to the Series 1997-1 Investor Certificates
will be deposited to the Principal Account in
accordance with
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subsection 4.2(e) to the extent of such shortfall.
(d) Allocations During the Controlled Accumulation
Period. During the Controlled Accumulation 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 or the Principal Funding
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
Floating 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 Fixed
Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of such
Principal Collections processed 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 an amount equal to the sum of
(x) the Controlled Deposit Amount, if such Date of
Processing is during the Controlled Accumulation
Period prior to the beginning of the Monthly Period
in which the Class A Scheduled Payment Date occurs,
or the Class B Investor Interest if such Date of
Processing is in the Controlled Accumulation Period
thereafter, and (y) the Collateral Interest
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Surplus as of such Date of Processing, then such
excess 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 an
amount equal to the sum of the Controlled Deposit
Amount and the Collateral Interest Surplus, then
Shared Principal Collections from other Series, if
any, allocable to the Series 1997- 1 Investor
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
Floating 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 if the Principal Allocation on any date exceeds
the Investor Interest, the amount of such excess
shall be
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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 Series 1997-1 Investor
Certificates, then Shared Principal Collections from
other Series, if any, allocable to the Series 1997-1
Investor 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 the related Transfer 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(d)(i), 4.6(e) and
4.12(a) with respect to such preceding Monthly Period, then
the Collateral Interest (after giving effect to reductions for
any Collateral Interest Charge-Offs and any Reallocated
Principal Collections on such Transfer Date) will be reduced
by the amount of such excess, but not by more than the Class A
Investor Default Amount for such Transfer Date. If such
reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest will be reduced to zero, and
the Class B Investor Interest (after giving effect to
reductions for any Class B Investor Charge-Offs and any
Reallocated Class B Principal Collections on such Transfer
Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If such reduction
would cause
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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 (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(d)(i), 4.6(e) 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(d)(ii), 4.6(f) and
4.12(b), the Collateral Interest (after giving effect to
reductions for any Collateral Interest Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and
any adjustments with respect thereto as described in
subsection 4.5(a)) will be reduced by the amount of such
excess but not by more than the Class B Investor Default
Amount for such Transfer Date. If such reduction would cause
the Collateral Interest to be a negative number, the
Collateral Interest shall be reduced to zero and the Class B
Investor Interest shall be reduced by the amount by which the
Collateral Interest would have been reduced below zero (a
"Class B Investor Charge-Off"). The Class B Investor Interest
will also be reduced by the amount of Reallocated Principal
Collections in excess of the Collateral Interest pursuant to
subsection 4.12(a) 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
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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
Transfer Date by amounts allocated and available for that
purpose as described under subsections 4.6(b)(iv), 4.6(d)(ii)
and (v), 4.6(f) and 4.12(b).
(c) On each Determination Date, the Servicer shall
calculate the Collateral Default Amount for the preceding
Monthly Period. If on any Determination Date, the Collateral
Default Amount for such Determination Date exceeds the amount
allocated and available to fund such amount pursuant to
subsections 4.6(d)(ix), (x) and (xii) and 4.6(g), the
Collateral Interest will be reduced by the amount of such
excess but not by more than the lesser of the Collateral
Default Amount and the Collateral Interest for such Transfer
Date (a "Collateral Interest Charge- Off"). The Collateral
Interest will also be reduced by the amount of Reallocated
Principal Collections pursuant to subsections 4.12(a) and (b)
and the amount of any portion of the Collateral Interest
allocated to the Class A Certificates or the Class B
Certificates to avoid a reduction in the Class A Investor
Interest, pursuant to subsection 4.5(a), or the Class B
Investor Interest, pursuant to subsection 4.5(b),
respectively. The Collateral Interest will thereafter be
reimbursed (but not in the excess of the unpaid principal
balance of the Collateral Interest) on any Transfer Date by
amounts allocated and available for that purpose as described
under subsections 4.6(d)(ix) and (x) and 4.6(g).
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
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withdraw, on the succeeding Transfer Date, the amounts required to be
withdrawn from the Finance Charge Account (or from the finance charge
accounts for other Series, as applicable) pursuant to subsections
4.6(a), (b), (c), (d), (e), (f) and (g). 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 Principal Funding Account and the Reserve Account, pursuant to
subsection 4.6(e). Any such withdrawal from the Reserve 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 Funds will be distributed in the following
priority:
(i) Class A Monthly Cap Rate Interest and the
Class A Covered 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 and deposit to the
Distribution Account, to the extent funds are
available from Class A Available Funds (i) first, an
amount equal to the sum of the Class A Monthly Cap
Rate Interest and the Class A Covered Amount for the
related Distribution Date; and (ii) then, an amount
equal to the amount of any overdue Class A Monthly
Cap Rate Interest and overdue Class A Covered Amount,
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
1997-1 Investor Certificates, the amount of Class A
Monthly Cap Rate Interest referred to in (i) above
shall be $1,288,635.42 (reflecting an initial period
of nineteen days).
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(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
Funds 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
Funds 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 apply such amount,
subject to Section 4.12, in accordance with Section
4.8 as Available Investor Principal Collections.
(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 Funds 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
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not theretofore been reimbursed pursuant to this
subsection 4.6(a)(iv) or otherwise pursuant to the
Agreement and shall apply such amount, subject to
Section 4.12, in accordance with Section 4.8 as
Available Investor Principal Collections. 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 Funds, if any, shall constitute Excess
Spread and shall be allocated and distributed as set
forth in subsection 4.6(d).
(b) On each Transfer Date, an amount equal to Class B
Available Funds 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 Funds, (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 1997-1 Investor
Certificates, the amount referred to in (i) above
shall be $105,895.31 (reflecting an initial period of
nineteen days).
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(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
Funds 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
Funds 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,
subject to Section 4.12, in accordance with Section
4.8 as Available Investor Principal Collections.
(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 Funds 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
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not theretofore been reimbursed pursuant to this
subsection 4.6(b)(iv) or otherwise pursuant to this
Agreement and shall apply such amount, subject to
Section 4.12, in accordance with Section 4.8 as
Available Investor Principal Collections. 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 Funds, if any, shall constitute Excess
Spread and shall be allocated and distributed as set
forth in subsection 4.6(d).
(c) On each Transfer Date, an amount equal to the
Collateral Available Funds will be distributed in the
following priority:
(i) Collateral 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 Collateral Available
Funds, an amount equal to the Collateral Interest
Monthly Servicing Fee accrued in respect of the
preceding Monthly Period plus all accrued and unpaid
Collateral Interest 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.
(ii) Excess Spread. The remaining Collateral
Available Funds, if any, shall constitute Excess
Spread and shall be allocated and distributed as set
forth in subsection 4.6(d).
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(d) On each Transfer Date, 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
Distribution Date, 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(d)(i), an amount equal to
the Class B Required Amount, if any, with respect to
the related Distribution Date, 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(d)(i) and (ii), and shall
deposit in the Distribution Account for distribution
to the Class A Certificateholders on the next
succeeding Distribution Date pursuant to Section 4.7,
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)
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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(d)(i) through (iii), and
shall deposit in the Distribution Account for
distribution to the Class B Certificateholders on the
next succeeding Distribution Date pursuant to Section
4.7, 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(d)(i) through (iv), an
amount equal to any unreimbursed 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, which amount shall be applied,
subject to Section 4.12, in accordance with Section
4.8 as Available Investor Principal Collections.
(vi) On each Transfer Date, the Servicer or
the Trustee, acting in accordance
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with instructions from the Servicer, shall withdraw
from the Finance Charge Account, and pay to the
Collateral Interest Holder in accordance with the
Loan Agreement, to the extent funds are available
from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through
(v), an amount equal to the sum of (x) the Collateral
Monthly Interest for the related Monthly Period and
(y) the amount of any accrued and unpaid Collateral
Monthly Interest for any prior Monthly Periods.
(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(d)(i) through (vi), and
shall deposit in the Distribution Account for
distribution to the Class A Certificateholders on the
next succeeding Distribution Date pursuant to Section
4.7, 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(d)(i) through (vii), and
shall deposit in the Distribution
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Account for distribution to the Class B
Certificateholders on the next succeeding
Distribution Date pursuant to Section 4.7, 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, to the extent funds are available from
Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (viii), an
amount equal to the Collateral Default Amount for the
preceding Monthly Period, which amount shall be
applied, subject to Section 4.12, in accordance with
Section 4.8 as Available Investor Principal
Collections.
(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(d)(i) through (ix), an
amount equal to the aggregate amount by which the
Collateral Interest has been reduced below the
Required Collateral Interest for reasons other than
the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of
such reductions which have not been previously
reimbursed), which amount shall be
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applied, subject to Section 4.12, in accordance with
Section 4.8 as Available Investor Principal
Collections.
(xi) On each Transfer Date from and after the
Reserve Account Funding Date to but excluding the
date on which the Reserve Account shall terminate
pursuant to subsection 4.9(f), 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(d)(i) through (x), and
shall deposit in the Reserve Account, an amount equal
to the excess, if any, of the Required Reserve
Account Amount over the Available Reserve Account
Amount (without giving effect to any deposit made on
such date hereunder).
(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(d)(i) through (xi), an
amount equal to the aggregate amount of any
additional amounts due and payable under the Loan
Agreement, which amount shall be applied and
distributed in accordance with and to the extent
specified in the Loan Agreement.
(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(d)(i) through
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(xii), and shall deposit in the Distribution Account
for distribution to the Class A Certificateholders on
the next succeeding Distribution Date pursuant to
Section 4.7, an amount equal to the amount of any
Class A Excess Interest which accrued during the
related Interest Accrual Period.
(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, to the extent funds are available from
Excess Spread after giving effect to the withdrawals
pursuant to subsections 4.6(d)(i) through (xiii), and
shall deposit in the Distribution Account for
distribution to the Class B Certificateholders on the
next succeeding Distribution Date pursuant to Section
4.7, an amount equal to the amount of any Class B
Excess Interest which accrued during the related
Interest Accrual Period.
(xv) 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(d)(i) through (xiv), 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.
(xvi) 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
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the extent funds are available from Excess Spread
after giving effect to the withdrawals pursuant to
subsections 4.6(d)(i) through (xv), the amounts of
any accrued and unpaid expenses of the Trust
specified in writing by the Trustee to the Servicer,
and shall make such amounts available to the Trustee
to pay such accrued and unpaid expenses of the Trust,
if any, not otherwise paid pursuant to this Section
4.6.
(xvii) 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(d)(i) through (xvi), and shall pay such amount to
the holder of the Exchangeable Seller Certificate.
(e)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 Covered Amount
for such Distribution Date and Class A Covered Amounts
previously due but not paid to the Class A Certificateholders
on a prior Distribution Date, (iv) 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, (v) the Class A Investor Default Amount, if
any, for the related Monthly Period and (vi) the unreimbursed
Class A Investor Charge- Offs, exceeds the Class A Available
Funds deposited in the Finance Charge Account for the related
Monthly Period. In the event that the Class A Required Amount
for such Distribution Date
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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
up to the Class A Required Amount for such Distribution Date
shall be distributed from the Finance Charge Account on the
related Transfer Date pursuant to subsection 4.6(d)(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 on such Transfer Date
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 1997-1
Investor Certificates from other Series, in an amount up to
the remaining Class A Required Amount, and such amount shall
be deposited into the Distribution Account on such Transfer
Date for distribution on the related Distribution Date in
accordance with the priorities set forth in 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 Shared Finance Charge Collections allocable to the
Class A Certificates, all or a portion of the Reallocated
Principal Collections with respect to such Monthly Period in
an amount up to such excess shall be distributed on such
Transfer Date pursuant to subsection 4.12(a).
(f) 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,
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(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, if any, for the related Monthly
Period, and (v) the unreimbursed Class B Investor Charge-
Offs, exceeds the Class B Available Funds deposited in the
Finance Charge Account for the related Monthly Period. In the
event that the Class B Required Amount for the related
Transfer 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 subsection 4.6(d)(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 on such Transfer Date
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 1997-1
Investor Certificates from other Series, after the application
thereof pursuant to subsection 4.6(e), in an amount up to the
remaining Class B Required Amount, and such amount shall be
deposited to the Distribution Account on such Transfer Date on
the related Distribution Date in accordance with the
priorities set forth in subsections 4.6(b)(i) through (iv). In
the event that the Class B Required Amount for such
Distribution Date exceeds the amount of Excess Spread and
Shared Finance Charge Collections allocable to the Class B
Certificates on such Transfer Date, all or a portion of the
Reallocated
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Collateral Principal Collections with respect to such Monthly
Period, if any, remaining after the application thereof
pursuant to Section 4.6(e), in an amount up to such excess,
shall be distributed on such Transfer Date pursuant to Section
4.12(b).
(g) On each Transfer Date, in the event that the
amounts due on such Transfer Date pursuant to subsections
4.6(c)(i) and 4.6(d)(v) through (xii) exceed in whole or in
part the Excess Spread allocable thereto on to such Transfer
Date, then the Trustee shall, in accordance with the related
Supplements, withdraw on such Transfer Date 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 1997-1 Investor Certificates
from other Series, after the application thereof pursuant to
subsections 4.6(e) and (f), in an amount up to such excess or
such lesser amount as may be available after the application
thereof pursuant to subsections 4.6(e) and (f), and such
amount shall be distributed to the Servicer on such Transfer
Date in accordance with Section 4.6(c)(i) and then applied in
accordance with the priorities set forth in subsections
4.6(d)(v) through (xii).
SECTION 4.7 Payment of Investor Certificate Interest. On each
Distribution Date, the Paying Agent shall pay in accordance with
Section 5.1, (a) 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(d)(i), (iii), (vii) and (xiii), 4.6(e), 4.11(a) and
4.12(a) on the related Transfer Date and (b) 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(d)(ii), (iv), (viii) and (xiv),
4.6(f), 4.11(a) and 4.12(b) on the related Transfer Date.
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SECTION 4.8 Payment of Investor Certificate Principal.
(a) On each Determination Date, the Servicer shall
instruct the Trustee to withdraw, and the Trustee, acting in
accordance with such instructions, shall withdraw on such
Transfer Date or the related Distribution Date, as applicable,
to the extent of available funds, the amounts required to be
withdrawn from the Finance Charge Account, the Principal
Account, the Principal Funding Account and the Distribution
Account as follows:
(i) on each Transfer Date with respect to the
Revolving Period, an amount equal to the Available
Investor Principal Collections for the related
Monthly Period shall be distributed on each Transfer
Date, to the extent available, in the following
priority:
(A) an amount equal to the Collateral
Monthly Principal with respect to such Transfer
Date shall be distributed to the Collateral
Interest Holder in accordance with the Loan
Agreement; and
(B) the remaining Available Investor
Principal Collections, if any, shall constitute
Shared Principal Collections to be deposited and
applied in the manner specified in subsection
4.2(e) of the Agreement.
(ii) on each Transfer Date with respect to the
Controlled Accumulation Period (beginning on the
first Transfer Date following the Monthly Period in
which the Controlled Accumulation Period commences),
to the extent available, in the following priority:
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(A) on each Transfer Date occurring prior to
the Class A Scheduled Payment Date, an amount
equal to the Class A Monthly Principal shall be
deposited into the Principal Funding Account;
(B) on the Transfer Date immediately
following the payment in full of the Class A
Investor Interest on the Class A Scheduled Payment
Date, an amount equal to the Class B Monthly
Principal with respect to such Transfer Date will
be deposited in the Distribution Account;
(C) on each Transfer Date after giving
effect to the distribution referred to in clauses
(A) and (B), if a reduction in the Required
Collateral Interest has occurred on or prior to
such Transfer Date, an amount equal to the
Collateral Monthly Principal with respect to such
Transfer Date will be paid to the Collateral
Interest Holder in accordance with the Loan
Agreement; and
(D) the remaining Available Investor
Principal Collections, if any, shall constitute
Shared Principal Collections to be deposited and
applied in the manner specified in subsection
4.2(e) of the Agreement.
(iii) on each Transfer Date with respect to the
Rapid Amortization Period (beginning on the first
Transfer Date following the Monthly Period in which
the Rapid Amortization Period commences), to the
extent available, in the following priority:
(A) an amount equal to the Class A Monthly
Principal with respect to such
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Transfer Date will be deposited in the
Distribution Account;
(B) upon payment of the Class A Investor
Interest in full, an amount equal to the Class B
Monthly Principal with respect to such Transfer
Date will be deposited in the Distribution
Account;
(C) upon payment of the Class B Investor
Interest in full, an amount equal to the
Collateral Monthly Principal with respect to such
Transfer Date will be paid to the Collateral
Interest Holder in accordance with the Loan
Agreement; and
(D) the remaining Available Investor
Principal Collections, if any, shall constitute
Shared Principal Collections to be deposited and
applied in the manner specified in subsection
4.2(e) of the Agreement;
provided, further, that on each Transfer Date in the
Controlled Accumulation 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 Principal Funding 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 Deposit Amount exceeds the Available Investor
Principal Collections on such Transfer Date; provided,
further, 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).
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(b)(i) On the earlier to occur of (i) the first
Transfer Date with respect to the Rapid Amortization Period
and (ii) the Transfer Date immediately preceding the Class A
Scheduled Payment Date, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the
Principal Funding Account and deposit in the Distribution
Account the amount on deposit in the Principal Funding
Account.
(ii) On the Determination Date preceding the Transfer
Date immediately prior to the Series 1997-1 Termination 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 Investor Interest as of the immediately preceding
Distribution Date, after giving effect to all payments,
deposits and withdrawals made on such 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).
(c) On each Distribution Date occurring after a
deposit is made to the Distribution Account pursuant to
subsection 4.8(a) or (b) of the Agreement or Section 5 or 15
of the Series Supplement, the Paying Agent shall pay, in
accordance with Section 5.1 to the Series 1997-1 Investor
Certificateholders from the Distribution Account, the amount
so deposited into the Distribution Account.
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(d) The Controlled Accumulation Period is scheduled
to commence at the close of business on the Controlled
Accumulation Date; provided that if the Controlled
Accumulation Period Length (determined as described below) on
any Determination Date on or after the Determination Date
preceding the Reserve Account Funding Date is less than
fourteen months, the Servicer, at its option, may elect to
modify the date on which the Controlled Accumulation Period
actually commences to the first day of the month that is a
number of months prior to the month in which the Class A
Scheduled Payment Date occurs at least equal to the Controlled
Accumulation Period Length (so that, as a result of such
election, the number of Monthly Periods in the Controlled
Accumulation Period will at least equal the Controlled
Accumulation Period Length) and shall provide prompt written
notice of such action to the Trustee; provided that (i) the
length of the Controlled Accumulation Period will not be less
than four months; (ii) such determination of the Controlled
Accumulation Period Length shall be made on each Determination
Date prior to the commencement of the Controlled Accumulation
Period, and any election to shorten the Controlled
Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the
Controlled Accumulation Period Length determined on any
subsequent Determination Date, but the Controlled Accumulation
Period shall in no event commence prior to the Controlled
Accumulation Date, and (iii) notwithstanding any other
provision of this Series Supplement to the contrary, no
election to postpone the commencement of the Controlled
Accumulation Period shall be made after a Pay Out Event shall
have occurred and be continuing with respect to any other
Series. The "Controlled Accumulation Period Length" will mean
a number of months such that the amount available for
distribution of principal on the Class A Certificates on the
Class A Scheduled Payment Date
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is expected to equal or exceed the Class A Investor Interest,
assuming for this purpose that (1) the payment rate with
respect to Principal Collections remains constant at the
lowest level of such payment rate during the twelve preceding
Monthly Periods (or such lower payment rate as Servicer may
select), (2) the total amount of Principal Receivables in the
Trust (and the principal amount on deposit in the Excess
Funding Account, if any) remains constant at the level on such
date of determination, (3) no Pay Out Event with respect to
any Series will subsequently occur during the Controlled
Accumulation Period and (4) no additional Series (other than
any Series being issued on such date of determination) will
subsequently be issued during the Controlled Accumulation
Period.
SECTION 4.9 Establishment of the Reserve Account.
(a) Reserve Account. The Servicer, for the benefit of
the Class A 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 Class A Certificateholders, the
"Reserve 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 Class A Certificateholders. The Trustee shall possess all
right, title and interest in all funds on deposit from time to
time in the Reserve Account and in all proceeds thereof. If,
at any time, the institution holding the Reserve Account
ceases to be a Qualified Trust Institution, the Servicer shall
within 20 Business Days establish a new Reserve Account
meeting the conditions specified above with a Qualified Trust
Institution and shall transfer any cash and/or any investments
that are
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on deposit in the existing Reserve Account to such new Reserve
Account. From the date such new Reserve Account is
established, it shall be the "Reserve Account." The Trustee,
acting in accordance with instructions from the Servicer,
shall (i) make withdrawals from the Reserve Account from time
to time in an amount up to the Available Reserve Account
Amount at such time, for the purposes set forth in this Series
Supplement, and (ii) on each Transfer Date (from and after the
Reserve Account Funding Date) prior to the termination of the
Reserve Account pursuant to Section 4.9(f) make a deposit into
the Reserve Account in the amount specified in, and otherwise
in accordance with, subsection 4.6(d)(xi).
(b) Administration of the Reserve Account. Funds on
deposit in the Reserve Account on any Transfer Date, after
giving effect to any deposits to or withdrawals from the
Reserve Account on such Transfer Date, shall be invested by
the Trustee at the direction of the Servicer in Permitted
Investments that will mature so that such funds will be
available for withdrawal on or prior to the following Transfer
Date; and provided, further, that each Permitted Investment
shall mature such that such Permitted Investment shall be
available for withdrawal on or prior to the following Transfer
Date. The Trustee shall maintain, either on its own behalf or
through its nominee or custodian, on behalf of the Class A
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. No Permitted Investment shall be disposed of prior
to its maturity. On each Transfer Date, all interest and
earnings (net of losses and investment expenses) accrued since
the preceding Transfer Date on funds
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on deposit in the Reserve Account shall be retained in the
Reserve Account to the extent that the Available Reserve
Account Amount is less than the Required Reserve Account
Amount; and the balance, if any, shall be deposited into the
Finance Charge Account and included in Class A Available Funds
for such Transfer Date. For purposes of determining the
availability of funds or the balances in the Reserve Account
for any reason under this Agreement, except as otherwise
provided in the preceding paragraph, all investment earnings
on such funds shall be deemed not to be available or on
deposit.
(c) Calculation of Reserve Draw Amount. On or before
each Transfer Date with respect to the Controlled Accumulation
Period prior to the payment in full of the Class A Investor
Interest and on or before the first Transfer Date with respect
to the Rapid Amortization Period, the Servicer shall calculate
the "Reserve Draw Amount" which shall be equal to the
Principal Funding Investment Shortfall with respect to each
Transfer Date with respect to the Controlled Accumulation
Period or the first Transfer Date with respect to the Rapid
Amortization Period less, in each case, the amount of funds
deposited into the Finance Charge Account on such Transfer
Date pursuant to subsection 4.9(b).
(d) Withdrawal of Reserve Draw Amount. If the Reserve
Draw Amount for any Transfer Date is greater than zero, the
Trustee, acting in accordance with the instructions of the
Servicer, shall withdraw from the Reserve Account an amount
equal to the lesser of (x) such Reserve Draw Amount and (y)
the Available Reserve Account Amount as of such Transfer Date,
and shall deposit such amount into the Finance Charge Account
and included in Class Available Funds for such Transfer Date.
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(e) Withdrawal of Reserve Account Surplus. If the
Reserve Account Surplus for any Transfer Date, after giving
effect to all deposits to and withdrawals from the Reserve
Account with respect to such Transfer Date, is greater than
zero, the Trustee, acting in accordance with the instructions
of the Servicer, shall withdraw from the Reserve Account not
later than 1:00 p.m. (New York City time) on such Transfer
Date an amount equal to the Reserve Account Surplus and pay
such amount in accordance with the Loan Agreement.
(f) Termination of the Reserve Account. Upon the
earliest to occur of (i) the termination of the Trust pursuant
to Article XII of the Agreement, (ii) if the Controlled
Accumulation Period has not commenced, the first Transfer Date
relating to the Rapid Amortization Period, and if the
Controlled Accumulation Period has commenced, the earlier to
occur of (I) the first Transfer Date with respect to the Rapid
Amortization Period and (II) the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee,
acting in accordance with the instructions of the Servicer,
after the prior payment of all amounts owing to the Class A
Certificateholders that are payable from the Reserve Account
as provided in this Series Supplement, shall withdraw from the
Reserve Account and pay in accordance with the Loan Agreement,
all amounts, if any, on deposit in the Reserve Account and the
Reserve Account shall be deemed to have terminated for
purposes of this Series Supplement.
SECTION 4.10 Transferor's or Servicer's Failure to Make a
Deposit or Payment.
(a) If the Servicer fails to make, or to give
instructions to make, 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
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this Series Supplement (collectively, "Excluded Payments"))
relating to the Series 1997-1 Investor Certificates required
to be made or given by the Servicer on the related Transfer
Date at the time specified in the Agreement (including
applicable grace periods), the Trustee shall make such payment
or deposit from the applicable Investor Account without
instruction from the Servicer. 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), (b)(i) and (d)(vi) on each Transfer Date, and (ii)
payable to the Series 1997-1 Investor 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.
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 0.12% for the related Interest Accrual Period
exceeds the Class A Cap
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Rate or LIBOR plus 0.32% 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 0.12% exceeds the Class
A Cap Rate or, in the case of the Class B Interest Rate Cap,
LIBOR plus 0.32% 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 the counterparty rating of the
Interest Rate Cap Provider is withdrawn or reduced below Aa3
by Moody's or below AAA by Standard & Poor's or, with respect
only to an Interest Rate Cap Provider for a Replacement
Interest Rate Cap, (i) the long term unsecured debt or long
term certificate of deposit rating of such Interest Rate Cap
Provider is withdrawn or reduced below Aa3 by Moody's or (ii)
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, then within 30
days after such withdrawal or reduction (notice of which the
Interest Rate Cap Provider is required, under each Interest
Rate Cap, to provide to the Trustee, Moody's and Standard &
Poor's promptly upon obtaining knowledge thereof), the
Interest Rate Cap Provider, at its own expense, is required,
under each Interest Rate Cap, either to (x) obtain a
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Replacement Interest Rate Cap for each such Interest Rate Cap
to which it is then currently a party or (y) enter into or
establish, with respect to each such Interest Rate Cap, any
other arrangement satisfactory to Moody's and Standard &
Poor's, including collateral, guarantees or letters of credit,
which arrangement will result in Moody's and Standard & Poor's
not reducing or withdrawing the ratings of the Class A
Certificates or the Class B Certificates in effect immediate
prior to the ratings downgrade of the Interest Rate Cap
Provider (a "Qualified Substitute Arrangement"). Upon receipt
of notice of any such reduction or withdrawal, the Trustee, at
the direction of the Servicer, shall, unless such a
Replacement Interest Rate Cap Provider or Qualified Substitute
Arrangement has theretofore been established or obtained, use
its best efforts to establish or obtain or cause the Interest
Rate Cap Provider to establish or obtain, with respect to each
such Interest Rate Cap, a Replacement Interest Rate Cap or
Qualified Substitute Arrangement; provided, however, that in
the event at any time any Qualified Substitute Arrangement
established pursuant to this Section 4.11 or pursuant to the
applicable Interest Rate Cap shall cease to be satisfactory to
the Rating Agency or shall terminate prior to the Class A
Scheduled Payment Date (in the case of a Qualified Substitute
Arrangement with respect to the Class A Interest Rate Cap) or
the Class B Scheduled Payment Date (in the case of a Qualified
Substitute Arrangement with respect to the Class B Interest
Rate Cap), then the provisions of this Section 4.11(b) shall
again be applied and in connection therewith the 30-day period
referred to above shall commence on the date the Servicer
receives notice of such cessation or termination, as the case
may be. Subject to Section 4.11(c) below, the Trustee shall,
with respect to any Interest Rate Cap for which a Replacement
Interest Rate Cap or Qualified Substitute Arrangement has been
or (with respect to clauses (A), (C) and (D)
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below) will be obtained, (A) timely provide any written notice
required thereby to the Interest Rate Cap Provider of its
intention to terminate the Interest Rate Cap within such
30-day period, (B) terminate such Interest Rate Cap within
such 30-day period, (C) request the payment to it of all
amounts due to the Trust under such Interest Rate Cap through
the termination date and (D) 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.
(c) The Trustee shall not at any time terminate any
Interest Rate Cap (including any Replacement Interest Rate Cap
or Qualified Substitute Arrangement with respect thereto)
unless, prior to or simultaneously with the termination
thereof, the Interest Rate Cap Provider, 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 each of Moody's and Standard & Poor's
confirming that the termination of such Interest Rate Cap and
its replacement with such Replacement Interest Rate Cap or
Qualified Substitute Arrangement will not result in a
reduction or withdrawal of its rating of the Class A
Certificates or the Class B Certificates. Notwithstanding
anything to the contrary in Section 4.11(b) above, the Trustee
shall not at any time terminate any such Interest Rate Cap (or
such Replacement Interest Rate Cap or Qualified Substitute
Arrangement with respect thereto) that comprises all or a
portion of any Qualified Substitute Arrangement established
pursuant to subsection 4.11(b) unless the latter Qualified
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Substitute Arrangement has been or is required to be
terminated pursuant to this Section 4.11.
(d) The Servicer shall notify the Trustee, the Rating
Agency and the Collateral Interest Holder 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
Moody's or Standard & Poor'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 each of Moody's and Standard &
Poor's 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, subject to the terms of the Interest
Rate Cap and to any subsequent replacement of the Interest
Rate Cap pursuant to this Section 4.11, 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 the Interest Cap
Provider, prepared in accordance with accounting principles
that are generally accepted in its place of domicile.
(g) The Trustee, on behalf of the Certificateholders,
shall have the right to, and upon notification from the
Servicer shall, sell
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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 Adjusted
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) The Trustee shall have received written
confirmation from the Rating Agency that such sale
will not result in a reduction or withdrawal of the
then current rating on the relevant class of
Certificates by the Rating Agency.
The Servicer shall have the duty of (A) obtaining a
fair market value price for the sale of the Trust's rights
under any portion of an Interest Rate Cap sold pursuant to the
subsection 4.11(g), (B) notifying the Trustee of prospective
purchasers and bids, (C) selecting the purchaser of such
portion of the Interest Rate Cap, and (D) 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 such portion of the Interest Rate Cap and
to release the lien of the Trustee thereon 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 Funds or
Class B Available Funds in accordance with subsections 4.6(a)
and (b).
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SECTION 4.12 Reallocated Principal Collections. On each
Transfer Date, the Servicer shall apply, or shall cause the Trustee to
apply, the Reallocated Principal Collections (applying all Reallocated
Collateral Principal Collections in accordance with subsections 4.12(a)
and (b) prior to applying any Reallocated Class B Principal Collections
in accordance with subsection 4.12(a) for any amounts still owing after
the application of Reallocated Collateral Principal Collections) with
respect to such Transfer Date, to make the following distributions on
each Transfer Date 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 Transfer
Date over (ii) the amount of Excess Spread and Shared Finance
Charge Collections from other Series with respect to the
related Monthly Period, shall be applied pursuant to
subsections 4.6(a)(i) through (iv); and
(b) an amount equal to the excess, if any, of (i) the
Class B Required Amount, if any, with respect to such Transfer
Date over (ii) the amount of Excess Spread and Shared Finance
Charge Collections from other Series allocated and available
to the Class B Certificates pursuant to subsection 4.6(d)(ii)
and 4.6(f) on such Transfer Date shall be applied pursuant to
subsections 4.6(b)(i) through (iv).
On each Transfer Date, the Collateral Interest shall be
reduced by the amount of Reallocated Collateral Principal Collections
and by the amount of Reallocated Class B Principal Collections applied
pursuant to subsections 4.12(a) and/or (b) on such Transfer Date. If
such reduction would cause the Collateral Interest (after giving effect
to any Collateral Interest Charge-Offs for such Transfer Date) to be a
negative number, the Collateral Interest (after giving effect to any
Collateral Interest Charge-Offs for such Transfer Date) shall be
reduced to zero and the Class B Investor Interest shall be reduced by
the
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amount by which the Collateral Interest would have been reduced below
zero. If the reallocation of Reallocated Principal Collections would
cause the Class B Investor Interest (after giving effect to any Class B
Investor Charge-Offs for such Transfer Date) to be a negative number on
any Transfer Date, Reallocated Principal Collections shall be
reallocated on such Transfer Date in an aggregate amount not to exceed
the amount which would cause the Class B Investor Interest (after
giving effect to any Class B Investor Charge-Offs for such Transfer
Date) to be reduced to zero.
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).
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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
Interest Rate Cap Provider, the Collateral Interest Holder,
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
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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
Finance Charge Collections.
(b) The Transferor may at its option, at any time,
upon not less than 20 Business Days prior written notice to
the Servicer, the Trustee, the Collateral Interest Holder, 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 and the Collateral
Interest Holder by its acceptance of the Collateral Interest
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.
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ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
[THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1997-1]
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
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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 1997-1 Investor
Certificateholder of record on the immediately preceding
Record Date and the Rating Agencies a statement substantially
in the form of Exhibit 2 to the Series Supplement relating to
Series 1997-1 and the Collateral Interest 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, and to the Collateral Interest
Holder on the preceding Transfer
Date;
(ii) the amount of such distribution, if any,
allocable to principal with respect to the Class A
Certificates, the Class B Certificates and the
Collateral Interest, respectively;
(iii) the amount of such distribution
allocable to Class A Monthly Interest, Class
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B Monthly Interest, and Collateral Monthly Interest,
respectively;
(iv) the amount of Principal Collections processed
during the preceding Monthly Period, as appropriate,
and allocated in respect of the Class A Certificates,
the Class B Certificates and the Collateral Interest,
respectively;
(v) the aggregate amount of Principal Receivables,
the Investor Interest, the Adjusted Investor
Interest, the Class A Investor Interest, the Class A
Adjusted Investor Interest, the Class B Investor
Interest, the Collateral Interest, the Class B Fixed
Allocation, the Collateral Fixed Allocation, the
Floating Investor Percentage, the Class A Floating
Allocation, the Class B Floating Allocation, the
Collateral Floating Allocation and the Fixed Investor
Percentage, in each case 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 and 61 or more days
delinquent in accordance with the Servicer's then
existing Account Guidelines by class of delinquency
as of the close of business on the last day of the
preceding Monthly Period;
(vii) the Class A Investor Default Amount,
the Class B Investor Default Amount and the
Collateral Default Amount for the preceding Monthly
Period;
(viii) the aggregate amount of Class A
Investor Charge-Offs, Class B Investor Charge-Offs
and Collateral Interest Charge- Offs for the
preceding Monthly Period;
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(ix) the aggregate amount of Investor
Charge-Offs reimbursed to the Class A
Certificateholders, the Class B Certificateholders
and the Collateral Interest Holder on the Transfer
Date immediately preceding such Distribution Date;
(x) the amount of the Class A Monthly
Servicing Fee, the Class B Monthly Servicing Fee and
the Collateral Interest Monthly Servicing Fee for the
preceding Monthly Period;
(xi) the Principal Funding Account Balance
as of the related Transfer Date;
(xii) the Accumulation Shortfall with
respect to the related Transfer Date;
(xiii) the amount of the Principal Funding
Investment Proceeds transferred to the Finance Charge
Account on the related Transfer Date;
(xiv) the Class A Principal Funding
Investment Shortfall on the related Transfer Date;
(xv) the amount of Class A Available Funds,
Class B Available Funds and Collateral Available
Funds on deposit in the Finance Charge Account on the
related Transfer Date;
(xvi) the Pool Factor as of the end of the
last day of the preceding Monthly Period;
(xvii) the aggregate amount of Finance
Charge Collections during the preceding Monthly
Period (including amounts arising from the sale of
either Interest Rate Cap to be treated as Finance
Charge Collections), as appropriate, and allocated in
respect of the Series 1997-1 Investor Certificates;
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(xviii) the Class A Required Amount, the
Class B Required Amount, the amount of Reallocated
Collateral Principal Collections and Reallocated
Class B Principal Collections, if any, to be applied
with respect to the Required Amounts, and the amount
of any reductions in the Collateral Interest and the
Class B Investor Interest, if any, to satisfy the
Required Amounts, in each case with respect to the
preceding Monthly Period;
(xix) the Reserve Account Draw and the
Available Reserve Account Amount with respect to the
related Transfer Date; and
(xx) the ratio of the Collateral Interest to
the Investor Interest 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 1998, 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
1997-1 Certificateholder, a statement prepared by
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the Servicer containing the information required to be
contained in the regular monthly report to Series 1997-1
Investor 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 1997-1 Investor 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 1997-1 Investor
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.
SECTION 9.A Series 1997-1 Pay Out Events. If any one of the following
events shall occur during the Revolving Period or the Controlled Accumulation
Period with respect to the Series 1997-1 Investor 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
1997-1 Investor 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 1997-1 Investor
Certificateholders (which determination shall be made without regard to
whether any funds are available pursuant to 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 1997-1 Investor
Certificates evidencing Undivided Interests aggregating not less than
50% of each of
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the Class A Investor Interest, the Class B Investor Interest and the
Collateral Interest, and continues to affect materially and adversely
the interests of the Series 1997-1 Investor 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) of
the Agreement, (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 1997-1 Investor
Certificates evidencing Undivided Interests aggregating not less than
50% of each of the Class A Investor Interest, the Class B Investor
Interest and the Collateral Interest, and (ii) as a result of which the
interests of the Series 1997-1 Investor Certificateholders are
materially and adversely affected (which determination shall be made
without regard to whether any funds are available pursuant to the
Interest Rate Caps) and continue to be materially and adversely
affected for such period; provided, however, that a Series 1997-1 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) with respect to any Determination Date, the average of the
Portfolio Yields for the three consecutive Monthly Periods preceding
such Determination Date is a rate which is less than the average of the
Base Rates for such Monthly Periods;
(d) the Transferor shall fail to convey Receivables arising
under Additional Accounts to the Trust, as required by subsection
2.6(e) of the Agreement;
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(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1997-1 Investor
Certificateholders (which determination shall be made without regard to
the subordination of the Collateral Interest or whether funds are
available pursuant to the Enhancement or the Interest Rate Caps);
(f) failure to pay the Class A Certificates in full on the
Class A Scheduled Payment Date;
(g) failure to pay the Class B Certificates in full on the
Class B Scheduled Payment Date; or
(h) 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 1997-1 Investor Certificates evidencing Undivided
Interests aggregating more than 50% of each of the Class A Investor Interest,
the Class B Investor Interest and the Collateral Interest by notice then given
in writing to the Transferor and the Servicer (and to the Trustee if given by
the Certificateholders and the Collateral Interest Holder) may declare that a
pay out event (a "Series 1997-1 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) or (h) a Series 1997-1 Pay Out Event shall occur without any notice or
other action on the part of the Trustee or the Series 1997-1 Investor
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
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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 Collateral Interest Holder, and each of 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 1997-1 Termination. All principal or interest with
respect to the Series 1997-1 Investor Certificates shall be due and payable no
later than the Scheduled Series 1997-1 Termination Date. In the event that the
Investor Interest is greater than zero on the Scheduled Series 1997-1
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 Series 1997-1 Investor Certificateholders pro rata in
final payment of all principal of and accrued interest on the Series 1997-1
Investor 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 Finance Charge
Collections and the denominator of which is the sum of all Investor Percentages
with respect to Finance Charge Collections 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 Collateral Interest Holder to satisfy
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any amounts owing under the Loan Agreement and thereafter paid to the Holder of
the Exchangeable Seller Certificate. Upon such Scheduled Series 1997-1
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 Series 1997-1 Investor Certificateholders 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 Series 1997-1 Investor Certificateholders which
would, in either case, result in the subordination of the rights of the Series
1997-1 Investor Certificateholders to the rights of the Holders of any other
Series.
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SECTION 15. Repurchase of the Series 1997-1 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 1997-1
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 1997-1 Certificateholders), may direct the Transferor to
purchase the Series 1997-1 Investor 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 Series 1997-1 Investor Certificates in the
Distribution Account, for distribution to the Series 1997-1 Investor
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 4.8(b)(ii) on the related Transfer Date, (ii) an amount equal to all
interest accrued but unpaid on the Series 1997-1 Investor Certificates through
and including the last day of the Interest Accrual Period in which such Transfer
Date occurs, less the amount on deposit in the Finance Charge Account and, with
respect to the Class A Certificates, Principal Funding Investment Proceeds and
amounts available to be withdrawn from the Reserve Account on the related
Transfer Date, which will be transferred to the Distribution Account to pay
interest pursuant to subsections 4.6(a) through (d), as applicable, on such
Transfer Date and (iii) any additional amounts owing to the Collateral Interest
Holder pursuant to the Loan Agreement. The
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deposit into the Distribution Account of the reassignment deposit amount shall
be considered a prepayment in full of the Series 1997-1 Investor Certificates.
The Series 1997-1 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 1997-1
Investor Certificateholders give notice directing the Transferor to purchase the
Series 1997-1 Investor Certificates as provided above, the obligation of the
Transferor to purchase the Series 1997-1 Investor 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 1997-1 Investor
Certificateholders or the Trustee on behalf of the Series 1997-1 Investor
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 that will be
outstanding on such last day, (y) in the case of Series for which the
Certificate Rate is a floating rate, the Certificate Rate with respect to such
Monthly Period).
SECTION 18. Series 1997-1 Investor Exchange. Pursuant to subsection
6.9(b) of the Agreement, the Series 1997-1 Investor
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Certificateholders may tender their Series 1997-1 Investor 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
Series 1997-1 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 1997-1 Investor Certificateholders. Such notice
of exchange will specify, among other things: (a) the amount of Series 1997-1
Investor 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 1997-1 Investor 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 1997-1 Investor Certificates, and shall issue such Series of
Series 1997-1 Investor Certificates and a new Exchangeable Seller Certificate,
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 or prior to 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
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information described in clauses (i) and (ii) of the preceding sentence.
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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: /s/ Michael J. Ciborowski
-----------------------------
Name: Michael J. Ciborowski
Title: Vice President
BANKERS TRUST COMPANY, not in
its individual capacity but
solely as Trustee
By: /s/ Louis Bodi
-----------------------------
Name: Louis Bodi
Title: Vice President
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<PAGE>
EXHIBIT 1-A
FORM OF CLASS A INVESTOR CERTIFICATE
$____________
No.1 CUSIP No. ___________
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS A ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA1 and MasterCard1/ credit card
receivables generated or to be generated by People's Bank.
(Not an interest in or obligation of
People's Bank or any
Affiliate thereof.)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE SENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S
BANK OR ITS AGENT FOR REGISTRATION OF TRANS FER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGIS TERED 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
- ----------
1 VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
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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 an Amended and Restated Pooling and Servicing Agreement,
dated as of March 18, 1997, as supplemented by the Series 1997-1 Supplement
dated as of March 18, 1997 (collectively, the "Agreement"), by and between
People's Bank, as 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 Transferor 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 Transferor, 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 (or a beneficial interest therein) con sistently 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 Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law.
This Class A 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. Although a summary of certain
provisions of the Agreement is set forth below, this Class A Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
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the Trustee. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Agreement.
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, and (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, and the Investor Accounts,
and (iii) 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
$425,000,000 Floating Rate Class A Asset Backed Certificates, Series 1997-1 (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
will not exceed an amount equal to the Class A Investor Interest at such time.
The Class A Initial Investor Interest is $425,000,000 minus the retirement of
any Class A Certificates pursuant to an Investor Exchange. The Class A Investor
Interest on any date of
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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; provided, however, that the Class A Investor Interest may not be
reduced below zero. In addition to the Class A Certificates, a class of
certificates entitled "People's Bank Credit Card Master Trust $33,750,000
Floating Rate Class B Asset Backed Certificates, Series 1997-1" (the "Class B
Certificates") and an Undivided Interest in the Trust in the initial amount of
$41,250,000 (the "Collateral Interest," and together with the Class A
Certificates and the Class B Certificates, the "Certificates") will be issued,
and the Exchangeable Seller Cer tificate 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
repre sented by the Certificates or any other Series of certificates.
Interest on the Class A Certificates will be distributed on April 15,
1997 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.
No principal will be payable to the Class A Certificate holders during
the Revolving Period, which begins on the date of issuance of this Class A
Certificate or during the Controlled Accumulation Period. During the Controlled
Accumulation Period, which is scheduled to begin with the December 2000 Monthly
Period but which may be postponed as provided in the Agreement, an amount equal
to the Controlled Deposit Amount will be deposited into the Principal Funding
Account on each Transfer Date commenc ing with the Transfer Date following the
Monthly Period in which the Controlled Accumulation Period commences. The amount
on deposit in the Principal Funding Account will be distributed as principal to
the Class A Certificateholders on the February 2002 Distribution Date (the
"Class A Scheduled Payment Date"), unless
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paid earlier as the result of the occurrence of a Pay Out Event and the
commencement of the Rapid Amortization Period, or later in accordance with the
Agreement. During the Rapid Amortization Period, if any, in addition to monthly
payments of interest on the Class A Certificates, 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 the Rapid
Amortization Period commences.
The Servicer will 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 Transferor 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 Transferor
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 Agree ment, 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
Certif icate prior to the close of business on the day any Collections are
deposited in the Collection Account, but may make such pay ments 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 Distribution Date, 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,
interest will be distributed to the Class A Certificateholders in an amount
equal to the sum of: (i) the product of (a) the Class A Certificate
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Rate, (b) the lesser of the Class A Adjusted Investor Interest determined as of
the preceding Distribution Date, after giving effect to all payments, deposits
and withdrawals on such Distri bution Date or Closing Date, as applicable, and
the Expected Class A Principal as of the preceding Distribution Date or Closing
Date (or, for the initial Interest Accrual Period, the Class A Initial Investor
Interest), and (c) the actual number of days in the related Interest Accrual
Period divided by 360, plus (ii) the Class A Covered Amounts for such Interest
Accrual Period, plus (iii) the product of (a) the Class A Excess Princi pal, (b)
the lesser of the Class A Certificate Rate and 10.12% per annum, and (c) the
actual number of days in the related Interest Accrual Period divided by 360,
plus (iv) 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 Interest Accrual Period which has not been
distributed to the Class A Certificateholders, plus, (v) 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 10.12%, (b) the Class A
Excess Principal and (c) the actual number of days in the related Interest
Accrual Period divided by 360.
On each Determination Date during the Revolving Period, the Controlled
Accumulation Period and the Rapid Amortization Period, if any, the Servicer will
determine the Class A Required Amount and the Class B Required Amount. If either
or both of the Required Amounts are greater than zero after application of
available Finance Charge Collections, Excess Spread and Shared Finance Charge
Collections, then Principal Collections allocable to the Collateral Interest
will be reallocated and applied first to fund the remaining Class A Required
Amount, if any, and second to fund the remaining Class B Required Amount, if
any, and to the extent that Reallocated Collateral Principal Collections are
less than such remaining Class A Required Amount, Principal Collections
allocable to the Class B Certificates will then be reallocated and applied to
fund the remaining Class A Required Amount. The Collateral Interest and (if the
Collateral Interest is reduced to zero) the Class B Investor Interest will be
reduced by the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections applied to fund the Required Amounts.
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If, on any Distribution Date, Reallocated Collateral Principal
Collections are insufficient to fund the remaining Class A Required Amount for
the related Monthly Period, then the Collateral Interest (after giving effect to
reduction for any Collateral Interest Charge-Offs and Reallocated Principal
Collections) will be reduced by the amount of such deficiency (but not by more
than the Class A Investor Default Amount for such Monthly Period). In the event
that such reduction would cause the Collateral Interest to be a negative number,
the Collateral Interest will be reduced to zero, and the Class B Investor
Interest (after giving effect to reductions for any Class B Investor Charge-Offs
and any Reallocated Class B Princi pal Collections in excess of the Collateral
Interest as of such Distribution Date) will be reduced by the amount by which
the Collateral Interest would have been reduced below zero. 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.
The Trustee has entered into the Class A Interest Rate Cap with the
Interest Rate Cap Provider for the exclusive benefit of the Class A
Certificateholders. On each Transfer Date that the Class A Certificate Rate for
the related Interest Accrual Period exceeds the Class A Cap Rate, 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 Class A
Interest Rate Cap. The Class A Notional Amount will at all times be equal to or
greater than the amount of the Expected Class A Principal. The Class A Interest
Rate Cap or its Replacement Interest Rate Cap or Qualified Substitute
Arrangement will termi nate on the day immediately following the Class A
Scheduled Payment Date.
People's Bank, as Servicer, is entitled to receive as ser vicing
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 the preceding Monthly Period, payable on each succeeding
Distribution Date. With respect to any Distribution Date, the Class A Monthly
Servicing Fee will equal one-twelfth of the product of 2.00% per annum and the
Class A Adjusted Investor Interest as of the last
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day of the preceding Monthly Period; provided that the Class Monthly Servicing
Fee for the first Distribution Date will be an amount equal to five
thirty-firsts of the foregoing amount.
On each Transfer Date, beginning with the Transfer Date following the
Monthly Period in which the Controlled Accumulation Period commences, an amount
equal to the Controlled Deposit Amount will be deposited in the Principal
Funding Account. The amounts on deposit in the Principal Funding Account will be
deposited in the Distribution Account for distribution to the Class A
Certificateholders on the Class A Scheduled Payment Date.
As provided in the Agreement, Principal Collections remaining after
funding of the Required Amounts during the Revolving Period and the Controlled
Accumulation Period and Principal Collections remaining after funding of the
Controlled Deposit Amount during the Controlled Accumulation Period will be
applied as Shared Principal Collections and distributed first to the
certificateholders of other Series to the extent of Principal Shortfalls, if
any, and then to the Holder of the Exchangeable Seller Certificate. In addition,
during the Controlled Accumu lation Period and the Rapid Amortization Period,
Shared Principal Collections from other Series available to the Certificates
will be applied to pay the Certificateholders to the extent of Princi pal
Shortfalls, if any, with respect to Series 1997-1.
On each Distribution Date beginning with 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, and certain other amounts
treated as Available Investor Principal Collections 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 1997-1 Termination Date.
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 Certif icate) without the presentation or surrender of
this Certificate or the making of any notation thereon, except that with respect
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to Certificates registered in the name of the nominee of a Clear ing 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 Transferor 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 1997-1
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 Transferor 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.
The Agreement and any Supplement may be amended by the Transferor, 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
Transferor, the Servicer and the Trustee, and without the consent of any
Certificateholders, to (a) provide for the transfer by the Transferor of its
interest in and to all or part of the Accounts in accordance with the provisions
of the Agreement and (b) pro vide 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 may not adversely
affect
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in any material respect the interests of 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-exist ing rating of the certificates of any Series.
The Agreement and any Supplement may be amended by the Tran sferor, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregat ing 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.
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 1997-1 Supplement, the Transferor 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
Transferor of the Discount Option will be subject to, among other things, the
receipt by the Trustee of written confirmation from each
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<PAGE>
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 will 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 option.
As provided in the Agreement and subject to certain limita tions
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 de scribed in the
Agreement.
Subject to the prior termination of Series 1997-1, the Agreement
provides that the right of the Class A Certificateholders to receive payments
from the Trust will termi nate on the Scheduled Series 1997-1 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 will 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.
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<PAGE>
Unless the certificate of authentication hereon has been ex ecuted 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.
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<PAGE>
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: March 27, 1997
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<PAGE>
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)
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<PAGE>
EXHIBIT 1-B
FORM OF CLASS B INVESTOR CERTIFICATE
$-----------
No. R-1 CUSIP No. ___________
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS B ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA1 and MasterCard1/ credit card
receivables generated or to be generated by People's Bank.
(Not an interest in or obligation of
People's Bank or any
Affiliate thereof.)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE SENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S
BANK OR ITS AGENT FOR REGISTRATION OF TRANS FER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGIS TERED 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
- --------
1 VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
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<PAGE>
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 an Amended and Restated Pooling and Servicing Agreement, dated as of March
18, 1997, and as supplemented by the Series 1997-1 Supplement, dated as of March
18, 1997, (collectively, the "Agreement"), by and between People's Bank, as
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 Transferor 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 Transferor, 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 (or a beneficial interest therein) 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 Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law.
This Class B 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. Although a summary of certain
provisions of the Agreement is set forth below, this Class B Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
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<PAGE>
the Trustee. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Agreement.
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, and the Investor Accounts and (iii) 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
$33,750,000 Floating Rate Class B Asset Backed Certificates, Series 1997-1 (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
will not exceed an amount equal to the Class B Investor Interest at such time.
The Class B Initial Investor Interest is $33,750,000 minus the retirement of any
Class B Certificates pursuant to an Inves tor Exchange. The Class B Investor
Interest on any date of
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<PAGE>
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, Reallocated Principal Collections and other reductions of the Class
B Investor Interest in respect of the Class A Required Amount over Class B
Investor Charge-Offs, Reallocated Principal Collections and such other
reductions reimbursed prior to such date of determination; provided, however,
that the Class B Investor Interest may not be reduced below zero. In addition to
the Class B Certificates, a class of certificates entitled "People's Bank Credit
Card Master Trust $425,000,000 Floating Rate Class A Asset Backed Certificates,
Series 1997-1" (the "Class A Certificates") and an Undivided Interest in the
Trust in the initial amount of $41,250,000 (the "Collateral Interest," and
together with the Class A Certificates and the Class B Certifi cates, the
"Certificates") will be issued, and the Exchangeable Seller Certificate will be
issued 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 Receiv ables not represented by the Certificates or any other
Series of certificates.
Interest on the Class B Certificates will be distributed on April 15,
1997 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. Principal with respect to the
Class B certificates is scheduled to be distributed on the March 2002
Distribution Date, (the "Class B Scheduled Payment Date"), but may be paid
earlier or later as provided in the Agreement. During the Rapid Amortization
Period, if any, interest and prin cipal will be distributed to the Class B
Certificateholders on the Distribution Date of each calendar month until the
Class B Certificateholders have been paid in full.
The Servicer will deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of
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<PAGE>
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 Transferor 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 Transferor
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 para graph.
On each Distribution Date, 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,
interest will be distributed to the Class B Certificateholders in an amount
equal to 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, 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 (or, for the initial Interest Accrual Period,
the the Class B Initial Investor Interest), as applica ble, and (c) the actual
number of days in the related Interest Accrual Period divided by 360, plus (ii)
the product of (a) the Class B Excess Principal, (b) the lesser of the Class B
Certif icate Rate and 10.32%, and (c) the actual number of days in the related
Interest Accrual Period divided by 360, plus (iii) to the
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<PAGE>
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 Interest 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 10.32%, (b) the Class B Excess Princi pal and (c) the
actual number of days in the related Interest Accrual Period divided by 360.
On each Determination Date during the Revolving Period, the Controlled
Accumulation Period and the Rapid Amortization Period, if any, the Servicer will
determine the Class A Required Amount and the Class B Required Amount. If either
or both of the Required Amounts are greater than zero after application of
available Finance Charge Collections, Excess Spread and Shared Finance Charge
Collections, then Principal Collections allocable to the Collateral Interest
will be reallocated and applied first to fund the remaining Class A Required
Amount, if any, and second to fund the remaining Class B Required Amount, if
any, and to the extent that Reallocated Collateral Principal Collections are
less than such remaining Class A Required Amount, Principal Collections
allocable to the Class B Certificates will then be reallocated and applied to
fund the remaining Class A Required Amount. The Collateral Interest will be
reduced by the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections applied to fund the Required Amounts.
The Class B Investor Interest will be reduced by the amount of Reallocated Class
B Principal Collections in excess of the Collateral Interest (after giving
effect to reductions for an Collateral Interest Charge-Offs and any reallocated
Collateral Principal Collections as of the related Distribution Date) applied to
fund the Class A Required Amount.
If, on any Distribution Date, Reallocated Collateral Principal
Collections are insufficient to fund the remaining Class A Required Amount for
the related Monthly Period, then the Collateral Interest (after giving effect to
reduction for any Collateral Interest Charge-Offs and Reallocated Principal
Collections) will be reduced by the amount of such deficiency (but not by more
than the Class A Investor Default Amount for such Monthly Period). In the event
that such reduction would cause the Collateral Interest to be a negative number,
the
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<PAGE>
Collateral Interest will be reduced to zero, and the Class B Investor Interest
(after giving effect to reductions for any Class B Investor Charge-Offs and any
Reallocated Class B Princi pal Collections in excess of the Collateral Interest
as of such Distribution Date) will be reduced by the amount by which the
Collateral Interest would have been reduced below zero. 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.
If, on any Distribution Date, Reallocated Collateral Principal
Collections not required to fund the Class A Required Amount are insufficient to
fund the remaining Class B Required Amount for such Monthly Period, then the
Collateral Interest (after giving effect to reduction for any Collateral
Interest Charge-Offs, Reallocated Principal Collections and any adjustments made
thereto for the benefit of the Class A Certificateholders) will be reduced by
the amount of such deficiency (but not by more than the Class B Investor Default
Amount for such Monthly Period). In the event that such reduction would cause
the Collateral Interest to be a negative number, the Collateral Interest will be
reduced to zero, and the Class B Investor Interest will be reduced by the amount
by which the Collateral Interest would have been reduced below zero.
The Trustee has entered into the Class B Interest Rate Cap with the
Interest Rate Cap Provider for the exclusive benefit of the Class B
Certificateholders. On each Transfer Date that the Class B Certificate Rate for
the related Interest Accrual Period exceeds the Class B Cap Rate, 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 Class B
Interest Rate Cap. The Class B Notional Amount will at all times equal the
amount of the Expected Class B Principal. The Class B Interest Rate Cap, or its
Replacement Interest Rate Cap or Quali fied Substitute Arrangement, will
terminate on the day immedi ately following the Class B Scheduled Payment Date.
People's Bank, as Servicer, is entitled to receive as ser vicing
compensation a monthly servicing fee in an amount equal to one-twelfth of the
product of 2.00% per annum and the Aggregate
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<PAGE>
Principal Receivables in the Trust on the last day of the preceding Monthly
Period, payable on each succeeding Distribution Date. With respect to any
Distribution Date, the Class B Monthly Servicing Fee will equal 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; provided that the Class B Monthly Servicing
Fee for the first Distribution Date will be an amount equal to five
thirty-firsts of the foregoing amounts.
On the Transfer Date immediately preceding the Class B Scheduled
Payment Date, and on each Transfer Date thereafter until the Class B Investor
Interest has been reduced to zero, the Servicer or the Trustee acting in
accordance with instructions from the Servicer will 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 Distri bution Account
for distribution to the Class B Certificateholders on the next succeeding
Distribution Date, to the extent specified in the Agreement.
As provided in the Agreement, Principal Collections remain ing after
funding of the Required Amounts during the Revolving Period and the Controlled
Accumulation Period and Principal Collections remaining after funding of the
Controlled Deposit Amount during the Controlled Accumulation Period will be
applied as Shared Principal Collections and distributed first to the
certificateholders of other Series to the extent of Principal Shortfalls, if
any, and then to the Holder of the Exchangeable Seller Certificate. In addition,
during the Controlled Accumu lation Period and the Rapid Amortization Period,
Shared Principal Collections from other Series available to the Certificates
will be applied to pay the Certificateholders to the extent of Princi pal
Shortfalls, if any, with respect to Series 1997-1.
On each Distribution Date beginning with 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, and certain other amounts
treated as Available Investor Principal Collections 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 1997-1 Termination Date and,
following the final principal payment to
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<PAGE>
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 1997-1 Termination Date.
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 Certifi cate) 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 Clear ing 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 Transferor 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 1997-1
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 Transferor 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.
The Agreement and any Supplement may be amended by the Transferor, 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, 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
Transferor, the Servicer and the Trustee, and without the consent of any Certifi
cateholders, to (a) provide for the transfer by the Transferor 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 Receiv ables, in an amount
up to the aggregate amount by which the pur chase price of Principal Receivables
as sold thereafter is less than 100%, as Collections of Finance Charge
Receivables; provided, however, that any such action may not adversely affect in
any material respect the interests of 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.
The Agreement and any Supplement may be amended by the Tran sferor, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregat ing 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.
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
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<PAGE>
the same aggregate Undivided Interests will be issued to the designated
transferee or transferees.
Pursuant to the Series 1997-1 Supplement, the Transferor 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
Transferor 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 will 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 option.
As provided in the Agreement and subject to certain limita tions
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 de scribed in the
Agreement.
Subject to the prior termination of Series 1997-1, the Agreement
provides that the right of the Class B Certificateholders to receive payments
from the Trust will termi nate on the Scheduled Series 1997-1 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
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<PAGE>
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 Inter change pursuant to subsections 2.5(k) and (l)
of the Agreement. The Trustee will 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 ex ecuted 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.
- 11 -
<PAGE>
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: March 27, 1997
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<PAGE>
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)
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<PAGE>
EXHIBIT 2
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1997-1
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 1997-1 and
may not correspond to Monthly Period numbers used for other Series of
the Trust.)
21. Information Regarding Distributions to Certificateholders
21.1 Total amount distributed to
Certificateholders (per $1,000
Initial Investor Interest) _________
21.2 Total principal amount
distributed to Certificateholders
(per $1,000 Initial Investor Interest) _________
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<PAGE>
21.3 Total interest amount
distributed to Certificateholders
(Per $1,000 Initial Investor Interest) _________
22. Receivables Balances
22.1 Aggregate Principal Receivables in
Trust, end of period __ _________
(a) Aggregate Principal Receivables
in Trust on Closing Date _________
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<PAGE>
22.2 Investor Interest, end of period __ _________
(a) Investor Interest as of Closing Date _________
22.3 Investor Interest as a percentage
of Trust Principal Receivables _________
(a) Investor Interest as a percentage of
Trust Principal Receivables as of the
Closing Date _________
22.4 Adjusted Investor Interest _________
22.5 Floating Investor Percentage _________
22.6 Fixed Investor Percentage _________
23. Collections _________
23.1 Aggregate amount of Collections Processed _________
during the Monthly Period allocated to
Certificateholders
B. Monthly Pay Rate for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) Period - 4 _________%
(v) Period - 5 _________%
(vi) Period - 6 _________%
(vii) 6 mo. Avg. _________%
23.2 Principal Collections during the Monthly _________
Period allocated to Certificateholders
23.3 Amount by which Controlled Accumulation _________
exceeds principal allocated to Investors
23.4 Finance Charge Collections during the Monthly _________
Period allocated to Certificateholders
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<PAGE>
23.5 Annualized Gross Portfolio Yield for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
24. Delinquent Balances*
Aggregate Percentage
Account Aggregate
Balances Receivables
-------- -----------
24.1 Less than 31 days delinquent ___________ __________%
24.2 31 - 60 days delinquent ___________ __________%
24.3 61-90 days delinquent ___________ __________%
24.4 More than 90 days delinquent ___________ __________%
24.5 Total ___________ __________%
25. Default Summary
25.1 Aggregate Investor Default Amount _________
Aggregate Percentage
Account Aggregate
Balances Receivables
-------- -----------
25.2 Investor default percentage for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
- 4 -
<PAGE>
25.3 Investor Charge-Offs
(i) Aggregate dollar amount _________
(ii) Per $1,000 of Initial Investor Interest _________
25.4 Reimbursed Investor Charge-Offs
(i) Aggregate dollar amount _________
(ii) Per $1,000 of Initial Investor Interest _________
25.5 Reallocated Principal Collections
(i) Aggregate dollar amount _________
(ii) Per $1,000 of Initial Investor Interest _________
25.6 Base Rate _________
25.7 Portfolio Yield minus Base Rate for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
26. Monthly Investor Servicing Fee _________
27. Accumulation Shortfall _________
28.1 Principal Funding Investment Proceeds _________
28.2 Principal Funding Investment Shortfall _________
29. Withdrawal from Reserve Account under
Section 4.6 _________
30. Required Reserve Account Amount _________
31. Available Reserve Account Amount _________
32. Pool Factor _________
- 5 -
<PAGE>
33. Collateral Interest as a Percentage of
Investor Interest _________
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 Accumulation 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.
- 6 -
<PAGE>
EXHIBIT 3
FORM OF DTC LETTER OF REPRESENTATION
- 1 -
<PAGE>
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/ AND PASS-THROUGH CERTIFICATES
Letter of Representations
[To be Completed by Issuer and Trustee]
People's Bank Credit Card Master Trust
[Name of Issuer]
Banker Trust Company
[Name of Trustee]
March 27, 1997
[Date]
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: $425,000,000 Floating Rate Class A Asset Backed Certificates, Series
1997-1 $33,750,000 Floating Rate Class B Asset Backed Certificates,
Series 1997-1
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee will
act as trustee with respect to the Securities pursuant to an Amended and
Restated Pooling and Servicing Agreement dated March 18, 1997, (the "Document").
Goldman, Sachs & Co. is distributing the Securities through The Depository Trust
Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities, Issuer
and Trustee make the following representations to DTC:
- 2 -
<PAGE>
1. Prior to closing on the Securities on March 27, 1997, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each stated maturity of the Securities in the face
amounts set forth on Schedule A hereto, the total of which represents 100% of
the principal amount of such Securities. If, however, the aggregate principal
amount of any maturity exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
Issuer or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of
DTC and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC). ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC not less
than 15 calender days in advance of such record date. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Reorganization Department at
(212) 709-6896 or (212) 709-6897, and receipt of such notices shall be confirmed
by telephoning (212) 709-6870. Notices to DTC pursuant to this Paragraph by mail
or by any other means shall be sent to DTC's Reorganization Department as
indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to DTC
by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designated to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer or
Trustee shall forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow. Notices to DTC pursuant to the Paragraph by
telecopy shall be sent to DTC's Call Notification Department at (516) 227-4039
or (516) 227-4190. If the party sending the notice does not receive a telecopy
receipt from DTC confirming that the notice
- 3 -
<PAGE>
has been received, such party shall telephone (516) 227-4070. Notices to DTC
pursuant to this Paragraph by mail or by any other means shall be sent to:
Manager: Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trustee
to Security holders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notice to DTC pursuant to this Paragraph and notices of
other corporate actions by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-1093 or 212 709-1094 and receipt of such notices shall
be confirmed by telephoning 212 709-6554. Notices to DTC pursuant to the above
by mail or by any other means shall be sent to:
Manager: Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized denomination
if less than $1,000 face value; payable on each payment date allocated as to the
interest and principal portions thereof preferably 5 but not less than 2
business days prior to such payment date. Such notices, which shall also contain
the current pool factor, any special adjustments to principal/interest rates
(e.g. adjustments due to deferred interest or shortfall), and Trustee contact's
name and telephone number, shall be sent by telecopy to DTC's Dividend
Department at (212) 709-1723, or if by mail or by any other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. [Note: Issuer must represent one of the following, and cross out the
other:] [The interest accrual period is payment date to payment date.]
- 4 -
<PAGE>
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent, as
well as the dollar amount of the payment for each issue. Notification of payment
details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and- interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between Issuer
or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Trustee and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or 212 709-1666 and
receipt of such notices shall be confirmed by telephoning 212 709-1270. Notices
to DTC pursuant to the above by mail or by any other means shall be sent to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between Trustee and DTC, such
payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Trustee.
- 5 -
<PAGE>
The Security certificate(s) shall remain in Agent's custody as a
"Balance Certificate" subject to the provisions of the Balance Certificate
Agreement between Agent and DTC currently in effect.
11. DTC shall receive all reorganization payment and CUSIP-level detail
resulting from corporate actions (such as tender officer, remarketings, or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address
as the number or address to which notices or payments of interest or principal
may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Trustee's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Trustee to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Trustee prior to payment, if
required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
15. DTC may discontinue providing its services as securities depositary
with respect to the Securities at any time by giving reasonable notice to Issuer
or Trustee (at which time DTC will confirm with Issuer or Trustee the aggregate
principal amount of Securities outstanding). Under such circumstances, at DTC's
request Issuer and Trustee shall cooperate fully with DTC by taking appropriate
action to make valuable one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
- 6 -
<PAGE>
17. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES --
to be included in DTC Letter of Representations
Issuer and Agent recognize that DTC does not in any way undertake to,
and shall not have any responsibility to, monitor or ascertain whether a
transfer of Securities could give rise to a transaction prohibited or not
otherwise permissible under the Employee Retirement Income Security Act of 1974
or under Section 4975 of the Internal Revenue Code of 1986. Issuer and Agent
acknowledge that: a) so long as Cede & Co. is the sole record owner of the
Securities, it shall be entitled to all voting rights in respect thereof and to
receive the full amount of all principal, premium, if any, and interest payable
with respect thereto; and b) DTC shall treat any DTC Participant having
Securities credited to its DTC accounts as entitled to the full benefits of
ownership of such Securities even if the crediting of such Securities to the DTC
accounts of such Participant results from transfers or failures to transfer in
violation of such laws. (The treatment by DTC of the effects of the crediting by
it of Securities to the accounts of DTC Participants shall not affect the rights
of Issuer or purchasers, sellers, or holders of Securities against any DTC
Participant.)
Notes:
A. If there is a Trustee (as defined in this Letter of Representations).
Trustee as well as Issuer must sign this Letter. If there is no Trustee
in signing this Letter Issuer itself undertakes to perform all of the
obligations set forth herein.
B. Schedule B contains statements that DTC believes accurately describe
DTC, the method of effecting book-entry transfers of securities
distributed through DTC, and certain related matters.
Very truly yours,
People's Bank Credit Card Master Trust
--------------------------------------
(Issuer)
By:
(Authorized Officer's Signature)
Bankers Trust Company
--------------------------------------
(Trustee)
By:___________________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:_________________________
cc: Underwriter
Underwriter's Counsel
SCHEDULE A
$425,000,000 Floating Rate Class A Asset Backed Certificates, Series 1997-1
---------------------------------------------------------------------------
$33,750,000 Floating Rate Class B Asset Backed Certificates, Series 1997-1
--------------------------------------------------------------------------
- 7 -
<PAGE>
<TABLE>
<CAPTION>
CUSIP Number Principal Amount Maturity Date Interest Rate
- ------------ ---------------- ------------- -------------
<S> <C> <C> <C>
710318AJ5 $150,000,000 February 2002 5.745% from March 27,
Class A Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.12%
thereafter
710318AJ5 $150,000,000 February 2002 5.745% from March 27,
Class A Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.12%
thereafter
710318AJ5 $125,000,000 February 2002 5.745% from March 27,
Class A Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.12%
thereafter
710318AK2 $33,750,000 March 2002 5.945% from March 27,
Class B Certificates Distribution Date 1997 through April 14, 1997
and LIBOR + 0.32% thereafter
</TABLE>
- 8 -
<PAGE>
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to certain issues)
1. The Depository Trust Company "DTC", New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Security certificate will be
issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
- 9 -
<PAGE>
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date identified in a listing attached to
the Omnibus Proxy.
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC. Trustee, or Issuer, subject
to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest to DTC is the responsibility of Issuer
or Trustee, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee [or
Tender/Remarketing Agent], and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee [or Tender/Remarketing Agent]. The
requirement for physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's records
and followed by a book-entry credit of tendered Securities to Trustee [or
Tender/Remarketing Agent's] DTC account.]
- 10 -
<PAGE>
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
- 10 -
<PAGE>
EXHIBIT 4
FORM OF MONTHLY PAYMENT INSTRUCTIONS TO TRUSTEE
BANKERS TRUST COMPANY
ABA #021001033
A/C 01-419-647
CORPORATE TRUST AND AGENCY GROUP
ATTENTION: LOUIS BODI/KEITH SCHOTT
RE: PEOPLE'S BANK1997-1 FINANCE CHARGE ACCOUNT
ON _________________________ PLEASE PERFORM THE FOLLOWING TRANSACTIONS PURSUANT
TO THE SERIES 1997-1 SUPPLEMENT AND THE AMENDED AND RESTATED POOLING AND
SERVICING AGREEMENT DATED AS OF MARCH 18, 1997:
Per Section Please withdraw $0.00 from Finance
4.6 (a) (i) & Charge Account - 22756 and deposit into the
4.6 (d) (vii) Distribution Account - 22753 to pay Monthly
Certificate Interest to Class A Investors.
Per Section Please withdraw $0.00 from Finance
4.6 (b) (i) & Charge Account - 22756 and deposit into the
4.6 (d) (viii) Distribution Account - 22753 to pay Monthly
Certificate Interest to Class B Investors.
Per Section Pleae withdraw $0.00 from Finance
4.6 (d) (vi) Charge Account - 22756 and deposit into the
Distribution Account - 22753 to pay
Collateral Monthly Interest to the
Collateral Interest Holder.
Per Section Please withdraw $0.00 from
4.6 (a) (ii), Finance Charge Account - 22756 to pay Monthly
4.6 (b) (ii), Investor Servicing Fee to People's Bank.
4.6 (c) (i) &
4.6 (d) (vii)
Per Section Please withdraw $0.00 from Finance
4.6 (a) Charge Account - 22756 to pay Investor
(iii), Default Amount to People's Structured Finance Corp.
4.6 (c) (iii)
&
4.6 (d) (ix)
- 1 -
<PAGE>
4.6 (d) (ix)
Per Section Please withdraw $0.00 from Finance
4.6 (d) Charge Account - 22756 and wire to People's
(xvii) Structured Finance.
AUTHORIZED BY:______________________________
LISA BROOKS, VICE PRESIDENT
- 2 -
<PAGE>
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 1997-1
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:
- 1 -
<PAGE>
EXHIBIT 6
Form of Notification to Trustee Regarding
Failure to Make Payment
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1997-1
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:
- 1 -
<PAGE>
EXHIBIT 4.3
(Multicurrency-Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of March 27, 1997
Bankers Trust Company, not in its individual capacity but solely as Trustee for
People's Bank Credit Card Master Trust ("Party A") and Lehman Brothers Financial
Products Inc. ("Party B") 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.
<PAGE>
(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.
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(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.
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(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;
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(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.
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(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
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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;
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<PAGE>
(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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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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
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(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
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<PAGE>
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
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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
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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
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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
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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
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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
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<PAGE>
(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
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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;
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(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
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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
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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
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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,
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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.
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"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, LEHMAN BROTHERS FINANCIAL PRODUCTS INC.
not in its individual capacity
but solely as Trustee for
People's Bank Credit Card
Master Trust
By: /s/ Louis Bodi By: /s/ Florence D. Nolan
------------------ ----------------------
Name: Louis Bodi Name: Florence D. Nolan
Title: Vice President Title: Vice President
Date: March 27, 1997 Date: March 27, 1997
- 27 -
<PAGE>
EXECUTION COPY
SCHEDULE
to the
MASTER AGREEMENT
Dated as of March 27, 1997
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
LEHMAN BROTHERS FINANCIAL PRODUCTS INC.,
a corporation organized under the laws of
the State of Delaware
("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)
<PAGE>
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 or Party B.
(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,
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 any portion of any
such payment, (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 with respect to Party B, the counterparty rating (a
"Rating") by Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies Inc. ("S&P"), or Moody's Investors Service, Inc.
("Moody's", and together with S&P, the "Rating Agencies") is withdrawn
by either Rating Agency or reduced below AAA by S&P or Aa3 by Moody's
(either such withdrawal or reduction, a "Downgrade"), Party B shall
promptly notify in writing Party A and the Rating Agencies, and shall
within 30 days of the date of such Downgrade, 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
1997-1 Certificates in effect immediately prior to such Downgrade, at
the expense of Party B, (x) obtain a substitute cap provider ("X") that
(1) is reasonably acceptable to Party A, (2) has Ratings of AAA by S&P
and at least Aa3 by Moody's, or has the Specified Ratings from both
-2-
<PAGE>
Moody's and S&P, and (3) is acceptable to the Rating Agencies, and
replace the Transactions outstanding 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
outstanding hereunder. In the event that Party B fails to satisfy any
of its obligations referred to in this subparagraph (i) within the time
period prescribed, such failure shall constitute an Additional
Termination Event with Party B as the Affected Party.
(ii) "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 1997-1 Certificates outstanding immediately prior to the
Downgrade.
(iii) "Specified Ratings" shall mean (A) a long term unsecured
debt or long term certificate of deposit rating of at least Aa3 by
Moody's and (B) a short term unsecured debt or short term certificate
of deposit rating of A-1+ by S&P.
(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
the day that notice of the amount payable is effective."
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:
-3-
<PAGE>
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. In making this representation, it may rely on (i) the
accuracy of any representation made by the other party pursuant to
Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
contained in Section 4(d) of this Agreement, provided that it shall not
be a breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) Payee Tax Representations. For the purposes of Section 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 Form/Document/ Date by which
deliver document Certificate to be delivered
- ---------------- ----------- ---------------
Party A W-9 for the Trust Upon execution of this
Agreement.
(b) Other documents to be delivered are:
-4-
<PAGE>
Party
required to Covered by
deliver Form/Document/ Date by which Section 3(d)
document Certificate to be delivered Representation
- -------- ----------- --------------- --------------
Party A A Certificate of an Upon execution Yes.
authorized officer of of this
the party, certifying Agreement.
the names, true
signatures and
authority of the
officers of the party
signing this
Agreement.
Party A An opinion of counsel Upon execution Yes.
for Party A. of this
Agreement
Party A The relevant excerpts Upon execution Yes.
from the Trust of this
Agreement of Party A Agreement.
pursuant to which
Party A is authorized
to enter into this
Agreement.
Party B A certificate of an Upon execution Yes.
authorized officer of of this
the party, certifying Agreement.
the names, true
signatures and
authority of the
officers of the party
signing this
Agreement.
Party B Opinion of counsel to Upon execution Yes.
Party B and addressed of this
to Party A, the Agreement.
rating agencies
rating the
Certificates issued
by the Trust,
covering such other
matters as reasonably
requested by, and
satisfactory to the
addressees.
-5-
<PAGE>
Party B A copy of the annual Upon execution Yes.
report of Party B of this
containing audited Agreement and,
consolidated thereafter,
financial statements upon request of
for such fiscal year Party A or the
certified by Servicer.
independent public
accountants and
prepared in
accordance with
generally accepted
accounting practices
consistently applied.
-6-
<PAGE>
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 (People's
Bank Series 1997-1)
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: Lehman Brothers Financial Products Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200 USA
Attention: Documentation Group
Facsimile No.: (212) 526-1877
Telephone No.: (212) 528-7097
(For all purposes.)
(b) Process Agent. Not applicable.
-7-
<PAGE>
(c) Multibranch Party. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(d) Calculation Agent. The Calculation Agent is Party B, unless
otherwise specified in a Confirmation in relation to the relevant Transaction.
(e) Credit Support Document. None.
(f) Credit Support Provider. None.
(g) 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.
(h) "Affiliate" will have the meaning specified in Section
14 of this Agreement.
(i) 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, but subject to paragraph (f) of this Part 5, 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
-8-
<PAGE>
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 any portion of any such
payment, 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.
(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) 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 (i) 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 (ii) Party B has given its consent to such transfer (which consent
shall not be unreasonably withheld by Party B). 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,
this Schedule 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
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<PAGE>
Trustee, the Trustee will have no personal liability for any amounts required to
be paid by the Trust under this Agreement.
(g) 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 1997-1 Certificates.
(h) 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 Potential Event of 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 pursuant to Section 6(e)(ii)(1) as if Party A
were the sole Affected Party, 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.
(i) 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 described in paragraph
(j) below.
(j) Transactions. This Agreement and all Transactions relate to the
Trust's Series 1997-1 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 March 27, 1997, and attached
as Exhibit A hereto, as such Confirmations are modified from time to time.
(k) Capitalized Terms. Capitalized terms not otherwise defined herein
or in the Definitions shall have the meanings assigned to them in the Amended
and Restated Pooling and Servicing Agreement, dated as of March 18, 1997
amending and restating in the entirety, 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 1997-1 Supplement, dated as of March
18, 1997 (the "Supplement") (as so supplemented, the "Pooling and Servicing
Agreement").
-10-
<PAGE>
(l) Waiver of Jury Trial. Each party hereto hereby irrevocably waives
any and all right to trial by jury in any Proceedings.
(m) 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. ss.
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.
(n) No Reliance. Each party acknowledges and agrees that (i) it is
acting solely in the capacity of an arm's length contractual counterparty, with
respect to this Agreement and any Transaction hereunder, and (ii) it is not
acting as a financial advisor or fiduciary of the other party (or in any similar
capacity) with respect to the Agreement and any Transaction hereunder regardless
of whether it provides the other party with market information or its views.
Each party represents to the other party (which representation shall be deemed
to be repeated on each date on which any Transaction is entered into) that it
understands the risks of the Transactions it enters and any legal, regulatory,
tax, accounting and economic consequences arising therefrom and that its
decision to enter into each Transaction has been based solely on its independent
evaluation and the independent evaluation of its representatives in light of its
financial capabilities and objectives.
(o) 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.
(p) Notice by Facsimile. In addition to the methods outlined in Section
12(a), notices and communications (other than for the purposes of Section
13(c)), may also be sent by telecopier at the numbers specified in Part 4 of
this Schedule. Promptly after giving any such notice or communication, the
sender shall also confirm the notice or communication by telephone at the number
and to the attention of the party specified in Part 4 of this Schedule. Provided
that such telephonic confirmation is made promptly, a notice or communication
sent via telecopier will be effective upon receipt.
-11-
<PAGE>
(q) Country of Domicile. The country of domicile of Party A is the
United States of America. The country of domicile of Party B is the United
States of America.
(r) Confirmation. Each Confirmation supplements, forms part of, and
will be read and construed as one with, this Agreement.
(s) Accuracy of Specified Information. Section 3(d) is hereby amended
by adding in the third line thereof after the word "respect" and before the
period the words "or, in the case of audited or unaudited financial statements
or balance sheets, a fair presentation of the financial condition of the
relevant person".
(t) "Form W-9" means United States Internal Revenue Service Form W-9 or
any successor form.
[Rest of page intentionally left blank.]
-12-
<PAGE>
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 LEHMAN FINANCIAL PRODUCTS INC.
its individual capacity but
solely as Trustee for
People's Bank Credit Card
Master Trust
By: /s/ Louis Bodi By: /s/ Florence D. Nolan
- ------------------------------ --------------------------------
Name: Louis Bodi Name: Florence D. Nolan
Title: Vice President Title: Vice President
DATE: March 27, 1997 DATE: March 27, 1997
-13-
<PAGE>
EXECUTION COPY
[Series 1997-1]
[Class A]
CONFIRMATION
Date: March 27, 1997
To: Bankers Trust Company,
not in its individual
capacity, but solely as
Trustee for People's Bank
Credit Card Master Trust
Attention: Structured Finance Group
From: Lehman Brothers Financial Products Inc.
(the "Cap Provider")
Transaction
Reference Number: 35772
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between us. 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.
(a) This Confirmation supplements, forms a part of, and is subject to,
the Master Agreement dated as of March 27, 1997, 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 March 18, 1997, between
People's Bank and the Cap Provider, which supplements the Master Agreement dated
as of March 18, 1997, between People's Bank and the Cap Provider 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.
<PAGE>
(b) 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 October, 2001 is
U.S.$425,000,000. 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
---- ------
November 15, 2001 $318,750,000
December 15, 2001 $212,500,000
January 15, 2002 $106,250,000
Trade Date: March 18, 1997 1/
-
Effective Date: April 15, 1997 2/
-
Effective Date
of Assignment: March 27,1997
Termination Date: The Distribution Date in February, 2002.
- --------
1 This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of March 27, 1997, among People's Bank,
the Trustee and the Cap Provider (the "Assignment Agreement"), pursuant
to which People's Bank transferred all of its rights, title,
obligations and interest in and under two confirmations, dated March
18, 1997, between People's Bank and the Cap Provider. Such
confirmations had a "Trade Date" of March 18, 1997 and an "Effective
Date" of April 15, 1997.
2 See footnote 1.
-2-
<PAGE>
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/
-
Floating Amounts:
Floating Rate Payer: Cap Provider
Cap Rate: 10.0% per annum
Floating Rate Payer
Payment Dates: The fourth 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: To be determined.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month.
Spread: None.
- --------
3 Pursuant to the Assignment Agreement, under the [Class A] Confirmation,
dated March 18, 1997, executed by People's Bank and the Cap Provider,
relating to this Confirmation, the Fixed Amount was U.S.$1,657,500.
-3-
<PAGE>
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: Cap Provider
(c) Account Details:
Payments to Bankers Trust
Company, as Trustee
Account for payments: Bankers Trust Company
ABA No.: 021001033
Account No.: 01419647
Reference: People's Bank 1997-1
Attention: Corporate Trust and
Agency Group
Payments to Cap Provider
Account for payments: The Chase Manhattan Bank, New York
ABA No.: ABA# 021000021
Account No.: A/C# 066-289009
Account Name: A/C of Lehman
Brothers Financial Products Inc.
(d) 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.
-4-
<PAGE>
Credit Support Documents:
Credit Support Documents with
respect to Cap Provider: See Master Agreement.
Credit Support Documents with
respect to Trustee: None.
Certain Defined Terms:
"Distribution Dates" shall mean April 15, 1997 and the fifteenth day of
each calendar month thereafter, or, if such fifteenth day is not a Business Day,
the next succeeding Business Day.
-5-
<PAGE>
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.
LEHMAN BROTHERS FINANCIAL
PRODUCTS INC.
By: /s/ Florence D. Nolan
---------------------
Name: Florence D. Nolan
Title: Vice President
<PAGE>
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: /s/ Louis Bodi
-----------------------
Name: Louis Bodi
Title: Vice President
-7-
<PAGE>
EXECUTION COPY
[Series 1997-1]
[Class B]
CONFIRMATION
Date: March 27, 1997
To: Bankers Trust Company,
not in its individual
capacity, but solely as
Trustee for People's Bank
Credit Card Master Trust
Attention: Structured Finance Group
From: Lehman Brothers Financial Products Inc.
(the "Cap Provider")
Transaction
Reference Number: 35776
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between us. 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.
(a) This Confirmation supplements, forms a part of, and is subject to,
the Master Agreement dated as of March 27, 1997, 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 March 18, 1997, between
People's Bank and the Cap Provider, which supplements the Master Agreement dated
as of March 18, 1997, between People's Bank and the Cap Provider 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.
<PAGE>
(b) The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Rate Cap Transaction
Notional Amount: U.S.$33,750,000
Trade Date: March 18, 1997 1/
-
Effective Date: April 15, 1997 2/
-
Effective Date
of Assignment: March 27, 1997
Termination Date: The Distribution Date in
March, 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/
-
Floating Amounts:
Floating Rate Payer: Cap Provider
- --------
1 This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of March 27, 1997, among People's Bank,
the Trustee and the Cap Provider (the "Assignment Agreement"), pursuant
to which People's Bank transferred all of its rights, title,
obligations and interest in and under two confirmations, dated March
18, 1997, between People's Bank and the Cap Provider. Such
confirmations had a Trade Date of March 18, 1997 and an Effective Date
of April 15, 1997.
2 See footnote 1.
3 Pursuant to the Assignment Agreement, under the [Class B] Confirmation,
dated March 18, 1997, executed by People's Bank and the Cap Provider,
relating to this Confirmation, the Fixed Amount was U.S.$148,500.
-2-
<PAGE>
Cap Rate: 10.0% per annum
Floating Rate Payer
Payment Dates: The fourth 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: To be determined.
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: Cap Provider
(c) Account Details:
-3-
<PAGE>
Payments to Bankers Trust
Company, as Trustee:
Account for payments: Bankers Trust Company
ABA No.: 021001033
Account No.: 01419647
Reference: People's Bank 1997-1
Attention: Corporate Trust and
Agency Group
Payments to Cap Provider:
Account for payments: The Chase Manhattan Bank,
New York
ABA No.: 021000021
Account No.: 066-289009
Account Name: A/C of Lehman
Brothers Financial Products
Inc.
(d) 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:
Credit
Support Documents with
respect to Cap Provider: See the Master Agreement.
Credit Support Documents
with respect to Trustee: None.
Certain Defined Terms:
-4-
<PAGE>
"Distribution Dates" shall mean April 15, 1997 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.
LEHMAN BROTHERS FINANCIAL PRODUCTS INC.
By:____________________________________
Name:
Title:
<PAGE>
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: /s/ Louis Bodi
------------------------
Name: Louis Bodi
Title: Vice President
-6-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 20
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- -------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Trust Activity Series 1997-1
Beginning of Month - Aggregate Principal Receivables 0.00
Principal Collections on the Receivables 0.00
Finance Charge Collections 0.00
Receivables in Defaulted Accounts 0.00
End of Month - Aggregate Principal Receivables 0.00
Investor Interest Series 1994-1 0.00
Investor Interest Series 1994-2 0.00
Investor Interest Series 1995-1 0.00
Investor Interest Series 1996-1 0.00
Investor Interest Series 1997-1 0.00
Seller Principal Receivables 0.00
Total Investor Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
Adjusted Investor Interest 0.00
Class A Adjusted Investor Interest 0.00
Class B Investor Interest 0.00
Collateral Interest 0.00
Class A Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
Class B Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
- -------------------------------------------------------------------------------------------------------------------------
Page 1 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Trust Activity Series 1997-1 (con't)
Collateral Interest Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
Seller Percentage with respect to...
Finance Charges 0.0000000%
Charged-Off Accounts 0.0000000%
Principal Receivables 0.0000000%
2. Allocation of Funds in Collection Account
Class A Available Funds 0.00
Class A Monthly Cap Interest Payable to Class A Certificateholders
(See "Calculation of Certificate Interest" #4) 0.00
Unpaid Class A Monthly Cap Interest 0.00
Class A Monthly Servicing Fee
(See "Calculation of Monthly Servicing Fee" #7) 0.00
Unpaid Class A Monthly Servicing Fee 0.00
Class A Investor Default Amount
Class A Investor Charge-Offs 0.00
0.00
Excess Spread from Class A Finance Charge Collections 0.00
Class A Required Amount 0.00
Class B Available Funds 0.00
Class B Monthly Cap Interest Payable to Class B Certificateholders
(See "Calculation of Certificate Interest" #4) 0.00
Unpaid Class B Monthly Cap Interest 0.00
Class B Monthly Servicing Fee
(See "Calculation of Monthly Servicing Fee" #7) 0.00
Unpaid Class B Monthly Servicing Fee 0.00
Class B Investor Default Amount 0.00
Class B Investor Charge-Offs 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Page 2 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- -------------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Excess Spread from Class B Finance Charge Collections 0.00
Class B Required Amount 0.00
Collateral Available Funds 0.00
Collateral Interest Monthly Servicing Fee
(See "Calculation of Monthly Servicing Fee" #7) 0.00
Unpaid Collateral Interest Monthly Servicing Fee 0.00
Excess Spread from Collateral Interest Finance Charge Collections 0.00
Total Excess Spread 0.00
Excess Spread used to satisfy Class A Required Amount 0.00
Excess Spread used to satisfy remaining Class A Monthly Cap Interest 0.00
Excess Spread used to satisfy remaining Class A Monthly Servicing Fee 0.00
Excess Spread used to satisfy remaining Class A Investor Default Amount 0.00
Excess Spread used to satisfy Unreimbursed Class A Investor Charge-Offs 0.00
Remaining Class A Required Amount 0.00
Excess Spread used to satisfy Class B Required Amount 0.00
Excess Spread used to satisfy remaining Class B Monthly Cap Interest 0.00
Excess Spread used to satisfy remaining Class B Monthly Servicing Fee 0.00
Excess Spread used to satisfy remaining Class B Investor Default Amount 0.00
Excess Spread used to satisfy Unreimbursed Class B Investor Charge-Offs 0.00
Remaining Class B Required Amount 0.00
Shared Finance Charges used to satisfy Remaining Class A Required Amount 0.00
Shared Finance Charges used to satisfy remaining Class A Monthly Cap Interest 0.00
Shared Finance Charges used to satisfy remaining Class A Monthly Servicing Fee 0.00
Shared Finance Charges used to satisfy remaining Class A Investor Default Amount 0.00
Shared Finance Charges used to satisfy Unreimbursed Class A Investor Charge-Offs 0.00
Remaining Class A Required Amount 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Page 3 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ----------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Reallocated Collateral Principal used to satisfy Remaining Class A
Required Amount 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class A
Monthly Cap Interest 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class A
Monthly Servicing Fee 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class A
Investor Default Amount 0.00
Reallocated Collateral Principal Collections used to satisfy Unreimbursed
Class A Charge-Offs 0.00
Remaining Class A Required Amount 0.00
Reallocated Class B Principal Collections used to satisfy remaining
Class A Required Amount 0.00
Reallocated Class B Principal Collections used to satisfy remaining
Class A Monthly Cap Interest 0.00
Reallocated Class B Principal Collections sued to satisfy remaining
Class A Monthly Servicing Fee 0.00
Reallocated Class B Principal Collections used to satisfy remaining
Class A Investor Default Amount 0.00
Reallocated Class B Principal Collections used to satisfy Unreimbursed
Class A Investor Charge-Offs 0.00
Remaining Class A Required Amount 0.00
Collateral Interest used to satisfy Unreimbursed Class A
Investor Charge-Offs 0.00
Class B Investor Interest used to satisfy Unreimbursed Class A
Investor Charge-Offs 0.00
Shared Finance Charges used to satisfy Remaining Class B Required Amount 0.00
Shared Finance Charges used to satisfy remaining Class B Monthly
Cap Interest 0.00
Shared Finance Charges used to satisfy remaining Class B Monthly
Servicing Fee 0.00
Shared Finance Charges used to satisfy remaining Class B Investor
Default Amount 0.00
Shared Finance Charges used to satisfy Unreimbursed Class B Investor
Charge-Offs 0.00
Remaining Class B Required Amount 0.00
- ----------------------------------------------------------------------------------------------------------------------
Page 4 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Reallocated Collateral Principal used to satisfy Remaining Class B
Required Amount 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class B
Monthly Cap Interest 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class B
Monthly Servicing Fee 0.00
Reallocated Collateral Principal Collections used to satisfy remaining Class B
Investor Default Amount 0.00
Reallocated Collateral Principal Collections used to satisfy Unreimbursed Class B
Charge-Offs 0.00
Remaining Class B Required Amount 0.00
Collateral Interest used to satisfy Unreimbursed Class B Investor Charge-Offs 0.00
Excess Spread used to satisfy interest on overdue Class A
(See "Calculation of Certificate Interest" #4) 0.00
Excess Spread used to satisfy interest on overdue Class B
(See "Calculation of Certificate Interest" #4) 0.00
Excess Spread used to satisfy unreimbursed reductions to Class B
Investor Interest from prior periods 0.00
Excess Spread used to pay Collateral Monthly Interest 0.00
Excess Spread used to satisfy excess of Class A Monthly Interest
over Class A Monthly Cap Rate (other than Class A Excess Interest) 0.00
Excess Spread used to satisfy excess of Class B Monthly Interest
over Class B Monthly Cap Rate (other than Class B Excess Interest) 0.00
Excess Spread used to satisfy Aggregate Collateral Default Amount from previous
periods 0.00
Excess Spread used to satisfy Unreimbursed Reductions to Collateral Invested
Amount 0.00
- ------------------------------------------------------------------------------------------------------------------------
Page 5 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Allocation of Funds in Collection Account (con't)
Excess Spread used to fund Reserve Account up to Required Reserve Account 0.00
Excess Spread used to satisfy payments per Loan Agreement 0.00
Excess Spread used to satisfy Class A Excess Interest 0.00
Excess Spread used to satisfy Class B Excess Interest 0.00
Excess Spread used for Shared Finance Charge Collections for Other Series 0.00
Excess Spread used to pay other accrued and unpaid expenses of the Trust 0.00
Excess Spread paid to Holder of Exchangeable Seller Certificate (dollars) 0.00
Excess Spread paid to Holder of Exchangeable Seller
Certificate (percentage of Investor Interest) 0.0000%
Unreimbursed Class A Charge-Offs 0.00
Unreimbursed Class A Charge-Offs per $1,000 Original Investment 0.00
Unreimbursed Class B Charge-Offs 0.00
Unreimbursed Class B Charge-Offs per $1,000 Original Investment 0.00
Available Principal Collections 0.00
Monthly Principal Payable To Class A Certificateholders
(See "Calculation of Monthly Principal" #5) 0.00
Monthly Principal Payable To Class B Certificateholders
(See "Calculation of Monthly Principal" #5) 0.00
Monthly Principal Payable To Collateral Interest Holders
(See "Collateral Interest Amount Activity" #8) 0.00
Monthly Principal Reinvested In Receivables
(See "Calculation of Monthly Principal" #5) 0.00
- ------------------------------------------------------------------------------------------------------------------------
Page 6 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Allocation of Funds in Collection Account (con't)
(Net Deposit)/Draws on Shared Principal Collections 0.00
Required Shared Finance Charge Collections from other Series 0.00
Draw on Shared Finance Charge Collections from other Series 0.00
Required Shared Finance Charge Collections for other Series 0.00
Deposit of Shared Finance Charge Collections for other Series 0.00
Total Distribution to Class A Investors 0.00
Total Distribution to Class A Investors per $1,000 Invested 0.00
Total Distributions to Class B Investors 0.00
Total Distribution to Class B Investors per $1,000 Invested 0.00
Total Distribution to Collateral Interest Holders 0.00
Total Distribution to Collateral Interest Holders per $1,000 Invested 0.00
3. Principal Funding Account and Reserve Account
Beginning Balance of Principal Funding Account 0.00
Deposits into Principal Funding Account 0.00
Withdrawals from Principal Funding Account 0.00
Ending Balance of Principal Funding Account 0.00
Accumulation Shortfall 0.00
Principal Funding Investment Proceeds 0.00
Principal Funding Investment Shortfall 0.00
Beginning Balance of Reserve Account 0.00
Available Reserve Account Amount 0.00
Required Reserve Account Amount 0.00
Reserve Account Investment Proceeds 0.00
Deposits from Excess Spread into Reserve Account 0.00
Reserve Account Draws 0.00
Ending Balance of Reserve Account 0.00
4. Calculation of Certificate Interest
Class A Certificate Rate 0.00000%
Previous Month's Class A Deficiency Amount 0.00
- ------------------------------------------------------------------------------------------------------------------------
Page 7 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
4. Calculation of Certificate Interest (con't)
Class A Interest at the Certificate Rate + 0.5% on Deficiency Amount 0.00
Covered Amount 0.00
Principal Funding Investment Proceeds 0.00
Principal Funding Investment Shortfall 0.00
Reserve Account Draws 0.00
Class A Investor Certificate Interest Shortfall 0.00
(Deficiency Amounts)
This Month Class A Certificate Interest 0.00
Expected Class A Principal 0.00
This Month Class A Cap Shortfall 0.00
Class A Excess Interest 0.00
Total Class A Interest Distributable to Class A Certificateholders 0.00
Total Class A Interest Distributable per $1,000 of Class A Original Investment 0.00
Class B Certificate Rate 0.00000%
Previous Month's Class B Deficiency Amount 0.00
Class B Interest at the Certificate Rate + 0.5% on Deficiency Amount 0.00
Class B Investor Certificate Interest Shortfall 0.00
This Month Class B Certificate Interest 0.00
Expected Class B Principal 0.00
This Month Class B Cap Shortfall 0.00
Class B Excess Interest 0.00
Total Class B Interest Distributable to Class B Certificateholders 0.00
Total Class B Interest Distributable per $1,000 of Class B Original Investment 0.00
Total Certificate Interest Distributable to Class A and Class B Certificateholders 0.00
Total Interest Distributable per $1,000 of Original Investment to Class A
and Class B Certificateholders 0.00
- ------------------------------------------------------------------------------------------------------------------------
Page 8 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
5. Calculation of Monthly Principal
Beginning Investor Interest 0.00
Beginning Class A Investor Interest 0.00
Class A Available Principal Collections 0.00
Maximum Monthly Principal to Class A Certificateholders 0.00
Monthly Principal Payable to Class A Certificateholders 0.00
Class A Controlled Deposit Amount 0.00
Class A Controlled Accumulation Amount 0.00
Class A Monthly Unreimbursed Charge-Offs 0.00
Total Class A Monthly Principal 0.00
Ending Class A Investor Interest 0.00
Class A Monthly Principal Payable per $1,000 of Original Investment 0.00
Class A Monthly Principal Reinvested in Receivables 0.00
Beginning Class B Investor Interest 0.00
Class B Available Principal Collections 0.00
Maximum Monthly Principal to Class B Certificateholders 0.00
Class B Monthly Principal 0.00
Monthly Principal Payable to Class B Certificateholders 0.00
Class B Monthly Unreimbursed Charge-Offs 0.00
Total Class B Monthly Principal 0.00
Ending Class B Investor Interest 0.00
Class B Monthly Principal Payable per $1,000 of Original Investment 0.00
Class B Monthly Principal Reinvested in Receivables 0.00
Class B Reallocated Principal 0.00
Prior Month's Cumulative Class B Reallocated Principal 0.00
Class B Investor Interest used to satisfy Unreimbursed Class A
Investor Charge-Offs 0.00
Prior Month's Cumulative Class B Investor Interest used to satisfy
Unreimbursed Class A Investor Charge-Offs 0.00
Required Shared Principal Collections for other Series 0.00
Deposit of Shared Principal Collections for other Series 0.00
Required Shared Principal Collections from other Series 0.00
Draw on Shared Principal Collections from other Series 0.00
Ending Investor Interest 0.00
- ------------------------------------------------------------------------------------------------------------------------
Page 9 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
6. Calculation of Pool Factor
(Ending Certificate Balance divided by Initial Principal Amount to 7 decimal places) 0.000000
7. Calculation of Monthly Servicing Fee
Class A Servicing Fee Percentage 0.00%
Class B Servicing Fee Percentage 0.00%
Collateral Interest Amount Servicing Fee Percentage 0.00%
Beginning Class A Investor Interest 0.00
Beginning Class B Investor Interest 0.00
Beginning Collateral Investor Interest 0.00
Beginning Investor Interest 0.00
Class A Monthly Servicing Fee 0.00
Class B Monthly Servicing Fee 0.00
Collateral Interest Monthly Servicing Fee 0.00
Total Monthly Servicing Fee 0.00
Class A Monthly Servicing Fee Shortfall 0.00
Class B Monthly Servicing Fee Shortfall
Collateral Interest Amount Monthly Servicing Fee Shortfall 0.00
8. Collateral Interest Amount Activity
Beginning of Month Balance 0.00
Required Collateral Interest Amount 0.00
Collateral Interest Amount Monthly Interest 0.00
Collateral Interest Amount Certificate Interest Shortfall 0.00
Collateral Monthly Principal 0.00
Collateral Monthly Principal Payable per $1,000 of Original Investment 0.00
Collateral Interest Monthly Interest Payable per $1,000 of Original Investment 0.00
Excess Spread used to satisfy payments per Loan Agreement 0.00
Collateral Interest Amount Deposits 0.00
End of Month Balance 0.00
Reinvestment Income Received on Collateral Interest Amount 0.00
Aggregate Collateral Interest Amount Draws 0.00
Available Collateral Interest Amount (Dollars) 0.00
Available Collateral Interest Amount (Percentage) 0.00%
Ratio of Collateral Interest to Investor Interest 0.00%
- ------------------------------------------------------------------------------------------------------------------------
Page 10 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
- ------------------------------------------------------------------------------------------------------------------------
Number of Months Series in Existence 1
Monthly Period Ended March 31, 1997
Distribution Date April 15, 1997
Determination Date April 10, 1997
Number of Days in Period 19
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9. Past Due Statistics
(past due on a contractual basis)
1-30 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
31-60 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
61-90 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
91-120 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
121-150 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
151-180 days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
181 + days past due Dollars 0
Percent Dollars 0.00%
Number of Accts 0
Percent Number of Accts 0.00%
10. Base Rate Calculation
Base Rate 0.00%
Portfolio Yield (net of losses) 0.00%
Excess of Portfolio Yield over Base Rate 0.00%
- ------------------------------------------------------------------------------------------------------------------------
Page 11 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
11. Number of Accounts in the Trust
Number of Additional Accounts 0
Number of Removed Accounts 0
Number of Automatic Additional Accounts 0
Ending Number of Accounts 0
- ------------------------------------------------------------------------------------------------------------------------
Page 12 People's Bank Credit Card Master Trust
</TABLE>
<PAGE>
