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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) April 1, 1998
PEOPLE'S BANK
(Exact Name of Registrant as Specified in its Charter)
Connecticut
(State or Other Jurisdiction of Incorporation)
333-45785 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 232.
Index to Exhibits appears at page 5.
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Item 5. Other Events.
The Registrant is filing final forms of the exhibits listed in Item
7(c) below.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
No. Document Description
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1 Underwriting Agreement.
4.1 Series 1998-1 Supplement to the Pooling and Servicing
Agreement.
4.2 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 13, 1998 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 Series 1998-1 Supplement to the
Pooling and Servicing Agreement.............................. 38
4.2 Interest Rate Caps........................................... 167
20 Monthly Servicer's Report.................................... 221
EXHIBIT 1
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$343,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1998-1
$27,000,000 Floating Rate Class B
Asset Backed Certificates, Series 1998-1
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 24, 1998
Dear Sirs:
People's Structured Finance Corp., a Connecticut corporation ("PSFC")
and a wholly owned subsidiary of People's Bank, a Connecticut stock savings bank
(the "Bank"), proposes, subject to the terms and conditions stated herein, to
sell to the underwriters listed on Schedule A hereto (the "Underwriters"), an
aggregate of $343,000,000 principal amount of People's Bank Credit Card Master
Trust Floating Rate Class A Asset Backed Cer tificates, Series 1998-1 (the
"Class A Certificates") and $27,000,000 Floating Rate Class B Asset Backed
Certificates, Series 1998-1 (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 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
further amended by an amendment thereto dated as of September 24, 1998 (the "P&S
Agreement"). Additional credit card receivables have been transferred to the
Trust
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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"), Assignment No. 4 between the Bank and
the Trustee, dated as of October 1, 1996 ("Assignment No. 4"), Assignment No. 5
between the Bank and the Trustee, dated as of May 1, 1997 ("Assignment No. 5"),
Assignment No. 6 between the Bank and the Trustee, dated as of August 1, 1997
("Assignment No. 6"), Assignment No. 7 between the Bank and the Trustee, dated
as of November 1, 1997 ("Assignment No. 7") and Assignment No. 8 between the
Bank and the Trustee, dated as of February 2, 1998 ("Assignment No. 8"). 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 1998-1
Supplement between People's Bank, as Transferor and Servicer, and Bankers Trust
Company as Trustee, dated as of April 1, 1998 (the "Series Supplement" and,
together with the P&S Agreement, Assignment No. 1, Assignment No. 2, Assignment
No. 3, Assignment No. 4, Assignment No. 5, Assignment No. 6, Assignment No. 7
and Assignment No. 8, 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 Cer
tificateholders 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 $30,000,000 (the "Collateral
Interest"), which is subordinate to the Class A Certificates and the Class B
Certificates. To the extent not de fined herein, capitalized terms used herein
have the meanings assigned in the Pooling and Servicing Agreement.
1. PSFC and the Bank, each only as to itself, repre sents and warrants
to, and agrees with, the Underwriters that:
(a) A registration statement in respect of the Certificates
has been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered to the
Underwriters, has been declared effective by the Commission in such
form; no other document
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with respect to such registration statement has heretofore been filed
with the Commission and no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that
purpose has been initiated or, to PSFC's or the Bank's knowledge, as
applicable, threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Securities Act of 1933, as amended (the "Act"), being
hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto and
including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the registration statement at the time it
was declared effective, each as amended at the time such part of the
registration statement became effective, being hereinafter called the
"Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, being hereinafter called
the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to either PSFC
or the Bank by the Representatives expressly for use therein;
(c) The Registration Statement conforms, and the Pro spectus
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 Regis tration 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
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statements or omissions made in reliance upon and in conformity with
information furnished in writing to either PSFC or the Bank by the
Representatives expressly for use therein;
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there has
not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, business, management, financial position, stockholders' equity
or results of operations of either PSFC or the Bank and any of the
Bank's subsidiaries, on a consolidated basis, and (ii) neither PSFC nor
the Bank or any of the Bank's subsidiaries has entered into any
transaction or agreement (whether or not in the ordinary course of
business) material to PSFC or the Bank and the Bank's subsidiaries,
taken as a whole, that, in the case of either such clause (i) or (ii),
would reasonably be expected to materially adversely affect the
interests of the holders of the Certificates, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Bank has been duly incorporated and is validly
existing as a Connecticut stock savings bank 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 Certificateholders, or any Enhancement
Provider;
(f) PSFC has been duly incorporated and is validly existing as
a Connecticut corporation in good standing under the laws of the State
of Connecticut, with all power, authority and legal right necessary to
own its properties and conduct its business as described in the
Prospectus, and to enter into and perform its obligations under this
Agreement and the Assignment and had at all relevant times, and now
has, the power, authori ty and legal right to acquire, own and exchange
the Exchange able 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 li censes and
approvals in each jurisdiction in which failure to
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qualify or to obtain such licenses or approvals would have a material
adverse effect on the Certificateholders or any En hancement 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, authenti cated, issued and delivered
and will be entitled to the benefits provided by the Pooling and
Servicing Agreement; the Pooling and Servicing Agreement has been duly
authorized by the Bank and, when executed and delivered by the Bank and
the Trustee, will constitute a valid and binding agreement of the Bank,
subject (x) to the effect of any applicable bankruptcy, insolvency,
reorganization, moratoriums, and other similar laws affecting
creditors' rights generally, (y) to the effect of general principles of
equity including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law), and (z) to the further
qualification that certain remedial provisions in the Pooling and
Servicing Agree ment 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 descrip tions 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 (re gardless
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,
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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 ineffec tive 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 pursu ant to
applicable law legally adequate remedies for a realiza tion of the
principal benefits purported to be provided there by);
(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 encum brance (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 sub ject, 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 regu lation
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 re quired for the issue and sale of the Certificates
or the consummation by PSFC or the Bank, as applicable, of the
transactions contemplated by this Agreement, the Assignment, the Loan
Agreement or the Pooling and Servicing Agreement, except the filing of
Uniform Commercial Code financing state ments 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;
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(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
representations and warranties of the Seller relating to the
Receivables made in Section 2.4 of the Pooling and Ser vicing 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 market able title to the
Receivables transferred to the Trustee pursu ant 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
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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 execu tion 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 Cer tificates,
in each case free and clear of any Liens (other than Liens created by
the Underwriters and other than as contemplat ed 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 or will have been paid by
PSFC or the Bank, as applicable, 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, 1997 ("the Series Cut-Off Date"),
in accordance with the Pooling and Servicing Agreement of not less than
$2,845,000,000 (after giving effect to the addition of Accounts on
February 2, 1998 and the removal of Accounts on March 2, 1998);
(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 99.71% of the principal amount thereof. The Class B
Certificates being purchased
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by the Underwriters hereunder are to be purchased at a purchase price equal to
99.71% 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 Under writers hereunder, in
definitive or book-entry form, and in such authorized denominations and
registered in such names as the Underwriters may request upon at least
forty-eight hours' prior notice to PSFC, shall be delivered by or on behalf of
PSFC to the Underwriters against payment by the Underwriters or on behalf of the
Underwriters of the purchase price therefor, in immediately available funds,
drawn to the order of PSFC, at the office of Mayer, Brown & Platt, 1675
Broadway, New York, New York 10019, at 10:00 a.m. on April 1, 1998, 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 pre pare 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 Prelim inary
Prospectus or Prospectus, of the suspension of the quali fication of
the Certificates for offering or sale in any jurisdiction, of the
initiation or threatening of any proceed ing for any such purpose, or
of any request by the Commission for the amending or supplementing of
the Registration Statement
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or Prospectus or for additional information; and, in the event of the
issuance of any stop order or any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Certif icates for
offering and sale under the securities laws of such jurisdictions as
the Underwriters may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Certificates, provided that in connection therewith
neither PSFC nor the Bank shall be required to qualify as a foreign
corporation or dealer in securities, or to file a general consent to
service of process, in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus
in such quantities as the Underwriters may from time to time reasonably
request, and, if the delivery of a pro spectus is required at any time
prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Certificates
and if at such time any event shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
in order to comply with the Act, to notify the Underwriters and to
prepare and file with the Commission and furnish without charge to the
Underwriters and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case the
Underwriters are required to deliver a prospectus in connection with
the sales of any of the Certificates at any time nine months or more
after the date of issue of the Prospectus, upon the request of the
Underwriters but at the expense of the Underwriters, to prepare and
deliver to the Underwriters as many copies as the Underwriters may
reasonably request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;
(d) To make generally available to the Certificateholders, as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c)), an earnings
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statement of the Trust (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Bank, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the earlier of (i) the termi nation 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 Certifi cates, 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 IBCA, Inc. is conditional upon the
furnishing of documents or the taking of any other actions by PSFC or
the Bank, PSFC or the Bank, as applicable, shall furnish such documents
and take any such other actions.
6. PSFC and the Bank each covenants and agrees with the Underwriters
that together they will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the counsel and accountants of PSFC and the Bank,
as applicable, in connection with the registration of the Certificates under the
Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Prelim inary Prospectus and the
Prospectus and amendments and supple ments 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,
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the Blue Sky and Legal Investment Memoranda and any other docu ments 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 hereun der shall be
subject, in its discretion, to the condition that all representations and
warranties and other statements of each of PSFC and the Bank herein are, at and
as of the Time of Delivery, true and correct, the condition that each of PSFC
and the Bank shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of PSFC, the Bank or the Underwriters,
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to the reasonable satisfaction of the Representatives;
(b) Since the respective dates as of which information is
given in the Prospectus, there shall not have been any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, management,
financial position, stockholders' equity or results of operations of
either PSFC or the Bank and its subsidiaries on a consolidated basis
otherwise than as set forth or contemplated in the Prospectus, the
effect
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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 re spective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set
forth in subsec tions (a) through (c) of this Section and as to such
other mat ters 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 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 autho rized,
executed and delivered by each of PSFC and the Bank;
(ii) The Certificates have been duly autho rized,
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
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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 ren dered
ineffective by the applicable laws of the State of New York or
judicial decisions governing such pro visions or holding their
enforcement to be unreasonable under the then existing
circumstances (but, in such counsel's opinion, there exists in
the Pooling and Ser vicing 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 consti tutes 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 gener ally 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 proceed ing 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
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<PAGE>
Agreement or pursuant to applicable law legally adequate
remedies for a realization of the principal benefits purported
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 Pro spectus.
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 State ment 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 manner
and within the time period required by Rule 424(b). To the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose are pending or threatened
by the Commission. Such counsel does not know of any contracts
or documents of a character required to be described in the
Registration Statement or Prospectus
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<PAGE>
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 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 sched ules, and other
financial and operating data included therein as to which such
counsel expresses no view) contained or contains any untrue
statement of a mate rial 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 circum
stances under which they were made, not misleading; and
(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 subsid iaries or the legal opinion of the
general counsel of PSFC and/or the Bank as such counsel shall
reasonably deem neces sary.
(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
16
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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 Consider ations"
are a fair and accurate summary of the material tax consequences of the
issuance and holding of the Certificates;
(h) Pullman & Comley, LLC, special Connecticut tax counsel for
the Bank, shall have furnished to the Underwriters their opinion, dated
the Time of Delivery and satisfactory in form and substance to the
Underwriters and its counsel, to the effect that for Connecticut state
income tax purposes the Cer tificates 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:
17
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(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 obli gations 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 unenforceable by the Bank or the Trust or would
have a material adverse effect on the Certifi cateholders or
any Enhancement Provider;
(ii) PSFC has been duly incorporated and is validly
existing as a Connecticut corporation in good standing under
the laws of the State of Connecticut, with all power,
authority and legal right necessary to own its properties and
conduct its business as de scribed 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 ob tain such licenses or approvals
would have a material adverse effect on the Certificateholders
or any Enhancement Provider;
(iii) This Agreement, the Pooling and Servicing
Agreement, the Certificates, the Assignment and the Loan
Agreement have been duly authorized, exe cuted and delivered
by the Bank;
(iv) This Agreement and the Assignment have been duly
authorized, executed and delivered by PSFC;
(v) No consent, approval, authorization or order of
any governmental agency or body is required for (A) the
performance by the Bank of its obligations under the Pooling
and Servicing Agreement or 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 re quired under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Certificates by the Underwriters;
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<PAGE>
(vi) Neither the execution and delivery of this
Agreement or the Assignment by PSFC and the Bank, or the
Certificates, the Pooling and Servicing Agree ment or the Loan
Agreement by the Bank, nor the perfor mance 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 re sult in a default under any of the terms and provisions
of, the Certificate of Incorporation of PSFC, the Arti cles 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 activi ties 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 Agre ement,
the Pooling and Servicing Agreement, the Loan Agreement, the
Certificates or the Assignment, (iii) seeking any
determination or ruling that would materi ally 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 de termination or ruling that would materially and ad
versely affect the validity or enforceability of this
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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 fi nancial 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 state ments, 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 be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not mis leading.
(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;
20
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(l) At the Time of Delivery, the Underwriters shall have
received an opinion of Seward & Kissel, counsel to the Trustee, dated
the Time of Delivery, and satisfactory in form and substance to the
Underwriters and their counsel, to the effect that:
(i) the Trustee is a banking corporation duly
incorporated and validly existing under the laws of the State
of New York;
(ii) the Trustee has full power and authority to
execute and deliver, and to perform its obligations under the
Pooling and Servicing Agreement and the Loan Agreement and to
carry out the trans actions 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 Agree ment and the
Loan Agreement and that each of the Pool ing and Servicing
Agreement and the Loan Agreement is the legal, valid 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 en forceability thereof may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium,
liquidation and other similar laws affecting the
enforceability of creditors' rights generally, and general
principles of equity (regardless of whether the enforcement of
such remedies is considered in a proceeding at law or in
equity) as well as concepts of reasonableness, good faith and
fair dealing;
(v) the Certificates have been duly authenticated by
the Trustee pursuant to the Pooling and Servicing Agreement;
(vi) no approval, authorization or other action by or
filing with, any governmental authority of the United States
of America or the State of New York having jurisdiction over
the banking or trust powers of the Trustee is required in
connection with the execution and delivery by the Trustee of
the Pooling
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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 Depardieau Brocas Massie &
Associes., French counsel to Credit Lyonnais and of Cadwalader,
Wickersham & Taft, counsel to Credit Lyonnais New York Branch (the
"Collateral Interest Holder"), as to the due authorization, execution
and delivery of the Loan Agreement by the Collateral Interest Holder
and the enforce ability of the Loan Agreement, in each case in form and
sub stance 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
IBCA, Inc. 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 autho rization, execution, delivery and
enforceability by or against the Interest Rate Cap Provider of the
interest rate cap agree ments, to be dated on or prior to April 1,
1998, between the Trustee and the Interest Rate Cap Provider (the
interest rate cap agreements are collectively referred to herein as the
"In terest 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
22
<PAGE>
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 impractica ble 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;
(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 memo randa 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 transac tions
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
23
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liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Underwriters for any legal or other expenses reasonably incurred
by the Underwriters in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that neither
PSFC nor the Bank shall be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Regis tration 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 Under writers 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 Prospec tus, 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 Pro
spectus was corrected in the Prospectus or the Prospectus as then amended or
supplemented.
(b) The Underwriters will indemnify and hold harmless PSFC and the Bank
against any losses, claims, damages or liabilities to which either PSFC or the
Bank may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to
24
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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 indemni fying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other indem
nifying party similarly notified, to assume the defense there of, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. Any indemnifying party against whom indemnity may be
sought shall not be liable to indemnify any indemnified party under this Section
8 if any settlement of any such action is effected without such indemnifying
party's consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such
25
<PAGE>
proportion as is appropriate to reflect the relative benefits received by PSFC
and the Bank on the one hand and the Underwriters on the other from the offering
of the Certificates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of PSFC and the Bank on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by PSFC and the Bank on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by PSFC bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by PSFC or the Bank on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
PSFC, the Bank and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equita ble 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. Notwith standing 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 misrep resentation (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.
26
<PAGE>
(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, representa tions, warranties
and other statements of PSFC, the Bank and the Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriters or any controlling person of the Underwriters, PSFC, or the
Bank, or any officer or director or controlling person of PSFC or the Bank, and
shall survive deliv ery of and payment for the Certificates.
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
Certifi cates on the terms contained herein. If within thirty-six hours after
such default by any Underwriter the Underwriters do not ar range for the
purchase of such Class A Certificates, then PSFC shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Underwriters to purchase such Class A Certificates
on such terms. In the event that, within the respective periods, the
Underwriters notify PSFC that the Underwriters have so arranged for the purchase
of such Class A Certificates or PSFC notifies the Underwriters that it has so
arranged for the purchase of such Certificates, the Underwriters or PSFC shall
have the right to postpone the Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and PSFC and the Bank agree to file promptly any amendments to the
Registration Statement or the Prospectus which in the opinion of the
Underwriters may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Class A Certificates.
27
<PAGE>
(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 pro vided 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 Certif
icates 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 pro vided in subsection (a) above, the aggregate
principal amount of Class A Certificates which remains unpurchased exceeds
one-elev enth of the aggregate principal amount of all the Class A Certif
icates, or if PSFC shall not exercise the right described in sub section (b)
above to require each non-defaulting Underwriter to purchase Securities of the
defaulting Underwriter, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter, PSFC or the Bank,
except for the expenses to be borne by PSFC, the Bank and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve the defaulting Underwriter
from liability for its default.
11. If either the Class A Certificates or the Class B Certificates are
not delivered by or on behalf of PSFC for any reason as provided herein, PSFC or
the Bank will reimburse the Underwriters for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Certificates, but neither PSFC nor the Bank shall then have any
further liability to the Underwriters except as provided in Section 6 and
Section 8 hereof.
12. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to Goldman, Sachs & Co., at 85 Broad Street, New York,
New York 10004, Attention: Registration Department; if to PSFC shall be
delivered or sent by mail, telex or facsimile transmission to 850 Main Street,
Bridgeport, Connecticut 06604, Attention: William
28
<PAGE>
T. Kosturko, Esq; and if to the Bank shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Bank set forth in the
Registration Statement, Attention: William T. Kosturko, Esq. Any such
statements, request notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, PSFC the Bank and, to the extent provided in
Section 8 and Section 9 hereof, the officers and directors of PSFC and the Bank
and each person who controls PSFC, the Bank or the Underwriters, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Certificates from the Underwriters shall
be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence in this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. Any covenant, provision, agreement or term of this Agreement that
is prohibited or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.
18. Each Underwriter represents and agrees that (a) it has only issued
or passed on and shall only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Certificates to a person who
is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions) Order 1996 or who is a person to whom
the document may otherwise lawfully be issued or passed on; (b) it has complied
and shall comply with all applicable provisions of the Financial Services Act
1986 of Great Britain with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom; and (c) if such
Underwriter is an authorized person under the Financial Services Act 1986, it
has only promoted and shall only promote (as that term is defined in Regulation
1.02 of the
29
<PAGE>
Financial Services (Promotion of Unregulated Schemes) Regulations 1991) to any
person in the United Kingdom the scheme described in the Prospectus if that
person is of a kind described either in Section 76(2) of the Financial Services
Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991.
30
<PAGE>
If the foregoing is in accordance with your understand ing, 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/Michael J. Ciborowski
---------------------------
Name: Michael J. Ciborowski
Title: Vice 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............ $85,750,000
J.P. Morgan Securities Inc..... $85,750,000
Lehman Brothers Inc............ $85,750,000
Salomon Brothers Inc........... $85,750,000
$343,000,000
Aggregate
Principal
Amount of the
Class B
Underwriter Certificates
- ----------- ------------
Goldman, Sachs & Co............ $27,000,000
32
EXHIBIT 4.1
- --------------------------------------------------------------------------------
PEOPLE'S BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1998-1 Investor Certificateholders
--------------------------------------------------------------
SERIES 1998-1 SUPPLEMENT
Dated as of April 1, 1998
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of March 18, 1997
--------------------------------------------------------------
$400,000,000
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$343,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1998-1
$27,000,000 Floating Rate Class B
Asset Backed Certificates, Series 1998-1
$30,000,000 Collateral Interest, Series 1998-1
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS .....................................................................1
SECTION 1. Designation...................................................1
SECTION 2. Definitions...................................................2
SECTION 2.1 Other Definitional Provisions................................26
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 1998-1
Certificates.................................................28
SECTION 7. Depositary; Form of Delivery of Series 1998-1
Certificates.................................................28
SECTION 8. Enhancement..................................................29
SECTION 9. Article IV of Agreement......................................29
SECTION 9.A Series 1998-1 Pay Out Events.................................74
SECTION 10. Series 1998-1 Termination....................................76
SECTION 11. Ratification and Reaffirmation of Pooling and
Servicing Agreement..........................................77
SECTION 12. Ratification and Reaffirmation of Representations
and Warranties...............................................77
SECTION 13. [RESERVED]...................................................77
SECTION 14. No Subordination.............................................77
SECTION 15. Repurchase of the Series 1998-1 Certificates.................77
SECTION 16. Counterparts.................................................79
SECTION 17. Additional Covenants of Transferor...........................79
SECTION 18. Series 1998-1 Investor Exchange..............................79
- i -
<PAGE>
Page
SECTION 19. Governing Law................................................80
SECTION 20. Notification to Luxembourg Stock Exchange....................80
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 1998-1 SUPPLEMENT, dated as of April 1, 1998 (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 amended (as the same may be further 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 1998-1 Investor Certificates
shall be issued in two Classes, which shall be designated generally as the
Floating Rate Class A Asset Backed Certificates, Series 1998-1 and the Floating
Rate Class B Asset Backed Certificates, Series 1998-1. 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 1998-1 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 Agreement and this Series Supplement upon
payment by the
- 1 -
<PAGE>
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(b) 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 1998-1
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.
- 2 -
<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, provided, that with respect to the Monthly Period
preceding the first Transfer Date, the amount calculated under clause (a) of
this definition shall equal zero.
"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.
"Available Shared Principal Collections" shall mean, with respect to
any Monthly Period, Shared Principal Collections available to be allocated to
the Series 1998-1 Investor Certificates from each other Series.
- 3 -
<PAGE>
"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 1998-1
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 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), (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), and (e) with respect to the
Monthly Period preceding the first Transfer Date, the amount specified as Class
A Available Funds in the proviso to subsection 4.4(c)(i).
"Class A Cap Rate" shall mean 9.14% per annum.
- 4 -
<PAGE>
"Class A Certificate Rate" shall mean, with respect to the period from
and including the Closing Date through and including April 14, 1998, 5.8275% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to 0.14% 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 1998-1, 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), 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 Adjusted 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
- 5 -
<PAGE>
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 $343,000,000, less the portion of
such amount represented by Class A Certificates tendered and canceled pursuant
to any Series 1998-1 Investor Exchange occurring prior to such date of
determination.
"Class A Interest Rate Cap" shall mean the master agreement dated as of
April 1, 1998 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated April
1, 1998 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).
"Class A Investor Default Amount" shall mean, with respect to any
Monthly Period, 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 1998-1 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 1998-1 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
- 6 -
<PAGE>
Period, (b) the Class A Adjusted Investor Interest as determined 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
Class A Initial Investor Interest, 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 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 to the least of (i) Available Investor Principal Collections on deposit in
the Principal Account with respect to the related Monthly Period, (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
Monthly Period preceding the first Transfer Date, zero, and (b) with respect to
any subsequent Monthly Period, 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 or greater than the Expected Class A Principal with respect to
such date of determination, calculated based upon a Controlled Accumulation
Period commencing November 1, 2002 (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).
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"Class A Required Amount" shall have the meaning specified in
subsection 4.6(e).
"Class A Scheduled Payment Date" shall mean the March 2003 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), (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), and (c) with respect
to the Monthly Period preceding the first Transfer Date, the amount specified as
Class B Available Funds in the proviso to subsection 4.4(c)(i).
"Class B Cap Rate" shall mean 9.34% per annum.
"Class B Certificate Rate" shall mean, with respect to the period from
and including the Closing Date through and including April 14, 1998, 6.0275% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to 0.34% 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 1998-1, 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 the preceding Distribution Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date),
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<PAGE>
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 $27,000,000 less the portion of such
amount represented by Class B Certificates tendered and canceled pursuant to any
Series 1998-1 Investor Exchange occurring prior to such date of determination.
"Class B Interest Rate Cap" shall mean the master agreement dated as of
April 1, 1998 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated April
1, 1998 between the Trustee and the Interest Rate Cap Provider, relating to the
Class B Certificates and for the exclusive benefit of the Class B
Certificateholders, or (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
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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, with respect to any
Monthly Period, 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 foregoing clauses (c), (d) and (e); provided, however, that upon the tender
and cancellation of any Class B Certificates pursuant to a Series 1998-1
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 1998-1 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 (after giving effect to all
payments, deposits and withdrawals on such Distribution Date) or, for the first
Distribution Date, the Class B Initial Investor Interest, 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
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<PAGE>
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 amount equal to the
lesser of (i) Available Investor Principal Collections on deposit in the
Principal Account with respect to the related Monthly Period (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
Monthly Period preceding the first Transfer Date, zero, and (b) with respect to
any subsequent Monthly Period, 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).
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<PAGE>
"Class B Scheduled Payment Date" shall mean the April 2003 Distribution
Date.
"Closing Date" shall mean April 1, 1998.
"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
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, with respect to any Monthly
Period, 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 the Initial Collateral Interest and the
denominator of which is the Initial Investor Interest.
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<PAGE>
"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 Monthly Period preceding the first Transfer Date, zero, and (b) with
respect to any subsequent Monthly Period, one-twelfth of the product of 2.00%
and the Collateral Interest on the last day of the preceding Monthly Period.
"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
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<PAGE>
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 Transfer 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 by a reduction of the Required Collateral
Percentage as described in the definition of "Required Collateral Percentage",
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 deposit in
the Principal Account with respect to the related Monthly Period, or (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 on deposit in
the Principal Account with respect to the related Monthly Period 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, $24,500,000; provided that if the Controlled
Accumulation Period Length is modified pursuant to subsection 4.8(d), (i) the
Controlled Accumulation Amount for each such 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 January 1, 2002.
"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
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<PAGE>
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 1998-1 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).
"Distribution Date" shall mean April 15, 1998 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 1998-1
Termination Date.
"Enhancement" shall mean, with respect to the Series 1998-1
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 1998-1
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
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<PAGE>
Funding Investment Proceeds for such Transfer Date exceed the Class A 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 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 IBCA, Inc.
"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
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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.
"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
$30,000,000.
"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 1998-1 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).
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"Investor Charge-Offs" shall mean, with respect to any Transfer Date,
the sum of the Class A Investor Charge-Offs, the 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, (i) with respect to the Monthly
Period preceding the first Transfer Date, an amount equal to zero, and (ii) with
respect to each Monthly Period thereafter, 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 24, 1998 (for the period from and including the Closing Date
through and including April 14, 1998) 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 April 1, 1998, 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.
"Minimum Aggregate Principal Receivables" shall have the meaning
specified in Section 4 hereof.
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"Minimum Seller Interest" shall have the meaning specified in Section 4
hereof.
"Monthly Investor Servicing Fee" shall mean (a) with respect to the
Monthly Period preceding the first Transfer Date, zero, 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
1998-1 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 1998-1
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 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
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<PAGE>
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; or (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 in
and to such Permitted Investment for the benefit of the Series 1998-1 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 1998-1 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 1998-1 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.
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"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 Adjusted Yield" shall mean, with respect to any Transfer
Date or Determination Date, the average of the percentages obtained for each of
the three preceding Monthly Periods by subtracting the Base Rate from the
Portfolio Yield for such Monthly Period.
"Portfolio Yield" shall mean, with respect to the Series 1998-1
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 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).
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"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 1998-1 Investor Certificates, the excess of (x) an amount equal to the
sum (without duplication) of (A) during the 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 1998-1 Termination Date.
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"Rating Agency" shall mean, with respect to the Series 1998-1
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 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, AA- by Fitch 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 AA- by Fitch, and a
short term unsecured debt or short term certificate of deposit rating
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of A-1+ by Standard & Poor's, and (c) is acceptable to Moody's, Fitch and
Standard & Poor's.
"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 $12,000,000; 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 1998-1 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, 7.50% 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 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,
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would cause a Pay Out Event to occur with respect to the Series 1998-1 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
Adjusted 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 Adjusted 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 Adjusted 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 day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Scheduled Series 1998-1 Termination Date" shall mean the November 2005
Distribution Date.
"Series 1998-1" shall mean the Series represented by the Series 1998-1
Investor Certificates.
"Series 1998-1 Certificates" shall mean the Class A Certificates and
the Class B Certificates.
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"Series 1998-1 Collection Subaccount" shall have the meaning specified
in Section 4.2B.
"Series 1998-1 Investor Certificateholders" shall mean the Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder.
"Series 1998-1 Investor Certificates" shall mean the Class A
Certificates, the Class B Certificates and the Collateral Interest.
"Series 1998-1 Investor Exchange" shall mean an Investor Exchange
pursuant to Section 6.9(b) of the Agreement and Section 18 hereof.
"Series 1998-1 Pay Out Event" shall have the meaning specified in
Section 9A hereof.
"Series 1998-1 Termination Date" shall mean the earlier to occur of (i)
the day after the Distribution Date on which the Series 1998-1 Investor
Certificates are paid in full or (ii) the Scheduled Series 1998-1 Termination
Date.
"Series Servicing Fee Percentage" shall mean 2.00%.
"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 1998-1 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 1998-1 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 1998-1
Investor Certificates.
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"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 1998-1 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 Series
1998-1 Investor 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
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 Series 1998-1 Investor 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
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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 1998-1 Investor Certificates on any date of determination shall be
7% of the 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 1998-1 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.
SECTION 5. Reassignment and Transfer Terms. The Series 1998-1 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 1998-1 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 1998-1 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
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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 1998-1 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 1998-1 Certificates. The
Transferor shall execute and deliver the Series 1998-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1998-1 Certificates when authenticated in
accordance with Section 6.2 of the Agreement.
SECTION 7. Depositary; Form of Delivery of Series 1998-1 Certificates.
(a) The Series 1998-1 Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1, 6.2, 6.9 and 6.11 of the Agreement.
(b) The depositary for the Series 1998-1 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 1998-1 Investor Certificates, Class A Certificates
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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 1998-1 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 1998-1 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 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.
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 1998-1 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 1998- 1 Investor Certificates:
ARTICLE IV
RIGHTS OF SERIES 1998-1 INVESTOR CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Series 1998-1 Investor Certificateholders. The
Series 1998-1 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 1998-1
Investor
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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 1998-1 Investor Certificates, (c) funds
and securities on deposit in the Finance Charge Account, the Principal Account,
the Distribution Account and the Series 1998-1 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 1998-1 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 1998-1 Collection Subaccount, the Principal
Funding Account, the Reserve Account or the Interest Rate Caps, except as
specifically provided in this Article IV.
SECTION 4.2B The Series 1998-1 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 1998-1 Investor Certificateholders,
bearing a designation clearly indicating that the funds therein are held in
trust for the benefit of the Series 1998-1 Investor Certificateholders (the
"Series 1998-1 Collection Subaccount"). Funds allocable to the Series 1998-1
Investor Certificates which are deposited into the Collection Account will be
transferred to the Series 1998-1 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
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maintain accurate records reflecting each transaction in the Series 1998-1
Collection Subaccount and that funds held therein shall at all times be held in
trust for the benefit of the Series 1998-1 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 1998-1 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 1998-1 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 or prior to the Transfer Date
following the Monthly Period in which such funds were processed for collection;
provided, however, that any Permitted Investment in short term U.S. treasury
securities may mature one day after such Transfer Date and may be sold on such
Transfer Date. All interest and earnings (net of losses and investment expenses)
on funds on deposit in the Series 1998-1 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 1998-1 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 1998-1 Investor Certificateholders. The Qualified Trust Institution shall
maintain, either on its own or through its nominee or custodian for the benefit
of the Series 1998-1 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
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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 1998-1
Collection Subaccount. For purposes of determining the availability of funds or
the balances in the Series 1998-1 Collection Subaccount for any reason under
this Agreement, all investment earnings on such funds (net of losses and
expenses) shall be deemed not to be available or on deposit so long as a
Servicer Default shall not be continuing pursuant to this Section 4.2B.
Permitted Investments shall not be disposed of prior to their maturity other
than as provided above with respect to short term U.S. treasury securities.
SECTION 4.3 Establishment of Series 1998-1 Investor Accounts. (a) The
Finance Charge Account, the Principal Account and the Principal Funding Account.
The Servicer, for the benefit of the Series 1998-1 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", 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 1998-1 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 1998-1 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
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entitled to give instructions to the Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the
Series 1998-1 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 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 1998-1
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 1998-1 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
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restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, 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 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
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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 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 $840,612.50 shall be deposited in the Finance Charge Account
from proceeds of the sale of the Series 1998-1 Investor Certificates,
and such deposit shall be deemed to constitute
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$777,323.75 of Class A Available Funds and $63,288.75 of Class B
Available Funds with respect to the Monthly Period preceding the first
Transfer Date 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 1998-1 Investor
Certificates will be deposited to the Principal Account in
accordance with 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
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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 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 1998- 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:
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(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 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 Investor Interest, then Shared
Principal Collections from other Series, if any, allocable to
the Series 1998-1 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
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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 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 pursuant to subsection 4.5(a). The Class B Investor Interest
will thereafter be reimbursed
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(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 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 subsections 4.3(c), 4.9(b) and 4.9(d).
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(a) On each Transfer Date, an amount equal to the Class A Available
Funds for the related Monthly Period 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 such 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 1998-1 Investor Certificates,
the amount of Class A Monthly Cap Rate Interest referred to in (i)
above shall be $777,323.75 (reflecting an initial period of 14 days).
(ii) Class A Monthly Servicing Fee. On each Transfer Date, the
Servicer or the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw from the Finance Charge Account, to the
extent funds are available from such 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
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the extent funds are available from such 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 such 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 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, for the Related Monthly Period 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
for the Related Monthly Period 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 such Class B
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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
1998-1 Investor Certificates, the amount referred to in (i) above shall
be $63,288.75 (reflecting an initial period of 14 days).
(ii) Class B Monthly Servicing Fee. On each Transfer Date, the
Servicer or the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw from the Finance Charge Account, to the
extent funds are available from such 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 such 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
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withdraw from the Finance Charge Account, to the extent funds are
available from such 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 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, for the related Monthly Period 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 for the related Monthly Period will be distributed in the following
priority:
(i) Collateral Interest 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 such 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, for the related Monthly Period 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) 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
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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 (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 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
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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 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,
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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 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
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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 (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.
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(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 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 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
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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 1998-1 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, (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
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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 1998-1
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 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 1998-1 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
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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.
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
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(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:
(A) on each Transfer Date occurring prior to the
Class A Scheduled Payment Date, an amount equal to the Class A
Monthly Principal with respect to such Transfer Date 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, for the related Monthly Period shall
constitute Shared Principal Collections to be deposited and
applied in the manner specified in subsection 4.2(e) of the
Agreement.
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(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 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, for the related Monthly Period 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 or (following the Class A Scheduled Payment Date) the
Distribution Account, as applicable, an amount equal to the lesser of
(x) the amount on deposit in the Excess Funding Account (exclusive of
investment earnings) and (y) the amount by which the Controlled Deposit
Amount on such Transfer Date exceeds the Available Investor Principal
Collections for the related Monthly Period; provided, further, that on
the first Transfer Date with respect to the Rapid Amortization Period,
the
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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).
(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 1998-1 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
1998-1 Investor Certificateholders from the Distribution Account, the
amount so deposited into the Distribution Account.
(d) The Controlled Accumulation Period is scheduled to
commence on the Controlled
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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 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
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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. On
each Determination Date on which the Controlled Accumulation Period
Length is modified pursuant to this Section 4.8(d), the Servicer shall
also determine the related Controlled Accumulation Amount, which shall
be an amount not less than (x) the Class A Investor Interest on such
date, divided by (y) the Controlled Accumulation Period Length
determined on such date.
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
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
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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 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 this 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
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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 such Transfer Date 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 such amount shall be included in Class A Available
Funds for such Transfer Date.
(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
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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 this Series Supplement (collectively, "Excluded
Payments")) relating to the Series 1998-1 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
1998-1 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
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the respective Interest Rate Cap) from the Interest Rate Cap Provider
on or prior to each Transfer Date if LIBOR plus 0.14% for the related
Interest Accrual Period exceeds the Class A Cap Rate or LIBOR plus
0.34% 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 0.14% exceeds the Class A Cap
Rate or, in the case of the Class B Interest Rate Cap, LIBOR plus 0.34%
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, AA- by
Fitch or 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 AA-by Fitch 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, Fitch, and Standard & Poor's promptly upon
obtaining knowledge thereof and notice of which the Trustee shall
provide to the Servicer within two Business Days after receipt
thereof), the Interest Rate Cap Provider, at its own expense, is
required, under each Interest Rate Cap, either to (x) obtain a
Replacement Interest Rate Cap for each such Interest Rate Cap to which
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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, Fitch, and Standard & Poor's, including
collateral, guarantees or letters of credit, which arrangement will
result in Moody's, Fitch 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) 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
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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
concurrently 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, Fitch, 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 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, Fitch 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
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Replacement Interest Rate Cap and (ii) a letter from each of Moody's,
Fitch 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
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.
(h) The Servicer shall have the duty of (i) 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), (ii)
notifying the Trustee of prospective purchasers and bids, (iii)
selecting the purchaser of such portion of the Interest Rate Cap, and
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(iv) 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).
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).
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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 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
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United States dollars to leading European banks for a period equal to one month
(commencing on the first day of such Interest Accrual Period).
SECTION 4.14 Discount Option.
(a) The Transferor may at its option (the "Discount Option"),
at any time, upon not less than 20 Business Days prior written notice
to the Servicer, the Trustee, the 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 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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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.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
[THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1998-1]
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
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Certificateholder) of amounts on deposit in the Distribution Account as
are payable to the Class A Certificateholders pursuant to Sections 4.7
and 4.8 hereof by check mailed to each Class A Certificateholder except
that, with respect to Class A Certificates registered in the name of
the nominee of a Clearing Agency, such distribution shall be made in
immediately available funds.
(b) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the certificate delivered by the
Servicer to the Trustee pursuant to subsection 3.4(b)) to each Class B
Certificateholder of record on the immediately preceding Record Date
(other than as provided in subsection 2.4(e) or Section 12.3 respecting
a final distribution) such Class B Certificateholder's pro rata share
(based on the aggregate Undivided Interests represented by Class B
Certificates held by such Class B Certificateholder) of amounts on
deposit in the Distribution Account as are payable to the Class B
Certificateholders pursuant to Sections 4.7 and 4.8 hereof by check
mailed to each Class B Certificateholder except that, with respect to
Class B Certificates registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately
available funds.
SECTION 5.2 Monthly Certificateholders' Statement.
(a) On or before each Distribution Date, the Paying Agent
shall forward to each Series 1998-1 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 1998-1 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
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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 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
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Charge-Offs and Collateral Interest Charge- Offs for the
preceding Monthly Period;
(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 1998-1 Investor
Certificates;
(xviii) the Class A Required Amount, the Class B
Required Amount, the amount of Reallocated Collateral
Principal Collections and Reallocated Class B Principal
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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 1999, 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 1998-1 Certificateholder, a
statement prepared by the Servicer containing the information required
to be contained in the regular monthly report to Series 1998-1 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 1998-1 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 1998-1 Investor
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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 1998-1 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 1998-1 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
1998-1 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 1998-1 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 1998-1 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 continues to affect
materially and adversely the interests of the Series 1998-1 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 1998-1 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
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Collateral Interest, and (ii) as a result of which the interests of the
Series 1998-1 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 1998-1 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 Portfolio
Adjusted Yield is less than zero;
(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;
(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1998-1 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 1998-1 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 1998-1 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 1998-1 Pay Out Event shall occur without any notice or
other action on the part of the
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Trustee or the Series 1998-1 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 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 Agency.
SECTION 10. Series 1998-1 Termination. All principal or interest with
respect to the Series 1998-1 Investor Certificates shall be due and payable no
later than the Scheduled Series 1998-1 Termination Date. In the event that the
Investor Interest is greater than zero on the Scheduled Series 1998-1
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 1998-1 Investor Certificateholders pro rata in
final payment of all principal of and accrued interest on the Series 1998-1
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
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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 any amounts owing under the Loan Agreement and thereafter paid to the
Holder of the Exchangeable Seller Certificate. Upon such Scheduled Series 1998-
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 1998- 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 1998-1 Investor Certificateholders which
would, in either case, result in the subordination of the rights of the Series
1998-1 Investor Certificateholders to the rights of the Holders of any other
Series.
SECTION 15. Repurchase of the Series 1998-1 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 1998-1
Certificates evidencing Undivided Interests aggregating more than 50% of each of
the Class A Investor
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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
1998-1 Certificateholders), may direct the Transferor to purchase the Series
1998-1 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 1998-1 Investor Certificates in the Distribution Account,
for distribution to the Series 1998-1 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 1998-1 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 deposit into the Distribution Account of the reassignment deposit
amount shall be considered a prepayment in full of the Series 1998-1 Investor
Certificates. The Series 1998-1 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 1998-1 Investor Certificateholders give notice directing the Transferor
to purchase the Series 1998-1 Investor Certificates as provided above, the
obligation of the Transferor to purchase the Series 1998-1 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 1998-1
Investor Certificateholders
- 79 -
<PAGE>
or the Trustee on behalf of the Series 1998-1 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 1998-1 Investor Exchange. Pursuant to subsection
6.9(b) of the Agreement, the Series 1998-1 Investor Certificateholders may
tender their Series 1998-1 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 1998-1 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 1998-1 Investor Certificateholders. Such notice of exchange will specify,
among other things: (a) the amount of Series 1998-1 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 in which the tender and cancellation of the Series 1998-1
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 1998-1 Investor
Certificates, and shall issue such Series of Series 1998-1 Investor Certificates
- 80 -
<PAGE>
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 information described in clauses (i) and
(ii) of the preceding sentence.
- 81 -
<PAGE>
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
- 82 -
<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 1998-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA(1) 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 REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESEN TATIVE
OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns
of CEDE & CO. with respect to this certificate, the "Class A Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter created
under selected VISA and MasterCard credit card accounts (the "Accounts") of
People's Bank, a Connecticut stock savings bank, all Receivables in Automatic
Additional Accounts and Additional Accounts added to the Trust from time to
time, all monies due or to become due in payment of the Receivables (including
all Finance Charge Receivables), and the other assets and interests constituting
the Trust pursuant to an Amended and Restated Pooling and Servicing Agreement,
dated as of March 18, 1997, as supplemented by the Series 1998-1 Supplement
- --------
1 VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
<PAGE>
dated as of April 1, 1998 (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
Certif icates (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 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
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)
- 2 -
<PAGE>
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
$343,000,000 Floating Rate Class A Asset Backed Certificates, Series 1998-1 (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 $343,000,000 minus the retirement of
any Class A Certificates pursuant to an Investor Exchange. The Class A Investor
Interest on any date of determination will be an amount equal to (a) the Class A
Initial Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class A Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
A Investor Charge-Offs over Class A Investor Charge-Offs reimbursed prior to
such date of determination; provided, however, that the Class A Investor
Interest may not be reduced below zero. In addi tion to the Class A
Certificates, a class of certificates entitled "People's Bank Credit Card Master
Trust $27,000,000 Floating Rate Class B Asset Backed Certificates, Series
1998-1" (the "Class B Certificates") and an Undivided Interest in the Trust in
the initial amount of $30,000,000 (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 reissued to the
Holder of the Exchange able Seller Certificate pursuant to the Agreement, and
other Series of certificates have been, and may from time to time be, issued by
the Trust, which represent or will represent an undivided interest in the Trust.
The Exchangeable Seller Certificate will represent the interest in the Principal
Receivables not represented by the Certificates or any other Series of
certificates.
Interest on the Class A Certificates will be distributed on April 15,
1998 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
- 3 -
<PAGE>
A Certificateholders of record on the Record Date preceding the related
Distribution Date.
No principal will be payable to the Class A Certificateholders 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 sched uled to begin January 1, 2002 but which may
be postponed as provided in the Agreement, an amount equal to the Controlled
Depos it Amount will be deposited into the Principal Funding Account on each
Transfer Date commencing with the Transfer Date following the Monthly Period in
which the Controlled Accumulation Period com mences. The amount on deposit in
the Principal Funding Account will be distributed as principal to the Class A
Certificateholders on the March 2003 Distribution Date (the "Class A Scheduled
Payment Date"), unless 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 circum stances permitted under the Agreement, the
Servicer need not deposit Collections into the Collection Account, the Principal
Account or the Finance Charge Account in accordance with the immediately
preceding sentence, or make payments to the Holder of the Exchangeable Seller
Certificate prior to the close of business on the day any Collections are
deposited in the Collection Account, but may make such payments on the Transfer
Date in the Monthly Period following the Monthly Period in which such
Collections are received in an amount equal to the net amount of such deposits,
payments and withdrawals which would have been made but for the provisions of
this paragraph.
- 4 -
<PAGE>
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 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 Distribution 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 Principal, (b)
the lesser of the Class A Certificate Rate and 9.14% 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 9.14%, (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.
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
- 5 -
<PAGE>
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 reduc
tions for any Class B Investor Charge-Offs and any Reallocated Class B Principal
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 Inter est Rate Cap or Qualified Substitute
Arrangement will terminate 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 day of the preceding Monthly
Period; provided that the Class A Monthly Servicing Fee for the first
Distribution Date will be an amount equal to zero.
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 Certif
icateholders 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
- 6 -
<PAGE>
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 Accumulation Period and the Rapid Amortization Period,
Shared Principal Collections from other Series available to the Certificates
will be applied to pay the Certifi cateholders to the extent of Principal
Shortfalls, if any, with respect to Series 1998-1.
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 1998-1 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 Certificate) without the presentation or surrender of
this Certificate or the making of any notation thereon, except that with respect
to Certif icates registered in the name of the nominee of a Clearing Agency,
distributions will be made in the form of immediately available funds.
This Class A Certificate does not represent an obligation of, or an
interest in, the 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 1998-1
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.
- 7 -
<PAGE>
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 provi
sions of the Agreement and (b) provide for the purchase of Princi pal
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 Receiv ables 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 aggregating not less than 66-2/3% of the
principal amount of each Series adversely affected, for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series. No such amendment, however, may (a) reduce in
any manner the amount of, or delay the timing of, distributions required to be
made on such Series, (b) change the definition of or the manner of calculating
the interest of any certificateholder of such Series or (c) reduce the aforesaid
percentage of undivided interests, the holders of which are required to consent
to any such amendment, in each case without the consent of all
certificateholders of all Series adversely affected.
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
- 8 -
<PAGE>
Undivided Interests will be issued to the designated transferee or transferees.
Pursuant to the Series 1998-1 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 Certificatehold er 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 Inter ests, as requested by the
Class A Certificateholder surrendering such Class A Certificates. No service
charge may be imposed for any such exchange but the Servicer or Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1998-1, the Agreement
provides that the right of the Class A Certificateholders to receive payments
from the Trust will terminate on the Scheduled Series 1998-1 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 (with out
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
instru ments 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.
- 9 -
<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.
- 10 -
<PAGE>
IN WITNESS WHEREOF, People's Bank has caused this Class A Cer tificate
to be executed by its duly authorized officer.
PEOPLE'S BANK
By:
------------------------------
Dated: April 1, 1998
- 11 -
<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)
- 12 -
<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 1998-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA(1) 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 REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESEN TATIVE
OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns
of CEDE & CO. with respect to this certificate, the "Class B Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter created
under selected VISA and MasterCard credit card accounts (the "Accounts") of
People's Bank, a Connecticut stock savings bank, all Receivables in Automatic
Additional Accounts and Additional Accounts added to the Trust from time to
time, all monies due or to become due in payment of the Receivables (including
all Finance Charge Receivables), and the other assets and interests constituting
the Trust pursuant to an Amended and Restated Pooling and Servicing Agreement,
dated as
- --------
1 VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
<PAGE>
of March 18, 1997, and as supplemented by the Series 1998-1 Supple ment, dated
as of April 1, 1998, (collectively, the "Agreement"), by and between People's
Bank, as Transferor and Servicer, and Bank ers 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
Certif icates (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
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
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<PAGE>
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 subsec
tions 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
$27,000,000 Floating Rate Class B Asset Backed Certificates, Series 1998-1 (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 $27,000,000 minus the retirement of any
Class B Certificates pursuant to an Investor Exchange. The Class B Investor
Interest on any date of determination will be an amount equal to (a) the Class B
Initial Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class B Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
B Investor Charge-Offs, 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 $343,000,000 Floating Rate Class A Asset Backed Certificates,
Series 1998-1" (the "Class A Certificates") and an Undivided Interest in the
Trust in the initial amount of $30,000,000 (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 Receivables not represented by the Certificates or any other
Series of certificates.
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<PAGE>
Interest on the Class B Certificates will be distributed on April 15,
1998 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 April 2003
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 principal 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 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 Col lections 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 with drawals 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 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
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<PAGE>
Date or Closing Date (or, for the initial Interest Accrual Period, the Class B
Initial Investor Interest), as applicable, 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 Certificate Rate and
9.34%, and (c) the actual number of days in the related Interest Accrual Period
divided by 360, plus (iii) to the extent permitted by applicable law, any
interest accrued on the Class B Certificates (including interest on any overdue
Class B Monthly Interest) during any prior 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 9.34%, (b) the Class B
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 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 Collateral Interest will be reduced to zero, and the Class B Investor
Interest (after giving effect to reduc tions for any Class B Investor
Charge-Offs and any Reallocated
- 5 -
<PAGE>
Class B Principal 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 immediately 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 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 zero.
On the Transfer Date immediately preceding the Class B Sched uled
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
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<PAGE>
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 Distribution Account for distribution to the Class B
Certificateholders on the next suc ceeding Distribution Date, to the extent
specified in the Agree ment.
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 Accumulation Period and the Rapid Amortization Period,
Shared Principal Collections from other Series available to the Certificates
will be applied to pay the Certifi cateholders to the extent of Principal
Shortfalls, if any, with respect to Series 1998-1.
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 1998-1 Termination Date and,
following the final principal payment to the Class A Certificateholders, to the
Class B Certificateholders until the earlier of the date on which the Class B
Investor Interest is paid in full and the Series 1998-1 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 Certificate) without the presentation or surrender of
this Certificate or the making of any notation thereon, except that with respect
to Certif icates registered in the name of the nominee of a Clearing Agency,
distributions will be made in the form of immediately available funds.
This Class B Certificate does not represent an obligation of, or an
interest in, the 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.
- 7 -
<PAGE>
As provided in the Agreement, withdrawals from the Series 1998-1
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
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 provi
sions of the Agreement and (b) provide for the purchase of Princi pal
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 Receiv ables 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 aggregating not less than 66-2/3% of the
principal amount of each Series adversely affected, for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series. No such amendment, however, may (a) reduce in
any manner the amount of, or delay the timing of, distributions required to be
made on such Series, (b) change the definition of or the manner of calculating
the interest of any certificateholder of such Series or (c) reduce the aforesaid
percentage of undivided interests, the holders of which are required to consent
to any such amendment, in each case without the consent of all
certificateholders of all Series adversely affected.
- 8 -
<PAGE>
The transfer of this Class B Certificate shall be registered in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the Class B
Certificateholder or such Class B Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class B Certificates of
authorized denomination and for the same aggregate Undivided Interests will be
issued to the designated transferee or transferees.
Pursuant to the Series 1998-1 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 Certificatehold er 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 Inter ests, as requested by the
Class B Certificateholder surrendering such Class B Certificates. No service
charge may be imposed for any such exchange but the Servicer or Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1998-1, the Agreement
provides that the right of the Class B Certificateholders to receive payments
from the Trust will terminate on the Scheduled Series 1998-1 Termination Date.
Upon the termination of Trust pursuant to Section 12.1 of the Agreement, the
Trustee will assign and convey to the Holder of the Exchangeable Seller
Certificate (without recourse, representation or warranty) all right, title and
- 9 -
<PAGE>
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 instru ments 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.
- 10 -
<PAGE>
IN WITNESS WHEREOF, People's Bank has caused this Class B Cer tificate
to be executed by its duly authorized officer.
PEOPLE'S BANK
By:
----------------------------
Dated: April 1, 1998
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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 1998-1
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 1998-1 and
may not correspond to Monthly Period numbers used for other Series of
the Trust.)
21. Information Regarding Distributions to Certificateholders
1.1 Total amount distributed to
Certificateholders (per $1,000
Initial Investor Interest) _____________
1.2 Total principal amount
distributed to Certificateholders
(per $1,000 Initial Investor Interest) _____________
1.3 Total interest amount
distributed to Certificateholders
(Per $1,000 Initial Investor Interest) _____________
2. Receivables Balances
2.1 Aggregate Principal Receivables in
Trust, end of period ___ _____________
(a) Aggregate Principal Receivables
in Trust on Closing Date _____________
<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 _____________
23.5 Annualized Gross Portfolio Yield for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
- 2 -
<PAGE>
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 Percent of
Account Aggregate
Balances Receivables
-------- -----------
25.2 Investor default percentage for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
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
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<PAGE>
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
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
#_______
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<PAGE>
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.
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<PAGE>
EXHIBIT 3
FORM OF DTC LETTER OF REPRESENTATION
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]
---------------------
[Date]
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: $____________ Floating Rate Class A Asset Backed
Certificates, Series ______ $__________ Floating Rate
Class B Asset Backed Certificates, Series ______
[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 as of March 18, 1997 as amended
by an Amendment, dated as of September 24, 1997, (the "Document").
______________ 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
<PAGE>
to the Securities, Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _________________, 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
- 2 -
<PAGE>
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 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
- 3 -
<PAGE>
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.]
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
- 4 -
<PAGE>
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.
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,
- 5 -
<PAGE>
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.
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:
- 6 -
<PAGE>
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
- 7 -
<PAGE>
SCHEDULE A
$____________ Floating Rate Class A Asset Backed Certificates,
Series ______
- -------------------------------------------------------------------------------
$__________ Floating Rate Class B Asset Backed Certificates,
Series ______
- -------------------------------------------------------------------------------
CUSIP Number Principal Amount Maturity Date Interest Rate
- ------------ ---------------- ------------- -------------
- 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
- 9 -
<PAGE>
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.
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
- 10 -
<PAGE>
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. 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.
- 11 -
<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 BANK 1998-1 FINANCE CHARGE ACCOUNT
ON ___________________________ PLEASE PERFORM THE FOLLOWING
TRANSACTIONS PURSUANT TO THE SERIES 1998-1 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) Distribution Account - 22753 to pay Monthly
(viii) Certificate Interest to Class B Investors.
Per Section Please withdraw $0.00 from
4.6 (d) (vi) Finance 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
4.6 (a) Finance Charge Account - 22756 to pay
(iii), Investor Default Amount to People's
4.6 (c) (iii) Structured Finance Corp.
& 4.6 (d) (ix)
4.6 (d) (ix)
Per Section Please withdraw $0.00 from
4.6 (d) Finance Charge Account - 22756 and wire to
(xvii) People's Structured Finance Corp.
<PAGE>
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 1998-1
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:
<PAGE>
EXHIBIT 6
Form of Notification to Trustee Regarding
Failure to Make Payment
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
This is to inform you that we have been unable to make a [payment or
deposit] in the amount of __________ for the Monthly Period beginning on
________ and ending on _________. Such payments were to be made from [Account]
on _________ and such payment or deposit was to be made to [Person or Account].
_____________________________
Name:
Title:
EXHIBIT 4.2
(Multicurrency-Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of April 1, 1998
Bankers Trust Company, not in
its individual capacity, but solely as
Trustee for People's Bank Credit Card Lehman Brothers Financial
Master Trust Products, Inc.
("Party A") and ("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.
(d) Deduction or Withholding for Tax.
- 2 -
<PAGE>
(i) Gross-Up. All payments under this Agreement will be made
without any deduction or withholding for or on account of any Tax
unless such deduction or withholding is required by any applicable law,
as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required to deduct or
withhold, then that party ("X") will:-
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full amount
required to be deducted or withheld from any additional amount
paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been
assessed against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable
to Y, evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled under
this Agreement, such additional amount as is necessary to
ensure that the net amount actually received by Y (free and
clear of Indemnifiable Taxes, whether assessed against X or Y)
will equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:-
(A) the failure by Y to comply with or
perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d); or
(B) the failure of a representation made by
Y pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
(ii) Liability. If:-
(1) X is required by any applicable law, as modified
by the practice of any relevant governmental revenue
authority, to make any deduction or
- 3 -
<PAGE>
withholding in respect of which X would not be required to pay
an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies
the liability resulting from such Tax, Y will promptly pay to
X the amount of such liability (including any related
liability for interest, but including any related liability
for penalties only if Y has failed to comply with or perform
any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or
effective designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment obligation
will, to the extent permitted by law and subject to Section 6(c), be required to
pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but excluding)
the date of actual payment, at the Default Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party defaults in the
performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. Representations.
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction is
entered into and, in the case of the representations in Section 3(f), at all
times until the termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organized and validly existing under
the laws of the jurisdiction of its Organization or incorporation and,
if relevant under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and
any other documentation relating to this Agreement to which it is a
party, to deliver this Agreement and any other documentation relating
to this Agreement that it is required by this Agreement to deliver and
to perform its obligations under this Agreement and
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any obligations it has under any Credit Support Document to which it is
a party and has taken all necessary action to authorize such execution,
delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) Consents. All governmental and other consents that are
required to have been obtained by it with respect to this Agreement or
any Credit Support Document to which it is a party have been obtained
and are in full force and effect and all conditions of any such
consents have been complied with; and
(v) Obligations Binding. Its obligations under this Agreement
and any Credit Support Document to which it is a party constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event
of Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that
is furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is accurate
and true.
(f) Payee Tax Representations. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
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4. Agreements.
Each party agrees with the other that, so long as either party has or
may have any obligation under this Agreement or under any Credit Support
Document to which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party
or, in certain cases under subparagraph (iii) below, to such government or
taxing authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to make
a payment under this Agreement or any applicable Credit Support
Document without any deduction or withholding for or on account of any
Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of the party
in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such
other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorizations. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or other
authority that are required to be obtained by it with respect to this Agreement
or any Credit Support Document to which it is a party and will use all
reasonable efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true promptly
upon learning of such failure.
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(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp
Tax levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organized, managed
and controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events.
(a) Events of Default. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any of the following events constitutes an
event of default (an "Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make,
when due, any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) required to be made by it if such failure is not
remedied on or before the third Local Business Day after notice of such
failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with
or perform any agreement or obligation (other than an obligation to
make any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support
Provider of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit
Support Document or the failing or ceasing of such Credit
Support Document to be in full force and effect for the
purpose of this Agreement (in either case other than in
accordance with its terms) prior to the satisfaction of all
obligations of such party under each Transaction to which such
Credit Support Document relates without the written consent of
the other party; or
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(3) the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity of, such Credit Support
Document;
(iv) Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider
of such party in this Agreement or any Credit Support Document proves
to have been incorrect or misleading in any material respect when made
or repeated or deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit
Support Provider of such party or any applicable Specified Entity of
such party (1) defaults under a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, there
occurs a liquidation of, an acceleration of obligations under, or an
early termination of, that Specified Transaction, (2) defaults, after
giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or
exchange date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) Cross Default. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence of (1) a
default, event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of
such party or any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent
or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts as they become due;
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(3) makes a general assignment, arrangement or composition
with or for the benefit of its creditors; (4) institutes or
has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation or
(B) is not dismissed, discharged, stayed or restrained in each
case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit
Support Provider of such party consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all its assets
to, another entity and, at the time of such consolidation,
amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity
fails to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any Credit
Support Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail
to extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity
of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any event specified below constitutes an
Illegality if the event is specified in (i) below, a Tax Event if the event is
specified in (ii) below or a Tax Event Upon Merger if the event is
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specified in (iii) below, and, if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:-
(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):-
(1) to perform any absolute or contingent obligation
to make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply with any
other material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other obligation
which the party (or such Credit Support Provider) has under
any Credit Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after
the date on which a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to this
Agreement) or (y) a Change in Tax Law, the party (which will be the
Affected Party) will, or there is a substantial likelihood that it
will, on the next succeeding Scheduled Payment Date (1) be required to
pay to the other party an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment
from which an amount is required to be deducted or withheld for or on
account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of
Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party")
on the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
has been deducted or withheld for or on account of any Indemnifiable
Tax in respect of which the other party is not required to pay an
additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or
substantially all its assets to, another entity (which will be the
Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
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(iv) Credit Event Upon Merger. If "Credit Event Upon Merger"
is specified in the Schedule as applying to the party, such party
("X"), any Credit Support Provider of X or any applicable Specified
Entity of X consolidates or amalgamates with, or merges with or into,
or transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) Additional Termination Event. If any "Additional
Termination Event" is specified in the Schedule or any Confirmation as
applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for such
Additional Termination Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
6. Early Termination.
(a) Right to Terminate Following Event of Default. If at any time an
Event of Default with respect to a party (the "Defaulting Party") has occurred
and is then continuing, the other party (the "Non-defaulting Party") may, by not
more than 20 days notice to the Defaulting Party specifying the relevant Event
of Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as applying
to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6)
or, to the extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the presentation of the
relevant petition upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto,
(8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party
will, promptly upon becoming aware of it, notify the other party,
specifying the nature of that Termination Event and each Affected
Transaction and will also give such other information about that
Termination Event as the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is
only one Affected Party, or if a Tax
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Event Upon Merger occurs and the Burdened Party is the Affected Party,
the Affected Party will, as a condition to its right to designate an
Early Termination Date under Section 6(b)(iv), use all reasonable
efforts (which will not require such party to incur a loss, excluding
immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to
exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties,
each party will use all reasonable efforts to reach agreement within 30
days after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.
(iv) Right to Terminate. If:-
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section
6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event occurs,
or a Tax Event Upon Merger occurs and the Burdened Party is
not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then continuing, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
Affected Transactions.
(c) Effect of Designation.
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(i) If notice designating an Early Termination Date is given
under Section 6(a) or (b), the Early Termination Date will occur on the
date so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each party will
make the calculations on its part, if any, contemplated by Section 6(e)
and will provide to the other party a statement (1) showing, in
reasonable detail, such calculations (including all relevant quotations
and specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in
respect of any Early Termination Date under Section 6(e) will be
payable on the day that notice of the amount payable is effective (in
the case of an Early Termination Date which is designated or occurs as
a result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is
effective (in the case of an Early Termination Date which is designated
as a result of a Termination Event). Such amount will be paid together
with (to the extent permitted under applicable law) interest thereon
(before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding)
the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the parties
fail to designate a payment measure or payment method in the Schedule, it will
be deemed that "Market Quotation" or the "Second Method", as the case may be,
shall apply. The amount, if any, payable in respect of an Early Termination Date
and determined pursuant to this Section will be subject to any Set-off.
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(i) Events of Default. If the Early Termination Date results
from an Event of Default:-
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party will
pay to the Non-defaulting Party the excess, if a positive
number, of (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and
Loss apply, the Defaulting Party will pay to the
Non-defaulting Party, if a positive number, the Non-defaulting
Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and
Loss apply, an amount will be payable equal to the
Non-defaulting Party's Loss in respect of this Agreement. If
that amount is a positive number, the Defaulting Party will
pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results
from a Termination Event:-
(1) One Affected Party. If there is one Affected
Party, the amount payable will be determined in accordance
with Section 6(e)(i)(3), if Market Quotation applies, or
Section 6(e)(i)(4), if Loss applies, except that, in either
case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
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(2) Two Affected Parties. If there are two Affected
Parties:-
(A) if Market Quotation applies, each party
will determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will
determine its Loss in respect of this Agreement (or,
if fewer than all the Transactions are being
terminated, in respect of all Terminated
Transactions) and an amount will be payable equal to
one-half of the difference between the Loss of the
party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of that amount to
Y.
(iii) Adjustment for Bankruptcy. In circumstances where an
Early Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this Section
6(e) will be subject to such adjustments as are appropriate and
permitted by law to reflect any payments or deliveries made by one
party to the other under this Agreement (and retained by such other
party) during the period from the relevant Early Termination Date to
the date for payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
7. Transfer.
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-
(a) a party may make such a transfer of this Agreement
pursuant to a consolidation or amalgamation with, or merger with or
into, or transfer of all
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or substantially all its assets to, another entity (but without
prejudice to any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party under
Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency.
(a) Payment in the Contractual Currency. Each payment under this
Agreement will be made in the relevant currency specified in this Agreement for
that payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency other
than the Contractual Currency, except to the extent such tender results in the
actual receipt by the party to which payment is owed, acting in a reasonable
manner and in good faith in converting the currency so tendered into the
Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required to
make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any
judgment or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this Agreement,
(ii) for the payment of any amount relating to any early termination in respect
of this Agreement or (iii) in respect of a judgment or order of another court
for the payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any
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<PAGE>
premiums and costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law,
these indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to its subject matter and
supersedes all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii)
and 6(c)(ii), the obligations of the parties under this Agreement will survive
the termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and
waiver in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed an
original.
(ii) The parties intend that they are legally bound by the
terms of each Transaction from the moment they agree to those terms
(whether orally or otherwise). A Confirmation shall be entered into as
soon as practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
- 17 -
<PAGE>
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to operate
as a waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that
right, power or privilege or the exercise of any other right, power or
privilege.
(g) Headings. The headings used in this Agreement are for convenience
of reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties.
(a) If Section 10(a) is specified in the Schedule as applying, each
party that enters into a Transaction through an Office other than its head or
home office represents to the other party that, notwithstanding the place of
booking office or jurisdiction of incorporation or organization of such party,
the obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be deemed
to be repeated by such party on each date on which a Transaction is entered
into.
(b) Neither party may change the Office through which it makes and
receives payments or deliveries for the purpose of a Transaction without the
prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule,
such Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses.
A Defaulting Party will, on demand, indemnify and hold harmless the
other party for and against all reasonable out-of-pocket expenses, including
legal fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any Credit
Support Document to which the Defaulting Party is a party or by reason of the
early termination of any Transaction, including, but not limited to, costs of
collection.
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<PAGE>
12. Notices.
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on
the date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback
is received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient in
legible form (it being agreed that the burden of proving receipt will
be on the sender and will not be met by a transmission report generated
by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the date
that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following, day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction.
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings
relating to this Agreement ("Proceedings"), each party irrevocably:-
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<PAGE>
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process
Agent (if any) specified opposite its name in the Schedule to receive, for it
and on its behalf, service of process in any Proceedings. If for any reason any
party's Process Agent is unable to act as such, such party will promptly notify
the other party and within 30 days appoint a substitute process agent acceptable
to the other party. The parties irrevocably consent to service of process given
in the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions.
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in Section
5(b).
"Affected Party" has the meaning specified in Section 5(b).
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<PAGE>
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person,
any entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Defaulting Party, the
Default Rate;
(b) in respect of an obligation to pay an amount under Section
6(e) of either party from and after the date (determined in accordance
with Section 6(d)(ii)) on which that amount is payable, the Default
Rate;
(c) in respect of all other obligations payable or deliverable
(or which would have been but for Section 2(a)(iii)) by a
Non-defaulting Party, the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorization,
exemption, notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is
specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
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<PAGE>
"Default Rate" means a rate per annum equal to the cost (without proof
or evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organized, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or enforced,
this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined pursuant
to provisions contained, or incorporated by reference, in this Agreement, (b) in
relation to any other payment, in the place where the relevant account is
located and, if different, in the principal financial center, if any, of the
currency of such payment, (c) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), in the city specified in
the address for notice provided by the recipient and, in the case of a notice
contemplated by Section 2(b), in the place where the relevant new account is to
be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations
for performance with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an
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<PAGE>
amount that party reasonably determines in good faith to be its total losses and
costs (or gain, in which case expressed as a negative number) in connection with
this Agreement or that Terminated Transaction or group of Terminated
Transactions, as the case may be, including any loss of bargain, cost of funding
or, at the election of such party but without duplication, loss or cost incurred
as a result of its terminating, liquidating, obtaining or reestablishing any
hedge or related trading position (or any gain resulting from any of them). Loss
includes losses and costs (or gains) in respect of any payment or delivery
required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made,
except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount determined on the
basis of quotations from Reference Market-makers. Each quotation will be for an
amount, if any, that would be paid to such party (expressed as a negative
number) or by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in respect
of such Terminated Transaction or group of Terminated Transactions that would,
but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference Market-maker
to provide its quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the
party obliged to make a determination under Section 6(e), and, if each party is
so obliged, after consultation with the other. If more than three quotations are
provided, the Market Quotation will be the arithmetic mean of the quotations,
without regard to the quotations having the highest and lowest values. If
exactly three such quotations are provided, the Market Quotation will be the
quotation remaining after disregarding the highest and lowest quotations. For
this purpose, if more than one
- 23 -
<PAGE>
quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the Non-defaulting Party (as certified
by it) if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's
head or home office.
"Potential Event of Default" means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good faith (a)
from among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or to
make an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the
jurisdictions (a) in which the party is incorporated, organized, managed and
controlled or considered to have its seat, (b) where an Office through which the
party is acting for purposes of this Agreement is located, (c) in which the
party executes this Agreement and (d) in relation to any payment, from or
through which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is
to be made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the payer of
an amount under Section 6 is entitled or subject (whether arising under this
Agreement, another contract, applicable law or otherwise) that is exercised by,
or imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early
Termination Date, the sum of:-
(a) the Termination Currency Equivalent of the Market
Quotations (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a Market
Quotation is determined; and
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<PAGE>
(b) such party's Loss (whether positive or negative and
without reference to any Unpaid Amounts) for each Terminated
Transaction or group of Terminated Transactions for which a Market
Quotation cannot be determined or would not (in the reasonable belief
of the party making the determination) produce a commercially
reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.
"Specified Transaction"means, subject to the Schedule, (a) any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such party)
and the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar
tax.
"Tax" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination
Date (a) if resulting from a Termination Event, all Affected Transactions and
(b) if resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
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<PAGE>
"Termination Currency Equivalent" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency amount and,
in respect of any amount denominated in a currency other than the Termination
Currency (the "Other Currency"), the amount in the Termination Currency
determined by the party making the relevant determination as being required to
purchase such amount of such Other Currency as at the relevant Early Termination
Date, or, if the relevant Market Quotation or Loss (as the case may be), is
determined as of a later date, that later date, with the Termination Currency at
the rate equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event
Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean
of the cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become payable
but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to
such Early Termination Date and which remain unpaid as at such Early Termination
Date and (b) in respect of each Terminated Transaction, for each obligation
under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market value of that which was (or would have
been) required to be delivered as of the originally scheduled date for delivery,
in each case together with (to the extent permitted under applicable law)
interest, in the currency of such amounts, from (and including) the date such
amounts or obligations were or would have been required to have been paid or
performed to (but excluding) such Early Termination Date, at the Applicable
Rate. Such amounts of interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. The fair market value of any
obligation referred to in clause (b) above shall be reasonably determined by the
party obliged to make the determination under Section 6(e) or, if each party is
so obliged, it shall be the average of the Termination Currency Equivalents of
the fair market values reasonably determined by both parties.
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<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 its individual
capacity, but solely as
Trustee for People's Bank Lehman Brothers
Credit Card Master Trust Financial Products, Inc.
- ------------------------ ------------------------
(Name of Party) (Name of Party)
By: /s/ Louis Bodi By: /s/ Florence D. Nolan
-------------- ---------------------
Name: Louis Bodi Name: Florance D. Nolan
Title: Vice President Title: Vice President
Date: April 1, 1998 Date: April 1, 1998
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<PAGE>
EXECUTION COPY
[Series 1998-1]
SCHEDULE
to the
MASTER AGREEMENT
Dated as of April 1, 1998
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.
<PAGE>
"Credit Event Upon Merger" has the meaning specified in Section 5(b) as
it applies to Party B but not Party A. "Materially weaker" as such term is used
in Section 5(b)(iv) means that the resulting, surviving or transferee entity has
suffered a Downgrade (as defined herein except that the resulting, surviving or
transferee entity will replace Party B within the Downgrade definition).
(c) The "Cross-Default" provisions of Section 5(a)(vi) will not apply
to Party A 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"), Moody's Investors Service, Inc.
("Moody's") or Fitch IBCA, Inc. ("Fitch"; Fitch, S&P and Moody's are
collectively referred to herein as the "Rating Agencies") is withdrawn
by any Rating Agency or reduced below AAA by S&P, Aa3 by Moody's or AA-
by Fitch (any 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
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<PAGE>
the Series 1998-1 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 and AA- by Fitch, or
has the Specified Ratings from all the Rating Agencies 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 1998-1 Certificates outstanding immediately prior to the
Downgrade.
(iii) "Specified Ratings" shall mean (A) long term unsecured
debt or long term certificate of deposit ratings of at least Aa3 by
Moody's and at least AA- by Fitch 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."
-3-
<PAGE>
PART 2
Tax Representations
(a) Payer Tax Representations. For the purposes of Section 3(e) of this
Agreement, Party B will make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to Party A under
this Agreement. 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.
- ------- ----------------- ---------------------------------
-4-
<PAGE>
(b) Other documents to be delivered are:
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
required to Covered by
deliver Form/Document/ Date by which Section 3(d)
document Certificate to be delivered Representation
- -------- ----------- --------------- --------------
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 1998-1)
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
-8-
<PAGE>
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, 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.
-9-
<PAGE>
(f) No Personal Liability. In the absence of gross negligence, willful
misconduct, or bad faith on the part of the Trustee, the Trustee will have no
personal liability for any amounts required to be paid by the Trust under this
Agreement.
(g) 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 1998-1 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 1998-1 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 April 1, 1998, 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 amended from time to time, as supplemented by the Series 1998-1
Supplement, dated as of April
-10-
<PAGE>
1, 1998 (the "Supplement") (as so supplemented, the "Pooling and Servicing
Agreement").
(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
-11-
<PAGE>
telephonic confirmation is made promptly, a notice or communication sent via
telecopier will be effective upon receipt.
(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.
(u) Limitation of Liability. It is expressly understood and agreed by
the parties hereto that (a) this Agreement is executed and delivered by Bankers
Trust Company, not individually or personally but solely as Trustee, in the
exercise of the powers and authority conferred and vested in it, and (b) nothing
herein contained shall be construed as creating any liability on Bankers Trust
Company, individually or personally other than solely in its capacity as
Trustee, to perform any covenant either expressed or implied as Trustee, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties who are signatories to
this agreement and by any person claiming by, through or under such parties.
[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 BROTHERS FINANCIAL
its individual capacity but PRODUCTS INC.
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: April 1, 1998 DATE: April 1, 1998
-13-
<PAGE>
EXECUTION COPY
[Series 1998-1]
[Class A]
CONFIRMATION
Date: April 1, 1998
To: Bankers Trust Company,
not in its individual
capacity, but solely as
Trustee for People's Bank
Credit Card Master Trust
Attention:
From: Lehman Brothers Financial Products Inc., (the "Cap
Provider")
Transaction
Reference Number: 51598
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between us on the date hereof. This
letter constitutes a "Confirmation" as referred to in the Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions
(as published by the International Swap Dealers Association, Inc.) (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
(a) This Confirmation supplements, forms a part of, and is subject to,
the Master Agreement dated as of April 1, 1998, 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, 1998, between
People's Bank and the Cap Provider, which supplements the Master Agreement dated
as of March
<PAGE>
18, 1998, between People's Bank and the Cap Provider shall be deemed canceled in
its entirety, and all right, title, obligations and interest created thereunder
shall cease to exist, except that this Confirmation shall be effective.
(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 November, 2002 is U.S.
$343,000,000. Thereafter, the
Notional Amount for the applicable
Calculation Period commencing on
the applicable date specified below
(or, if such day is not a Business
Day, commencing on the following
Business Day) is set forth below
opposite such date:
Notional
Date Amount
---- ------
December 15, 2002 $257,250,000
January 15, 2003 $171,500,000
February 15, 2003 $85,750,000
March 15, 2003 $ 0
Trade Date: March 18, 1998 1/
- --------
1/ This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of April 1, 1998 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, 1998 between People's Bank and Cap Provider. Such confirmations had
a "Trade Date" of March 18, 1998 and an "Effective Date" of April 15,
1998.
-2-
<PAGE>
Effective Date: April 15, 1998 2/
Effective Date
of Assignment: April 1, 1998
Termination Date: The Distribution Date in March, 2003.
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: The Cap Provider
Cap Rate: 9.0% 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".
- --------
2/ See footnote 1.
3/ Pursuant to the Assignment Agreement, under the [Class A] confirmation,
dated March 18, 1998 executed by People's Bank and the Cap Provider,
relating to this Confirmation, the Fixed Amount was U.S.$324,135.
-3-
<PAGE>
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: The Cap Provider
(c) Account Details:
Payments to Bankers Trust
Company, as Trustee
Account for payments: Bankers Trust Company
ABA No.: 021001033
Account No.: 0149647
Reference: People's Bank 1998-1
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: Account 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
-4-
<PAGE>
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 Master Agreement.
Counterparty Credit
Support Documents: None.
Certain Defined Terms:
"Distribution Dates" shall mean May 15, 1998 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
-6-
<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
-------------------------
-7-
<PAGE>
EXECUTION COPY
[Series 1998-1]
[Class B]
CONFIRMATION
Date: April 1, 1998
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: 51611
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 April 1, 1998, 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]
<PAGE>
Confirmation dated March 18, 1998, between People's Bank and the Cap Provider,
which supplements the Master Agreement dated as of March 18, 1998, 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.
(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.$27,000,000
Trade Date: March 18, 1998 1/
Effective Date: April 15, 1998 2/
Effective Date
of Assignment: April 1, 1998
Termination Date: The Distribution Date in April
2003.
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.
- --------
1/ This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of April 1, 1998, 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, 1998 between People's Bank and the Cap Provider. Such confirmations
had a Trade Date of March 18, 1998 and an Effective Date of April 15,
1998.
2/ See footnote 1.
-2-
<PAGE>
Fixed Amount: Zero.3/
Floating Amounts:
Floating Rate Payer: Cap Provider
Cap Rate: 9.0% 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.
- --------
3/ Pursuant to the Assignment Agreement, under the [Class B] Confirmation,
dated March 18, 1998, executed by People's Bank and the Cap Provider,
relating to this Confirmation, the Fixed Amount was U.S.$29,700.
-3-
<PAGE>
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.: 0149647
Reference: People's Bank 1998-1
Attention: Corporate Trust and
Agency Group
Payments to Cap Provider:
Account for payment: The Chase Manhattan Bank,
New York
ABA No.: 021000021
Account No.: 066-289009
Account Name: Account 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 Period.
-4-
<PAGE>
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:
"Distribution Dates" shall mean May 15, 1998 and the fifteenth day of each
calendar month thereafter, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day.
[Rest of page intentionally left blank]
-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
-6-
<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-
EXHIBIT 20
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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 0.00
Class A Investor Charge-Offs 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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
<PAGE>
PEOPLE'S BANK CREDIT CARD MASTER TRUST SERIES 1997-1
MONTHLY SERVICER'S REPORT
MONTHLY SERVICER'S REPORT
Number of Months Series in Existence __
Monthly Period Ended ______________
Distribution Date ______________
Determination Date ______________
Number of Days in Period ___
- --------------------------------------------------------------------------------
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
