Exhibit 4.2
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PEOPLE'S BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1997-1 Certificateholders
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SERIES 1997-1 SUPPLEMENT
Dated as of March [__], 1997
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of March [__], 1997
-----------------------------------
$[ ]
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$[_______________] Floating Rate Class A
Asset Backed Certificates, Series 1997-1
$[_______________] Floating Rate Class B
Asset Backed Certificates, Series 1997-1
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TABLE OF CONTENTS
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Page
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RECITALS........................................................1
SECTION 1. Designation........................................1
SECTION 2. Definitions........................................2
SECTION 2.1 Other Definitional Provisions.....................26
SECTION 3. Conveyance of Interest in Reserve Account.........26
SECTION 4. Minimum Seller Interest, Minimum Aggregate Principal
Receivables and Removal of Accounts...............26
SECTION 5. Reassignment and Transfer Terms...................27
SECTION 6. Delivery and Payment for the Series 1997-1
Certificates......................................27
SECTION 7. Depositary; Form of Delivery of Series 1997-1
Certificates......................................27
SECTION 8. Enhancement.......................................28
SECTION 9. Article IV of Agreement...........................28
ARTICLE IV RIGHTS OF SERIES 1997-1 INVESTOR
CERTIFICATEHOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS....................28
SECTION 4.2A Rights of Series 1997-1 Investor
Certificateholders.........................28
SECTION 4.2B The Series 1997-1 Collection Subaccount....29
SECTION 4.3 Establishment of Series 1997-1 Investor
Accounts...................................31
SECTION 4.4 Allocations................................33
SECTION 4.5 Defaulted Accounts and Charge-Offs.........36
SECTION 4.6 Monthly Payments...........................38
SECTION 4.7 Payment of Investor Certificate Interest...49
SECTION 4.8 Payment of Investor Certificate Principal..49
SECTION 4.9 Establishment of the Reserve Account.......54
SECTION 4.10 Transferor's or Servicer's Failure to Make a
Deposit or Payment. ......................57
SECTION 4.11 Interest Rate Caps. ......................60
SECTION 4.12 Reallocated Principal Collections..........63
SECTION 4.13 Determination of LIBOR.....................64
SECTION 4.14 Discount Option............................65
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Page
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ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTORCERTIFICATEHOLDERS....................66
SECTION 5.1 Distributions..............................66
SECTION 5.2 Monthly Certificateholders' Statement......67
SECTION 9.A Series 1997-1 Pay Out Events......................70
SECTION 10. Series 1997-1 Termination.........................73
SECTION 11. Ratification and Reaffirmation of Pooling and
Servicing Agreement...............................74
SECTION 12. Ratification and Reaffirmation of Representations
and Warranties....................................74
SECTION 13. [RESERVED]........................................74
SECTION 14. No Subordination..................................74
SECTION 15. Repurchase of the Series 1997-1 Certificates......74
SECTION 16. Counterparts......................................76
SECTION 17. Additional Covenants of Transferor................76
SECTION 18. Series 1997-1 Investor Exchange...................76
SECTION 19. Governing Law.....................................77
SECTION 20. Notification to Luxembourg Stock Exchange.........77
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Page
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EXHIBIT 1-A Form of Class A Investor Certificate
EXHIBIT 1-B Form of Class B Investor Certificate
EXHIBIT 2 Form of Monthly Certificateholders' Statement
EXHIBIT 3 DTC Letter of Representations
EXHIBIT 4 Form of Monthly Payment Instructions to Trustee
EXHIBIT 5 Form of Notice to Trustee Regarding Completion
of
Required Deposits and Withdrawals
EXHIBIT 6 Form of Notification to Trustee Regarding
Failure
to Make Payment
EXHIBIT 7 Form of Notification to Trustee Regarding
Withdrawal From the Reserve Account
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SERIES 1997-1 SUPPLEMENT, dated as of March [__], 1997 (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 [ ], 1997 between PEOPLE'S
BANK and the Trustee (the "Pooling and Servicing Agreement").
RECITALS:
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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 Certificates authorized hereby shall be
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designated generally as the "Series 1997-1 Certificates". The Series 1997-1
Certificates shall be issued in two Classes, which shall be designated generally
as the Floating Rate Class A Asset Backed Certificates, Series 1997-1 and the
Floating Rate Class B Asset Backed Certificates, Series 1997-1. In addition,
there is hereby authorized a third Class which constitutes an uncertificated
interest in the Trust, which shall be deemed to be an "Investor Certificate" for
all purposes under the Agreement and this Series Supplement, except as expressly
provided herein, and shall be known as the Collateral Interest, Series 1997-1
and have the rights assigned to the Collateral Interest in this Series
Supplement.
(b) The Collateral Interest Holder, as holder of an "Investor Certificate"
under the Agreement, shall be entitled to the benefits of the Agreement and this
Series Supplement upon payment by the Collateral Interest Holder of amounts
owing on the Closing Date pursuant to the Loan Agreement. Notwithstanding the
foregoing, except as expressly provided herein, the provisions of Article VI and
Article XII of the Agreement relating to the registration, authentication,
delivery, presentation, cancellation and surrender of Registered Certificates
shall not be applicable to the Collateral Interest.
SECTION 2. Definitions. In the event that any term or provision contained
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herein shall conflict with or be inconsistent with any provision contained in
the Pooling and Servicing Agreement, the terms and provisions of this Series
Supplement shall govern. All capitalized terms not otherwise defined herein are
defined in the Pooling and Servicing Agreement. All Article, Section or
subsection references herein shall mean Article, Section or subsections of the
Pooling and Servicing Agreement except as otherwise provided herein. Each
capitalized term used or defined herein shall relate only to the Series 1997-1
Investor Certificates and to no other Series of Certificates issued by the
Trust.
"Accumulation Shortfall" initially shall mean zero and thereafter means,
----------------------
with respect to any Monthly Period during the Controlled Accumulation Period,
the excess, if any, of the Controlled Deposit Amount for the previous Monthly
Period over the amount deposited into the Principal Funding Account pursuant to
subsection 4.8(a)(ii)(A) with respect to the Class A Certificates for the
previous Monthly Period.
"Adjusted Investor Interest" shall mean, on any date of determination, an
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amount equal to the sum of (a) the Class A Adjusted Investor Interest, (b) the
Class B Investor Interest and (c) the Collateral Interest.
"Agreement" shall mean the Pooling and Servicing Agreement as the same may
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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
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Monthly Period, an amount equal to (a) Collections of Principal Receivables
processed on any Date of Processing during such Monthly Period, which were
allocated to the Investor Interest and were deposited in the Principal Account
pursuant to subsection 4.4(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
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pursuant to (x) subsection 4.6(a)(iii) or 4.6(b)(iii) 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, respectively, the Class A Investor
Default Amount or the Class B Investor Default Amount), which shall, without
duplication, be included as Available Investor Principal Collections), plus (d)
Available Shared Principal Collections with respect to such Monthly Period.
"Available Reserve Account Amount" shall mean, as to any Transfer Date, the
--------------------------------
lesser of (a) the amount on deposit in the Reserve Account on such date (after
taking into account any interest and earnings retained in the Reserve Account
pursuant to subsection 4.9(b) on such date, but before giving effect to any
deposit made or to be made pursuant to subsection 4.6(d)(xi) to the Reserve
Account on such date) and (b) the Required Reserve Account Amount.
"Available Shared Principal Collections" shall mean, with respect to any
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Monthly Period, Shared Principal Collections available to be allocated to the
Series 1997-1 Investor Certificates from each other Series [that has a
controlled or scheduled amortization or accumulation period beginning after the
Class B Expected Final Distribution Date].
"Base Rate" shall mean, with respect to any Monthly Period, the weighted
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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) plus [2.00]% per annum.
"Calculation Period" shall have the meaning specified in the applicable
------------------
Interest Rate Cap.
"Certificate Rate" for purposes of Section 17 hereof shall mean, with
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respect to 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.
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"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 Collections
of Finance Charge Receivables (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) with respect to any Monthly
Period during the Controlled Accumulation Period prior to the payment in full of
the Class A Investor Interest, 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 (d) or which will be required to be deposited in the Finance Charge
Account pursuant to such subsections on the related Transfer Date (before giving
effect to any permitted netting) and (d) the proceeds of the sale of any Class A
Interest Rate Cap deposited into the Collection Account during the related
Monthly Period pursuant to subsection 4.11(g).
"Class A Cap Rate" shall mean [____]% per annum.
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"Class A Certificate Rate" shall mean, with respect to the period from and
------------------------
including the Closing Date through and including April 14, 1997, [____]% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to [____]% in excess of LIBOR as determined on the related LIBOR
Determination Date.
"Class A Certificateholder" shall mean the Person in whose name a Class A
-------------------------
Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any of the Floating Rate Class A Asset
--------------------
Backed Certificates, Series 1997-1 executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form of Exhibit 1-A hereto.
"Class A Excess Interest" shall mean, on any date of determination, an
-----------------------
amount equal to the product of (a) the amount by which the Class A Certificate
Rate exceeds the Class A Cap
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Rate, (b) the Class A Excess Principal, if any, and (c) the actual number of
days in the related Interest Accrual Period divided by 360.
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"Class A Excess Principal" shall mean on any date of determination the
------------------------
amount by which the Class A Investor Interest exceeds the Expected Class A
Principal after giving effect to all payments, deposits and withdrawals on such
date.
"Class A 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 A
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 A Floating Allocation" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class A Adjusted Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class A Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class A Initial Investor Interest" shall, on any date of determination,
---------------------------------
mean the aggregate initial principal amount of the Class A Certificates on the
Closing Date, which is $[_______________], less the portion of such amount
represented by Class A Certificates tendered and canceled pursuant to any Series
1997-1 Investor Exchange occurring prior to such date of determination.
"Class A Interest Rate Cap" shall mean the master agreement dated as of
-------------------------
March [__], 1997 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated on or
prior to March [__], 1997 between the Trustee and the Interest Rate Cap
Provider, relating to the Class A Certificates and for the exclusive benefit of
the Class A Certificateholders, or (unless context requires otherwise) any
Replacement Interest Rate Cap or Qualified Substitute Arrangement.
"Class A Investor Allocation" shall mean, with respect to any Monthly
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Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables during the Revolving Period, the Class A
Floating Allocation, and
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(b) with respect to Principal Receivables during the Controlled Accumulation
Period or Rapid Amortization Period, the Class A Fixed Allocation.
"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 Transfer
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Date, an amount equal to the product of (a) the Investor Default Amount for the
related Monthly Period and (b) the Class A Floating Allocation applicable for
the related 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,
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that upon the tender and cancellation of any Class A Certificates pursuant to a
Series 1997-1 Investor Exchange, the amounts stated in clauses (b) and (c) shall
be computed with respect to the Class A Certificates not tendered or canceled
pursuant to such Series 1997-1 Investor Exchange; provided further, however,
---------------- -------
that such Class A Investor Interest may not be reduced below zero.
"Class A Monthly Cap Rate Interest" shall mean, with respect to any
---------------------------------
Distribution Date, an amount equal to the product of (a) the lesser of the Class
A Certificate Rate and the Class A Cap Rate, (b) the Class A Adjusted Investor
Interest as determined as of the preceding Distribution Date or, for the initial
Interest Accrual Period, the Closing Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date or Closing Date as
applicable) and (c) the actual number of days in the related Interest Accrual
Period divided by 360.
"Class A Monthly Interest" shall mean, with respect to any Distribution
------------------------
Date, an amount equal to the sum of (a) the product of (i) the Class A
Certificate Rate and, (ii) the lesser of the Class A Investor Interest as of the
preceding Distribution Date or, for the initial Interest Accrual Period, the
Closing Date (after giving effect to all payments, deposits and withdrawals on
such Distribution Date or Closing Date), and the Expected Class A Principal as
of the preceding Distribution Date and (iii) the actual number of days in the
related Interest Accrual Period divided by 360 and (b) the product of (i) the
Class A Excess Principal, (ii) the lesser of the Class A Certificate Rate and
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Class A Cap Rate and (iii) the actual number of days in the related Interest
Accrual Period divided by 360.
"Class A Monthly Principal" shall mean, with respect to each Transfer Date
-------------------------
relating to the Controlled Accumulation Period or the Rapid Amortization Period,
prior to the payment in full of the Class A Investor Interest, an amount equal
the least of (i) Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date, (ii) for each Transfer
Date with respect to the Controlled Accumulation Period, prior to the Class A
Scheduled Payment Date, the applicable Controlled Deposit Amount for such
Transfer Date, and (iii) the Class A Adjusted Investor Interest prior to any
deposits on such Transfer Date.
"Class A Monthly Servicing Fee" shall mean with respect to the first
-----------------------------
Transfer Date, $0.00 and with respect to any subsequent Transfer Date, one-
twelfth of the product of [2.00]% and the Class A Investor Interest on the last
day of the preceding Monthly Period.
"Class A Notional Amount" shall mean, on any date of determination, an
-----------------------
amount equal to the Executed Class A Principal on such date.
"Class A Required Amount" shall have the meaning specified in subsection
-----------------------
4.6(e).
"Class A Scheduled Payment Date" shall mean the [ ] Distribution
------------------------------
Date.
"Class B Available Funds" shall mean, with respect to any Monthly Period,
-----------------------
an amount equal to the sum of the Class B Floating Allocation of Collections of
Finance Charge Receivables (other than the proceeds of the sale of any Interest
Rate Cap pursuant to Section 4.11(g)) processed on any Date of Processing during
such Monthly Period, which are allocated to the Investor Interest and deposited
in the Finance Charge Account pursuant to Article IV (or which will be deposited
in the Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection 4.2(a) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 4.4(c)(i),
4.4(d)(i) or 4.4(e)(i) as if they had been deposited in the Collection Account
during such Monthly Period), and (b) the proceeds of the sale of any Class B
Interest Rate Cap deposited into the Collection Account during the related
Monthly Period pursuant to subsection 4.11(g).
"Class B Cap Rate" shall mean [____]% per annum.
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"Class B Certificate Rate" shall mean, with respect to the period from and
------------------------
including the Closing Date through and including April 14, 1997, [____]% per
annum, and with respect to each Interest Accrual Period thereafter, a per annum
rate equal to [____]% in excess of LIBOR, as determined on the related LIBOR
Determination Date.
"Class B Certificateholder" shall mean the Person in whose name a Class B
-------------------------
Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any of the Floating Rate Class B Asset
--------------------
Backed Certificates, Series 1997-1 executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form of Exhibit 1-B hereto.
"Class B Excess Interest" shall mean, on any date of determination, an
-----------------------
amount equal to the product of (a) the amount by which the Class B Certificate
Rate exceeds the Class B Cap Rate, (b) the Class B Excess Principal, if any, and
(c) the actual number of days in the related Interest Accrual Period divided by
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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
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$[_______________], less the portion of such amount represented by Class B
Certificates tendered and canceled pursuant to any Series 1997-1 Investor
Exchange occurring prior to such date of determination.
"Class B Interest Rate Cap" shall mean the master agreement dated as of
-------------------------
March [__], 1997 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated on or
prior to March [__], 1997 between the Trustee and the Interest Rate Cap
Provider, relating to the Class B Certificates and for the exclusive benefit of
the Class B Certificateholders, or (unless context requires otherwise) any
Replacement Interest Rate Cap or Qualified Substitute Arrangement.
"Class B Investor Allocation" shall mean, with respect to any Monthly
---------------------------
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables during the Revolving Period, the Class B
Floating Allocation, and (b) with respect to 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, for any Transfer Date, an
-------------------------------
amount equal to the product of (a) the Investor Default Amount for the related
Monthly Period and (b) the Class B Floating Allocation applicable for the
related 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
-----
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, 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,
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that upon the tender and cancellation of any Class B Certificates pursuant to a
Series 1997-1 Investor Exchange, the amounts stated in clauses (b), (c), (d),
(e) and (f) shall be computed with respect to the Class B Certificates not
tendered or canceled pursuant to such Series 1997-1 Investor Exchange; provided
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further, however,
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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, (b) the Class B Investor Interest
as determined as of the preceding Distribution Date or, for the initial Interest
Accrual Period, the Closing Date (after giving effect to all payments, deposits
and withdrawals on such Distribution Date or Closing Date) and (c) the actual
number of days in the related Interest Accrual Period divided by 360.
"Class B Monthly Interest" shall mean, with respect to any Distribution
------------------------
Date, an amount equal to the sum of (a) the product of (i) the Class B
Certificate Rate, (ii) the lesser of the Class B Investor Interest as of the
preceding Distribution Date or, for the initial Interest Accrual Period, the
Closing Date (after giving effect to all payments, deposits and withdrawals on
such Distribution Date or Closing Date) and the Expected Class B Principal as of
the preceding Distribution Date, and (iii) the actual number of days in the
related Interest Accrual Period divided by 360 and (b) the product of (i) the
Class B Excess Principal, (ii) the lesser of the Class B Certificate Rate and
the Class B Cap Rate and (iii) the actual number of days in the related 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 least of (i)
Available Investor Principal Collections on deposit in the Principal Account
(minus the portion of such Available Investor Principal Collections applied to
Class A Monthly Principal on such Transfer Date) and (ii) the Class B Investor
Interest for such Transfer Date.
"Class B Monthly Servicing Fee" shall mean, with respect to the first
-----------------------------
Transfer Date, $0.00, and with respect to any subsequent Transfer Date, one-
twelfth of the product of [2.00]% and the Class B Investor Interest on the last
day of the preceding Monthly Period.
"Class B Notional Amount" shall mean, on any date of determination, an
-----------------------
amount equal to the Expected Class B Principal.
"Class B Payment Commencement Date" shall mean either the Distribution Date
---------------------------------
on which the Class A Investor Interest is
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reduced to zero or, if the Class A Investor Interest is paid in full on the
Class A Scheduled Payment Date and the Rapid Amortization Period has not
commenced, the Distribution Date following the Class A Scheduled Payment
Distribution Date.
"Class B Required Amount" shall have the meaning specified in subsection
-----------------------
4.6(f).
"Class B Scheduled Payment Date" shall mean the [ ] Distribution
------------------------------
Date.
"Closing Date" shall mean March [__], 1997.
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"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 Collections of Finance Charge
Receivables 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 3.2(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, for any Transfer Date an amount
-------------------------
equal to the product of (a) the Investor Default Amount for the related Monthly
Period and (b) the Collateral Floating Allocation applicable for the related
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
- 11 -
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.
"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 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, 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, with respect to the
-----------------------------------------
first Transfer Date, $0.00, and with respect to any subsequent Transfer Date,
one-twelfth of the product of 2.00% and the Collateral Interest on the last day
of the preceding Monthly Period.
"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
- 12 -
Series 1997-1 Investor Certificateholders as of such date) exceeds the Required
Collateral Interest as of such date.
"Collateral Monthly Interest" shall mean, with respect to any Distribution
---------------------------
Date, an amount equal to the product of (i) the Collateral Rate, (ii) the
Collateral Interest as of the last day if the preceding monthly period or, for
the initial Interest Accrual Period, the Closing Date (after giving effect to
all payments, deposits and withdrawals on such Distribution Date or Closing
Date) and (iii) the actual number of days in the related Interest Accrual Period
divided by 360.
"Collateral Monthly Principal" shall mean (a) with respect to any Transfer
----------------------------
Date relating to the Revolving Period, following any reduction of the Required
Collateral Interest effected as described in clause (z) of the proviso of the
definition of "Required Collateral Interest", an amount equal to the lesser of
(x) the Collateral Interest Surplus as of such Transfer Date and (y) the
Available Investor Principal Collections on such Transfer Date, (b) with respect
to any Transfer Date relating to the Controlled Accumulation Period or the Rapid
Amortization Period, as the case may be, an amount equal to the lesser of (x)
the Collateral Interest Surplus as of such Transfer Date and (y) the Available
Investor Principal Collections remaining after allocations to the Series 1997-1
Certificateholders pursuant to Section 4.8 on such Transfer Date.
"Collateral Rate" shall mean [____]% per annum from March [__], 1997
---------------
through May 15, 1997, and with respect to each Interest Accrual Period
thereafter, a per annum rate [__]% in excess of LIBOR, as determined on the
related LIBOR Determination Date.
"Controlled Accumulation Amount" shall mean for any Transfer Date with
------------------------------
respect to the Controlled Accumulation Period prior to the payment in full of
the Class A Investor Interest, $[_________]; provided that if the Controlled
Accumulation Period Length is modified pursuant to subsection 4.8(c), (i) the
Controlled Accumulation Amount for each Transfer Date with respect to the
Controlled Accumulation Period shall mean the amount determined in accordance
with subsection 4.8(c) 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.
"Controlled Accumulation Date" shall mean [_______________].
----------------------------
"Controlled Accumulation Period" shall mean, unless a Pay Out Event shall
------------------------------
have occurred prior to such date, a period
- 13 -
commencing on the Controlled Accumulation Date or such later day as is
determined in accordance with subsection 4.8(c) and continuing to, but not
including, a Pay Out Commencement Date or to, and including, (i) the date of
termination of the Trust pursuant to Section 12.1 of the Agreement or (ii) the
Series 1997-1 Termination Date.
"Controlled Accumulation Period Length" shall have the meaning specified in
-------------------------------------
subsection 4.8(c).
"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)
any existing Accumulation Shortfall.
"Controlled Distribution Amount" shall have the meaning specified in
------------------------------
subsection 4.4(d)(ii).
"Controlled Excess Amount" shall have the meaning specified in subsection
------------------------
4.4(d)(ii).
"Covered Amount" shall mean an amount determined as of each Transfer Date
--------------
with respect to any Interest Accrual Period as the product of (a)(i) a fraction,
the numerator of which is the actual number of days in such Interest Accrual
Period and the denominator of which is 360, times (ii) the Class A Certificate
Rate in effect with respect to such Interest Accrual Period, and (b) 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.
"Definitive Certificates" shall have the meaning specified in Section 6.11.
-----------------------
"Discount Option" shall have the meaning specified in Section 4.14.
---------------
"Discount Percentage" shall have the meaning specified in Section 4.14.
-------------------
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.3(b).
"Distribution Date" shall mean April 15, 1997 and the fifteenth day of each
-----------------
calendar month thereafter, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day; provided, however, that no Distribution Date shall
-------- -------
occur after the earliest to occur of (x) the Distribution Date on which the
Investor Interest has been paid in full, (y) the date of termination of the
Trust pursuant to Section 12.1 of the Agreement, and (z) the Series 1997-1
Termination Date.
- 14 -
"Enhancement" shall mean the subordination of the Collateral Interest to
-----------
the extent provided herein and, with respect to the Class A Certificates, shall
also mean the funds and securities on deposit in the Reserve Account, up to the
Available Reserve Account Amount, and the subordination of the Class B
Certificates to the extent provided herein.
"Enhancement Provider" shall mean, with respect to the Series 1997-1
--------------------
Certificates, the Collateral Interest Holder, and with respect to any other
Series, the applicable provider of credit enhancement, if any.
"Excess Principal Funding Investment Proceeds" shall mean, with respect to
--------------------------------------------
each Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such Transfer
Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" shall mean the sum of the amounts specified pursuant to
-------------
subsections 4.6(a)(v), 4.6(b)(v) and 4.6(c)(ii).
"Expected Class A Principal" shall mean, with respect to any date of
--------------------------
determination, the amount of the Class A Investor Interest that is equal to (a)
on each date to but excluding the [ ] Distribution 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, assuming a Controlled Accumulation
Period commencing [ ], and the number of Distribution Dates occurring from
and including the [ ] Distribution Date, and (c) on each date thereafter,
zero.
"Expected Class B Principal" shall mean, with respect to any date of
--------------------------
determination, the amount of Class B Investor Interest that is equal to (a) 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.
"Fixed Investor Percentage" shall mean, with respect to any Monthly Period,
-------------------------
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 and
the denominator of which is the greater of (a) the aggregate amount of Principal
Receivables in the Trust determined as of the close
- 15 -
of business on the last day of the prior Monthly Period 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; provided
that, if a Reset Date occurs in a Monthly Period, the denominator determined
pursuant to clause (a) hereof for the period from and including such Reset Date
to but excluding the last day of such Monthly Period shall be the aggregate
amount of Principal Receivables in the Trust as of the beginning of the day on
such Reset Date after adjusting for the aggregate amount of Principal
Receivables removed from the Trust on such Reset Date.
"Floating Investor Percentage" shall mean, with respect to any Monthly
----------------------------
Period, the percentage equivalent of a fraction, the numerator of which is the
Adjusted Investor Interest as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, the
Initial Investor Interest) and the denominator of which is the greater of (a)
the aggregate amount of Principal Receivables as of the close of business on the
last day of the preceding Monthly Period (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 with
respect to Finance Charge Receivables, Default Amounts or Principal Receivables,
as applicable, on such date of determination; provided that if a Reset Date
occurs in a Monthly Period, the denominator determined pursuant to clause (a)
hereof for the period from and including such Reset Date to but excluding the
last day of such Monthly Period shall be the aggregate amount of Principal
Receivables in the Trust as of the beginning of the day on such Reset Date after
adjusting for the aggregate amount of Principal Receivables removed from the
Trust on such Reset Date.
"Floating Rate" shall have the meaning specified in the applicable Interest
-------------
Rate Cap.
"Initial Collateral Interest" shall mean the aggregate initial principal
---------------------------
amount of the Collateral Interest on the Closing Date, which is
$[_______________].
"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
- 16 -
the Closing Date) through and including the day preceding the current
Distribution Date.
"Interest Rate Cap" shall mean either the Class A Interest Rate Cap or the
-----------------
Class B Interest Rate Cap.
"Interest Rate Cap Payment" shall mean, with respect to any Distribution
-------------------------
Date, any payment required to be made by an Interest Rate Cap Provider to the
Trust pursuant to an Interest Rate Cap with respect to such Distribution Date.
"Interest Rate Cap Provider" shall mean [_______________], 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 Finance Charge Account, the Distribution
-----------------
Account, the Principal Account and the Principal Funding Account.
"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, with respect to any Distribution
-----------------------
Date, an amount equal to the product of (a) the sum of the Default Amounts for
all Defaulted Accounts during the immediately preceding Monthly Period and (b)
the Floating Investor Percentage (determined on a weighted average basis if a
Reset Date occurs during the related Monthly Period) 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.
- 17 -
"LIBOR" shall mean, for any Interest Accrual Period, the London interbank
-----
offered quotations for one-month Dollar deposits determined for each Interest
Accrual Period in accordance with the provisions of Section 4.13.
"LIBOR Determination Date" shall mean (a) for the initial Interest Period,
------------------------
March [__], 1997 (for the period from and including the Closing Date through and
including April 14, 1997) and (b) for each subsequent Interest Accrual Period,
the second London Banking Day prior to the commencement of such Interest Accrual
Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
--------------
Servicer, the Trustee and the Collateral Interest Holder, dated as of March
[__], 1997, as such agreement may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"London Banking Day" shall mean any day on which commercial banks are open
------------------
for business (including dealings in foreign exchange and deposits in U.S.
dollars) in London.
"Minimum Aggregate Principal Receivables" shall have the meaning specified
---------------------------------------
in Section 4 hereof.
"Minimum Seller Interest" shall have the meaning specified in Section 4
-----------------------
hereof.
"Monthly Investor Servicing Fee" shall mean, with respect to the first
------------------------------
Monthly Period, $0.00, and with respect to each subsequent Monthly Period, an
amount equal to one twelfth of the product of [2.00]% and the Investor Interest
as of the last day of the preceding Monthly Period.
"Monthly Total Principal Allocation" shall mean (a) with respect to any day
----------------------------------
in a Monthly Period, the Principal Allocation for such day plus the sum of all
Principal Allocations on each prior day of such Monthly Period or (b) with
respect to a Monthly Period shall mean the Principal Allocation, if any, for the
last day of such Monthly Period plus the sum of all Principal Allocations on
each prior day of such Monthly Period.
"Pay Out Commencement Date" shall mean, with respect to the Series 1997-1
-------------------------
Investor Certificates, the date on which a Trust Pay Out Event is deemed to
occur or occurs pursuant to Section 9.1 of the Agreement or a Series 1997-1 Pay
Out Event is deemed to occur or occurs pursuant to Section 9A hereof.
"Permitted Investments" shall mean with respect to the Series 1997-1
---------------------
Collection Subaccount, the Investor Accounts and the Reserve Account (a)
negotiable instruments or securities
- 18 -
either represented by instruments in bearer or registered form or book-entry
form at a federal reserve bank or held by a clearing corporation which are
registered in the name of the Trustee upon books maintained for that purpose by
or on behalf of the issuer thereof and identified on books maintained for that
purpose by the Trustee and held for the benefit of the Trust or the
Certificateholders and which evidence (i) direct obligations of the United
States of America or any agency or instrumentality thereof the full and timely
payment of which is guaranteed by the full faith and credit of the United States
of America; (ii) demand deposits, time deposits or certificates of deposit of,
or bankers' acceptances issued by, any depositary institution or trust company
incorporated under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal or state banking or
depositary institution authorities; provided, however, that at the time of the
-------- -------
Trust's investment or contractual commitment to invest therein, the certificates
of deposit or short-term deposits, if any, of such depositary institution or
trust company shall have a credit rating from Standard & Poor's of A-1+, and
either such certificates of deposit or short-term deposits shall have a credit
rating from Moody's of P-1 or the long-term unsecured debt obligations of such
depositary institution or trust company (other than such obligations whose
rating is based on collateral or on the credit of a Person other than such
institution or trust company) shall have a rating from Moody's of at least Aa3,
and the amount of such time deposits, demand deposits or certificates of deposit
are fully insured within the limits of insurance set by the FDIC and the
combined capital, surplus and undivided profits of such depositary institution
or trust company is not less than $3 million; (iii) certificates of deposit
having, at the time of the Trust's investment or contractual commitment to
invest therein, a rating from Moody's and Standard & Poor's of P-1 and A-1+,
respectively; (iv) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from Moody's
and Standard & Poor's of P-1 and A-1+, respectively; and (v) investments in
money market funds registered under the Investment Company Act rated in each
case in the highest investment category by Standard & Poor's and Moody's, or
otherwise approved in writing by the Rating Agency and acceptable to the
Enhancement Provider; and (b) demand deposits in the name of the Trust or the
Trustee, on behalf of the Trust, in any depositary institution or trust company
referred to in clause (a)(ii) above; provided, however, that with respect to any
-------- -------
of the Permitted Investments referred to herein, if requested by the Enhancement
Provider, the Servicer shall furnish to the Enhancement Provider an Opinion of
Counsel, in form and substance satisfactory to the Enhancement Provider and from
counsel reasonably acceptable to it, to the effect that, upon conveyance of
possession or registered ownership to the Trustee or its agent, nominee or
custodian, on behalf of the
- 19 -
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 1997-1 Investor Certificateholders.
Such opinion will be required only with respect to Permitted Investments of a
type that have not previously been the subject of such an opinion or that have
been the subject of a change in law. Notwithstanding the foregoing, if the
Rating Agency rating the Series 1997-1 Investor Certificates is not Standard &
Poor's or Moody's, any investments specified in this definition of "Permitted
Investments" as requiring a specific credit rating from Standard & Poor's or
Moody's must also have a comparable credit rating from, or otherwise be
acceptable to, the Rating Agency rating the Series 1997-1 Investor Certificates,
as confirmed to the Trustee in writing by such Rating Agency, and any
investments specified in this definition of "Permitted Investments" as requiring
written approval from Standard & Poor's or Moody's must also receive written
approval from such other Rating Agency.
"Pool Amount" shall mean, with respect to any Monthly Period, the aggregate
-----------
amount of Principal Receivables as of the close of business on the last day of
such Monthly Period.
"Pool Factor" shall mean, with respect to any Record Date, a number carried
-----------
out to seven decimal places representing the ratio of the Investor Interest as
of the end of the last day of the preceding Monthly Period (determined after
taking into account any increases or decreases in the Investor Interest which
will occur on the following Distribution Date) to the Initial Investor Interest.
"Portfolio Yield" shall mean, with respect to the Series 1997-1 Investor
---------------
Certificates and with respect to 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 and
(iii) the amount of the Reserve Draw Amount (up to the Available Reserve Account
Amount), if any, with respect to such Monthly Period, plus 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 (before giving
effect to any permitted netting) relating to such Monthly Period, and the
denominator of which is the Investor Interest as of the last day of the
preceding Monthly Period.
- 20 -
"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 Funding Account" shall have the meaning specified in subsection
-------------------------
4.3(a).
"Principal Funding Account Balance" shall mean, with respect to any date of
---------------------------------
determination, the principal amount, if any, on deposit in the Principal Funding
Account on such date of determination.
"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 Covered Amount determined as of such Transfer Date.
"Principal Shortfall" shall mean (i) on any Date of Processing for the
-------------------
Series 1997-1 Investor Certificates, the excess of (x) an amount equal to the
sum of the Controlled Deposit Amount and 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 and Standard & Poor's of at least Baa3 and BBB-,
respectively, and the deposits in whose accounts are insured to the limits
provided by law and as required by the FDIC.
- 21 -
"Rapid Amortization Period" shall mean an Amortization Period commencing on
-------------------------
the Pay Out Commencement Date and ending on the earlier to occur of (i) the date
of termination of the Trust pursuant to Section 12.1 or (ii) the Series 1997-1
Termination Date.
"Rating Agency" shall mean, with respect to the Series 1997-1 Certificates,
-------------
each of Moody's and Standard & Poor's.
"Reallocated Class B Principal Collections" shall mean, with respect to any
-----------------------------------------
Transfer Date, Collections of Principal Receivables (including amounts specified
pursuant to subsections 4.6(b)(iii) and (iv), 4.6(d)(ii) and 4.6(f) to be
treated as Collections of Principal Receivables allocable to the Class B
Investor Interest) 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 Collections
of Principal Receivables 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, Collections of Principal Receivables (including amounts
specified pursuant to subsections 4.6(d)(ix) and (x) to be treated as
Collections of Principal Receivables) 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 Collections of Principal Receivables 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 any interest rate cap having
-----------------------------
substantially the same terms and conditions as the Class A Interest Rate Cap or
the Class B Interest Rate Cap, as the case may be, and otherwise satisfying the
conditions set forth in Section 4.11.
- 22 -
"Required Collateral Interest" shall mean (a) initially, the Initial
----------------------------
Collateral Interest and (b) on any Transfer Date thereafter, an amount equal to
[___]% of (1) the sum of the Class A Adjusted Investor Interest and the Class B
Investor Interest on such Transfer Date, in each case after taking into account
all deposits in the Principal Funding Account on such date and payments to be
made on the related Distribution Date, plus (2) the Collateral Interest on the
----
prior Transfer Date, after any adjustments to be made on such Transfer Date, but
not less than $[_______________]; provided that (x) if either (i) there is a
--------
reduction in the Collateral Interest pursuant to clause (c), (d) or (e) of the
definition of such term or (ii) a Pay Out Event with respect to the Series 1997-
1 Investor Certificates has occurred, the Required Collateral Interest for any
Transfer Date shall (subject to clauses (y) and (z) below) equal the Required
Collateral Interest for the Transfer Date immediately preceding such reduction
or Pay Out Event, (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 after taking into account the payments to be made
on the related Distribution Date and (z) the Required Collateral Interest may be
reduced at Transferor's option at any time to a lesser amount if the Transferor,
the Servicer, the Collateral Interest Holder and the Trustee have been provided
with notification in writing by the Rating Agency 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) [.50]%
of the outstanding principal balance of the Class A Certificates 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 Trustee a certificate of an
authorized officer to the effect that, based on the facts known to such officer
at such time, in the reasonable belief of the Transferor, such designation will
not cause a Pay Out Event or an event that, after the giving of notice or the
lapse of time, would cause a Pay Out Event to occur with respect to the Series
1997-1 Investor Certificates.
"Reserve Account" shall have the meaning specified in subsection 4.9(a).
---------------
- 23 -
"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; (b) the first Transfer Date
for which the Portfolio Yield is less than [2.00]%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier than the
Transfer Date with respect to the Monthly Period which commences [twelve] months
prior to the commencement of the Controlled Accumulation Period; (c) the first
Transfer Date for which the Portfolio Yield is less than [3.00]%, but in such
event the Reserve Account Funding Date shall not be required to occur earlier
than the Transfer Date with respect to the Monthly Period which commences [six]
months prior to the commencement of the Controlled Accumulation Period; and (d)
the first Transfer Date for which the Portfolio Yield is less than [4.00]%, but
in such event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period which
commences [four] months prior to the commencement of the Controlled Accumulation
Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date following the
-----------------------
Reserve Account Funding Date, the amount, if any, by which the amount on deposit
in the Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
-------------------
4.9(c).
"Reset Date" shall mean a Removal Date that is not an Expired Accounts
----------
Removal Date.
"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 1997-1 Termination Date" shall mean the [_______________]
----------------------------------------
Distribution Date.
"Series 1997-1" shall mean the Series represented by the Series 1997-1
-------------
Certificates.
"Series 1997-1 Certificateholder" shall mean the holder of record of any
-------------------------------
Series 1997-1 Certificate.
"Series 1997-1 Certificates" shall have the meaning specified in Section 1
--------------------------
of this Series Supplement.
"Series 1997-1 Collection Subaccount" shall have the meaning specified in
-----------------------------------
Section 4.2B.
- 24 -
"Series 1997-1 Investor Certificateholders" shall mean the Series 1997-1
-----------------------------------------
Certificateholders and the Collateral Interest Holder.
"Series 1997-1 Investor Certificates" shall mean the Class A Certificates,
-----------------------------------
the Class B Certificates and the Collateral Interest.
"Series 1997-1 Investor Exchange" shall mean an Investor Exchange pursuant
-------------------------------
to Section 6.9(b) of the Agreement and Section 18 hereof.
"Series 1997-1 Pay Out Event" shall have the meaning specified in Section
---------------------------
9A hereof.
"Series 1997-1 Termination Date" shall mean the earlier to occur of (i) the
------------------------------
day after the Distribution Date on which the Series 1997-1 Investor Certificates
are paid in full or (ii) the Scheduled Series 1997-1 Termination Date.
"Series Account" shall mean the Series 1997-1 Collection Subaccount, the
--------------
Principal 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).
"Series Servicing Fee Percentage" shall mean [2.0]%.
-------------------------------
"Series Supplement" shall have the meaning specified on the first page of
-----------------
this document.
"Shared Finance Charge Collections" shall mean, with respect to any
---------------------------------
Transfer Date, as the context requires, either (a) the amount described in
subsection 4.6(d)(xv) allocated to the Series 1997-1 Investor Certificates but
available to cover shortfalls, if any, in amounts paid from Finance Charge
Collections for other Series, or (b) the aggregate amount allocated to Investor
Certificates of all other Series which the related Supplements specify are to be
treated as "Shared Finance Charge Collections" and which are available for
application pursuant to Sections 4.6(e) and 4.6(f) on such Transfer Date.
"Shared Principal Collections" shall mean, as the context requires, either
----------------------------
(a) the amounts allocated to the Series 1997-1 Investor Certificates which, in
accordance with subsections 4.4(c)(ii), 4.4(d)(ii) and 4.4(e)(ii), may be
applied to Principal Shortfalls with respect to other outstanding Series or (b)
the amounts allocated to the investor certificates (which are not retained by
the Transferor) of other Series which the applicable Supplements for such Series
specify are to be treated as "Shared Principal Collections" and which may be
applied to
- 25 -
cover Principal Shortfalls with respect to the Series 1997-1 Investor
Certificates.
"Telerate Page 3750" shall mean the display page currently so designated on
------------------
the Dow Jones Telerate Service (or such other page as may replace that page on
that service for the purpose of displaying comparable rates or prices).
"Transferor" shall mean People's Bank, a Connecticut capital stock savings
----------
bank, the Seller under the Agreement.
SECTION 2.1 Other Definitional Provisions. Whenever a determination is to
-----------------------------
be made under the Agreement as to whether a given action, course of conduct or
set of facts or circumstances could or would have a material adverse effect on
the Trust or the Series 1997-1 Investor Certificateholders (or any similar or
analogous determination), such determination shall be made without giving effect
to the Enhancement.
SECTION 3. Conveyance of Interest in Reserve Account. The Transferor
-----------------------------------------
and the Trustee intend that the Reserve Account and all property credited
thereto be the property of the Trust for the benefit of the Class A
Certificateholders. If and to the extent the Reserve Account and the property
credited thereto are characterized as property of the Transferor, the Transferor
hereby assigns, sets-over, conveys, pledges and grants a security interest and
lien (free and clear of all other Liens) to the Trustee for the benefit of the
Class A Certificateholders, in all of the Transferor's right, title and interest
(if any) in and to the Reserve Account and the amounts on deposit in the Reserve
Account and all property now or hereafter credited thereto, including but not
limited to Permitted Investments, together with all proceeds thereof, as
collateral security for the amounts payable from time to time to the Trustee,
for the benefit of the Class A Certificateholders.
SECTION 4. Minimum Seller Interest, Minimum Aggregate Principal
----------------------------------------------------
Receivables and Removal of Accounts. (a) The Minimum Seller Interest applicable
- -----------------------------------
to the Series 1997-1 Investor Certificates shall be 7%. The Minimum Aggregate
Principal Receivables shall be the sum of the numerators used to calculate the
Investor Percentage with respect to Principal Receivables for all Series then
outstanding. Upon final payment of the Series 1997-1 Investor Certificates, the
Minimum Aggregate Principal Receivables shall be computed in a manner consistent
with the Agreement or any future Supplement, as appropriate.
- 26 -
(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 1997-1 Investor
-------------------------------
Certificates shall be subject to transfer to the Transferor at its option, in
accordance with the terms specified in subsection 12.2(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial
Investor Interest. The Series 1997-1 Investor Certificates shall be subject to
mandatory transfer to the Transferor, in accordance with the terms specified in
subsection 12.2(a) of the Agreement, on the Distribution Date immediately
preceding the Scheduled Series 1997-1 Termination Date if the Investor Interest
is reduced to an amount less than or equal to 5% of the Initial Investor
Interest and the conditions specified in the proviso to Section 12.2(a) of the
Agreement shall have been satisfied. The deposit required in connection with
any such purchase shall be equal to (a) the Investor Interest, plus (b) accrued
----
and unpaid interest (other than Class A Excess Interest or Class B Excess
Interest, as the case may be) on the Series 1997-1 Investor Certificates through
and including the day preceding the day on which such purchase occurs, plus (c)
all additional amounts then due and payable to the Collateral Interest Holder
under the Loan Agreement, less (d) the amount on deposit in the Finance Charge
----
Account which will be transferred to the Distribution Account pursuant to
Section 4.6 on the related Transfer Date, less (e) the amount on deposit in the
----
Principal Account which will be transferred to the Distribution Account pursuant
to the second paragraph of Subsection 4.8(a) on the related Transfer Date. The
mandatory purchase requirement is in addition to any other provisions and
remedies provided by the Agreement and shall not serve to relieve any party of
obligations it may otherwise have or waive any remedy that is otherwise provided
in the Agreement.
SECTION 6. Delivery and Payment for the Series 1997-1 Certificates. The
-------------------------------------------------------
Transferor shall execute and deliver the Series 1997-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1997-1 Certificates when authenticated in
accordance with Section 6.2 of the Agreement.
SECTION 7. Depositary; Form of Delivery of Series 1997-1 Certificates.
----------------------------------------------------------
(a) The Series 1997-1 Certificates shall be
- 27 -
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 1997-1 Certificates shall be The
Depository Trust Company, and the Class A Certificates and the Class B
Certificates shall be initially registered in the name of CEDE & Co., its
nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1997-1 Investor Certificates, Class A Certificates or Class B
Certificates having Undivided Interests aggregating a specified percentage, such
direction or consent, with respect to the Class A Certificates and the Class B
Certificates, may be given by Certificate Owners having interests in the
requisite percentage of Series 1997-1 Certificates, Class A Certificates or
Class B Certificates, as the case may be, acting through the Clearing Agency and
the Clearing Agency Participants; provided, however, that the Trustee shall only
-------- -------
be obligated to follow such directions or consents from the depositary or
Clearing Agency.
SECTION 8. Enhancement. Enhancement for the Series 1997-1 Certificates
-----------
shall be the subordination of the Collateral Interest to the extent provided
herein, the Interest Rate Caps and, with respect to the Class A Certificates,
the subordination of the Class B Certificates to the extent provided herein.
SECTION 9. Article IV of Agreement. Any provision of Article IV of the
-----------------------
Agreement which distributes Collections to the Holder of the Exchangeable Seller
Certificate on the basis of the Seller Percentage shall continue to apply
irrespective of the issuance of the Series 1997-1 Investor Certificates.
Sections 4.1 and 4.2 of the Agreement shall be read in their entirety as
provided in the Agreement. Article IV of the Agreement (except for Sections 4.1
and 4.2 thereof) shall read in its entirety as follows and shall be applicable
only to the Series 1997-1 Investor Certificates:
- 28 -
ARTICLE IV
RIGHTS OF SERIES 1997-1 INVESTOR CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Series 1997-1 Investor Certificateholders. The
---------------------------------------------------
Series 1997-1 Investor Certificates shall represent fractional Undivided
Interests in the Trust, consisting of the right to receive, to the extent
necessary to make the required payments with respect to such Series 1997-1
Investor Certificates at the times and in the amount specified in this
Agreement, (a) the related Investor Percentage of Collections received with
respect to the Receivables, (b) funds on deposit in the Collection Account and
the Excess Funding Account allocable to the Series 1997-1 Investor Certificates,
(c) funds and securities on deposit in the Finance Charge Account, the Principal
Account, the Distribution Account and the Series 1997-1 Collection Subaccount,
(d) with respect to the Class A Certificates only, funds and securities on
deposit in the Reserve Account, up to the Available Reserve Account Amount, and
the Principal Funding Account and (e) with respect to the Class A Certificates
and the Class B Certificates only,
- 29 -
the right to receive payments pursuant to the Interest Rate Caps in accordance
with Section 4.11. The Collateral Interest shall be subordinate to the Class A
Certificates and the Class B Certificates to the extent described herein. The
Class B Certificates shall be subordinate to the Class A Certificates to the
extent described herein. The Exchangeable Seller Certificate shall represent
the ownership interest in the Trust Assets not allocated to the Series 1997-1
Investor Certificates or any other Series outstanding; provided, however, the
-------- -------
ownership interest represented by the Exchangeable Seller Certificate and any
other Series outstanding shall not represent any interest in the Series 1997-1
Collection Subaccount, the Principal Funding Account, the Reserve Account or the
Interest Rate Caps, except as specifically provided in this Article IV.
SECTION 4.2B The Series 1997-1 Collection Subaccount. Pursuant to Section
---------------------------------------
4.1 of the Agreement, the Servicer, on behalf of the Trustee, shall establish
and maintain a subaccount of the Collection Account to be maintained with a
Qualified Trust Institution, which shall initially be Bankers Trust Company, for
the benefit of the Series 1997-1 Investor Certificateholders, bearing a
designation clearly indicating that the funds therein are held in trust for the
benefit of the Series 1997-1 Investor Certificateholders (the "Series 1997-1
Collection Subaccount"). Funds allocable to the Series 1997-1 Investor
Certificates which are deposited into the Collection Account will be transferred
to the Series 1997-1 Collection Subaccount prior to further application.
References in this Series Supplement to deposits of such funds into the
Collection Account should be read to include such transfers. The Servicer, on
behalf of the Trustee, at all times shall maintain accurate records reflecting
each transaction in the Series 1997-1 Collection Subaccount and that funds held
therein shall at all times be held in trust for the benefit of the Series 1997-1
Investor Certificateholders. Pursuant to the authority granted to it pursuant
to subsection 3.1(b), the Servicer shall have the power, revocable by the
Trustee, to withdraw funds, and to instruct the Trustee to withdraw funds, from
the Series 1997-1 Collection Subaccount for the purpose of carrying out its
duties hereunder. All such instructions from the Servicer to the Trustee shall
be in writing; provided, however, that the Servicer is entitled to give
-------- -------
instructions to the Trustee by facsimile. Funds on deposit in the Series 1997-1
Collection Subaccount (not required to be deposited in the Finance Charge
Account or the Principal Account pursuant to Section 4.4 hereof) shall
- 30 -
at all times be invested by the Trustee, at the direction of the Servicer, in
Permitted Investments. Any such investment shall mature and such funds shall be
available for withdrawal, on the Transfer Date following the Monthly Period in
which such funds were processed for collection; provided, however, that any
-------- -------
Permitted Investment in short term U.S. treasury securities may mature one day
after such Transfer Date and may be sold on such Transfer Date. All interest
and earnings (net of losses and investment expenses) on funds on deposit in the
Series 1997-1 Collection Subaccount shall be deposited by the Trustee in a
separate deposit account with a Qualified Trust Institution in the name of the
Transferor, which shall not constitute a part of the Trust, or shall otherwise
be turned over to the Transferor not less frequently than monthly; provided,
--------
however, that following the failure of the Servicer to make a payment or
- -------
deposit, which failure results in the occurrence of a Servicer Default with
respect to the Series 1997-1 Investor Certificates, such interest and earnings
shall not be paid to the Transferor or deposited in such separate deposit
account during the period such Servicer Default is continuing, but shall be
retained in, or deposited into, the Finance Charge Account and shall be treated
as Collections of Finance Charge Receivables allocable to the Series 1997-1
Investor Certificateholders. The Qualified Trust Institution shall maintain,
either on its own or through its nominee or custodian for the benefit of the
Series 1997-1 Investor Certificateholders, possession of any certificated
negotiable instrument or security (other than certificated securities held by a
clearing corporation) evidencing the Permitted Investments described in clause
(a) of the definition thereof relating to the Collection Account from the time
of purchase thereof until the time of maturity. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
shall instruct the Trustee in writing with respect to the investment of funds on
deposit in the Series 1997-1 Collection Subaccount. For purposes of determining
the availability of funds or the balances in the Series 1997-1 Collection
Subaccount for any reason under this Agreement, all investment earnings on such
funds (net of losses and expenses) shall be deemed not to be available or on
deposit so long as a Servicer Default shall not be continuing pursuant to this
Section 4.2B. Permitted Investments shall not be disposed of prior to their
maturity other than as provided above with respect to short term U.S. treasury
securities.
- 31 -
SECTION 4.3 Establishment of Series 1997-1 Investor Accounts. (a) The
------------------------------------------------ ---
Finance Charge Account, the Principal Account and the Principal Funding Account.
- -------------------------------------------------------------------------------
The Servicer, for the benefit of the Series 1997-1 Investor Certificateholders,
shall establish and maintain with a Qualified Trust Institution, initially
Bankers Trust Company, in the name of the Trustee, on behalf of the Trust, three
segregated trust accounts maintained in the corporate trust department of such
Qualified Trust Institution, and held in trust by such Qualified Trust
Institution (the "Finance Charge Account" and the "Principal Account", and the
"Principal Funding Account", respectively), bearing a designation clearly
indicating that the funds therein are held in trust for the benefit of the
Series 1997-1 Investor Certificateholders. The Servicer, on behalf of the
Trustee (or the Trustee so long as the Finance Charge Account, the Principal
Account or the Principal Funding Account, are established with the Trustee) at
all times shall maintain accurate records reflecting each transaction in the
Principal Account, the Finance Charge Account and the Principal Funding Account,
and that funds held therein shall at all times be held in trust for the benefit
of the Series 1997-1 Investor Certificateholders. Pursuant to the authority
granted to it pursuant to subsection 3.1(b), the Servicer shall have the power,
revocable by the Trustee, to withdraw funds, and to instruct the Trustee to
withdraw funds, from the Finance Charge Account, Principal Account and the
Principal Funding Account for the purpose of carrying out its duties hereunder.
All such instructions from the Servicer to the Trustee shall be in writing;
provided, however, that the Servicer is entitled to give instructions to the
- -------- -------
Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the Series
------------------------
1997-1 Investor Certificateholders, shall cause to be established and maintained
in the name of the Trustee, on behalf of the Trust, with an office or branch of
a Qualified Trust Institution (other than the Transferor), initially Bankers
Trust Company, a non-interest bearing segregated demand deposit account
maintained in the corporate trust department of such Qualified Trust
Institution, and held in trust by such Qualified Trust Institution (the
"Distribution Account") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Series 1997-1
Investor Certificateholders. The Paying Agent shall have the revocable authority
to make withdrawals from the
- 32 -
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. Funds on deposit in Finance Charge Account, the
- -------------------------
Principal Account and the Principal Funding Account shall at all times be
invested by the Trustee at the direction of the Servicer in Permitted
Investments. Any such investment shall mature and such funds shall be available
for withdrawal on or prior to the Transfer Date following the Monthly Period in
which such funds were processed for collection. The Qualified Trust Institution
which holds the Finance Charge Account, the Principal Account and the Principal
Funding Account shall maintain either on its own or through its nominee or
custodian for the benefit of the Series 1997-1 Investor Certificateholders,
possession of any certificated negotiable instrument or security (other than
certificated securities held by a clearing corporation) evidencing the Permitted
Investments relating to the Principal Account, the Finance Charge Account or the
Principal Funding Account, as the case may be, described in clause (a) of the
definition of Permitted Investments from the time of purchase thereof until the
time of maturity; provided, however, that any Permitted Investment in short term
-------- -------
U.S. treasury securities may mature one day after such Transfer Date and may be
sold on such Transfer Date. Subject to the restrictions set forth above, the
Servicer, or a Person designated in writing by the Servicer, 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.
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
- 33 -
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.
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, 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 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 to
subsection 4.9. 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
- 34 -
or the Principal Funding Account, as the case may be) the following amounts as
set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the sum of
(x) the product of (A) the applicable Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of Processing
and (y) the proceeds of the sale of any Interest Rate Cap pursuant to subsection
4.11(g) on such Date of Processing.
(ii) Deposit in the Principal Account an amount equal to the product of
(A) the applicable Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of such Collections processed in
respect of Principal Receivables on such Date of Processing; provided, however,
-------- -------
that if the amount deposited into the Principal Account pursuant to this
subsection 4.4(c)(ii) exceeds the Collateral Interest Surplus, if any, as of
such Date of Processing then such excess shall not be treated as a Principal
Allocation and shall be treated as Shared Principal Collections allocable to
other Series and applied in accordance with Section 4.2(e) of the Agreement;
provided further that, if on any Date of Processing the aggregate amount of
- -------- -------
Collections deposited in the Principal Account on such Date of Processing
pursuant to this subsection 4.4(c)(ii) is less than an amount equal to the
Collateral Interest Surplus, then Shared Principal Collections from other
Series, if any, allocable to the Series 1997-1 Investor Certificates will be
deposited to the Principal Account in accordance with 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, as the case may be) 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
- 35 -
applicable Investor Percentage on the Date of Processing of such Collections and
(B) the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing and (y) the proceeds of the sale of any
Interest Rate Cap pursuant to subsection 4.11(g) on such Date of Processing.
(ii) Deposit in the Principal Account an amount, if any, equal to the
product of (A) the applicable Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of such Collections processed in
respect of Principal Receivables on such Date of Processing (for any such Date
of Processing, a "Principal Allocation"); provided, however, that if the Monthly
-------- -------
Total Principal Allocation on such Date of Processing exceeds 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 or the Class B Investor
Interest, as applicable, and the Collateral Interest Surplus, then Shared
Principal Collections from other Series, if any, allocable to the Series 1997-1
Investors 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:
- 36 -
(i) Deposit in the Finance Charge Account an amount equal to the sum
of (x) the product of (A) the applicable Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of such Collections
processed in respect of Finance Charge Receivables on such Date of Processing
and (y) the proceeds of the sale of any Interest Rate Cap pursuant to subsection
4.11(g).
(ii) Deposit in the Principal Account an amount equal to the Principal
Allocation; provided, however, that after the date on which the Investor
-------- -------
Interest has been reduced to zero, the amount determined in accordance with this
subparagraph (ii) shall be treated as Shared Principal Collections allocable to
other Series and applied in accordance with Section 4.2(e) of the Agreement;
provided, further, that if on any Date of Processing the Monthly Total Principal
- -------- -------
Allocation for such Date of Processing in such Monthly Period is less than the
aggregate outstanding principal amount of the Series 1997-1 Investor
Certificates, then Shared Principal Collections from other Series, if any,
allocable to the Series 1997-1 Investor Certificates pursuant to Section 4.2(e)
of the Agreement will be deposited in the Principal Account to the extent of
such shortfall.
SECTION 4.5 Defaulted Accounts and Charge-Offs. (a) On each
----------------------------------
Determination Date, the Servicer shall calculate the Class A Investor Default
Amount for the preceding Monthly Period. If on the related Transfer Date, the
Class A Investor Default Amount for such Determination Date exceeds the sum of
the amounts allocated with respect thereto pursuant to subsections 4.6(a)(iii),
4.6(d)(i), 4.6(e) and 4.12(a) with respect to such preceding Monthly Period,
then the Collateral Interest (after giving effect to reductions for any
Collateral Interest Charge-Offs and any Reallocated Principal Collections on
such Transfer Date) will be reduced by the amount of such excess, but not by
more than the lesser of the Class A Investor Default Amount and the Collateral
Interest (after giving effect to reductions for any Collateral Interest Charge-
Offs and any Reallocated Principal Collections on such Transfer Date) for such
Transfer Date. If such reduction would cause the Collateral Interest to be a
negative number, the Collateral Interest will be reduced to zero, and the Class
B Investor Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal
- 37 -
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 lesser of the Class B Investor
Default Amount and 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)) 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 (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
- 38 -
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), (x) [and (xii)] 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 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 Reserve Account, pursuant to subsection
4.6(e). Any such withdrawal from the Reserve Account shall be made on the date
provided in this Section 4.6 with respect to such withdrawal.
(a) On each Transfer Date, an amount equal to the Class A Available Funds
will be distributed in the following priority:
(i) Class A Monthly Cap Rate Interest and the Covered Amount. On each
--------------------------------------------------------
Transfer Date, the
- 39 -
Servicer or the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Finance Charge Account and deposit to the
Distribution Account, to the extent funds are available from Class A Available
Funds (i) first, an amount equal to the sum of the Class A Monthly Cap Rate
Interest and the 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 Covered Amount, for which a payment has not been made under
this subsection 4.6(a)(i) or otherwise pursuant to this Agreement; provided,
--------
however, that with respect to the first Distribution Date relating to the Series
- -------
1997-1 Investor Certificates, the amount of Class A Monthly Cap Rate Interest
referred to in (i) above shall be $[ ] (reflecting an initial period of
[___] days).
(ii) Class A Monthly Servicing Fee. On each Transfer Date, the Servicer
-----------------------------
or the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are available from
Class A Available Funds after giving effect to the withdrawals pursuant to
subsection 4.6(a)(i), an amount equal to the Class A Monthly Servicing Fee
accrued in respect of the preceding Monthly Period, plus all accrued and unpaid
Class A Monthly Servicing Fees in respect of previous Monthly Periods, and the
Servicer or the Trustee, as the case may be, shall pay such amount to the
Servicer.
(iii) Class A Investor Default Amount. On each Transfer Date, the Servicer
-------------------------------
or the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are available from
Class A Available Funds after giving effect to the withdrawal pursuant to
subsections 4.6(a)(i) and (ii), an amount equal to the Class A Investor Default
Amount, if any, for the preceding Monthly Period, and the Servicer or the
Trustee, as the case may be, shall apply such amount in accordance with Section
4.8, as if such amount were Collections of Principal Receivables.
- 40 -
(iv) Reimbursement of Class A Investor Charge-Offs. On each Transfer
---------------------------------------------
Date, the Servicer or the Trustee, acting in accordance with instructions of the
Servicer, shall withdraw from the Finance Charge Account, to the extent funds
are available from Class A Available Funds after giving effect to the
withdrawals and transfers pursuant to subsections 4.6(a)(i) through (iii), an
amount equal to the aggregate amount of Class A Investor Charge-Offs, if any,
which have not theretofore been reimbursed pursuant to this subsection
4.6(a)(iv) or otherwise pursuant to the Agreement and shall apply such amount in
accordance with Section 4.8, as if such amount were Collections of Principal
Receivables. On the date of any such reimbursement, the Class A Investor
Interest shall be increased by the amount of such reimbursement of Class A
Investor Charge-Offs.
(v) Excess Spread. The remaining Class A Available Funds, if any, shall
-------------
constitute Excess Spread and shall be allocated and distributed as set forth in
subsection 4.6(d).
(b) On each Transfer Date, an amount equal to Class B Available Funds will
be distributed in the following priority:
(i) Class B Monthly Cap Rate Interest. On each Transfer Date, the Servicer
---------------------------------
or the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account and deposit to the Distribution
Account, to the extent funds are available from Class B Available Funds, (i)
first, an amount equal to the Class B Monthly Cap Rate Interest for the related
Distribution Date; and (ii) then, an amount equal to the amount of any overdue
Class B Monthly Cap Rate Interest, for which a payment has not been made under
this subsection 4.6(b)(i) or otherwise pursuant to the Agreement; provided,
--------
however, that with respect to the first Distribution Date relating to the Series
- -------
1997-1 Investor Certificates, the amount referred to in (i) above shall be
$[___________] (reflecting an initial period of [ ] days).
(ii) Class B Monthly Servicing Fee. On each Transfer Date, the Servicer
-----------------------------
or the Trustee, acting
- 41 -
in accordance with instructions from the Servicer, shall withdraw from the
Finance Charge Account, to the extent funds are available from Class B Available
Funds after giving effect to the withdrawals pursuant to subsection 4.6(b)(i),
an amount equal to the Class B Monthly Servicing Fee accrued in respect of the
preceding Monthly Period, plus all accrued and unpaid Class B Monthly Servicing
Fees in respect of previous Monthly Periods, and the Servicer or the Trustee, as
the case may be, shall pay such amount to the Servicer.
(iii) Class B Investor Default Amount. On each Transfer Date, the Servicer
-------------------------------
or the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are available from
Class B Available Funds after giving effect to the withdrawal pursuant to
subsections 4.6(b)(i) and (ii), an amount equal to the Class B Investor Default
Amount, if any, for the preceding Monthly Period, and the Servicer or the
Trustee, as the case may be, shall apply such amount in accordance with Section
4.8 as if such amount were Collections of Principal Receivables allocable to the
Class B Investor Interest.
(iv) Reimbursement of Class B Investor Charge-Offs. On each Transfer
---------------------------------------------
Date, the Servicer or the Trustee, acting in accordance with instructions of the
Servicer, shall withdraw from the Finance Charge Account, to the extent funds
are available from Class B Available 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
in accordance with Section 4.8 as if such amounts were Collections of Principal
Receivables allocable to the Class B Investor Interest. On the date of any such
reimbursement, the Class B Investor Interest shall be increased by the amount of
such reimbursement of Class B Investor Charge-Offs.
- 42 -
(v) Excess Spread. The remaining Class B Available Funds, if any,
-------------
shall constitute Excess Spread and shall be allocated and distributed as set
forth in subsection 4.6(d).
(c) On each Transfer Date, an amount equal to the Collateral Available
Funds will be distributed in the following priority:
(i) Collateral Monthly Servicing Fee. On each Transfer Date, the
--------------------------------
Servicer or the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Finance Charge Account, to the extent funds
are available from Collateral Available Funds, an amount equal to the Collateral
Interest Monthly Servicing Fee accrued in respect of the preceding Monthly
Period plus all accrued and unpaid Collateral Interest Monthly Servicing Fees in
respect of previous Monthly Periods, and the Servicer or the Trustee, as the
case may be, shall pay such amount to the Servicer.
(ii) Excess Spread. The remaining Collateral Available Funds, if any,
-------------
shall constitute Excess Spread and shall be allocated and distributed as set
forth in subsection 4.6(d).
(d) On each Transfer Date, an amount equal to Excess Spread will be
distributed in the following priority:
(i) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess Spread, an amount
equal to the Class A Required Amount, if any, with respect to the related
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).
- 43 -
(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 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 in accordance with subsection 4.12(b) as if such amounts were
Collections of Principal Receivables allocable to the Class B Investor Interest.
(vi) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, 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
- 44 -
Collateral Monthly Interest for the related Monthly Period and (y) the amount of
any accrued and unpaid Collateral Monthly Interest for any prior Monthly
Periods.
(vii) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess Spread after
giving effect to the withdrawals pursuant to subsections 4.6(d)(i) through (vi),
and shall deposit in the Distribution Account for distribution to the Class A
Certificateholders on the next succeeding Distribution Date pursuant to Section
4.7, an amount equal to the amount by which the Class A Monthly Interest for the
related Interest Accrual Period exceeds the Class A Monthly Cap Rate Interest
(other than Class A Excess Interest), to the extent such amount is not paid by
the Interest Rate Cap Provider pursuant to the Class A Interest Rate Cap in
accordance with Section 4.11(a), plus any such amounts accrued and unpaid for
prior Interest Accrual Periods.
(viii) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess Spread after
giving effect to the withdrawals pursuant to subsections 4.6(d)(i) through
(vii), and shall deposit in the Distribution 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 in accordance with Section 4.8 as
if such amounts were Collections of Principal Receivables allocable to the
Collateral Interest.
(x) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the
- 45 -
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 in
accordance with Section 4.8 as if such amounts were Collections of Principal
Receivables allocable to the Collateral Interest.
(xi) On each Transfer Date from and after the Reserve Account Funding
Date to but excluding the date on which the Reserve Account shall terminate
pursuant to subsection 4.9(f), the Servicer or the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw from the Finance Charge
Account, to the extent funds are available from Excess Spread after giving
effect to the withdrawals pursuant to subsections 4.6(d)(i) through (x), and
shall deposit in the Reserve Account, an amount equal to the excess, if any, of
the Required Reserve Account Amount over the Available Reserve Account Amount
(without giving effect to any deposit made on such date hereunder).
(xii) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess Spread after
giving effect to the withdrawals pursuant to subsections 4.6(d)(i) through (xi),
an amount equal to the aggregate amount of any additional amounts due and
payable under the Loan Agreement, which amount shall be applied and distributed
in accordance with and to the extent specified in the Loan Agreement.
(xiii) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess Spread after
giving effect to the withdrawals pursuant to subsections 4.6(d)(i) through
(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
- 46 -
Servicer, shall withdraw from the Finance Charge Account, to the extent funds
are available from Excess Spread after giving effect to the withdrawals pursuant
to subsections 4.6(d)(i) through (xiii), and shall deposit in the Distribution
Account for distribution to the Class B Certificateholders on the next
succeeding Distribution Date pursuant to Section 4.7, an amount equal to the
amount of any Class B Excess Interest which accrued during the related Interest
Accrual Period.
(xv) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess Spread after
giving effect to the withdrawals pursuant to subsections 4.6(d)(i) through
(xiv), and shall make such amounts available to be applied as Shared Finance
Charge Collections to pay to Certificateholders of other Series to the extent of
shortfalls, if any, in amounts payable to such Certificateholders from Finance
Charge Collections allocated to such other Series in accordance with the related
Supplements.
(xvi) On each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the Finance
Charge Account, to 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 Covered Amount for such Distribution Date and Covered Amounts previously due
- 47 -
but not paid to the Class A Certificateholders on a prior Distribution Date,
(iv) the Class A Monthly Servicing Fee for the related Transfer 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 such Transfer Date 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 Excess Spread with respect to the related Monthly Period in an
amount up to the Class A Required Amount for such Distribution Date shall be
distributed from the Finance Charge Account on the related Transfer Date
pursuant to subsection 4.6(d)(i). In the event that the Class A Required Amount
for such Distribution Date exceeds the amount of Excess Spread with respect to
the related Monthly Period, then the Trustee shall, in accordance with the
related Supplements, withdraw on such Transfer Date from the finance charge
accounts for other Series the amounts of Shared Finance Charge Collections with
respect to the related Monthly Period, if any, allocable to the Series 1997-1
Investor Certificates from other Series, in an amount up to the remaining Class
A Required Amount, and such amount shall be deposited into the Distribution
Account on such Transfer Date for distribution on the related Distribution Date
in accordance with the priorities set forth in subsections 4.6(a)(i) through
(iv). In the event that the Class A Required Amount for such Distribution Date
exceeds the amount of Excess Spread and Shared Finance Charge Collections
allocable to the Class A Certificates, all or a portion of the Reallocated
Principal Collections with respect to such Monthly Period in an amount up to
such excess shall be distributed on such Transfer Date pursuant to subsection
4.12(a).
(f) With respect to each Distribution Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class B Required Amount"),
if any, by which the sum of (i) Class B Monthly Cap Rate Interest for such
Distribution Date, (ii) any Class B Monthly Cap Rate Interest previously due but
not paid to the Class B Certificateholders on a prior
- 48 -
Distribution Date, (iii) the Class B Monthly Servicing Fee for the related
Transfer 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
such Transfer Date, and (v) the unreimbursed Class B Investor Charge-Offs,
exceeds the Class B Available Funds deposited in the Finance Charge Account for
the related Monthly Period. In the event that the Class B Required Amount for
the related Transfer Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive Class B Required Amount on the related
Determination Date and all or a portion of Excess Spread (other than Excess
Spread applied to fund the Class A Required Amount with respect to such
Distribution Date) with respect to the related Monthly Period shall be
distributed from the Finance Charge Account on such Distribution Date pursuant
to subsection 4.6(d)(ii). In the event that the Class B Required Amount for such
Distribution Date exceeds the amount of Excess Spread with respect to such
Monthly Period remaining after application thereof to fund the Class A Required
Amount, then the Trustee shall, in accordance with the related Supplements,
withdraw on such Transfer Date from the finance charge accounts for other Series
the amounts of Shared Finance Charge Collections with respect to the related
Monthly Period, if any, allocable to the Series 1997-1 Investor Certificates
from other Series, after the application thereof pursuant to subsection 4.6(e),
in an amount up to the remaining Class B Required Amount, and such amount shall
be deposited to the Distribution Account on such Transfer Date on the related
Distribution Date in accordance with the priorities set forth in subsections
4.6(b)(i) through (iv). In the event that the Class B Required Amount for such
Distribution Date exceeds the amount of Excess Spread and Shared Finance Charge
Collections allocable to the Class B Certificates on such Transfer Date, all or
a portion of the Reallocated 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)(vi) through (x)
exceed
- 49 -
in whole or in part the Excess Spread allocable thereto on to such Transfer
Date, then the Trustee shall, in accordance with the related Supplements,
withdraw on such Transfer Date from the finance charge accounts for other Series
the amounts of Shared Finance Charge Collections with respect to the related
Monthly Period, if any, allocable to the Series 1997-1 Investor Certificates
from other Series, after the application thereof pursuant to subsections 4.6(e)
and (f), in an amount up to such excess or such lesser amount as may be
available after the application thereof pursuant to subsections 4.6(e) and (f),
and such amount shall be distributed to the Servicer on such Transfer Date in
accordance with Section 4.6(c)(i) and then applied in accordance with the
priorities set forth in subsections 4.6(d)(v) through (x).
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, (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 and (c) to the Collateral Interest
Holder from the Distribution Account the amount deposited into the Distribution
Account and allocated to the Collateral Interest pursuant to subsections
4.6(d)(vi) and (xii) and 4.6(g) on the related Transfer Date.
SECTION 4.8 Payment of Investor Certificate Principal. (a) On each
-----------------------------------------
Determination Date, Servicer shall instruct Trustee to withdraw, and 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
- 50 -
Principal Collections for the related Monthly Period shall be distributed on
each Transfer Date, to the extent available, in the following priority:
(A) an amount equal to the Collateral Monthly Principal with respect
to such Transfer Date shall be distributed to the Collateral Interest Holder in
accordance with the Loan Agreement; and
(B) the remaining Available Investor Principal Collections, if any,
shall constitute Shared Principal Collections to be deposited and applied in the
manner specified in subsection 4.2(e) of the Agreement.
(ii) on each Transfer Date with respect to the Controlled Accumulation
Period (beginning on the first Transfer Date following the Monthly Period in
which the Controlled Accumulation Period commences), to the extent available, in
the following priority:
(A) on each Transfer Date occurring prior to the Class A Scheduled Payment
Date, an amount equal to the Class A Monthly Principal shall be deposited into
the Principal Funding Account;
(B) on the Transfer Date immediately following 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 (i) and (ii), an amount equal to the Collateral Monthly
Principal with respect to such Transfer Date will be paid to the Collateral
Interest Holder in accordance with the Loan Agreement; and
(D) the remaining Available Investor Principal Collections, if any,
shall constitute Shared Principal Collections to be deposited and applied in the
manner specified in subsection 4.2(e) of the Agreement.
(iii) on each Transfer Date with respect to the Rapid Amortization Period
(beginning on the first Transfer Date following the Monthly Period in which the
Rapid Amortization Period commences), to the extent available, in the following
priority:
- 51 -
(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 deposited in the Distribution Account for distribution to the Collateral
Interest Holder; and
(D) the remaining Available Investor Principal Collections, if any,
shall constitute Shared Principal Collections to be deposited and applied in the
manner specified in subsection 4.2(e) of the Agreement;
provided, further, that on each Transfer Date in the Controlled Accumulation
- -------- -------
Period, the Servicer shall withdraw, or instruct the Trustee to withdraw, and on
such Transfer Date the Trustee shall withdraw, from the Excess Funding Account
and deposit to the Principal Funding Account, an amount equal to the lesser of
(x) the amount on deposit therein (exclusive of investment earnings) and (y) the
amount by which the Controlled Deposit Amount exceeds the Available Investor
Principal Collections on such Transfer Date; provided, further, that on the
-------- -------
first Transfer Date in the Rapid Amortization Period, the Servicer shall
withdraw, or instruct the Trustee to withdraw, and on such Transfer Date the
Trustee shall withdraw, from the Excess Funding Account and deposit to the
Distribution Account, any amount on deposit therein (exclusive of investment
earnings).
(b) 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 Servicer, shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in the
Principal Funding Account. On each Distribution Date, the Trustee shall
distribute the funds in the Distribution Account in accordance with Section 5.1.
On the Determination Date preceding the final Transfer Date, the Servicer
shall determine the amounts to be deposited pursuant
- 52 -
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 in 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 Collections of Principal
Receivables 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 Sections 5 or 15 of the
Series Supplement relating to the Series 1997-1 Investor Certificates, the
Paying Agent shall pay in accordance with Section 5.1 to the Series 1997-1
Investor Certificateholders from the Distribution Account, the amount so
deposited into the Distribution Account.
(d) The Controlled Accumulation Period is scheduled to commence at the
close of business on the Controlled Accumulation Date; provided that if the
Controlled Accumulation Period Length (determined as described below) on any
Determination Date on or after the December 2000 Determination 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); 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 on and after the December 2000 Determination Date but 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
- 53 -
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 Collections of Principal
Receivables remains constant at the lowest level of such payment rate during the
twelve preceding Monthly Periods (or such lower payment rate as Servicer may
select), (2) the total amount of Principal Receivables in the Trust (and the
principal amount on deposit in the Excess Funding Account, if any) remains
constant at the level on such date of determination, (3) no Pay Out Event with
respect to any Series will subsequently occur and (4) no additional Series
(other than any Series being issued on such date of determination) will be
subsequently issued.
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, and the Servicer shall establish any and all subaccounts or
administrative subaccounts to the Reserve Account specified in the Loan
Agreement. 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
- 54 -
investments to such new Reserve Account. From the date such new Reserve Account
is established, it shall be the "Reserve Account." The Trustee, acting in
accordance with instructions from the Servicer, shall (i) make withdrawals from
the Reserve Account from time to time in an amount up to the Available Reserve
Account Amount at such time, for the purposes set forth in this Series
Supplement, and (ii) on each Transfer Date (from and after the Reserve Account
Funding Date) prior to the termination of the Reserve Account pursuant to
Section 4.9(f) make a deposit into the Reserve Account in the amount specified
in, and otherwise in accordance with, subsection 4.6(d)(xi).
(b) Administration of the Reserve Account. Funds on deposit in the
-------------------------------------
Reserve Account on any Transfer Date, after giving effect to any deposits to or
withdrawals from the Reserve Account on such Transfer Date, shall be invested by
the Trustee at the direction of the Servicer in Permitted Investments that will
mature so that such funds will be available for withdrawal on or prior to the
following Transfer Date[; provided, however, that no such investment shall be
-------- -------
made before 2:00 p.m. (New York City time) on such Transfer Date;] and provided,
--------
further, that each Permitted Investment shall mature not later than the Business
- -------
Day preceding 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 the preceding paragraph,
all investment earnings on such funds shall be deemed not to be available or on
deposit.
- 55 -
(c) Calculation of Reserve Draw Amount. On or before each Transfer Date
----------------------------------
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest and on or before the first Transfer Date with
respect to the Rapid Amortization Period, the Servicer shall calculate the
"Reserve Draw Amount" which shall be equal to the Principal Funding Investment
Shortfall with respect to each Transfer Date with respect to the Controlled
Accumulation Period or the first Transfer Date with respect to the Rapid
Amortization Period less, in each case, the amount of funds deposited into the
Finance Charge Account on such Transfer Date pursuant to subsection 4.9(b). If
the Reserve Draw Amount for any Transfer Date is greater than zero, the Servicer
shall give written notice to the Trustee, in substantially the form of Exhibit 7
to this Supplement of such positive Reserve Draw Amount.
(d) Withdrawal of Reserve Draw Amount. If the Reserve Draw Amount for any
---------------------------------
Transfer Date is greater than zero, the Trustee, acting in accordance with the
instructions of the Servicer, shall withdraw from the Reserve Account an amount
equal to the lesser of (x) such Reserve Draw Amount and (y) the Available
Reserve Account Amount as of such Transfer Date, and shall deposit such amount
into the Finance Charge Account and included in Class Available Funds for such
Transfer Date.
(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) the
first Transfer Date relating to the Rapid Amortization Period, and (iii) 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
- 56 -
the Reserve Account and pay in accordance with the Loan Agreement, all amounts,
if any, on deposit in the Reserve Account and the Reserve Account shall be
deemed to have terminated for purposes of this Series Supplement.
SECTION 4.10 Transferor's or Servicer's Failure to Make a Deposit or
-------------------------------------------------------
Payment. (a) If the Servicer fails to make, or to give instructions to make,
- -------
any payment or deposit (other than as required by subsection 2.4(d) (except as
provided in the immediately following paragraph), 2.4(e), 2.4(f), 3.3, 9.2,
10.2, or 12.2(a) of the Agreement, or Sections 4 or 15 of this Series Supplement
(collectively, "Excluded Payments")) relating to the Series 1997-1 Investor
Certificates required to be made or given by the Servicer on the related
Transfer Date at the time specified in the Agreement (including applicable grace
periods), the Trustee shall make such payment or deposit from the applicable
Investor Account without instruction from the Servicer. The Trustee shall be
required to make any such payment, deposit or withdrawal hereunder only to the
extent that it has sufficient information to allow the Trustee to determine the
amount thereof; provided, however, that the Trustee shall in all cases be deemed
-------- -------
to have sufficient information to determine the amount of interest (i) required
to be paid or provided for under subsections 4.6(a)(i), (b)(i) and (d)(vi) on
each Transfer Date, and (ii) payable to the Series 1997-1 Investor
Certificateholders on each Distribution Date. The Servicer shall, upon request
of the Trustee, promptly provide the Trustee with all information necessary to
allow the Trustee to make such a payment or withdrawal. Such funds or the
proceeds of such withdrawal shall be applied by the Trustee in the manner in
which such payment or deposit should have been made by the Transferor or the
Servicer, as the case may be.
SECTION 4.11 Interest Rate Caps. (a) The Trustee hereby acknowledges
------------------
that the Class A Interest Rate Cap has been obtained for the benefit of the
Class A Certificateholders and the Class B Interest Rate Cap for the benefit of
the Class B Certificateholders. Each of the Interest Rate Caps provides that
(i) the Trust shall not be required to make any payments thereunder and (ii) the
Trust shall be entitled to receive a payment (determined in accordance with the
respective Interest Rate Cap) from the Interest Rate Cap Provider on or prior to
each Transfer Date if LIBOR plus [_____]% for the related Interest Accrual
Period exceeds the Class A Cap Rate or LIBOR plus [_____]% for the related
Interest Accrual Period exceeds the Class B
- 57 -
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 [_____]% exceeds the Class A Cap Rate or, in the case of the
Class B Interest Rate Cap, LIBOR plus [_____]% exceeds the Class B Cap Rate, as
applicable, (ii) the Class A Notional Amount or the Class B Notional Amount, as
applicable, for the related Calculation Period, and (iii) the actual number of
days in such Calculation Period divided by 360. Payments pursuant to the Class
A Interest Rate Cap will be deposited in the Distribution Account for payment to
the Class A Certificateholders on the following Distribution Date. Payments
pursuant to the Class B Interest Rate Cap will be deposited in the Distribution
Account for payment to the Class B Certificateholders on the following
Distribution Date.
(b) In the event that either (I) the short term unsecured debt or short
term certificate of deposit rating of the Interest Rate Cap Provider is
withdrawn or reduced below A-1+ by Standard & Poor's or (II) the long term
unsecured debt or long term certificate of deposit rating of the Interest Rate
Cap Provider is withdrawn or reduced below Aa3 by Moody's, then within 60 days
(in the case of a withdrawal or reduction by Standard & Poor's) or 30 days (in
the case of a withdrawal or reduction by Moody's) after such decline in the
creditworthiness of the Interest Rate Cap Provider as determined by the
applicable Rating Agency (notice of which the Interest Rate Cap Provider shall
provide to the Trustee and the Servicer promptly upon obtaining knowledge
thereof), the Interest Rate Cap Provider, at its own expense, will either (x)
obtain a Replacement Interest Rate Cap for each Interest Rate Cap under which it
is then currently an obligor or (y) enter into a Qualified Substitute
Arrangement. Upon receipt of notice of any such reduction or withdrawal, the
Trustee, at the direction of the Servicer, shall at its option either (i) with
the prior written confirmation of the applicable Rating Agency that such action
will not result in a reduction or withdrawal of the rating of the Class A
Certificates or the Class B Certificates, use its best efforts to (1) cause the
Interest Rate Cap Provider to pledge securities in the manner provided by
applicable law or (2) otherwise cause to be pledged securities, which in each
case shall be held by the Trustee, its custodian, or its agent free and clear of
the Lien of any third party, in a manner conferring on the Trustee a perfected
first Lien in
- 58 -
such securities securing the Interest Rate Cap Provider's performance of its
obligations under the applicable Interest Rate Cap or Caps, or (ii) provided
that, for each Interest Rate Cap under which such Interest Rate Cap Provider is
then currently an obligor, a Replacement Interest Rate Cap or Qualified
Substitute Arrangement meeting the requirements of Section 4.11(c) has been
obtained or will be obtained prior to or simultaneously with the termination of
such Interest Rate Cap pursuant to clause (B) below, (A) provide written notice
to the Interest Rate Cap Provider of its intention to terminate the Interest
Rate Cap within such 30-day period or 60-day period, as applicable, and (B)
terminate such Interest Rate Cap within such 30-day period or 60-day period, as
applicable, request the payment to it of all amounts due to the Trust under such
Interest Rate Cap through the termination date and deposit any such amounts so
received, on the day of receipt, to the Collection Account for application as
Finance Charge Receivables for the benefit of the applicable Class of
Certificateholders, or (iii) use reasonable efforts to establish any other
arrangement satisfactory to the Rating Agency including collateral, guarantees
or letters of credit, which arrangement will result in the applicable Rating
Agency not reducing or withdrawing the then rating of the Class A Certificates
or the Class B Certificates (a "Qualified Substitute Arrangement"); provided,
--------
however, that in the event at any time any alternative arrangement established
- -------
pursuant to clause (x) or clause (y) of the preceding sentence or pursuant to
clause (i) or clause (iii) of this sentence shall cease to be satisfactory to
the Rating Agency or shall terminate prior to the Class B Scheduled Payment
Date, then the provisions of this Section 4.11(b) shall again be applied and in
connection therewith the 30-day period or 60-day period, as applicable, referred
to above shall commence on the date the Servicer receives notice of such
cessation or termination, as the case may be.
(c) Unless an alternative arrangement pursuant to clause (x) or (y)(i) of
Section 4.11(b) is being established, the Trustee, at the direction of the
Servicer shall use its best efforts to obtain with respect to each Interest Rate
Cap referenced in Section 4.11(b) a Replacement Interest Rate Cap or Qualified
Substitute Arrangement meeting the requirements of this Section 4.11(c) during
the 30-day period referred to in Section 4.11(b). The Trustee shall not at any
time terminate any such Interest Rate Cap unless, prior to or simultaneously
with the termination thereof, the Trustee or the Servicer has
- 59 -
obtained or shall obtain (i) a Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect thereto, (ii) to the extent applicable, an
Opinion of Counsel as to the due authorization, execution, delivery, validity
and enforceability of such Replacement Interest Rate Cap or Qualified Substitute
Arrangement, as the case may be, and (iii) a letter from the Rating Agency
confirming that the termination of such Interest Rate Cap and its replacement
with such Replacement Interest Rate Cap or Qualified Substitute Arrangement will
not adversely affect its rating of the Class A Certificates or the Class B
Certificates.
(d) The Servicer shall notify the Trustee, the Rating Agency and the
Collateral Interest Holder within five Business Days after obtaining knowledge
that the long term unsecured debt or the long term certificate of deposit rating
of the Interest Rate Cap Provider has been withdrawn or reduced by Moody's or
the short-term unsecured debt or short-term certificate of deposit rating of the
Interest Rate Cap Provider has been withdrawn or reduced by Standard & Poors.
(e) Notwithstanding the foregoing, the Servicer may at any time obtain a
Replacement Interest Rate Cap, provided that the Servicer delivers to the
Trustee (i) an Opinion of Counsel as to the due authorization, execution and
delivery and validity and enforceability of such Replacement Interest Rate Cap
and (ii) a letter from the Rating Agency confirming that the termination of the
then current Interest Rate Cap and its replacement with such Replacement
Interest Rate Cap will not adversely affect its rating of the Class A
Certificates or the Class B Certificates.
(f) The Trustee hereby appoints the Interest Rate Cap Provider to perform
the duties of the calculation agent under the Interest Rate Cap and the Interest
Rate Cap Provider accepts such appointment. The Trustee shall, at the direction
of the Servicer, request a copy of the audited annual consolidated financial
statements of 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
(during the Amortization Period) to, and upon notification from the Servicer
shall, sell all or a portion of the Interest Rate Caps subject to the following
conditions having been met:
- 60 -
(i) The Notional Amount of the unsold portion of each Interest Rate
Cap remaining as an asset of the Trust shall at least equal the Class A Investor
Interest, in the case of the Class A Interest Rate Cap, and the Class B Investor
Interest, in the case of the Class B Interest Rate Cap, outstanding as of the
date of such sale; and
(ii) Such sale will not result in a reduction or withdrawal of the then
current rating on the relevant class of Certificates by the Rating Agency.
The Servicer shall have the duty of obtaining a fair market value price for
the sale of the Trust's rights under an Interest Rate Cap, notifying the Trustee
of prospective purchasers and bids, selecting the purchaser of such Interest
Rate Cap, and instructing the selected purchaser (and/or the Trustee) to deposit
the purchase price therefor into the Collection Account. The Trustee, upon
receipt of the purchase price into the Collection Account, shall execute all
documentation, prepared by the Servicer, necessary to effect the transfer of the
Trust's rights under the Interest Rate Cap and to release the lien of the
Trustee on the Interest Rate Cap and proceeds thereof.
Funds deposited in the Collection Account in respect of the sale of all or
a portion of a Class A Interest Rate Cap or a Class B Interest Rate Cap shall be
applied on the next Transfer Date as, respectively, Class A Available Funds or
Class B Available Funds in accordance with subsections 4.6(a) through (c).
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
- 61 -
respect to the related Monthly Period, shall be applied pursuant to subsections
4.6(a)(i) through (iv); and
(b) an amount equal to the excess, if any, of (i) the Class B Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread and Shared Finance Charge Collections from other Series allocated
and available to the Class B Certificates pursuant to subsection 4.6(d)(ii) and
4.6(f) on such Transfer Date shall be applied pursuant to subsections 4.6(b)(i)
through (iv).
On each Transfer Date, the Collateral Interest shall be reduced by the
amount of Reallocated Collateral Principal Collections and by the amount of
Reallocated Class B Principal Collections applied pursuant to subsections
4.12(a) and/or (b) on such Transfer Date. If such reduction would cause the
Collateral Interest (after giving effect to any Collateral Interest Charge-Offs
for such Transfer Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Interest Charge-Offs for such Transfer Date)
shall be reduced to zero and the Class B Investor Interest shall be reduced by
the 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
- 62 -
Accrual Period). The Trustee will request the principal London office of each
such bank to provide a quotation of its rate. If at least two such quotations
are provided, the rate for such Interest Accrual Period will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as requested,
the rate for such Interest Accrual Period will be the arithmetic mean of the
rates quoted by four major banks in New York City, selected by the Trustee, at
approximately 11:00 a.m., New York City time, on the first day of such Interest
Accrual Period for loans in United States dollars to leading European banks for
a period equal to one month (commencing on the first day of such Interest
Accrual Period).
SECTION 4.14 Discount Option. (a) The Transferor may at its option (the
---------------
"Discount Option"), at any time, upon not less than 20 Business Days prior
written notice to the Servicer, the Trustee, the Interest Rate Cap Provider, 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
- 63 -
matters set forth therein and shall incur no liability in so relying.
On and after the date of satisfaction of each of the above conditions, in
processing Collections of the Principal Receivables of the Accounts designated
pursuant to such notice, the Servicer shall deem the product of the Discount
Percentage and Collections of such Principal Receivables as Collections of
Finance Charge Receivables.
(b) The Transferor may at 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 1997-1]
SECTION 5.1 Distributions. (a) On each Distribution Date, the Paying
-------------
Agent shall distribute (in accordance with the certificate delivered by the
Servicer to the Trustee pursuant to subsection 3.4(b)) to each Class A
Certificateholder of record on the immediately preceding Record Date (other than
as provided in subsection 2.4(e) or Section 12.3 respecting a final
distribution) such Class A Certificateholder's pro rata share (based on the
--- ----
aggregate Undivided Interests represented by Class A Certificates held by such
Class A Certificateholder) of amounts on deposit in
- 64 -
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 1997-1
Certificateholder of record on the immediately preceding Record Date and the
Rating Agencies a statement substantially in the form of Exhibit 2 to the Series
Supplement relating to Series 1997-1 and the Collateral Interest prepared by the
Servicer setting forth among other things the following information (which, in
the case of subclauses (i), (ii) and (iii) below, shall be stated on the basis
of an original principal amount of $1,000 per Certificate and, in the case of
subclauses (viii) and (ix) shall be stated on an aggregate basis and on the
basis of an original principal amount of $1,000 per Certificate):
[(xviii) the total amount distributed to the Class A Certificateholders
and the Class B Certificateholders and the Collateral Interest Holder,
respectively, on such Distribution Date and to the Collateral Interest Holder or
the preceding Transfer Date;
(xix) the amount of such distribution, if any, allocable to principal with
respect to the Class A
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Certificates, the Class B Certificates and the Collateral Interest,
respectively;
(xx) the amount of such distribution allocable to interest on the Class A
Certificates, the Class B Certificates and the Collateral Interest,
respectively;
(xxi) the amount of Collections of Principal Receivables 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;
(xxii) 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 Investor Percentage, the Floating Investor Percentage,
the Class A Floating Allocation, the Class B Floating Allocation, the Collateral
Floating Allocation, the Fixed Investor Percentage, the Class A Fixed
Allocation, the Class B Fixed Allocation and the Collateral Fixed Allocation, in
each case as of the close of business on the last day of the preceding Monthly
Period;
(xxiii) the aggregate outstanding balance of Accounts which are up to 30,
31-60, 61-90 and 91 or more days delinquent in accordance with the Servicer's
then existing Account Guidelines as of the close of business on the last day of
the preceding Monthly Period;
(xxiv) the Class A Investor Default Amount, the Class B Investor Default
Amount and the Collateral Default Amount for the preceding Monthly Period;
(xxv) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Interest Charge-Offs for the preceding
Monthly Period;
(xxvi) 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;
- 66 -
(xxvii) 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;
(xxviii) the Principal Funding Account Balance as of the related Transfer
Date;
(xxix) the Accumulation Shortfall for the Class;
(xxx) the amount of the Principal Funding Investment Proceeds transferred to
the Finance Charge Account on the related Transfer Date;
(xxxi) the Principal Funding Investment Shortfall on the related Transfer
Date;
(xxxii) 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;
(xxxiii) the Pool Factor as of the end of the last day of the preceding
Monthly Period;
(xxxiv) 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 Collections of Finance Charge Receivables),
as appropriate, and allocated in respect of the Series 1997-1 Investor
Certificates;
(xxxv) the Class A Required Amount, the Class B Required Amount, the amount
required to be withdrawn from the Reserve Account, if any, to be applied with
respect to the Class A Covered Amount, the amount of Reallocated Collateral
Principal Collections and Reallocated Class B Principal Collections, if any, to
be applied with respect to the Required Amounts, and the amount of any
reductions in the Collateral Interest and the Class B Investor Interest, if any,
to satisfy the Required Amounts, in each case with respect to the preceding
Monthly Period;
(xxxvi) the Reserve Account Draw and the Available Reserve Account Amount on
the related Transfer Date Period; and
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(xxxvii) the ratio of the Collateral Interest to the Investor Interest as
of the last day of the preceding Monthly Period.]
The Monthly Certificateholders' Statement shall be substantially in the
form of Exhibit 2, with such changes as the Servicer may determine to be
necessary or desirable; provided, however, that no such change shall serve to
-------- -------
exclude information required by this subsection 5.2(a). The Servicer shall,
upon making such determination, deliver to the Trustee and the Rating Agency an
Officer's Certificate to which shall be annexed the form of Exhibit 2, as so
changed. Upon the delivery of such Officer's Certificate to the Trustee,
Exhibit 2, as so changed, shall for all purposes of this Agreement constitute
Exhibit 2. The Trustee may conclusively rely upon such Officer's Certificate as
to such change conforming to the requirements of this Agreement.
(b) On or before January 31 of each calendar year, beginning with calendar
year 1998, the Servicer shall furnish to the Paying Agent, who shall distribute
to each Person who at any time during the preceding calendar year was a Series
1997-1 Certificateholder, a statement prepared by the Servicer containing the
information required to be contained in the regular monthly report to Series
1997-1 Investor Certificateholders, as set forth in subclauses (i), (ii) and
(iii) above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Series 1997-1 Investor Certificateholder,
together with such other customary information (consistent with the treatment of
the Certificate as debt) as the Trustee or the Servicer deems necessary or
desirable to enable the Series 1997-1 Investor Certificateholders to prepare
their tax returns. Such obligations of the Paying Agent shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent pursuant to any requirements of the Internal
Revenue Code.
SECTION 9.A Series 1997-1 Pay Out Events. If any one of the following
----------------------------
events shall occur during the Revolving Period or the Controlled Accumulation
Period with respect to the Series 1997-1 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
- 68 -
Agreement relating to the Series 1997-1 Investor Certificates, or (B) this
Series Supplement, in each case on or before the date occurring five Business
Days after the date such payment or deposit is required to be made herein or
(ii) duly to observe or perform in any material respect any covenants or
agreements of the Transferor set forth in the Agreement, which failure has a
material adverse effect on the Series 1997-1 Investor Certificateholders (which
determination shall be made without regard to the subordination of the
Collateral Interest or whether any funds are available pursuant to the Interest
Rate Caps) and which continues unremedied for a period of 60 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Transferor by the Trustee, or to the Transferor and
the Trustee by the Holders of Series 1997-1 Investor Certificates evidencing
Undivided Interests aggregating not less than 50% of each of 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
Investor 1997-1 Certificateholders for such period;
(b) any representation or warranty made by the Transferor in the
Agreement, including this Series Supplement, or any information contained in a
computer file or microfiche list required to be delivered by the Transferor
pursuant to Section 2.1, 2.6 or 3.4(c) of the Agreement, (i) shall prove to have
been incorrect in any material respect when made or when delivered, which
continues to be incorrect in any material respect for a period of 60 days, after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by the Holders of the Series 1997-1 Investor
Certificates evidencing Undivided Interests aggregating not less than 50% of
each of the Class A Investor Interest, the Class B Investor Interest and the
Collateral Interest, and (ii) as a result of which the interests of the Series
1997-1 Investor Certificateholders are materially and adversely affected (which
determination shall be made without regard to the subordination of the
Collateral Interest or whether any funds are available pursuant to the Interest
Rate Caps) and continue to be materially and adversely affected for such period;
provided, however, that a Series 1997-1 Pay Out Event pursuant to this
- -------- -------
subsection 9A(b) shall not be deemed to have occurred hereunder if the
Transferor has accepted reassignment of the related Receivable, or all of such
Receivables, if
- 69 -
applicable, during such period in accordance with the provisions hereof;
(c) the average of the Portfolio Yield for any three consecutive Monthly
Periods is a rate which is less than the average of the Base Rate for such
period;
(d) the Transferor shall fail to convey Receivables arising under
Additional Accounts to the Trust, as required by subsection 2.6(e);
(e) any Servicer Default shall occur which would have a material adverse
effect on the Series 1997-1 Investor Certificateholders (which determination
shall be made without regard to the subordination of the Collateral Interest or
whether funds are available pursuant to the Enhancement or the Interest Rate
Caps);
(f) failure to pay the Class A Certificates in full on the Class A
Scheduled Payment Date;
(g) failure to pay the Class B Certificates in full on the Class B
Scheduled Payment Date; or
(h) failure of the Interest Rate Cap Provider to make any payment under
the Class A Interest Rate Cap or the Class B Interest Rate Cap within five days
of the date on which such payment was due;
then, in the case of any event described in subparagraphs (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1997-1 Investor Certificates evidencing Undivided
Interests aggregating more than 50% of each of the Class A Investor Interest,
the Class B Investor Interest and the Collateral Interest by notice then given
in writing to the Transferor and the Servicer (and to the Trustee if given by
the Certificateholders and the Collateral Interest Holder) may declare that a
pay out event (a "Series 1997-1 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in subparagraphs (c), (d),
(f), (g) or (h) a Series 1997-1 Pay Out Event shall occur without any notice or
other action on the part of the Trustee or the Series 1997-1 Investor
Certificateholders immediately upon the occurrence of such event.
Notwithstanding the foregoing, any failure of performance under Section
9A(a)(i) for a period of up to 60 calendar days with respect to an event
described in clause (i) below or up to
- 70 -
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 Agencies.
SECTION 10. Series 1997-1 Termination. All principal or interest with
-------------------------
respect to the Series 1997-1 Investor Certificates shall be due and payable no
later than the Scheduled Series 1997-1 Termination Date. In the event that the
Investor Interest is greater than zero on the Scheduled Series 1997-1
Termination Date, after giving effect to all transfers, withdrawals, deposits
and drawings to occur on such date and the payment of principal to be made on
the Certificates on such date, the Trustee will sell or cause to be sold, and
pay the proceeds to the Series 1997-1 Investor Certificateholders pro rata in
final payment of all principal of and accrued interest on the Series 1997-1
Investor Certificates, an amount of Principal Receivables and the related
Finance Charge Receivables (or interests therein) up to 110% of the Investor
Interest at the close of business on such date (but not more than an amount of
Receivables equal to the sum of (1) the product of (A) the Seller Percentage,
(B) the aggregate outstanding Principal Receivables and (C) a fraction the
numerator of which is the related Investor Percentage of Collections of Finance
Charge Receivables and the denominator of which is the sum of all Investor
Percentages with respect to Collections of Finance Charge Receivables of all
Series outstanding and (2) the Investor Interest of such Series). The
Transferor or any of its Affiliates shall be permitted to bid for such
Receivables. In addition, the Transferor or any of its Affiliates shall have
the right to match any bid by a third person and be granted the right to
purchase the Receivables at such matched bid price. Any proceeds of such sale
in excess of
- 71 -
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 1997-
1 Termination Date, final payment of all amounts allocable to the Certificates
shall be made in the manner provided in Section 12.3 of the Agreement.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
-------------------------------------------------------
Agreement. As supplemented by this Series Supplement, the Agreement is in all
- ---------
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
-----------------------------------------------------
Warranties. Except as otherwise provided in the Agreement, each of the
- ----------
Transferor, the Servicer and the Trustee hereby ratify and reaffirm its
representations and warranties contained in the Agreement as follows: (a) with
respect to the Transferor, the representations and warranties contained in (i)
Section 2.3 of the Agreement, (ii) Section 2.4(a) of the Agreement (with respect
to the Agreement as supplemented by this Series Supplement) and (iii) Section
2.4(b) of the Agreement, (b) with respect to the Servicer, the representations
and warranties contained in Section 3.3 of the Agreement and (c) with respect to
the Trustee, the representations and warranties contained in Section 11.15 of
the Agreement, as though such representations and warranties were made by such
party as of the Closing Date.
SECTION 13. [RESERVED]
----------
SECTION 14. No Subordination. Notwithstanding the provisions contained
----------------
in Section 13.1 of the Agreement to the contrary, the Agreement may also be
amended from time to time by the Servicer, the Transferor and the Trustee with
the consent of the Series 1997-1 Investor Certificateholders evidencing
Undivided Interests aggregating not less than 100% of the Investor Interest for
the purpose of (i) adding any provisions to or changing in any manner or
eliminating any of the provisions of this Series Supplement or (ii) modifying in
any manner the rights of the Series 1997-1 Investor Certificateholders which
would, in either case, result in the subordination of the rights of the Series
1997-1 Investor Certificateholders to the rights of the Holders of any other
Series.
SECTION 15. Repurchase of the Series 1997-1 Certificates. In the event of
--------------------------------------------
a breach of any of the representations and
- 72 -
warranties set forth in Section 12(a)(ii) hereof, either the Trustee or the
Holders of Series 1997-1 Certificates evidencing Undivided Interests aggregating
more than 50% of each of the Class A Investor Interest and the Class B Investor
Interest, by notice then given in writing to the Transferor (and to the Trustee
and the Servicer, if given by the Series 1997-1 Certificateholders), may direct
the Transferor to purchase the Series 1997-1 Certificates and the Collateral
Interest (as specified below) within 60 days of such notice, or within such
longer period as may be specified in such notice, which period shall not exceed
120 days, and the Transferor shall be obligated to purchase on a Distribution
Date specified by the Transferor (such Distribution Date, the "Repurchase Date")
occurring within such applicable period on the terms and conditions set forth
below; provided, however, that no such purchase shall be required to be made if,
-------- -------
at any time during such applicable period, the representations and warranties
contained in Section 12(a)(ii) hereof, shall then be true and correct in all
material respects. The Transferor shall deposit on the Transfer Date (in New
York Clearing House, next day funds) immediately preceding such Repurchase Date,
an amount equal to the reassignment deposit amount for such Series 1997-1
Investor Certificates in the Distribution Account, for distribution to the
Series 1997-1 Certificateholders and the Collateral Interest Holder 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 sum of the
Class A Investor Interest, the Class B Investor Interest and the Collateral
Interest at the end of the day on the last day of the Monthly Period preceding
the Repurchase Date, less the amount on deposit in the Principal Account which
will be transferred to the Distribution Account pursuant to the second paragraph
of subsection 4.8(a) on the related Transfer Date, (ii) an amount equal to all
interest accrued but unpaid on the Series 1997-1 Investor Certificates at the
Certificate Rate through and including the last day of the month preceding the
month in which such Transfer Date occurs, less the amount on deposit in the
Finance Charge Account [and, with respect to the Class A Certificates, the
Reserve Account,] which will be transferred to the Distribution Account to pay
interest pursuant to subsections 4.6(a) through (f) on the related Transfer Date
and (iii) any additional amounts owing to the Collateral Interest Holder
pursuant to the Loan Agreement. Payment of the portion of the reassignment
deposit amount and the transfer into the Distribution Account of the amounts
referred to in the second portion of clauses (i) and (ii) of the preceding
sentence, shall be considered a prepayment in full of the Series 1997-1
Certificates and the Collateral Interest. The Series 1997-1 Termination Date
shall be deemed to have occurred on the
- 73 -
Repurchase Date as long as such amount was deposited in full into the
Distribution Account on such Transfer Date. If the Trustee or the Series 1997-1
Investor Certificateholders give notice directing the Transferor to purchase the
Series 1997-1 Certificates as provided above, the obligation of the Transferor
to purchase the Series 1997-1 Investor Certificates and to pay the reassignment
deposit amount pursuant to this Section 15 shall constitute the sole remedy
respecting a breach of the representations and warranties referenced in Section
12(a)(ii) hereof available to the Series 1997-1 Investor Certificateholders or
the Trustee on behalf of the Series 1997-1 Investor Certificateholders.
SECTION 16. Counterparts. This Series Supplement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 17. Additional Covenants of Transferor. People's Bank, in its
----------------------------------
capacity as Transferor, hereby covenants that following the occurrence of a
Series Pay Out Event described in Section 9A(c) hereof, except as otherwise
required by any Requirements of Law, it will not reduce the Periodic Finance
Charges assessed on any Receivable, or other fees on any Account if the
Transferor reasonably believes that, as a result of such reduction, (i) the
weighted average of the Periodic Finance Charges on the last day of the Monthly
Period during which such reduction will be effective (weighted based on the
Transferor's reasonable belief as to the Principal Receivables which will be
outstanding on such last day) will be less than (ii) the sum of (1) 2.00% and
(2) the weighted average of the Certificates Rates of each Series that will be
outstanding on such last day (weighted based on the Transferor's reasonable
belief as to (x) the amount of the Investor Interest of each Series that will be
outstanding on such last day, (y) in the case of Series for which the
Certificate Rate is a floating rate, the Certificate Rate applicable to such
Monthly Period, and (z) in the case of the Series 1997-1 Investor Certificates,
the weighted average (weighted based on the Transferor's reasonable belief as to
the Principal Receivables which will be outstanding on such last day) of (A) the
lesser of the Class A Certificate Rate and the Class A Cap Rate, (B) the lesser
of the Class B Certificate Rate and the Class B Cap Rate and (C) the Collateral
Rate.
SECTION 18. Series 1997-1 Investor Exchange. Pursuant to subsection
-------------------------------
6.9(b) of the Agreement, the Series 1997-1 Certificateholders may tender their
Series 1997-1 Certificates, and the Holders of the Exchangeable Seller
Certificate may tender
- 74 -
the Exchangeable Seller Certificate, in exchange for (i) one or more newly
issued Series of Series 1997-1 Investor Certificates and (ii) a reissued
Exchangeable Seller Certificate in accordance with the terms and conditions
contained in a notice of exchange delivered to the Series 1997-1
Certificateholders. Such notice of exchange will specify, among other things:
(a) the amount of Series 1997-1 Certificates that may be tendered, (b) the
Certificate Rate with respect to the new Series, (c) the term of the Series, (d)
the method of computing the investor percentage, (e) the manner of Enhancement,
if any, with respect to the Series and (f) the time and the manner of the tender
and cancellation of the Series 1997-1 Certificates and the issuance of the new
Series of Certificates will be effectuated. Upon satisfaction of the conditions
contained in subsections 6.9(b) and 6.9(c) of the Agreement, and the receipt by
the Trustee of the Exchange Notice and the related Supplement, the Trustee shall
cancel the existing Exchangeable Seller Certificate and the applicable Series
1997-1 Certificates, and shall issue such Series of Series 1997-1 Investor
Certificates a new Exchangeable Seller Certificates, each dated the Exchange
Date.
SECTION 19. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 20. Notification to Luxembourg Stock Exchange. On or prior to
-----------------------------------------
each Distribution Date the Servicer shall, or shall cause the Trustee to, send
written notice to the Luxembourg Stock Exchange specifying (i) the Class A
Certificate Rate for the immediately following Distribution Date, (ii) the
amount of interest to be distributed in respect of the Class A Certificates for
the immediately following Distribution Date and (iii) the Class A Investor
Interest on the Distribution Date on which such report is being furnished (after
giving effect to all payments of principal to be made on such Distribution
Date). Promptly following each Distribution Date the Servicer shall cause a
notice to be published in a daily newspaper, which initially shall be the
Luxemburger Wort, specifying the information described in clauses (i) and (ii)
- ----------------
of the preceding sentence.
- 75 -
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
PEOPLE'S BANK,
Transferor and Servicer
By:
-----------------------------------
Name:
Title:
BANKERS TRUST COMPANY, not in
its individual capacity but
solely as Trustee
By:
-----------------------------------
Name:
Title:
- 76 -
EXHIBIT 1-A
-----------
FORM OF CLASS A INVESTOR CERTIFICATE
------------------------------------
$
No. CUSIP No.
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS A ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA and MasterCard 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 REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S BANK OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns of CEDE
& CO. with respect to this certificate, the "Class A Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter created
under selected VISA and MasterCard credit card accounts (the "Accounts") of
People's Bank, a Connecticut stock savings bank, all Receivables in Automatic
Additional Accounts and Additional
Accounts added to the Trust from time to time, all monies due or to become due
in payment of the Receivables (including all Finance Charge Receivables), and
the other assets and interests constituting the Trust pursuant to an Amended and
Restated Pooling and Servicing Agreement dated as of March [ ], 1997, and as
supplemented by the Series 1997-1 Supplement dated as of March [ ], 1997,
(collectively, the "Agreement"), by and between People's Bank, as Seller or
Transferor and Servicer, and Bankers Trust Company, as Trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth herein
below.
The Seller has structured the Agreement and the Investor Certificates with
the intention that the Investor Certificates will qualify under applicable tax
law as indebtedness, and the Seller, the Holder of the Exchangeable Seller
Certificate, the Servicer and each Investor Certificateholder (or Certificate
Owner) by acceptance of its Certificate (or, in the case of a Certificate Owner,
by virtue of such Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat the Investor Certificates consistently with, and to
take no action inconsistent with, the treatment of the Investor Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any
Certificateholder acquiring an interest in a Certificate through it to comply
with this Agreement as to treatment as indebtedness under applicable tax law.
To the extent not defined herein, capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement, as amended from time to time, the Certificateholder by virtue of the
acceptance hereof assents and by which the Certificateholder is bound. In the
case of conflict between the terms specified in this Class A Certificate and any
terms specified in the Agreement, the terms of the Agreement shall govern.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge Receivables
which arise generally from Periodic
1-A-2
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 in connection with any Accounts that meet
the definition of Automatic Additional Accounts (other than Receivables in
Additional Accounts), (b) all monies and investments 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) Interchange and Recoveries allocated to the Trust 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
Series 1997-1 Collection Subaccount, (iii) the benefits of a Reserve Account and
(iv) the benefit of the Class A Interest Rate Cap between the Trustee and the
Interest Rate Cap Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$[______________] Floating Rate Class A Asset Backed Certificates, Series 1997-1
(the "Class A Certificates"), each of which represents an undivided interest in
certain assets of the Trust, including the right to receive Collections
allocable to the Class A Certificates and other amounts at the times and in the
amounts specified in the Agreement to be deposited in the Investor Accounts or
paid to the Investor Certificateholders. The aggregate interest represented by
the Class A Certificates at any time in the Principal Receivables in the Trust
shall not exceed an amount equal to the Class A Investor Interest at such time.
The Initial Class A Investor Interest is $[_____________] minus the retirement
of any Class A Certificates pursuant to an Investor Exchange. The Class A
Investor Interest on any date of determination will be an amount equal to (a)
the Class A Initial Investor Interest, minus (b) the aggregate amount of
-----
payments of Certificate Principal paid to the Class A Certificateholders prior
to such date of determination, minus (c) the excess, if any, of the aggregate
-----
amount of Class A Investor Charge-Offs over Class A Investor Charge-Offs
----
reimbursed prior to such date of determination. In addition to the Class A
Certificates, a class of certificates entitled "People's Bank Credit Card Master
Trust $[____________] Floating Rate Class B Asset Backed Certificates, Series
1997-1" (the "Class B Certificates") will be issued, an uncertificated interest
in the Trust to be known as the Collateral Interest, Series 1997-1, will be
created pursuant to the Loan Agreement, and the Exchangeable Seller Certificate
will be reissued to the Holder of the Exchangeable Seller Certificate pursuant
to the Agreement, and other Series of certificates have been, and may from time
to time be, issued by the Trust, which
1-A-3
represent or will represent an undivided interest in the Trust. The Exchangeable
Seller Certificate will represent the interest in the Principal Receivables not
represented by the Investor Certificates or any other Series of certificates.
During the Revolving Period, which begins on the date of issuance of this
Class A Certificate, Certificate Interest at the Class A Certificate Rate will
be distributed on May 15, 1997 and on the fifteenth day of each calendar month
thereafter, or if such fifteenth day is not a Business Day, on the next
succeeding Business Day (a "Distribution Date"), to the Class A
Certificateholders of record on the Record Date preceding the related
Distribution Date. During either the Controlled Accumulation Period, which is
scheduled to begin with the [_______________] Monthly Period, unless the
Servicer elects to postpone the commencement of the Controlled Accumulation
Period and in certain other limited circumstances set forth in the Agreement,
Certificate Interest at the Class A Certificate Rate will continue to be
distributed on the fifteenth day of each calendar month, or if such fifteenth
day is not a Business Day, on the next succeeding Business Day, until the Class
A Scheduled Payment Date, which is scheduled to occur on [ ], on
which date any accrued and unpaid Certificate Interest and the Certificate
Principal will be distributed in full to the Class A Certificateholders. During
the Rapid Amortization Period, if any Certificate Interest and Certificate
Principal will be distributed to the Class A Certificateholders on the
Distribution Date of each calendar month commencing in the month following the
month in the Rapid Amortization Period commences.
The Servicer shall deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in no
event later than the second Business Day following such Date of Processing.
Notwithstanding anything in the Agreement to the contrary, for so long as,
and only so long as, the Seller shall remain the Servicer hereunder and (a)(i)
the Servicer provides to the Trustee a letter of credit or other arrangement
covering risk of collection of the Servicer acceptable to the Rating Agency (as
evidenced by letters from the Rating Agency) and (ii) the Seller shall not have
received a notice from the Rating Agency that such letter of credit or other
arrangement would result in the lowering or withdrawal of such Rating Agency's
then-existing rating of any Series of Investor Certificates or (b) under certain
other circumstances permitted under the Agreement, the Servicer need not deposit
Collections into the Collection Account, the Principal Account or the Finance
Charge Account in
1-A-4
accordance with the immediately preceding sentence, or make payments to the
Holder of the Exchangeable Seller Certificate prior to the close of business on
the day any Collections are received, but may make such payments on the Transfer
Date in the Monthly Period following the Monthly Period in which such
Collections are received in an amount equal to the net amount of such deposits,
payments and withdrawals which would have been made but for the provisions of
this paragraph.
On each Transfer Date, the Servicer or the Trustee acting in accordance
with instructions from the Servicer shall withdraw from the Finance Charge
Account and/or deposit to the Distribution Account to the extent funds are
available on the terms specified in the Agreement from Class A Available Funds,
from payments made pursuant to the Class A Interest Rate Cap and from Excess
Spread an amount equal to, with respect to Class A Certificates, the sum of: (i)
the product of (a) the Class A Certificate Rate, (b) the lesser of the Class A
Investor Interest determined as of the preceding Distribution Date (or, for the
initial Interest Accrual Period, the Closing Date), after giving effect to all
payments, deposits and withdrawals on such Distribution Date or Closing Date,
and the Expected Class A Principal as of the preceding Distribution Date or
Closing Date, and (c) the actual number of days in the related Interest Accrual
Period divided by 360, plus (ii) the product of (a) the Class A Excess
Principal, (b) the lesser of the Class A Certificate Rate and [____]% per annum,
and (c) the actual number of days in the related Interest Period divided by 360
(collectively, the "Class A Monthly Interest"), plus (iii) to the extent
permitted by applicable law, any interest accrued on the Class A Certificates
(including interest on any overdue Class A Monthly Interest) during any prior
accrual period which has not been distributed to the Class A Certificateholders,
plus, (iv) to the extent that there is available Excess Spread, an amount equal
to the product of (a) the amount by which the Class A Certificate Rate exceeds
[____]% per annum, (b) the Class A Excess Principal and (c) the actual number of
days in the related Interest Period divided by 360 (the "Class A Excess
Interest"). On such Transfer Date the Servicer or the Trustee shall deposit
such funds into the Distribution Account.
If, in any Monthly Period, collections of Finance Charge Receivables
allocable to the Class A Investor Interest for such Monthly Period available to
the Class A Certificates are insufficient to pay (i) the interest which accrued
on the Class A Certificates with respect to the related Distribution Date, in an
amount equal to the product of (a) the lesser of the Class A Certificate Rate
and the Class A Cap Rate, (b) the Class A
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Investor Interest as determined as of the preceding Distribution Date (or, for
the initial Interest Accrual Period, the Closing Date), after giving effect to
all payments, deposits and withdrawals on such Distribution Date or Closing Date
and (c) the actual number of days in the related Interest Accrual Period divided
by 360 (the "Class A Monthly Cap Rate Interest"), and any Class A Monthly Cap
Rate Interest accrued during any prior period which has not been distributed to
the Class A Certificateholders, (ii) the Class A Monthly Servicing Fee and any
accrued and unpaid Class A Monthly Servicing Fees from prior Monthly Periods,
(iii) the Class A Investor Default Amount for such Distribution Date, and (iv)
any unreimbursed Class A Investor Charge-Offs (the sum of the foregoing clauses
(i) through (iv) being referred to as the "Class A Required Amount"), then
first, Excess Spread, if any, from collections of Finance Charge Receivables
allocable to the Collateral Interest and the Class B Certificates will be
allocated to the Class A Certificates up to the unpaid amount of the Class A
Required Amount, second, Shared Finance Charge Collections, if any, allocable to
the Collateral Interest and Series 1997-1 will be allocated to the Class A
Certificates up to the amount of the Class A Required Amount remaining unpaid
and third, a withdrawal will be made from the Reserve Account on the
Distribution Date immediately following such Monthly Period, to the extent of
any Class A Required Amount remaining unpaid (but not more than the applicable
Available Reserve Account Amount). If such applicable Available Reserve Account
Amount is less than the unpaid amount of the Class A Required Amount for such
Distribution Date (after application of any available Excess Spread and Shared
Finance Charge Receivables), the applicable Collateral Floating Percentage and
Class B Floating Percentage or Collateral Fired Percentage and Class B Fired
Percentage, as the case may be, of the Investor Percentage of collections in
respect of Principal Receivables for the preceding Monthly Period will then be
used to fund the remaining Class A Required Amount (such collections,
"Reallocated Principal Collections"). The Collateral Interest and Class B
Investor Interest will be reduced by the amount of Reallocated Principal
Collections.
If, on such Distribution Date, the Excess Spread, Shared Finance Charge
Collections, Available Reserve Account Amount and Reallocated Principal
Collections are insufficient to fund the remaining Class A Required Amount for
such Monthly Period, the remaining Collateral Interest and Class B Investor
Interest will be reduced (but not in excess of the Class A Investor Default
Amount for such Distribution Date) by the amount of such remaining
insufficiency, until such time as the Collateral Interest and Class B Investor
Interest has been reduced to zero. Thereafter, the Class A Investor Interest
will be reduced by the
1-A-6
amount of any remaining unpaid Class A Required Amount (a "Class A Investor
Charge-Off"), but not in excess of the Class A Investor Default Amount for such
Distribution Date.
The Trustee has entered into the Class A Interest Rate Cap and Class B
Interest Rate Cap with the Interest Rate Cap Provider for the exclusive benefit
of the Class A Certificateholders and the Class B Certificateholders,
respectively. On each Transfer Date that the Class A Certificate Rate or the
Class B Certificate Rate for the related Interest Period exceeds the Class A Cap
Rate or the Class B Cap Rate, respectively, the Interest Rate Cap Provider will
make a payment to the Trustee, on behalf of the Trust, based on the amount of
such excess and the notional amount of the applicable Interest Rate Cap. The
Class A Notional Amount will at all times equal the amount of the Expected Class
A Principal, and the Class B Notional Amount will at all times equal the amount
of the Expected Class B Principal. The Class A Interest Rate Cap and the Class
B Interest Rate Cap, or its Replacement Interest Rate Cap or Qualified
Substitute Arrangement, will terminate on the day immediately following the
Class A Expected Final Distribution Date and the Class B Expected Final
Distribution Date, respectively.
People's Bank, as Servicer, is entitled to receive as servicing
compensation a monthly servicing fee in an amount equal to one-twelfth of the
product of [2.00]% per annum and the Aggregate Principal Receivables in the
Trust on the last day of each Monthly Period, payable on each succeeding
Distribution Date. With respect to any Distribution Date, the share of the
servicing fee allocable to the Class A Certificates shall be equal to one-
twelfth of the product of [2.00]% per annum and the Class A Investor Interest as
of the last day of the preceding Monthly Period. The remainder of the servicing
fee, which will be allocable to the Collateral Interest Holder, the Class B
Certificateholders, the Holder of the Exchangeable Seller Certificate and the
other Series of certificates, if any, will be payable by the Collateral Interest
Holder, the Class B Certificateholders, the Holder of the Exchangeable Seller
Certificate or by the Holders of such Series of certificates, and none of the
Trust, the Trustee or the Class A Certificateholders will have any obligation to
pay such portion of the servicing fee.
On the Determination Date in the Monthly Period following the Monthly
Period in which either the Controlled Accumulation Period or the Rapid
Amortization Period commences, and on each Determination Date thereafter, the
Servicer shall notify the Trustee that it will withdraw, or shall instruct the
Trustee to
1-A-7
withdraw, and on the next succeeding Transfer Date the Servicer or the Trustee
acting in accordance with such notice or instructions shall withdraw all amounts
on deposit in the Principal Account in respect of Collections processed during
the preceding Monthly Period and deposit such amounts in the Distribution
Account for distribution to the Class A Certificateholders to the extent
specified in the Agreement on the next succeeding Distribution Date.
If on any Distribution Date in the Controlled Accumulation Period through
and including the Class A Scheduled Payment Date, the Monthly Total Principal
Allocations for the prior Monthly Period are equal to or greater than an amount
equal to the sum of the Controlled Deposit Amount and the Collateral Monthly
Principal with respect to such Distribution Date, any excess of such Monthly
Total Principal Allocations over an amount equal to the sum of the Controlled
Deposit Amount and the Collateral Monthly Principal will be applied as Shared
Principal Collections and if not so used, paid from the Trust to the holder of
the Exchangeable Seller Certificate. If, while the Class A Investor Interest
exceeds zero, the Monthly Total Principal Allocations for any Monthly Period
during the Controlled Accumulation Period is less than an amount equal to the
sum of the Controlled Deposit Amount and the Collateral Monthly Principal, the
sum of such Monthly Total Principal Allocations and the amount of any Shared
Principal Collections available from other Series to the Certificates of this
Series will be paid from the Trust to the applicable Class A Certificateholders
in respect to the Class A Investor Interest to the extent specified in the
Agreement.
On each Distribution Date beginning in the month following the Monthly
Period in which the Rapid Amortization Period commences, the Monthly Total
Principal Allocations from the prior Monthly Period along with Shared Principal
Collections from other Series, if any, will be distributed to the Class A
Certificateholders until the earlier of the date on which the Class A Investor
Interest is paid in full and the Series 1997-1 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 1997-1 Termination Date and, following
the final principal payment to the Class B Certificateholders, to the Collateral
Interest Holder until the earlier of the date on which the Collateral Interest
is paid in full and the Series 1997-1 Termination Date.
On each Distribution Date occurring after a deposit is made pursuant to the
paragraphs above, the Paying Agent shall pay the
1-A-8
Class A Certificateholders the amount deposited into the Distribution Account on
the related Transfer Date in respect of interest payable to the Class A
Certificateholders and, in addition, on the Class A Scheduled Payment Date or
the Rapid Amortization Period, the Paying Agent shall pay to the Class A
Certificateholders the amount deposited on the related Transfer Date into the
Distribution Account in respect of principal payable to the Class A
Certificateholders. Distributions with respect to this Class A Certificate will
be made by the Paying Agent by check mailed to the address of the holders of
record appearing in the Certificate Register (except for the final distribution
in respect of this Class A Certificate) without the presentation or surrender of
this Certificate or the making of any notation thereon, except that with respect
to Certificates registered in the name of the nominee of a Clearing Agency,
distributions will be made in the form of immediately available funds.
This Class A Certificate does not represent an obligation of, or an
interest in, the Seller or the Servicer, and neither the Class A Certificates
nor the Accounts or Receivables are insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Class A
Certificate is limited in right of payment to certain collections respecting the
Receivables, as more specifically set forth hereinabove and in the Agreement.
As provided in the Agreement, withdrawals from the Series 1997-1 Investor
Accounts may be made upon the instructions of the Servicer from time to time for
purposes other than distributions to Class A Certificateholders.
The Seller may designate (subject to the terms and conditions of the
Agreement), Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust; provided, however, that the
-------- -------
Seller shall not make more than one such designation in any Monthly Period.
The Agreement and any Supplement may be amended by the Seller, the Servicer
and the Trustee, without the consent of the Investor Certificateholders, of any
Series, to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, and to add any other
provisions with respect to matters or questions arising under the Agreement and
any Supplement which are not inconsistent with the provisions of the Agreement
and any Supplement. The Agreement may be amended from time to time by the
Seller, the Servicer and the Trustee, with the consent of any Trustee and
1-A-9
without the consent of any Investor Certificateholders, to (a) provide for the
transfer by the Seller of its interest in and to all or part of the Accounts in
accordance with the provisions of the Agreement and (b) provide for the purchase
of Principal Receivables by the Trust at a price which is less than 100% of the
outstanding balance thereof, and to provide for the treatment of Collections of
Principal Receivables, in an amount up to the aggregate amount by which the
purchase price of Principal Receivables as sold thereafter is less than 100%, as
Collections of Finance Charge Receivables; provided, however, that any such
-------- -------
action shall not adversely affect in any material respect the interests of
Investor Certificateholders; provided further, however, that the Servicer and
---------------- -------
Trustee shall have received notice from the Rating Agency that any such
amendment will not result in the reduction or withdrawal of its then-existing
rating of the certificates of any Series. In addition, the Agreement and any
Supplement may be amended from time to time by the Seller, the Servicer and the
Trustee, without Investor Certificateholder consent, to add to or change any of
the provisions of the Agreement to provide that bearer certificates issued with
respect to any other Series may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any interest on
such bearer certificates, to permit such bearer certificates to be issued in
exchange for registered certificates or bearer certificates of other authorized
denominations or to permit the issuance of uncertificated certificates, subject
to certain conditions. Moreover, any Supplement and any amendments regarding
the addition or removal of Receivables from the Trust will not be considered
amendments requiring certificateholder consent under the provisions of the
Agreement or any Supplement.
The Agreement and any Supplement may be amended by the Seller, the Servicer
and the Trustee with the consent of the holders of certificates evidencing
undivided interests aggregating not less than 66-2/3% of the principal amount of
each Series adversely affected, for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of the Agreement or
any Supplement or of modifying in any manner the rights of certificateholders of
any Series. No such amendment, however, may (a) reduce in any manner the amount
of, or delay the timing of, distributions required to be made on such Series,
(b) change the definition of or the manner of calculating the interest of any
certificateholder of such Series or (c) reduce the aforesaid percentage of
undivided interests, the holders of which are required to consent to any such
amendment, in each case without the consent of all certificateholders of all
Series adversely affected. Promptly following the execution of any amendment to
the Agreement or any
1-A-10
Supplement, the Trustee will furnish written notice of the substance of such
amendment to each certificateholder of all Series (or with respect to an
amendment of a Supplement, to the applicable Series).
The transfer of this Class A Certificate shall (subject to the limitations
set forth in the Agreement) be registered in the Certificate Register upon
surrender of this Class A Certificate for registration of transfer at any office
or agency maintained by the Transfer Agent and Registrar accompanied by a
written instrument of transfer in a form satisfactory to the Trustee and the
Transfer Agent and Registrar duly executed by the Class A Certificateholder or
such Class A Certificateholder's attorney-in-fact duly authorized in writing,
and thereupon one or more new Class A Certificates of authorized denomination
and for the same aggregate Undivided Interests will be issued to the designated
transferee or transferees.
Pursuant to the Series 1997-1 Supplement, the Seller has the option (the
"Discount Option") at any time to designate as Finance Charge Receivables a
fixed or variable percentage of Receivables in designated Accounts which
otherwise would be treated as Principal Receivables. The exercise by the Seller
of the Discount Option will be subject to, among other things, the receipt by
the Trustee of written confirmation from each Rating Agency that the exercise of
such option will not result in a withdrawal or reduction of its rating of the
Certificates. Each Certificateholder by its acceptance of a beneficial interest
in a Certificate shall be deemed to have consented to the exercise by the Seller
of the Discount Option at such time as the Seller determines to exercise such
options.
As provided in the Agreement and subject to certain limitations therein set
forth, Class A Certificates are exchangeable for new Class A Certificates
evidencing like aggregate Undivided Interests, as requested by the Class A
Certificateholder surrendering such Class A Certificates. No service charge may
be imposed for any such exchange but the Servicer or Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
1-A-11
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1997-1, the Agreement provides
that the right of the Class A Certificateholders to receive payments from the
Trust will terminate on the Scheduled Series 1997-1 Termination Date. Upon the
termination of Trust pursuant to Section 12.1 of the Agreement (and subject to
the exceptions set forth in the Agreement), the Trustee will assign and convey
to the Holder of the Exchangeable Seller Certificate (without recourse,
representation or warranty) all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, and Recoveries
allocable to the Trust relating thereto and Interchange pursuant to subsections
2.5(k) and (l) of the Agreement. The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the Holder of the Exchangeable Seller Certificate to
vest in such Holder all right, title and interest which the Trustee had in the
Receivables.
1-A-12
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Class A Certificate shall not
be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, People's Bank has caused this Class A Certificate to be
executed by its duly authorized officer.
PEOPLE'S BANK
By:
------------------------------
Dated: March [ ], 1997
1-A-13
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)
1-A-14
EXHIBIT 1-B
-----------
FORM OF CLASS B INVESTOR CERTIFICATE
------------------------------------
$
No. R-1 CUSIP No.
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS B ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA and MasterCard 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 REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PEOPLE'S BANK OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
This certifies that CEDE & CO. (CEDE & CO. or any successors or assigns of CEDE
& CO. with respect to this certificate, the "Class B Investor
Certificateholders") is the registered owner of the undivided interest in
certain assets of a trust (the "Trust"), the corpus of which consists of a
portfolio of Receivables (the "Receivables") now existing or hereafter created
under selected VISA and MasterCard credit card accounts (the "Accounts") of
People's Bank, a Connecticut stock savings bank,
all Receivables in Automatic Additional Accounts and Additional Accounts added
to the Trust from time to time, all monies due or to become due in payment of
the Receivables (including all Finance Charge Receivables), and the other assets
and interests constituting the Trust pursuant to an Amended and Restated Pooling
and Servicing Agreement dated as of March [__], 1997 and as supplemented by the
Series 1997-1 Supplement dated as of March [__], 1997 (collectively, the
"Agreement"), by and between People's Bank, as Seller or Transferor and
Servicer, and Bankers Trust Company, as Trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth herein below.
The Seller has structured the Agreement and the Investor Certificates with
the intention that the Investor Certificates will qualify under applicable tax
law as indebtedness, and the Seller, the Holder of the Exchangeable Seller
Certificate, the Servicer and each Investor Certificateholder (or Certificate
Owner) by acceptance of its Certificate (or, in the case of a Certificate Owner,
by virtue of such Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat the Investor Certificates consistently with, and to
take no action inconsistent with, the treatment of the Investor Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any
Certificateholder acquiring an interest in a Certificate through it to comply
with this Agreement as to treatment as indebtedness under applicable tax law.
To the extent not defined herein, capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement, as amended from time to time, the Certificateholder by virtue of the
acceptance hereof assents and by which the Certificateholder is bound. In the
case of conflict between the terms specified in this Class B Certificate and any
terms specified in the Agreement, the terms of the Agreement shall govern.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of
1-B-2
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 in connection with any Accounts that meet the definition
of Automatic Additional Accounts (other than Receivables in Additional
Accounts), (b) all monies and investments 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) Interchange and Recoveries allocated to the Trust pursuant to
subsections 2.5(k) and (l) of the Agreement, (ii) such funds as from time to
time are deposited in the Collection Account, the Excess Funding Account, the
Investor Accounts and the Series 1997-1 Collection Subaccount 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
$[________] Floating Rate Class B Asset Backed Certificates, Series 1997-1 (the
"Class B Certificates"), each of which represents an undivided interest in
certain assets of the Trust, including the right to receive Collections
allocable to the Class B Certificates and other amounts at the times and in the
amounts specified in the Agreement to be deposited in the Investor Accounts or
paid to the Investor Certificateholders. The aggregate interest represented by
the Class B Certificates at any time in the Principal Receivables in the Trust
shall not exceed an amount equal to the Class B Investor Interest at such time.
The Initial Class B Investor Interest is $[________] minus the retirement of any
Class B Certificates pursuant to an Investor Exchange. The Class B Investor
Interest on any date of determination will be an amount equal to (a) the Class B
Initial Investor Interest, minus (b) the aggregate amount of payments of
-----
Certificate Principal paid to the Class B Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
-----
B Investor Charge-Offs and Reallocated Principal Collections over Class B
----
Investor Charge-Offs and Reallocated Principal Collections reimbursed prior to
such date of determination. In addition to the Class B Certificates, a class of
certificates entitled "People's Bank Credit Card Master Trust $[_________]
Floating Rate Class A Asset Backed Certificates, Series 1997-1" (the "Class A
Certificates") will be issued, an uncertified interest in the Trust to be known
as the Collateral Interest, Series 1997-1, will be created pursuant to the Loan
Agreement and an Exchangeable Seller Certificate will be issued to the Seller
pursuant to the
1-B-3
Agreement, and other Series of certificates have been, and may from time to time
be, issued by the Trust, which represent or will represent an undivided interest
in the Trust. The Exchangeable Seller Certificate will represent the interest
in the Principal Receivables not represented by the Investor Certificates or any
other Series of certificates.
During the Revolving Period, which begins on the date of issuance of this
Class B Certificate, Class B Certificate Interest at the Class B Certificate
Rate will be distributed on May 15, 1997 and on the fifteenth day of each
calendar month thereafter, or if such fifteenth day is not a Business Day, on
the next succeeding Business Day (a "Distribution Date"), to the Class B
Certificateholders of record on the Record Date preceding the related
Distribution Date. During either the Controlled Accumulation Period, which is
scheduled to begin with the [______________] Monthly Period, unless the Servicer
elects to postpone the commencement of the Controlled Accumulation Period and in
certain other limited circumstances set forth in the Agreement, Certificate
Interest at the Class A Certificate Rate will continue to be distributed on the
fifteenth day of each calendar month, or if such fifteenth day is not a Business
Day, on the next succeeding Business Day, until the Class A Scheduled Payment
Date, which is scheduled to occur on [ ], on which date any accrued
and unpaid Certificate Interest and the Certificate Principal will be
distributed in full to the Class A Certificateholders. During the Rapid
Amortization Period, Certificate Interest and Certificate Principal will be
distributed to the Class B Certificateholders on the Distribution Date of each
calendar month commencing in the month following the month in which the Rapid
Amortization Period commences.
The Servicer shall deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in no
event later than the second Business Day following such Date of Processing.
Notwithstanding anything in the Agreement to the contrary, for so long as,
and only so long as, the Seller shall remain the Servicer hereunder and (a)(i)
the Servicer provides to the Trustee a letter of credit or other arrangement
covering risk of collection of the Servicer acceptable to the Rating Agency (as
evidenced by letters from the Rating Agency) and (ii) the Seller shall not have
received a notice from the Rating Agency that such letter of credit or other
arrangement would result in the lowering or withdrawal of such Rating Agency's
then-existing rating of any Series of Investor Certificates or (b) under certain
circumstances permitted under the Agreement, the Servicer
1-B-4
need not deposit Collections into the Collection Account, the Principal Account
or the Finance Charge Account in accordance with the immediately preceding
sentence or make payments to the Holder of the Exchangeable Seller Certificate
prior to the close of business on the day any Collections are deposited in the
Collection Account, but may make such payments on the Transfer Date in the
Monthly Period following the Monthly Period in which such Collections are
received in an amount equal to the net amount of such deposits, payments and
withdrawals which would have been made but for the provisions of this paragraph.
On each Transfer Date, the Servicer or the Trustee acting in accordance
with instructions from the Servicer shall withdraw from the Finance Charge
Account and/or deposit to the Distribution Account to the extent funds are
available on the terms specified in the Agreement from Class B Available funds,
from payments made pursuant to the Class B Interest Rate Cap and from Excess
Spread an amount equal to, with respect to Class B Certificates, the sum of: (i)
the product of (a) the Class B Certificate Rate, (b) the lesser of the Class B
Investor Interest determined as of the preceding Distribution Date (or, for the
initial Interest Accrual Period, the Closing Date), after giving effect to all
payments, deposits and withdrawals on such Distribution Date and the Expected
Class B Principal as of the preceding Distribution Date or Closing Date and (c)
the actual number of days in the related Interest Period divided by 360, plus
(ii) the product of (a) the Class B Excess Principal, (b) the lesser of the
Class B Certificate Rate and [___]% per annum, and (c) the actual number of days
in the related Interest Period divided by 360 (collectively, the "Class B
Monthly Interest"), plus (iii) to the extent permitted by applicable law, any
interest accrued on the Class B Certificates (including interest on any overdue
Class B Monthly Interest) during any prior accrual period which has not been
distributed to the Class B Certificateholders, plus, (iv) to the extent that
there is available Excess Spread, an amount equal to the product of (a) the
amount by which the Class B Certificate Rate exceeds [____]% per annum, (b) the
Class B Excess Principal and (c) the actual number of days in the related
Interest Period divided by 360 (the "Class B Excess Interest"). On such
Transfer Date the Servicer or the Trustee shall deposit such funds into the
Distribution Account.
If, in any Monthly Period, collections of Finance Charge Receivables
allocable to the Class B Investor Interest for such Monthly Period available to
the Class B Certificates are insufficient to pay (i) the interest which accrued
on the Class B Certificates with respect to the related Distribution Date, in an
1-B-5
amount equal to the product of (a) the lesser of the Class B Certificate Rate
and the Class B Cap Rate, (b) the Class B Investor Interest as determined as of
the preceding Distribution Date (or, for the initial Interest Accrual Period,
the Closing Date), after giving effect to all payments, deposits and withdrawals
on such Distribution Date or Closing Date and (c) the actual number of days in
the related Interest Accrual Period divided by 360 (the "Class B Monthly Cap
Rate Interest"), and any Class B Monthly Cap Rate Interest accrued during any
prior period which has not been distributed to the Class B Certificateholders,
(ii) the Class B Monthly Servicing Fee and any accrued and unpaid Class B
Monthly Servicing Fees from prior Monthly Periods, (iii) the Class B Investor
Default Amount for such Distribution Date Monthly Period, and (iv) unreimbursed
Class B Investor Charge-Offs (the sum of the foregoing clauses (i) through (iv)
being referred to as the "Class B Required Amount"), then first, Excess Spread,
if any, from collections of Finance Charge Receivables allocable to the
Collateral Interest and the Class A Certificates will be allocated to the Class
B Certificates up to the unpaid amount of the Class B Required Amount, and
second, Shared Finance Charge Collections, if any, allocable to the Collateral
Interest and Series 1997-1 and not required to pay the Class A Required Amount
for such Distribution Date will be allocated to the Class B Certificates up to
the amount of the Class B Required Amount remaining unpaid.
If on any Distribution Date either or both of the Class A Required Amount
and the Class B Required Amount with respect to such Distribution Date after
application of Available Finance Charge Collections, Excess Spread and Shared
Finance Charge Collections, then Collections of Principal Receivables 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,
Collections of Principal Receivables 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 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 any
Collateral Interest Charge-Offs and any Reallocated Collateral Principal
Collections as of such Distribution Date) applied to fund the Class A Required
Amount.
1-B-6
The Trustee has entered into the Class A Interest Rate Cap and Class B
Interest Rate Cap with the Interest Rate Cap Provider for the exclusive benefit
of the Class A Certificateholders and the Class B Certificateholders,
respectively. On each Transfer Date that the Class A Certificate Rate or the
Class B Certificate Rate for the related Interest Period exceeds the Class A Cap
Rate or the Class B Cap Rate, respectively, the Interest Rate Cap Provider will
make a payment to the Trustee, on behalf of the Trust, based on the amount of
such excess and the notional amount of the applicable Interest Rate Cap. The
Class A Notional Amount will at all times equal the amount of the Expected Class
A Principal, and the Class B Notional Amount will at all times equal the amount
of the Expected Class B Principal. The Class A Interest Rate Cap and the Class
B Interest Rate Cap, or its Replacement Interest Rate Cap or Qualified
Substitute Arrangement, will terminate on the day immediately following the
Class A Expected Final Distribution Date and the Class B Expected Final
Distribution Date, respectively.
People's Bank, as Servicer, is entitled to receive as servicing
compensation a monthly servicing fee in an amount equal to one-twelfth of the
product of [2.0]% per annum and the Aggregate Principal Receivables in the Trust
on the last day of each Monthly Period, payable on each succeeding Distribution
Date. With respect to any Distribution Date, the share of the servicing fee for
each Monthly Period allocable to the Class B Certificates shall be equal to one-
twelfth of the product of [2.0]% per annum and the Class B Investor Interest as
of the last day of the preceding Monthly Period. The remainder of the servicing
fee, which will be allocable to the Class A Certificateholders, the Collateral
Interest Holder, the Holder of the Exchangeable Seller Certificate and the other
Series of certificates, if any, will be payable by the Class A
Certificateholders, the Collateral Interest Holder, the Holder of the
Exchangeable Seller Certificate or by the Holders of such Series of
certificates, and none of the Trust, the Trustee or the Class B
Certificateholders will have any obligation to pay such portion of the servicing
fee.
On the Determination Date immediately preceding the Class B Payment
Commencement Date, and on each Determination Date thereafter, the Servicer shall
notify the Trustee that it will withdraw, or shall instruct the Trustee to
withdraw, and on the next succeeding Transfer Date the Servicer or the Trustee
acting in accordance with such notice or instructions shall withdraw all amounts
on deposit in the Principal Account, in respect of Collections processed during
the preceding Monthly Period and deposit such amounts less any amounts required
to be paid on the
1-B-7
succeeding Distribution Date to the Class A Certificateholders in the
Distribution Account for distribution to the Class B Certificateholders to the
extent specified in the Agreement on the next succeeding Distribution Date.
If on the Class B Scheduled Payment Date the Monthly Total Principal
Allocations for the prior Monthly Period are equal to or greater than an amount
equal to the sum of the Class B Investor Interest as of the Class B Scheduled
Payment Date and the Collateral Monthly Principal, the amount of the Controlled
Distribution Amount will be paid from the Trust to the Class B
Certificateholders up to the outstanding Class B Investor Interest, as provided
in the Agreement and any excess of such Monthly Total Principal Allocations over
an amount equal to the sum of the Class B Investor Interest as of the Class B
Scheduled Payment Date and the Collateral Monthly Principal will be applied as
Shared Principal Collections and if not so used, paid from the Trust to the
holder of the Exchangeable Seller Certificate. If Monthly Total Principal
Allocation for any Monthly Period during the Controlled Accumulation Period is
less than an amount equal to the sum of the Class B Investor Interest as of the
Class B Scheduled Payment Date and the Collateral Monthly Principal, the sum of
such Monthly Total Principal Allocations and the amount of any Shared Principal
Collections available from other Series to the Certificates of this Series will
be paid from the Trust to the applicable Class B Certificateholders in respect
to the Class B Investor Interest to the extent specified in the Agreement.
On each Distribution Date beginning with the month following the Monthly
Period in which the Rapid Amortization Period commences, the Monthly Total
Principal Allocation from the prior Monthly Period along with Shared Principal
Collections from other Series, if any, will be distributed to the Class A
Certificateholders until the earlier of the date on which the Class A Investor
Interest is paid in full and the Series 1997-1 Termination Date and, following
the final principal payment to the Class A Certificateholders, to the Class B
Certificateholders until the Series 1997-1 Termination Date and, following the
final principal payment to the Class B Certificateholders, to the Collateral
Interest Holder until the earlier of the date on which the Collateral Interest
is paid in full and the Series 1997-1 Termination Date.
On each Distribution Date occurring after a deposit is made pursuant to the
paragraphs above, the Paying Agent shall pay the Class B Certificateholders the
amount deposited into the Distribution Account on the related Transfer Date in
respect of interest payable to the Class B Certificateholders and, in
1-B-8
addition, upon and following the Class B Scheduled Payment, Date, the Paying
Agent shall pay to the Class B Certificateholders the amount deposited on the
related Transfer Date into the Distribution Account in respect of principal
payable to the Class B Certificateholders. Distributions with respect to this
Class B Certificate will be made by the Paying Agent by check mailed to the
address of the holder of record appearing in the Certificate Register (except
for the final distribution in respect of this Class B Certificate) without the
presentation or surrender of this Certificate or the making of any notation
thereon, except that with respect to Certificates registered in the name of the
nominee of a Clearing Agency, distributions will be made in the form of
immediately available funds.
This Class B Certificate does not represent an obligation of, or an
interest in, the Seller or the Servicer, and neither the Class B Certificates
nor the Accounts or Receivables are insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Class B
Certificate is limited in right of payment to certain collections respecting the
Receivables, as more specifically set forth hereinabove and in the Agreement.
As provided in the Agreement, withdrawals from the Series 1997-1 Investor
Accounts may be made upon the instructions of the Servicer from time to time for
purposes other than distributions to Class B Certificateholders.
The Seller may designate (subject to the terms and conditions of the
Agreement) Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust; provided, however, that the
-------- -------
Seller shall not make more than one such designation in any Monthly Period.
The Agreement and any Supplement may be amended by the Seller, the Servicer
and the Trustee, without the consent of the Investor Certificateholder of any
Series, to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, to add any other
provisions with respect to matters or questions arising under the Agreement and
any Supplement which are not inconsistent with the provisions of the Agreement
and any Supplement. The Agreement may be amended from time to time by the
Seller, the Servicer and the Trustee, with the consent of the Trustee and
without the consent of the Investor Certificateholders of any Series, to (a)
provide for the transfer by the Seller of its interest in and to all or part of
the Accounts in accordance with the provisions of the Agreement and (b) provide
for the purchase of Principal
1-B-9
Receivables by the Trust at a price which is less than 100% of the outstanding
balance thereof, and to provide for the treatment of Collections of Principal
Receivables, in an amount up to the aggregate amount by which the purchase price
of Principal Receivables as sold thereafter is less than 100%, as Collections of
Finance Charge Receivables; provided, however, that any such action shall not
-------- -------
adversely affect in any material respect the interests of the
certificateholders; provided further, however, that the Servicer and the Trustee
---------------- -------
shall have received notice from the Rating Agency that any such amendment will
not result in the reduction or withdrawal of its then-existing rating of the
certificates of any Series. In addition, the Agreement and any Supplement may
be amended from time to time by the Seller, the Servicer and the Trustee,
without Investor Certificateholder consent, to add to or change any of the
provisions of the Agreement to provide that bearer certificates issued with
respect to any other Series may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any interest on
such bearer certificates, to permit such bearer certificates to be issued in
exchange for registered certificates or bearer certificates of other authorized
denominations or to permit the issuance of uncertificated certificates, subject
to certain conditions. Moreover, any Supplement and any amendments regarding
the addition or removal of Receivables from the Trust will not be considered
amendments requiring certificateholder consent under the provisions of the
Agreement or any Supplement.
The Agreement and any Supplement may be amended by the Seller, the Servicer
and the Trustee with the consent of the holders of certificates evidencing
undivided interests aggregating not less than 66-2/3% of the principal amount of
each Series adversely affected, for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of the Agreement or
any Supplement or of modifying in any manner the rights of Certificateholders of
any Series. No such amendment, however, may (a) reduce in any manner the amount
of, or delay the timing of, distributions required to be made on such Series,
(b) change the definition of or the manner of calculating the interest of any
Certificateholder of such Series or (c) reduce the aforesaid percentage of
undivided interests, the holders of which are required to consent to any such
amendment, in each case without the consent of all Certificateholders of all
Series adversely affected. Promptly following the execution of any amendment to
the Agreement or any Supplement, the Trustee will furnish written notice of the
substance of such amendment to each Certificateholder of all Series (or with
respect to an amendment of a Supplement, to the applicable Series).
1-B-10
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 1997-1 Supplement, the Seller has the option (the
"Discount Option") at any time to designate as Finance Charge Receivables a
fixed or variable percentage of Receivables in designated Accounts which
otherwise would be treated as Principal Receivables. The exercise by the Seller
of the Discount Option will be subject to, among other things, the receipt by
the Trustee of written confirmation from each Rating Agency that the exercise of
such option will not result in a withdrawal or reduction of its rating of the
Certificates. Each Certificateholder by its acceptance of a beneficial interest
in a Certificate shall be deemed to have consented to the exercise by the Seller
of the Discount Option at such time as the Seller determines to exercise such
options.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B Certificates are exchangeable for new Class B Certificates
evidencing like aggregate Undivided Interests, as requested by the Class B
Certificateholder surrendering such Class B Certificates. No service charge may
be imposed for any such exchange but the Servicer or Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1997-1, the Agreement provides
that the right of the Class B Certificateholders to receive payments from the
Trust will
1-B-11
terminate on the Scheduled Series 1997-1 Termination Date. Upon the termination
of Trust pursuant to Section 12.1 of the Agreement, the Trustee will assign and
convey to the Holder of the Exchangeable Seller Certificate (without recourse,
representation or warranty) all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, and Recoveries
allocable to the Trust relating thereto and Interchange pursuant to subsections
2.5(k) and (l) of the Agreement. The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the Holder of the Exchangeable Seller Certificate to
vest in such Holder all right, title and interest which the Trustee had in the
Receivables.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Class B Certificate shall not
be entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, People's Bank has caused this Class B Certificate to be
executed by its duly authorized officer.
PEOPLE'S BANK
By:
------------------------------
Dated: March [ ], 1997
1-B-12
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)
1-B-13
EXHIBIT 2
---------
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
---------------------------------------------
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1997-1
MONTHLY CERTIFICATEHOLDERS' STATEMENT FOR MONTHLY PERIOD #
--
Monthly Period - Beginning Date _________
Monthly Period - Ending Date _________
Determination Date _________
Distribution Date _________
(Note: Monthly Period numbers found herein refer solely to
Series 1997-1 and may not correspond to Monthly Period
numbers used for other Series of the Trust.)
21. Information Regarding Distributions to Certificateholders
21.1 Total amount distributed to Certificateholders
(per $1,000 Initial Investor Interest)
--------------
21.2 Total principal amount distributed to
Certificateholders (per $1,000 Initial
Investor Interest)
--------------
21.3 Total interest amount distributed to
Certificateholders (Per $1,000 Initial
Investor Interest)
--------------
22. Receivables Balances
22.1 Aggregate Principal Receivables in Trust,
end of period
--
--------------
(a) Aggregate Principal Receivables
in Trust on Closing Date
--------------
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 Collections of Principal Receivables during the
Monthly Period allocated to Certificateholders
--------------
23.3 Amount by which Controlled Accumulation
exceeds principal allocated to Investors
--------------
23.4 Collections of Finance Charge Receivables
during the Monthly Period allocated to
Certificateholders
--------------
23.5 Annualized Gross Portfolio Yield for:
(i) Period - 1 _________%
2-2
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
24. Delinquent Balances*
Aggregate Percentage
Account Aggregate
Balances Receivables
---------- -----------
24.1 Less than 31 days delinquent _________ _________ %
24.2 31 - 60 days delinquent _________ _________ %
24.3 61-90 days delinquent _________ _________ %
24.4 More than 90 days delinquent _________ _________ %
24.5 Total _________ _________ %
25. Default Summary
25.1 Aggregate Investor Default Amount
--------------
Aggregate 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
--------------
2-3
25.5 Reallocated Principal Collections
(i) Aggregate dollar amount
--------------
(ii) Per $1,000 of Initial Investor Interest
--------------
25.6 Base Rate
--------------
25.7 Portfolio Yield minus Base Rate for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
26. Monthly Investor Servicing Fee
--------------
27. Accumulation Shortfall
--------------
28.1 Principal Funding Investment Proceeds
--------------
28.2 Principal Funding Investment Shortfall
--------------
29. Withdrawal from Reserve Account under Section 4.6
--------------
30. Required Reserve Account Amount
--------------
31. Available Reserve Account Amount
--------------
32. Pool Factor
--------------
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
2-4
Amount by which Controlled Accumulation Amount exceeds Principal allocated
to Investors during the Monthly Period = $________ - Principal allocated to
Investors
Gross Portfolio Yield = Finance Charges allocated to Investors during the
Monthly Period (including Interchange allocated to Investors and deposited in
the Finance Charge Account)/Investor Interest for the prior Monthly Period
#_______
Portfolio Yield minus Base Rate - Finance charges allocated to Investors during
the Monthly Period (including Interchange allocated to Investors and deposited
in the Finance Charge Amount) - Investor Default Amount for the Monthly
Period/Investor Interest for the prior Monthly Period - Base Rate.
2-5
EXHIBIT 4
---------
Form of Monthly Payment Instructions to Trustee
ON __________, PLEASE PERFORM THE FOLLOWING TRANSACTIONS PURSUANT TO THE SERIES
1997-1 SUPPLEMENT AND THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
DATED MARCH [ ], 1997:
Per Section Please withdraw $_______ from Finance
4.6(a)(i) & Charge Account - and deposit into the
4.6(d)(vii) Distribution Account - to pay Class A
Monthly Interest to Class A Certificate
Holders.
Per Section Please withdraw $_______ from Finance
4.6(b)(i) & Charge Account - and deposit into the
4.6(d)(viii) Distribution Account - to pay Class B
Monthly Interest to Class B Certificate
Holders.
Per Section Please withdraw $__________ from Finance
4.6(d)(vi) Charge Account - and deposit into the
Distribution Account - to pay Collateral
Monthly Interest to the Collateral
Interest Holder.
Per Section Please withdraw $__________ from Finance
4.6(a)(ii), Charge Account - to pay Monthly Investor
4.6(b)(ii), Servicing Fee to People's Bank.
4.6(c)(i) &
4.6(d)(vii)
Per Section Please withdraw $_________ from Finance
4.6(a)(iii), Charge Account - to pay Investor Default
4.6(b)(iii) & Amount to People's Bank.
4.6(d)(ix)
Per Section Please withdraw $_________ from
4.6(d)(ix) Finance Charge Account - to pay Monthly
Loan Fee to _____________, as Administrative Agent
under the Loan Agreement, dated as of
March [ ], 1997 among Trustee, People's
Bank, _________________________ and
___________ ______________, Individually
and as Administrative Agent.
Per Section Please withdraw $____________ from Finance
4.6(d)(xvii) Charge Account - and pay to People's
Structured Finance Corp.
AUTHORIZED BY:
-------------------------------
EXHIBIT 5
---------
Form of Notification to Trustee Regarding
Completion of Required Deposits and Withdrawals
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1997-1
This is to inform you that on the Transfer Date occurring on _________
we have made all deposits and withdrawals for the Monthly Period beginning on
________ and ending on _________.
----------------------------------
Name:
Title:
EXHIBIT 6
---------
Form of Notification to Trustee Regarding
Failure to Make Payment
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1997-1
This is to inform you that we have been unable to make a [payment or
deposit] in the amount of __________ for the Monthly Period beginning on
________ and ending on _________. Such payments were to be made from [Account]
on _________ and such payment or deposit was to be made to [Person or Account].
----------------------------------
Name:
Title:
EXHIBIT 7
---------
Form of Notification to Trustee of Amount Required to be
Withdrawn From the Reserve Account
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1997-1
This is to inform you that for the Transfer Date occurring on
________, the Reserve Draw Amount will be $___________.
----------------------------------
Name:
Title: