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EXHIBIT 4.3
PEOPLE'S BANK
Transferor and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1998-1 Investor Certificateholders
----------------------------------------
SERIES 1998-1 SUPPLEMENT
Dated as of April 1, 1998
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of March 18, 1997
----------------------------------------
$400,000,000
PEOPLE'S BANK CREDIT CARD MASTER TRUST
$343,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1998-1
$27,000,000 Floating Rate Class B
Asset Backed Certificates, Series 1998-1
$30,000,000 Collateral Interest, Series 1998-1
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TABLE OF CONTENTS
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PAGE
----
RECITALS 1
SECTION 1. Designation..................................... 1
SECTION 2. Definitions..................................... 2
SECTION 2.1 Other Definitional Provisions................... 27
SECTION 3. Conveyance of Interest in Series Accounts....... 27
SECTION 4. Minimum Seller Interest, Minimum Aggregate
Principal Receivables and Removal of Accounts... 27
SECTION 5. Reassignment and Transfer Terms................. 28
SECTION 6. Delivery and Payment for the Series 1998-1
Certificates.................................... 28
SECTION 7. Depositary; Form of Delivery of Series 1998-1
Certificates.................................... 29
SECTION 8. Enhancement..................................... 29
SECTION 9. Article IV of Agreement......................... 29
SECTION 9.A Series 1998-1 Pay Out Events.................... 74
SECTION 10. Series 1998-1 Termination....................... 76
SECTION 11. Ratification and Reaffirmation of Pooling and
Servicing Agreement............................. 77
SECTION 12. Ratification and Reaffirmation of
Representations and Warranties.................. 77
SECTION 13. [RESERVED]...................................... 77
SECTION 14. No Subordination................................ 77
SECTION 15. Repurchase of the Series 1998-1 Certificates.... 78
SECTION 16. Counterparts.................................... 79
SECTION 17. Additional Covenants of Transferor.............. 79
SECTION 18. Series 1998-1 Investor Exchange................. 79
i
SECTION 19. Governing Law................................... 80
SECTION 20. Notification to Luxembourg Stock Exchange....... 80
EXHIBIT 1-A Form of Class A Investor Certificate
EXHIBIT 1-B Form of Class B Investor Certificate
EXHIBIT 2 Form of Monthly Certificateholders' Statement
EXHIBIT 3 DTC Letter of Representations
EXHIBIT 4 Form of Monthly Payment Instructions to Trustee
EXHIBIT 5 Form of Notice to Trustee Regarding Completion of
Required Deposits and Withdrawals
EXHIBIT 6 Form of Notification to Trustee Regarding Failure
to Make Payment
ii
SERIES 1998-1 SUPPLEMENT, dated as of April 1, 1998 (as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the Pooling and Servicing Agreement referenced below, this "Series Supplement")
by and between PEOPLE'S BANK, a Connecticut capital stock savings bank, as
Transferor and Servicer, and BANKERS TRUST COMPANY, a banking corporation
organized and existing under the laws of the State of New York, not in its
individual capacity but solely as Trustee under the Amended and Restated Pooling
and Servicing Agreement dated as of March 18, 1997 between People's Bank and the
Trustee (as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms, the "Pooling and Servicing
Agreement").
RECITALS:
--------
1. Section 6.9(b) of the Pooling and Servicing Agreement provides,
among other things, that the Transferor and the Trustee may at any time and from
time to time enter into a Supplement to the Pooling and Servicing Agreement for
the purpose of authorizing the delivery by the Trustee to the Transferor for the
execution and redelivery to the Trustee for authentication of one or more Series
of Investor Certificates.
2. Pursuant to this Series Supplement, the Transferor and the
Trustee on behalf of the Trust shall create a new Series of Investor
Certificates and shall specify the Principal Terms thereof.
SECTION 1. Designation. (a) The Series 1998-1 Investor Certificates
-----------
shall be issued in two Classes, which shall be designated generally as the
Floating Rate Class A Asset Backed Certificates, Series 1998-1 and the Floating
Rate Class B Asset Backed Certificates, Series 1998-1. In addition, there is
hereby authorized a third Class which constitutes an uncertificated interest in
the Trust, which shall be deemed to be an "Investor Certificate" for all
purposes under the Pooling and Servicing Agreement and this Series Supplement,
except as expressly provided herein, and shall be known as the Collateral
Interest, Series 1998-1 and have the rights assigned to the Collateral Interest
in this Series Supplement.
(b) The Collateral Interest Holder, as holder of an "Investor Certificate"
under the Pooling and Servicing Agreement, shall be entitled to the benefits of
the Pooling and Servicing Agreement and this Series Supplement upon payment by
the Collateral Interest Holder of amounts owing on the Closing Date pursuant to
the Loan Agreement. Notwithstanding the foregoing, except as expressly provided
herein, (i) the provisions of Article VI and Article XII of the Pooling and
Servicing Agreement relating to the registration, authentication, delivery,
presentation, cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest and (ii) the Opinion of Counsel specified
in clause (d) of the sixth sentence of subsection 6.9(h) of the Agreement shall
not be required with respect to the Collateral Interest.
SECTION 2. Definitions. In the event that any term or provision
-----------
contained herein shall conflict with or be inconsistent with any provision
contained in the Pooling and Servicing Agreement, the terms and provisions of
this Series Supplement shall govern. All capitalized terms not otherwise defined
herein are defined in the Pooling and Servicing Agreement. All Article, Section
or subsection references herein shall mean Article, Section or subsections of
the Pooling and Servicing Agreement except as otherwise provided herein. Each
capitalized term used or defined herein shall relate only to the Series 1998-1
Investor Certificates and to no other Series of Certificates issued by the
Trust.
"Accumulation Shortfall" shall mean (a) with respect to the Transfer Date
----------------------
occurring immediately prior to the Initial Class A Accumulation Date, zero, and
(b) with respect to each Transfer Date thereafter during the Controlled
Accumulation Period occurring prior to the Class A Scheduled Payment Date, the
excess, if any, of the applicable Controlled Deposit Amount for the immediately
preceding Transfer Date over the amount deposited into the Principal Funding
Account pursuant to subsection 4.8(a)(ii)(A) on such preceding Transfer Date.
"Adjusted Investor Interest" shall mean, on any date of determination, an
--------------------------
amount equal to the sum of (a) the Class A Adjusted Investor Interest, (b) the
Class B Investor Interest and (c) the Collateral Interest, in each case as of
such date of determination.
"Agent" shall have the meaning specified in the Loan Agreement.
-----
"Agreement" shall mean the Pooling and Servicing Agreement, as the same may
---------
be amended, supplemented or otherwise modified from time to time in accordance
with its terms, including by this Series Supplement thereto.
"Available Investor Principal Collections" shall mean, with respect to any
----------------------------------------
Monthly Period, an amount equal to (a) Principal Collections processed on any
Date of Processing during such Monthly Period, which were allocated to the
Investor Interest and were deposited in the Principal Account pursuant to
subsection 4.4(c)(ii), 4.4(d)(ii) or 4.4(e)(ii) (or which will be deposited in
the Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection
- 2 -
4.2(a) of the Agreement and will be allocated to the Investor Interest pursuant
to subsection 4.4(c)(ii), 4.4(d)(ii) or 4.4(e)(ii) as if they had been deposited
in the Collection Account during such Monthly Period), plus (b) the sum of the
amounts allocated on such related Transfer Date to Investor Default Amounts and
Investor Charge-Offs pursuant to subsections 4.6(a)(iii), 4.6(a)(iv),
4.6(b)(iii), 4.6(b)(iv), 4.6(d)(i), 4.6(d)(ii), 4.6(d)(ix), 4.6(d)(x) and 4.12,
as applicable, minus (c) the amount of Reallocated Principal Collections with
respect to such Monthly Period which pursuant to Section 4.12 are required to
fund the Class A Required Amount and the Class B Required Amount (other than any
portions thereof that are applied pursuant to (x) subsection 4.6(a)(iii),
4.6(a)(iv), 4.6(b)(iii) or 4.6(b)(iv) and (y) subsection 4.6(d)(i) or 4.6(d)(ii)
(to the extent such portions pursuant to subsection 4.6(d)(i) or 4.6(d)(ii) are
available to pay Investor Default Amounts or Investor Charge-Offs), which shall,
without duplication, be included as Available Investor Principal Collections
pursuant to clause (b) above), plus (d) Available Shared Principal Collections
with respect to such Monthly Period.
"Available Reserve Account Amount" shall mean, as to any Transfer Date, the
--------------------------------
lesser of (a) the amount on deposit in the Reserve Account on such date (after
taking into account any interest and earnings retained in the Reserve Account
pursuant to subsection 4.9(b) on such date, but before giving effect to any
deposit made or to be made pursuant to subsection 4.6(d)(xi) to the Reserve
Account on such date) and (b) the Required Reserve Account Amount.
"Available Shared Principal Collections" shall mean, with respect to any
--------------------------------------
Monthly Period, Shared Principal Collections available to be allocated to the
Series 1998-1 Investor Certificates from each other Series.
"Base Rate" shall mean, with respect to any Monthly Period, the Certificate
---------
Rate plus 2.00% per annum.
"Calculation Period" shall have the meaning specified in the applicable
------------------
Interest Rate Cap.
"Certificate Rate" shall mean, with respect to the Series 1998-1 Investor
----------------
Certificates and any Monthly Period, the weighted average of (i) the lesser of
the Class A Certificate Rate and the Class A Cap Rate, (ii) the lesser of the
Class B Certificate Rate and the Class B Cap Rate and (iii) the Collateral Rate
(weighted based on the Class A Investor Interest, the Class B Investor Interest
and the Collateral Interest, respectively, as of the last day of the preceding
Monthly Period).
- 3 -
"Class A Adjusted Investor Interest" shall mean, on any date of
----------------------------------
determination, an amount equal to the Class A Investor Interest minus the
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" shall mean, with respect to any Monthly Period,
-----------------------
an amount equal to the sum of (a) the Class A Floating Allocation of Finance
Charge Collections (other than the proceeds of the sale of any Interest Rate Cap
pursuant to Section 4.11(g)) processed on any Date of Processing during such
Monthly Period, which are allocated to the Investor Interest and deposited in
the Finance Charge Account pursuant to Article IV (or which will be deposited in
the Collection Account on the Transfer Date following such Monthly Period
pursuant to the fourth paragraph of subsection 4.2(a) of the Agreement and will
be allocated to the Investor Interest pursuant to subsection 4.4(c)(i),
4.4(d)(i) or 4.4(e)(i) as if they had been deposited in the Collection Account
during such Monthly Period), (b) the Principal Funding Investment Proceeds, if
any, arising pursuant to subsection 4.3(c) with respect to the related Transfer
Date which are to be applied as Class A Available Funds pursuant to such
subsection (or which will be required to be deposited in the Finance Charge
Account pursuant to such subsections on the related Transfer Date), (c) amounts,
if any, to be withdrawn from the Reserve Account which will be deposited into
the Finance Charge Account on the related Transfer Date pursuant to subsections
4.9(b) and 4.9(d) and (d) the proceeds from the sale of all or any portion of
the Class A Interest Rate Cap deposited into the Collection Account during such
Monthly Period pursuant to subsection 4.11(g).
"Class A Cap Rate" shall mean [____]% per annum.
----------------
"Class A Certificate Rate" shall mean, with respect to the period from and
------------------------
including the Closing Date through and including April 14, 1998, [____]% 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 1998-1, executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form of Exhibit 1-A hereto.
"Class A Covered Amount" shall mean an amount determined as of each
----------------------
Transfer Date with respect to any Interest Accrual Period
- 4 -
as the product of (a) a fraction, the numerator of which is the actual number of
days in such Interest Accrual Period and the denominator of which is 360, (b)
the Class A Certificate Rate in effect with respect to such Interest Accrual
Period, and (c) the Principal Funding Account Balance as of the Distribution
Date preceding such Transfer Date after giving effect to all payments, deposits
and withdrawals on such Distribution Date.
"Class A Excess Interest" shall mean, with respect to any Distribution
-----------------------
Date, an amount equal to the product of (a) the amount by which the Class A
Certificate Rate exceeds the Class A Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class A Excess Principal, if any, as
of the preceding Distribution Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date), and (c) the actual number
of days in such Interest Accrual Period divided by 360.
-------
"Class A Excess Principal" shall mean on any date of determination, the
------------------------
amount by which the Class A Adjusted Investor Interest exceeds the Expected
Class A Principal after giving effect to all payments, deposits and withdrawals
on such date.
"Class A Floating Allocation" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class A Adjusted Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class A Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean, on any date of
---------------------------------
determination, the aggregate initial principal amount of the Class A
Certificates on the Closing Date, which is $343,000,000, less the portion of
such amount represented by Class A Certificates tendered and canceled pursuant
to any Series 1998-1 Investor Exchange occurring prior to such date of
determination.
"Class A Interest Rate Cap" shall mean the master agreement dated as of
-------------------------
April ___, 1998 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated April
___, 1998 between the Trustee and the Interest Rate Cap Provider, relating to
the Class A Certificates and for the exclusive benefit of the Class A
Certificateholders, or (unless context requires otherwise) any Replacement
Interest Rate Cap or Qualified Substitute Arrangement with respect thereto, as
the same may in each case be amended,
- 5 -
supplemented or otherwise modified from time to time in accordance with its
terms upon ratings confirmation by the Rating Agency.
"Class A Investor Charge-Offs" shall have the meaning specified in
----------------------------
subsection 4.5(a).
"Class A Investor Default Amount" shall mean, (i) with respect to the
-------------------------------
period from and including the Closing Date through and including April 30, 1998,
an amount equal to the Class A Investor Default Amount (calculated pursuant to
clause (ii) of this definition) for the full April 1998 Monthly Period,
multiplied by [___/30], and (ii) with respect to each Monthly Period thereafter,
an amount equal to the product of (a) the Investor Default Amount for such
Monthly Period and (b) the Class A Floating Allocation for such Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination, an
-------------------------
amount equal to (a) the Class A Initial Investor Interest, minus (b) the
-----
aggregate amount of payments of principal paid to the Class A Certificateholders
pursuant to Section 4.8 prior to such date of determination, minus (c) the
-----
excess, if any, of the aggregate amount of Class A Investor Charge-Offs over
----
Class A Investor Charge-Offs reimbursed pursuant to subsections 4.6(a)(iv),
4.6(d)(i) and 4.6(e) prior to such date of determination; provided, however,
-------- -------
that upon the tender and cancellation of any Class A Certificates pursuant to a
Series 1998-1 Investor Exchange, the amounts stated in clauses (b) and (c) shall
be computed with respect to the Class A Certificates not tendered or canceled
pursuant to such Series 1998-1 Investor Exchange; provided further, however,
---------------- -------
that such Class A Investor Interest may not be reduced below zero.
"Class A Monthly Cap Rate Interest" shall mean, with respect to any
---------------------------------
Distribution Date, an amount equal to the product of (a) the lesser of the Class
A Certificate Rate and the Class A Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class A Adjusted Investor Interest as
determined as of the preceding Distribution Date or, for the initial Interest
Accrual Period, the Closing Date (after giving effect to all payments, deposits
and withdrawals on such Distribution Date or Closing Date, as applicable) and
(c) the actual number of days in such Interest Accrual Period divided by 360.
"Class A Monthly Interest" shall mean, with respect to any Distribution
------------------------
Date, an amount equal to the sum of (a) the product of (i) the Class A
Certificate Rate with respect to the immediately preceding Interest Accrual
Period and (ii) the lesser of the Class A Adjusted Investor Interest as of the
preceding Distribution Date (after giving effect to all payments, deposits and
withdrawals on such Distribution Date) and the Expected Class
- 6 -
A Principal as of the preceding Distribution Date, or, for the first
Distribution Date, the Class A Initial Investor Interest, and (iii) the actual
number of days in such Interest Accrual Period divided by 360, (b) the Class A
Covered Amount for such Interest Accrual Period, and (c) the product of (i) the
Class A Excess Principal as of such preceding Distribution Date, (ii) the lesser
of the Class A Certificate Rate and Class A Cap Rate with respect to such
Interest Accrual Period and (iii) the actual number of days in such Interest
Accrual Period divided by 360.
"Class A Monthly Principal" shall mean, with respect to each Transfer Date
-------------------------
relating to the Controlled Accumulation Period or the Rapid Amortization Period,
prior to the payment in full of the Class A Investor Interest, an amount equal
the least of (i) Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date, (ii) for each Transfer
Date with respect to the Controlled Accumulation Period, prior to the Class A
Scheduled Payment Date, the applicable Controlled Deposit Amount for such
Transfer Date, and (iii) the Class A Adjusted Investor Interest prior to any
deposits on such Transfer Date.
"Class A Monthly Servicing Fee" shall mean (a) with respect to the first
-----------------------------
Transfer Date, an amount equal to the Class A Monthly Servicing Fee (calculated
pursuant to clause (b) of this definition) for the full April 1998 Monthly
Period, multiplied by [___/30], and (b) with respect to any subsequent Transfer
Date, one-twelfth of the product of 2.00% and the Class A Adjusted Investor
Interest on the last day of the preceding Monthly Period.
"Class A Notional Amount" shall mean, on any date of determination, the
-----------------------
notional amount of the Class A Interest Rate Cap on such date, which shall be an
amount equal to or greater than the Expected Class A Principal with respect to
such date of determination, calculated based upon a Controlled Accumulation
Period commencing November 1, 2002 (with a Controlled Accumulation Period Length
of four months), less the aggregate notional amount of any portions of the Class
A Interest Rate Cap sold on or prior to such date pursuant to Section 4.11(g).
"Class A Required Amount" shall have the meaning specified in subsection
-----------------------
4.6(e).
"Class A Scheduled Payment Date" shall mean the March 2003 Distribution
------------------------------
Date.
"Class B Available Funds" shall mean, with respect to any Monthly Period,
-----------------------
an amount equal to the sum of (a) the Class B Floating Allocation of Finance
Charge Collections (other than the proceeds of the sale of any Interest Rate Cap
pursuant to Section
- 7 -
4.11(g)) processed on any Date of Processing during such Monthly Period, which
are allocated to the Investor Interest and deposited in the Finance Charge
Account pursuant to Article IV (or which will be deposited in the Collection
Account on the Transfer Date following such Monthly Period pursuant to the
fourth paragraph of subsection 4.2(a) of the Agreement and will be allocated to
the Investor Interest pursuant to subsection 4.4(c)(i), 4.4(d)(i) or 4.4(e)(i)
as if they had been deposited in the Collection Account during such Monthly
Period) and (b) the proceeds from the sale of all or any portion of the Class B
Interest Rate Cap deposited into the Collection Account during such Monthly
Period pursuant to subsection 4.11(g).
"Class B Cap Rate" shall mean [____]% per annum.
----------------
"Class B Certificate Rate" shall mean, with respect to the period from and
------------------------
including the Closing Date through and including April 14, 1998, [____]% 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 1998-1, executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form of Exhibit 1-B hereto.
"Class B Excess Interest" shall mean, with respect to any Distribution
-----------------------
Date, an amount equal to the product of (a) the amount by which the Class B
Certificate Rate exceeds the Class B Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class B Excess Principal, if any, as
of the preceding Distribution Date (after giving effect to all payments,
deposits and withdrawals on such Distribution Date), and (c) the actual number
of days in such Interest Accrual Period divided by 360.
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"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
- 8 -
Period and the denominator of which is equal to the Investor Interest as of the
close of business on such day.
"Class B Floating Allocation" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class B Investor Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided that, with respect to the first Monthly
Period, the Class B Floating Allocation means the percentage equivalent of a
fraction, the numerator of which is the Class B Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean, on any date of
---------------------------------
determination, the aggregate initial principal amount of the Class B
Certificates on the Closing Date, which is $27,000,000 less the portion of such
amount represented by Class B Certificates tendered and canceled pursuant to any
Series 1998-1 Investor Exchange occurring prior to such date of determination.
"Class B Interest Rate Cap" shall mean the master agreement dated as of
-------------------------
April ___, 1998 between the Trustee and the Interest Rate Cap Provider, as
supplemented by the schedule attached thereto and the confirmation dated April
___, 1998 between the Trustee and the Interest Rate Cap Provider, relating to
the Class B Certificates and for the exclusive benefit of the Class B
Certificateholders, or (unless context requires otherwise) any Replacement
Interest Rate Cap or Qualified Substitute Arrangement with respect thereto, as
the same may in each case be amended, supplemented or otherwise modified from
time to time in accordance with its terms upon ratings confirmation by the
Rating Agency.
"Class B Investor Allocation" shall mean, with respect to any Monthly
---------------------------
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables during the Revolving Period, the Class B
Floating Allocation, and (b) with respect to the Principal Receivables during
the Controlled Accumulation Period or Rapid Amortization Period, the Class B
Fixed Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified in
----------------------------
subsection 4.5(b).
"Class B Investor Default Amount" shall mean, (i) with respect to the
-------------------------------
period from and including the Closing Date through and including April 30, 1998,
an amount equal to the Class B Investor Default Amount (calculated pursuant to
clause (ii) of this definition) for the full April 1998 Monthly Period,
- 9 -
multiplied by [___/30], and (ii) with respect to each Monthly Period thereafter,
an amount equal to the product of (a) the Investor Default Amount for such
Monthly Period and (b) the Class B Floating Allocation for such Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination, an
-------------------------
amount equal to (a) the Class B Initial Investor Interest, minus (b) the
-----
aggregate amount of payments of principal paid to the Class B Certificateholders
pursuant to Section 4.8 prior to such date of determination, minus (c) the
-----
aggregate amount of Reallocated Class B Principal Collections allocated on all
prior Transfer Dates pursuant to Section 4.12 with respect to which the
Collateral Interest was not reduced pursuant to such Section 4.12, minus (d) the
-----
aggregate amount of Class B Investor Charge-Offs with respect to all prior
Transfer Dates, minus (e) the amount by which the Class B Investor Interest has
-----
been reduced on all prior Transfer Dates pursuant to the third sentence of
subsection 4.5(a) plus (f) the aggregate amount allocated and available on all
----
prior Transfer Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c), (d) and (e); provided, however, that upon the tender
-------- -------
and cancellation of any Class B Certificates pursuant to a Series 1998-1
Investor Exchange, the amounts stated in clauses (b), (c), (d), (e) and (f)
shall be computed with respect to the Class B Certificates not tendered or
canceled pursuant to such Series 1998-1 Investor Exchange; provided further,
----------------
however, that such Class B Investor Interest may not be reduced below zero.
- -------
"Class B Monthly Cap Rate Interest" shall mean, with respect to any
---------------------------------
Distribution Date, an amount equal to the product of (a) the lesser of the Class
B Certificate Rate and the Class B Cap Rate with respect to the immediately
preceding Interest Accrual Period, (b) the Class B Investor Interest as
determined as of the preceding Distribution Date or, for the initial Interest
Accrual Period, the Closing Date (after giving effect to all payments, deposits
and withdrawals on such Distribution Date or Closing Date) and (c) the actual
number of days in such preceding Interest Accrual Period divided by 360.
"Class B Monthly Interest" shall mean, with respect to any Distribution
------------------------
Date, an amount equal to the sum of (a) the product of (i) the Class B
Certificate Rate with respect to the immediately preceding Interest Accrual
Period, (ii) the lesser of the Class B Investor Interest as of the preceding
Distribution Date (after giving effect to all payments, deposits and withdrawals
on such Distribution Date) and the Expected Class B Principal as of the
preceding Distribution Date, or, for the first Distribution Date, the Class B
Initial Investor Interest, and (iii) the actual number of days in such Interest
Accrual Period divided by 360 and (b) the product of (i) the Class B
- 10 -
Excess Principal as of such preceding Distribution Date,(ii) the lesser of the
Class B Certificate Rate and the Class B Cap Rate with respect to such Interest
Accrual Period and (iii) the actual number of days in such Interest Accrual
Period divided by 360.
"Class B Monthly Principal" shall mean, with respect to each Transfer Date
-------------------------
relating to the Controlled Accumulation Period immediately following the Class A
Scheduled Payment Date, or with respect to any Transfer Date relating to the
Rapid Amortization Period, beginning with the Transfer Date on which the Class A
Investor Interest has been paid in full (after taking into account payments to
be made on the related Distribution Date), an amount equal to the lesser of (i)
Available Investor Principal Collections on deposit in the Principal Account
(minus the portion of such Available Investor Principal Collections applied to
Class A Monthly Principal on such Transfer Date) and (ii) the Class B Investor
Interest for such Transfer Date.
"Class B Monthly Servicing Fee" shall mean (a) with respect to the first
-----------------------------
Transfer Date, an amount equal to the Class B Monthly Servicing Fee (calculated
pursuant to clause (b) of this definition) for the full April 1998 Monthly
Period, multiplied by [___/30], and (b) with respect to any subsequent Transfer
Date, one-twelfth of the product of 2.00% and the Class B Investor Interest on
the last day of the preceding Monthly Period.
"Class B Notional Amount" shall mean, on any date of determination, the
-----------------------
notional amount of the Class B Interest Rate Cap on such date, which shall be an
amount equal to the Expected Class B Principal with respect to such date of
determination, less the aggregate notional amount of any portions of the Class B
Interest Rate Cap sold on or prior to such date pursuant to Section 4.11(g).
"Class B Payment Commencement Date" shall mean either the Distribution Date
---------------------------------
on which the Class A Investor Interest is reduced to zero or, if the Class A
Investor Interest is paid in full on the Class A Scheduled Payment Date and the
Rapid Amortization Period has not commenced, the Distribution Date following the
Class A Scheduled Payment Distribution Date.
"Class B Required Amount" shall have the meaning specified in subsection
-----------------------
4.6(f).
"Class B Scheduled Payment Date" shall mean the April 2003 Distribution
------------------------------
Date.
"Closing Date" shall mean April ___, 1998.
------------
"Collateral Allocation" shall mean, with respect to any Monthly Period, (a)
---------------------
with respect to Default Amounts and Finance
- 11 -
Charge Receivables at any time and Principal Receivables during the Revolving
Period, the Collateral Floating Allocation, and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Rapid Amortization
Period, the Collateral Fixed Allocation.
"Collateral Available Funds" shall mean, with respect to any Monthly
--------------------------
Period, the Collateral Floating Allocation of Finance Charge Collections
processed on any Date of Processing during such Monthly Period, which are
allocated to the Investor Interest and deposited in the Finance Charge Account
pursuant to Article IV (or which will be deposited in the Collection Account on
the Transfer Date following such Monthly Period pursuant to the fourth paragraph
of subsection 4.2(a) of the Agreement and will be allocated to the Investor
Interest pursuant to subsection 4.4(c)(i), 4.4(d)(i) or 4.4(e)(i) as if they had
been deposited in the Collection Account during such Monthly Period).
"Collateral Default Amount" shall mean, (i) with respect to the period from
-------------------------
and including the Closing Date through and including April 30, 1998, an amount
equal to the Collateral Default Amount (calculated pursuant to clause (ii) of
this definition) for the full April 1998 Monthly Period, multiplied by [___/30],
and (ii) for each Monthly Period thereafter, an amount equal to the product of
(a) the Investor Default Amount for such Monthly Period and (b) the Collateral
Floating Allocation for such Monthly Period.
"Collateral Fixed Allocation" shall mean, with respect to any Monthly
---------------------------
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on such day.
"Collateral Floating Allocation" shall mean, with respect to any Monthly
------------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Collateral Interest as of the close of
business on the last day of the preceding Monthly Period and the denominator of
which is equal to the Adjusted Investor Interest as of the close of business on
such day; provided that, with respect to the first Monthly Period, the
Collateral Floating Allocation means the percentage equivalent of a fraction,
the numerator of which is 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
- 12 -
make the required payments to the Collateral Interest Holder under this Series
Supplement, the portion of Collections allocable thereto under the Agreement and
this Series Supplement, and funds on deposit in the Collection Account allocable
thereto pursuant to the Agreement and this Series Supplement. On any date of
determination, for purposes of all calculations in the Agreement and this Series
Supplement, the amount of the Collateral Interest shall be an amount equal to
(a) the Initial Collateral Interest, minus (b) the aggregate amount of payments
-----
of principal paid to the Collateral Interest Holder pursuant to Section 4.8
prior to such date of determination, minus (c) the aggregate amount of
-----
Reallocated Principal Collections allocated on all prior Transfer Dates pursuant
to Section 4.12, minus (d) the aggregate amount of Collateral Interest Charge-
-----
Offs with respect to all prior Transfer Dates, minus (e) the amount by which the
-----
Collateral Interest has been reduced on all prior Transfer Dates pursuant to the
second sentence of subsection 4.5(a) plus (f) the aggregate amount allocated and
----
available on all prior Transfer Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
-------- -------
that such Collateral Interest may not be reduced below zero.
"Collateral Interest Charge-Offs" shall have the meaning specified in
-------------------------------
subsection 4.5(c).
"Collateral Interest Holder" shall mean the entity so designated in the
--------------------------
Loan Agreement.
"Collateral Interest Monthly Servicing Fee" shall mean (a) with respect to
-----------------------------------------
the first Transfer Date, an amount equal to the Collateral Interest Monthly
Servicing Fee (calculated pursuant to clause (b) of this definition) for the
full April 1998 Monthly Period, multiplied by [___/30], and (b) with respect to
any subsequent Transfer Date, one-twelfth of the product of 2.00% and the
Collateral Interest on the last day of the preceding Monthly Period.
"Collateral Interest Surplus" shall mean, with respect to any date of
---------------------------
determination, the amount, if any, by which the Collateral Interest as of such
date (after giving effect to reductions in the Collateral Interest for any
Collateral Interest Charge-Offs and Reallocated Principal Collections and any
further adjustments to the Collateral Interest for the benefit of the Class A
Certificateholders and the Class B Certificateholders as of such date) exceeds
the Required Collateral Interest as of such date.
"Collateral Monthly Interest" shall mean, with respect to any Transfer
---------------------------
Date, an amount equal to the product of (i) the Collateral Rate with respect to
the related Interest Accrual
- 13 -
Period, (ii) the Collateral Interest as of the preceding Distribution Date
(after giving effect to all payments, deposits and withdrawals on such
Distribution Date) or, for the first Transfer Date, the Initial Collateral
Interest, and (iii) the actual number of days in the related Interest Accrual
Period divided by 360.
"Collateral Monthly Principal" shall mean (a) with respect to any Transfer
----------------------------
Date relating to the Revolving Period, following any reduction of the Required
Collateral Interest effected as described in clause (x) of the proviso of the
definition of "Required Collateral Interest", an amount equal to the lesser of
(x) the Collateral Interest Surplus as of such Transfer Date and (y) the
Available Investor Principal Collections on such Transfer Date, (b) with respect
to any Transfer Date relating to the Controlled Accumulation Period or the Rapid
Amortization Period, as the case may be, an amount equal to the lesser of (x)
the Collateral Interest Surplus as of such Transfer Date and (y) the excess, if
any of (i) the Available Investor Principal Collections over (ii) the sum of the
Class A Monthly Principal and the Class B Monthly Principal on such Transfer
Date.
"Collateral Rate" shall mean for any Interest Accrual Period, the rate
---------------
specified in the Loan Agreement.
"Controlled Accumulation Amount" shall mean (a) for any Transfer Date with
------------------------------
respect to the Controlled Accumulation Period prior to the payment in full of
the Class A Investor Interest, $[________]; provided that if the Controlled
Accumulation Period Length is modified pursuant to subsection 4.8(d), (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(d) on the date on which the Controlled Accumulation Period
has most recently been modified and (ii) the sum of the Controlled Accumulation
Amounts for all Transfer Dates with respect to the modified Controlled
Accumulation Period shall not be less than the Class A Investor Interest, and
(b) for any Transfer Date with respect to the Controlled Accumulation Period
after the payment in full of the Class A Investor Interest, an amount equal to
the Class B Investor Interest on such Transfer Date.
"Controlled Accumulation Date" shall mean November 1, 2002.
----------------------------
"Controlled Accumulation Period" shall mean, unless a Pay Out Event has
------------------------------
occurred prior to such date, a period commencing on the Controlled Accumulation
Date or such later day as is determined in accordance with subsection 4.8(d) and
continuing to, but not including, a Pay Out Commencement Date or to, and
including, (i) the date of termination of the Trust pursuant to
- 14 -
Section 12.1 of the Agreement or (ii) the Series 1998-1 Termination Date.
"Controlled Accumulation Period Length" shall have the meaning specified in
-------------------------------------
subsection 4.8(d).
"Controlled Deposit Amount" shall mean, with respect to any Transfer Date,
-------------------------
the sum of (a) the Controlled Accumulation Amount for such Transfer Date and (b)
the Accumulation Shortfall, if any, as of such date.
"Definitive Certificates" shall have the meaning specified in Section 6.11
-----------------------
of the Agreement.
"Discount Option" shall have the meaning specified in Section 4.14.
---------------
"Discounted Percentage" shall have the meaning specified in Section 4.14.
---------------------
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.3(b).
"Distribution Date" shall mean April 15, 1998 and the fifteenth day of each
-----------------
calendar month thereafter, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day; provided, however, that no Distribution Date shall
-------- -------
occur after the earliest to occur of (x) the Distribution Date on which the
Investor Interest has been paid in full, (y) the date of termination of the
Trust pursuant to Section 12.1 of the Agreement, and (z) the Series 1998-1
Termination Date.
"Enhancement" shall mean, with respect to the Series 1998-1 Investor
-----------
Certificates, the subordination of the Collateral Interest to the extent
provided herein, and, with respect to the Class A Certificates, the funds and
securities on deposit in the Reserve Account, up to the Available Reserve
Account Amount, and the subordination of the Class B Certificates to the extent
provided herein.
"Enhancement Provider" shall mean, with respect to the Series 1998-1
--------------------
Certificates, the Collateral Interest Holder, and with respect to any other
Series, the applicable provider of credit enhancement, if any.
"Excess Principal Funding Investment Proceeds" shall mean, with respect to
--------------------------------------------
each Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such Transfer
Date exceed the Class A Covered Amount determined on such Transfer Date.
- 15 -
"Excess Spread" shall mean the sum of the amounts specified pursuant to
-------------
subsections 4.6(a)(v), 4.6(b)(v) and 4.6(c)(ii).
"Expected Class A Principal" shall mean, with respect to any date of
--------------------------
determination, (a) on each date to but excluding the Initial Class A
Accumulation Date, the Class A Initial Investor Interest, (b) on each date
thereafter to but not including the Class A Scheduled Payment Date, the Class A
Initial Investor Interest less the product of (i) the Controlled Accumulation
Amount and (ii) the number of Distribution Dates that have occurred from and
including the Initial Class A Accumulation Date, and (c) on each date
thereafter, zero.
"Expected Class B Principal" shall mean, with respect to any date of
--------------------------
determination, (a) on each date to but excluding the Class B Scheduled Payment
Date, the Class B Initial Investor Interest, and (b) on each date thereafter,
zero.
"Finance Charge Account" shall have the meaning specified in Section
----------------------
4.3(a).
"Finance Charge Collections" shall mean Collections in respect of Finance
--------------------------
Charge Receivables.
"Fitch" shall mean Fitch Investors Service, L.P.
-----
"Fixed Investor Percentage" shall mean, with respect to any date of
-------------------------
determination, the percentage equivalent of a fraction, the numerator of which
is the Investor Interest as of the close of business on the last day of the
Revolving Period (or, if there has been an Investor Exchange with respect to the
Certificates after the end of the Revolving Period, the Investor Interest as of
the end of the Revolving Period will be reduced ratably to reflect the amount of
Certificates tendered and canceled pursuant to any Investor Exchange) and the
denominator of which is the greater of (a) the Aggregate Principal Receivables
as of such date of determination and (b) the sum of the numerators used to
calculate the Investor Percentages for all outstanding Series with respect to
Principal Receivables on such date of determination.
"Floating Investor Percentage" shall mean, with respect to any date of
----------------------------
determination, the percentage equivalent of a fraction, the numerator of which
is the Adjusted Investor Interest determined as of the close of business on the
last day of the Monthly Period immediately preceding such date of determination
(or with respect to the first Monthly Period, the Initial Investor Interest) and
the denominator of which is the greater of (a) the Aggregate Principal
Receivables as of such date of determination (or with respect to the first
Monthly Period, the aggregate amount of Principal Receivables in the
- 16 -
Trust as of the beginning of the day on the Closing Date), and (b) the sum of
the numerators used to calculate the Investor Percentages for all outstanding
Series on such date of determination with respect to Finance Charge Receivables,
Default Amounts or Principal Receivables, as applicable, on such date of
determination.
"Initial Class A Accumulation Date" shall mean the first Distribution Date
---------------------------------
occurring after the Monthly Period in which the Controlled Accumulation Period
commences.
"Initial Collateral Interest" shall mean the aggregate initial principal
---------------------------
amount of the Collateral Interest on the Closing Date, which is $30,000,000.
"Initial Investor Interest" shall mean the sum of the Class A Initial
-------------------------
Investor Interest, the Class B Initial Investor Interest and the Initial
Collateral Interest.
"Interest Accrual Period" shall mean, with respect to any Distribution
-----------------------
Date, the period beginning on and including the Distribution Date occurring in
the preceding calendar month (or, in the case of the first Distribution Date,
from and including the Closing Date) through and including the day preceding the
current Distribution Date.
"Interest Rate Cap Payment" shall mean, with respect to any Distribution
-------------------------
Date, any payment required to be made by the Interest Rate Cap Provider to the
Trust pursuant to an Interest Rate Cap with respect to such Distribution Date.
"Interest Rate Cap Provider" shall mean [________] in its capacity as
--------------------------
obligor under the Interest Rate Caps, or if any Replacement Interest Rate Cap or
Qualified Substitute Arrangement is obtained pursuant to Section 4.11, any
obligor with respect to such Replacement Interest Rate Cap or Qualified
Substitute Arrangement.
"Interest Rate Caps" shall mean, collectively, the Class A Interest Rate
------------------
Cap and the Class B Interest Rate Cap.
"Investor Accounts" shall mean the Series 1998-1 Collection Subaccount
------------------
established under Section 4.2B, the Principal Account, the Principal Funding
Account and the Finance Charge Account established under subsection 4.3(a), the
Distribution Account established under subsection 4.3(b) and the Reserve Account
established under subsection 4.9(a).
"Investor Charge-Offs" shall mean, with respect to any Transfer Date, the
--------------------
sum of the Class A Investor Charge-Offs, the
- 17 -
Class B Investor Charge-Offs and the Collateral Interest Charge-Offs, in each
case with respect to such Transfer Date.
"Investor Default Amount" shall mean, with respect to any Monthly Period,
-----------------------
an amount equal to the product of (a) the sum of the Default Amounts for all
Defaulted Accounts during such Monthly Period and (b) the Floating Investor
Percentage for such Monthly Period.
"Investor Interest" shall mean for any date of determination, the sum of
-----------------
the Class A Investor Interest, the Class B Investor Interest and the Collateral
Interest, each as of such date.
"Investor Percentage" shall mean, for any date of determination, (a) with
-------------------
respect to Finance Charge Receivables and Default Amounts at any time and
Principal Receivables during the Revolving Period, the Floating Investor
Percentage and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or the Rapid Amortization Period, the Fixed Investor
Percentage.
"LIBOR" shall mean, for any Interest Accrual Period, the London interbank
-----
offered quotations rate for one-month Dollar deposits determined for each
Interest Accrual Period in accordance with the provisions of Section 4.13.
"LIBOR Determination Date" shall mean (a) for the initial Interest Period,
------------------------
[March ___, 1998] (for the period from and including the Closing Date through
and including April 14, 1998) and (b) for each subsequent Interest Accrual
Period, the second London Banking Day preceding the first day of such Interest
Accrual Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
--------------
Servicer, the Trustee, the Agent and the other financial institutions party
thereto, dated as of April ___, 1998, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"London Banking Day" shall mean any day on which commercial banks are open
------------------
for business (including dealings in foreign exchange and deposits in U.S.
dollars) in London.
"Minimum Aggregate Principal Receivables" shall have the meaning specified
---------------------------------------
in Section 4 hereof.
"Minimum Seller Interest" shall have the meaning specified in Section 4
-----------------------
hereof.
- 18 -
"Monthly Investor Servicing Fee" shall mean (a) with respect to the first
------------------------------
Monthly Period, an amount equal to the Monthly Investor Servicing Fee
(calculated pursuant to clause (b) of this definition) for the full April 1998
Monthly Period, multiplied by [___/30], and (b) with respect to each subsequent
Monthly Period, an amount equal to one twelfth of the product of 2.00% and the
Adjusted Investor Interest as of the last day of the preceding Monthly Period.
"Monthly Total Principal Allocation" shall mean (a) with respect to any day
----------------------------------
in a Monthly Period, the Principal Allocation for such day plus the sum of all
Principal Allocations on each prior day of such Monthly Period or (b) with
respect to any Monthly Period, the Principal Allocation, if any, for the last
day of such Monthly Period plus the sum of all Principal Allocations on each
prior day of such Monthly Period.
"Pay Out Commencement Date" shall mean, with respect to the Series 1998-1
-------------------------
Investor Certificates, the date on which a Trust Pay Out Event is deemed to
occur or occurs pursuant to Section 9.1 of the Agreement or a Series 1998-1 Pay
Out Event is deemed to occur or occurs pursuant to Section 9A hereof.
"Permitted Investments" shall mean with respect to the Investor Accounts,
---------------------
(a) negotiable instruments or securities either represented by instruments in
bearer or registered form or book-entry form at a federal reserve bank or held
by a clearing corporation which are registered in the name of the Trustee upon
books maintained for that purpose by or on behalf of the issuer thereof and
identified on books maintained for that purpose by the Trustee and held for the
benefit of the Trust or the Certificateholders and which evidence (i) direct
obligations of the United States of America or any agency or instrumentality
thereof the full and timely payment of which is guaranteed by the full faith and
credit of the United States of America; (ii) demand deposits, time deposits or
certificates of deposit of, or bankers' acceptances issued by, any depositary
institution or trust company incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking or depositary institution authorities; provided,
--------
however, that at the time of the Trust's investment or contractual commitment
- -------
to invest therein, the certificates of deposit or short-term deposits, if any,
of such depositary institution or trust company shall have a credit rating from
Standard & Poor's of A-1+ and from Fitch (if rated by Fitch) of F-1+, and either
such certificates of deposit or short-term deposits shall have a credit rating
from Moody's of P-1 or the long-term unsecured debt obligations of such
depositary institution or trust company (other than such obligations whose
rating is based on collateral or on the credit of a Person other than such
institution or trust company) shall have a rating from
- 19 -
Moody's of at least Aa3, and the amount of such time deposits, demand deposits
or certificates of deposit are fully insured within the limits of insurance set
by the FDIC and the combined capital, surplus and undivided profits of such
depositary institution or trust company is not less than $3 million; (iii)
certificates of deposit having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating from Moody's, Standard &
Poor's and Fitch (if rated by Fitch) of P-1 and A-1+ and F-1+, respectively;
(iv) commercial paper having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating from Moody's, Standard &
Poor's and Fitch (if rated by Fitch) of P-1, A-1+ and F-1+, respectively; or (v)
investments in money market funds registered under the Investment Company Act
rated in each case in the highest investment category by Standard & Poor's,
Moody's and Fitch (if rated by Fitch), or otherwise approved in writing by the
Rating Agency and acceptable to the Enhancement Provider; and (b) demand
deposits in the name of the Trust or the Trustee, on behalf of the Trust, in any
depositary institution or trust company referred to in clause (a)(ii) above;
provided, however, that with respect to any of the Permitted Investments
- -------- -------
referred to herein, if requested by the Enhancement Provider, the Servicer shall
furnish to the Enhancement Provider an Opinion of Counsel, in form and substance
satisfactory to the Enhancement Provider and from counsel reasonably acceptable
to it, to the effect that, upon conveyance of possession or registered ownership
to the Trustee or its agent, nominee or custodian, on behalf of the Trust, of
such Permitted Investment, the Trustee, on behalf of the Trust, will have a
perfected first priority security interest in and to such Permitted Investment
for the benefit of the Series 1998-1 Investor Certificateholders. Such opinion
will be required only with respect to Permitted Investments of a type that have
not previously been the subject of such an opinion or that have been the subject
of a change in law. Notwithstanding the foregoing, if the Rating Agency rating
the Series 1998-1 Investor Certificates is not Standard & Poor's, Moody's or
Fitch, any investments specified in this definition of "Permitted Investments"
as requiring a specific credit rating from Standard & Poor's, Moody's or Fitch
(if rated by Fitch) must also have a comparable credit rating from, or otherwise
be acceptable to, the Rating Agency rating the Series 1998-1 Investor
Certificates, as confirmed to the Trustee in writing by such Rating Agency, and
any investments specified in this definition of "Permitted Investments" as
requiring written approval from Standard & Poor's, Moody's or Fitch must also
receive written approval from such other Rating Agency.
"Pool Amount" shall mean, with respect to any Monthly Period, the aggregate
-----------
amount of Principal Receivables as of the close of business on the last day of
such Monthly Period.
- 20 -
"Pool Factor" shall mean, with respect to any Record Date, a number carried
-----------
out to seven decimal places representing the ratio of the Investor Interest as
of the end of the last day of the preceding Monthly Period (determined after
taking into account any increases or decreases in the Investor Interest which
will occur on the following Distribution Date) to the Initial Investor Interest.
"Pooling and Servicing Agreement" shall have the meaning specified in the
-------------------------------
preamble to this document.
"Portfolio Yield" shall mean, with respect to the Series 1998-1 Investor
---------------
Certificates and any Monthly Period, the annualized percentage equivalent of a
fraction the numerator of which is equal to the sum of (i) the lesser of (x) the
Finance Charge Receivables allocable to the Investor Interest for such Monthly
Period, calculated on a billed basis, after subtracting therefrom an amount
equal to the Investor Default Amount with respect to such Monthly Period, and
(y) the aggregate amount of Collections with respect to such Monthly Period,
(ii) the Principal Funding Investment Proceeds deposited into the Finance Charge
Account on the Transfer Date related to such Monthly Period, (iii) the amount of
the Reserve Draw Amount (up to the Available Reserve Account Amount), if any,
with respect to such Monthly Period, and (iv) any amounts of interest and
earnings described in Section 4.9, each deposited or required to be deposited
into the Finance Charge Account on the Transfer Date relating to such Monthly
Period (without duplication of amounts referenced in clauses (i), (ii) and (iii)
above), and the denominator of which is the Investor Interest as of the last day
of the preceding Monthly Period.
"Principal Account" shall have the meaning specified in subsection 4.3(a).
-----------------
"Principal Allocation" shall have the meaning specified in subsection
--------------------
4.4(d)(ii).
"Principal Collections" shall mean Collections in respect of Principal
---------------------
Receivables.
"Principal Funding Account" shall have the meaning specified in subsection
-------------------------
4.3(a).
"Principal Funding Account Balance" shall mean, with respect to any date of
---------------------------------
determination, the amount of funds, if any, on deposit in the Principal Funding
Account on such date of determination (other than Principal Funding Investment
Proceeds).
"Principal Funding Investment Proceeds" shall mean, with respect to each
-------------------------------------
Transfer Date, the investment earnings on funds
- 21 -
in the Principal Funding Account (net of investment expenses and losses) for the
period from and including the immediately preceding Transfer Date to but
excluding such Transfer Date.
"Principal Funding Investment Shortfall" shall mean, with respect to each
--------------------------------------
Transfer Date relating to the Controlled Accumulation Period, the amount, if
any, by which the Principal Funding Investment Proceeds for such Transfer Date
are less than the Class A Covered Amount determined as of such Transfer Date.
"Principal Shortfall" shall mean (i) on any Date of Processing for the
-------------------
Series 1998-1 Investor Certificates, the excess of (x) an amount equal to the
sum of (A) during the Controlled Accumulation Period, the Controlled Deposit
Amount, and during the Rapid Amortization Period, the Investor Interest, in each
case with respect to the related Monthly Period, and (B) at any time, the
Collateral Interest Surplus with respect to the related Monthly Period over (y)
the Monthly Total Principal Allocation for such Date of Processing, or (ii) for
any other Series the amounts specified as such in the Supplement for such other
Series.
"Qualified Substitute Arrangement" shall have the meaning specified in
--------------------------------
subsection 4.11(b).
"Qualified Trust Institution" shall mean a depository institution or trust
---------------------------
company having corporate trust powers under applicable federal and state laws
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia; provided, however, that the long-
-------- -------
term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depository institution or trust company shall have a
credit rating from Moody's, Standard & Poor's and Fitch (if rated by Fitch) of
at least Baa3, BBB- and BBB-, respectively, and the deposits in whose accounts
are insured to the limits provided by law and as required by the FDIC.
"Rapid Amortization Period" shall mean an Amortization Period commencing on
-------------------------
the Pay Out Commencement Date and ending on the earlier to occur of (i) the date
of termination of the Trust pursuant to Section 12.1 or (ii) the Series 1998-1
Termination Date.
"Rating Agency" shall mean, with respect to the Series 1998-1 Certificates,
-------------
each of Moody's, Standard & Poor's and Fitch, and with respect to the Collateral
Interest means Fitch.
"Reallocated Class B Principal Collections" shall mean, with respect to any
-----------------------------------------
Transfer Date, Principal Collections (including
- 22 -
amounts specified pursuant to subsections 4.6(b)(iii) and (iv), 4.6(d)(ii) and
4.6(f) to be treated as Available Investor Principal Collections) applied in
accordance with subsection 4.12(a) in an amount not to exceed the product of (a)
the Class B Investor Allocation for the Monthly Period relating to such Transfer
Date, (b) the Investor Percentage for the Monthly Period relating to such
Transfer Date and (c) the amount of Principal Collections for the Monthly Period
relating to such Transfer Date; provided, that such amount shall not exceed the
Class B Investor Interest after giving effect to any Class B Investor Charge-
Offs for such Transfer Date.
"Reallocated Collateral Principal Collections" shall mean, with respect to
--------------------------------------------
any Transfer Date, Principal Collections (including amounts specified pursuant
to subsections 4.6(d)(ix) and (x) to be treated as Available Investor Principal
Collections) applied in accordance with subsections 4.12(a) and (b) in an amount
not to exceed the product of (a) the Collateral Allocation for the Monthly
Period relating to such Transfer Date, (b) the Investor Percentage for the
Monthly Period relating to such Transfer Date and (c) the amount of Principal
Collections for the Monthly Period relating to such Transfer Date; provided,
--------
that such amount shall not exceed the Collateral Interest after giving effect to
any Collateral Interest Charge-Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean, with respect to any
---------------------------------
Transfer Date, the sum of (a) the Reallocated Class B Principal Collections and
(b) the Reallocated Collateral Principal Collections with respect to such
Transfer Date.
"Reference Banks" shall mean four major banks in the London interbank
---------------
market selected by the Trustee.
"Replacement Interest Rate Cap" shall mean, with respect to the Class A
-----------------------------
Interest Rate Cap or the Class B Interest Rate Cap, any substitute interest rate
cap having substantially the same terms and conditions as such Interest Rate Cap
and with respect to which the Interest Rate Cap Provider party thereto (a) is
reasonably acceptable to the Trustee, (b) has either (i) a counterparty rating
of at least Aa3 by Moody's and AAA by Standard & Poor's, or (ii) if not a
counterparty rating, a long term unsecured debt or long term certificate of
deposit rating of at least Aa3 by Moody's and a short term unsecured debt or
short term certificate of deposit rating of A-1+ by Standard & Poor's, and (c)
is acceptable to Moody's and Standard & Poor's.
"Required Collateral Interest" shall mean, (a) with respect to the Closing
----------------------------
Date, the Initial Collateral Interest and (b) with respect to any Transfer Date
thereafter, an amount equal to the product of (1) the Required Collateral
Percentage and (2) the
- 23 -
Adjusted Investor Interest on such Transfer Date after taking into account all
deposits in the Principal Funding Account on such date and payments to be made
on the related Distribution Date, but not less than $15,000,000; provided that
--------
(x) if either (i) there is a reduction in the Collateral Interest pursuant to
clause (c), (d) or (e) of the definition of such term or (ii) a Pay Out Event
with respect to the Series 1998-1 Investor Certificates has occurred, the
Required Collateral Interest for any Transfer Date shall (subject to clause (y)
below) equal the Required Collateral Interest for the Transfer Date immediately
preceding such reduction or Pay Out Event and (y) in no event shall the Required
Collateral Interest exceed the sum of the outstanding principal amounts of (i)
the Class A Certificates and (ii) the Class B Certificates, each as of the last
day of the Monthly Period preceding such Transfer Date, less cash held in the
Principal Funding Account as of such Transfer Date, in each case after taking
into account deposits, withdrawals and payments to be made on the related
Distribution Date.
"Required Collateral Percentage" shall mean, with respect to any Transfer
------------------------------
Date, 8.25% or, at the Transferor's option, a lesser percentage if on or prior
to such Transfer Date the Transferor, the Servicer, the Agent and the Trustee
shall each have received a copy of a written notice from the Rating Agency to
the effect that such action will not result in such Rating Agency reducing or
withdrawing its then existing rating of the Class A Certificates or the Class B
Certificates.
"Required Reserve Account Amount" shall mean, with respect to any Transfer
-------------------------------
Date on or after the Reserve Account Funding Date, an amount equal to (a) 0.50%
of the Class A Investor Interest or (b) any other amount designated by the
Transferor; provided that if such designation is less than the amount determined
--------
pursuant to clause (a), Transferor shall (i) provide the Servicer, the
Collateral Interest Holder and the Trustee with notification in writing by the
Rating Agency addressed to the Transferor, the Servicer and the Trustee that
such action will not result in such Rating Agency reducing or withdrawing its
then existing rating of the Class A Certificates or the Class B Certificates and
(ii) deliver to the Trustee a certificate of an authorized officer to the effect
that, based on the facts known to such officer at such time, in the reasonable
belief of the Transferor, such designation will not cause a Pay Out Event or an
event that, after the giving of notice or the lapse of time, would cause a Pay
Out Event to occur with respect to the Series 1998-1 Investor Certificates.
"Reserve Account" shall have the meaning specified in subsection 4.9(a).
---------------
- 24 -
"Reserve Account Funding Date" shall mean the Transfer Date which occurs
----------------------------
not later than the earliest of (a) the Transfer Date with respect to the Monthly
Period which commences no later than three months prior to the commencement of
the Controlled Accumulation Period, or such earlier date as the Servicer may
determine, (b) the first Transfer Date for which the Portfolio Yield is less
than 2.00%, but in such event the Reserve Account Funding Date shall not be
required to occur earlier than the Transfer Date with respect to the Monthly
Period which commences twelve months prior to the commencement of the Controlled
Accumulation Period, (c) the first Transfer Date for which the Portfolio Yield
is less than 3.00%, but in such event the Reserve Account Funding Date shall not
be required to occur earlier than the Transfer Date with respect to the Monthly
Period which commences six months prior to the commencement of the Controlled
Accumulation Period and (d) the first Transfer Date for which the Portfolio
Yield is less than 4.00%, but in such event the Reserve Account Funding Date
shall not be required to occur earlier than the Transfer Date with respect to
the Monthly Period which commences four months prior to the commencement of the
Controlled Accumulation Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date following the
-----------------------
Reserve Account Funding Date, the amount, if any, by which the amount on deposit
in the Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
-------------------
4.9(c).
"Revolving Period" shall mean the period from and including the Closing
----------------
Date to, but not including, the earlier of (a) the day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Scheduled Series 1998-1 Termination Date" shall mean the November 2005
----------------------------------------
Distribution Date.
"Series 1998-1" shall mean the Series represented by the Series 1998-1
-------------
Investor Certificates.
"Series 1998-1 Certificates" shall mean the Class A Certificates and the
--------------------------
Class B Certificates.
"Series 1998-1 Collection Subaccount" shall have the meaning specified in
-----------------------------------
Section 4.2B.
"Series 1998-1 Investor Certificateholders" shall mean the Class A
-----------------------------------------
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder.
- 25 -
"Series 1998-1 Investor Certificates" shall mean the Class A Certificates,
-----------------------------------
the Class B Certificates and the Collateral Interest.
"Series 1998-1 Investor Exchange" shall mean an Investor Exchange pursuant
-------------------------------
to Section 6.9(b) of the Agreement and Section 18 hereof.
"Series 1998-1 Pay Out Event" shall have the meaning specified in Section
---------------------------
9A hereof.
"Series 1998-1 Termination Date" shall mean the earlier to occur of (i) the
------------------------------
day after the Distribution Date on which the Series 1998-1 Investor Certificates
are paid in full or (ii) the Scheduled Series 1998-1 Termination Date.
"Series Servicing Fee Percentage" shall mean 2.00%.
-------------------------------
"Series Supplement" shall have the meaning specified in the preamble to
-----------------
this document.
"Shared Finance Charge Collections" shall mean, with respect to any
---------------------------------
Transfer Date, as the context requires, either (a) the amount described in
subsection 4.6(d)(xv) allocated to the Series 1998-1 Investor Certificates but
available to cover shortfalls, if any, in amounts paid from Finance Charge
Collections for other Series, or (b) the aggregate amount allocated to Investor
Certificates of all other Series which the related Supplements specify are to be
treated as "Shared Finance Charge Collections" and which are available for
application pursuant to subsections 4.6(e), 4.6(f) and 4.6(g) on such Transfer
Date.
"Shared Principal Collections" shall mean, as the context requires, either
----------------------------
(a) the amounts allocated to the Series 1998-1 Investor Certificates which, in
accordance with subsections 4.4(c)(ii), 4.4(d)(ii) and 4.4(e)(ii), may be
applied to Principal Shortfalls with respect to other outstanding Series or (b)
the amounts allocated to the investor certificates (which are not retained by
the Transferor) of other Series which the applicable Supplements for such Series
specify are to be treated as "Shared Principal Collections" and which may be
applied to cover Principal Shortfalls with respect to the Series 1998-1 Investor
Certificates.
"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.
- 26 -
SECTION 2.1 Other Definitional Provisions. Whenever a determination
-----------------------------
is to be made under the Agreement as to whether a given action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Trust or the Series 1998-1 Investor Certificateholders (or any
similar or analogous determination), such determination shall be made without
giving effect to the Enhancement.
SECTION 3. Conveyance of Interest in Series Accounts.
-----------------------------------------
(a) The Transferor and the Trustee intend that the Series Accounts and all
property credited thereto be the property of the Trust for the benefit of the
Certificateholders. If and to the extent the Series Accounts and the property
credited thereto are characterized as property of the Transferor, the Transferor
hereby assigns, sets-over, conveys, pledges and grants a security interest and
lien (free and clear of all other Liens) to the Trustee for the benefit of the
Certificateholders, in all of the Transferor's right, title and interest (if
any) in and to the Series Accounts and the amounts on deposit in the Series
Accounts and all property now or hereafter credited thereto, including but not
limited to Permitted Investments, together with all proceeds thereof, as
collateral security for the amounts payable from time to time to the Trustee,
for the benefit of the Certificateholders.
(b) The Series Accounts shall be established at a depository institution
which agrees in writing as follows: (i) all money, securities, instruments and
other property credited to any such account shall be treated as "financial
assets" within the meaning of Section 8-102(a)(9) of the 1994 Official Text of
the Uniform Commercial Code and (ii) such depository institution will comply
with "entitlement orders" (within the meaning of Section 8-102(a)(8) of the 1994
Official Text of the Uniform Commercial Code) issued by the Trustee and relating
to such account without further consent by the Transferor or any other person.
SECTION 4. Minimum Seller Interest, Minimum Aggregate Principal
----------------------------------------------------
Receivables and Removal of Accounts. (a) The Minimum Seller Interest
- -----------------------------------
applicable to the Series 1998-1 Investor Certificates on any date of
determination shall be 7% of the average Aggregate Principal Receivables for
such date of determination. The Minimum Aggregate Principal Receivables shall be
the sum of the numerators used to calculate the Investor Percentage with respect
to Principal Receivables for all Series then outstanding. Upon final payment of
the Series 1998-1 Investor Certificates, the Minimum Aggregate Principal
Receivables shall be computed in a manner consistent with the Agreement or any
future Supplement, as appropriate.
- 27 -
(b) In addition to the requirements contained in subsections 2.7(a) and
(b) of the Agreement with respect to the removal of Accounts, pursuant to
subsection 2.7(b)(iii)(c) of the Agreement, the removal of any Receivables of
any Removed Accounts on any Removal Date shall not, in the reasonable belief of
the Transferor, result in the failure to make a deposit of a Controlled Deposit
Amount or a payment of Collateral Monthly Principal.
SECTION 5. Reassignment and Transfer Terms. The Series 1998-1
-------------------------------
Investor Certificates shall be subject to transfer to the Transferor at its
option, in accordance with the terms specified in subsection 12.2(a) of the
Agreement, on any Distribution Date on or after the Distribution Date on which
the Investor Interest is reduced to an amount less than or equal to 5% of the
Initial Investor Interest. The Series 1998-1 Investor Certificates shall be
subject to mandatory transfer to the Transferor, in accordance with the terms
specified in subsection 12.2(a) of the Agreement, on the Distribution Date
immediately preceding the Scheduled Series 1998-1 Termination Date if the
Investor Interest is reduced to an amount less than or equal to 5% of the
Initial Investor Interest and the conditions specified in the proviso to Section
12.2(a) of the Agreement shall have been satisfied. The deposit required in
connection with any such purchase shall be equal to (a) the Investor Interest,
plus (b) accrued and unpaid interest (other than Class A Excess Interest or
- ----
Class B Excess Interest, as the case may be) on the Series 1998-1 Investor
Certificates through and including the day preceding the day on which such
purchase occurs, plus (c) all additional amounts then due and payable to the
Collateral Interest Holder under the Loan Agreement, less (d) the amount on
----
deposit in the Finance Charge Account which will be transferred to the
Distribution Account pursuant to Section 4.6 on the related Transfer Date, less
----
(e) the amount on deposit in the Principal Account which will be transferred to
the Distribution Account pursuant to the second paragraph of Subsection 4.8(a)
on the related Transfer Date. The mandatory purchase requirement is in addition
to any other provisions and remedies provided by the Agreement and shall not
serve to relieve any party of obligations it may otherwise have or waive any
remedy that is otherwise provided in the Agreement.
SECTION 6. Delivery and Payment for the Series 1998-1 Certificates.
-------------------------------------------------------
The Transferor shall execute and deliver the Series 1998-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1998-1 Certificates when authenticated in
accordance with Section 6.2 of the Agreement.
SECTION 7. Depositary; Form of Delivery of Series 1998-1 Certificates.
----------------------------------------------------------
(a) The Series 1998-1 Certificates shall be
- 28 -
delivered as Book-Entry Certificates as provided in Sections 6.1, 6.2, 6.9 and
6.11 of the Agreement.
(b) The depositary for the Series 1998-1 Certificates shall be The
Depository Trust Company, and the Class A Certificates and the Class B
Certificates shall be initially registered in the name of CEDE & Co., its
nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1998-1 Investor Certificates, Class A Certificates or Class B
Certificates having Undivided Interests aggregating a specified percentage, such
direction or consent, with respect to the Class A Certificates and the Class B
Certificates, may be given by Certificate Owners having interests in the
requisite percentage of Series 1998-1 Certificates, Class A Certificates or
Class B Certificates, as the case may be, acting through the Clearing Agency and
the Clearing Agency Participants; provided, however, that so long as the Class
-------- -------
A Certificates and Class B Certificates are in book-entry form, the Trustee
shall only be obligated to follow such directions or consents from the
depositary or Clearing Agency.
SECTION 8. Enhancement. Enhancement for the Series 1998-1
-----------
Certificates shall be the subordination of the Collateral Interest to the extent
provided herein, the Interest Rate Caps and, with respect to the Class A
Certificates, the subordination of the Class B Certificates to the extent
provided herein.
SECTION 9. Article IV of Agreement. Any provision of Article IV of
-----------------------
the Agreement which distributes Collections to the Holder of the Exchangeable
Seller Certificate on the basis of the Seller Percentage shall continue to apply
irrespective of the issuance of the Series 1998-1 Investor Certificates.
Sections 4.1 and 4.2 of the Agreement shall be read in their entirety as
provided in the Agreement. Article IV of the Agreement (except for Sections 4.1
and 4.2 thereof) shall read in its entirety as follows and shall be applicable
only to the Series 1998-1 Investor Certificates:
ARTICLE IV
RIGHTS OF SERIES 1998-1 INVESTOR CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2A Rights of Series 1998-1 Investor Certificateholders.
---------------------------------------------------
The Series 1998-1 Investor Certificates shall represent fractional
Undivided Interests in the Trust, consisting of the right to receive, to
the extent necessary to make the required
- 29 -
payments with respect to such Series 1998-1 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 1998-1 Investor Certificates, (c)
funds and securities on deposit in the Finance Charge Account, the
Principal Account, the Distribution Account and the Series 1998-1
Collection Subaccount, (d) with respect to the Class A Certificates only,
funds and securities on deposit in the Reserve Account, up to the Available
Reserve Account Amount, and the Principal Funding Account and (e) with
respect to the Class A Certificates and the Class B Certificates only, the
right to receive payments pursuant to the Interest Rate Caps in accordance
with Section 4.11. The Collateral Interest shall be subordinate to the
Class A Certificates and the Class B Certificates to the extent described
herein. The Class B Certificates shall be subordinate to the Class A
Certificates to the extent described herein. The Exchangeable Seller
Certificate shall represent the ownership interest in the Trust Assets not
allocated to the Series 1998-1 Investor Certificates or any other Series
outstanding; provided, however, the ownership interest represented by the
-------- -------
Exchangeable Seller Certificate and any other Series outstanding shall not
represent any interest in the Series 1998-1 Collection Subaccount, the
Principal Funding Account, the Reserve Account or the Interest Rate Caps,
except as specifically provided in this Article IV.
SECTION 4.2B The Series 1998-1 Collection Subaccount. Pursuant to
---------------------------------------
Section 4.1 of the Agreement, the Servicer, on behalf of the Trustee, shall
establish and maintain a subaccount of the Collection Account to be
maintained with a Qualified Trust Institution, which shall initially be
Bankers Trust Company, for the benefit of the Series 1998-1 Investor
Certificateholders, bearing a designation clearly indicating that the funds
therein are held in trust for the benefit of the Series 1998-1 Investor
Certificateholders (the "Series 1998-1 Collection Subaccount"). Funds
allocable to the Series 1998-1 Investor Certificates which are deposited
into the Collection Account will be transferred to the Series 1998-1
Collection Subaccount prior to further application. References in this
Series Supplement to deposits of such funds into the Collection Account
should be read to include such transfers. The
- 30 -
Servicer, on behalf of the Trustee, at all times shall maintain accurate
records reflecting each transaction in the Series 1998-1 Collection
Subaccount and that funds held therein shall at all times be held in trust
for the benefit of the Series 1998-1 Investor Certificateholders. Pursuant
to the authority granted to it pursuant to subsection 3.1(b), the Servicer
shall have the power, revocable by the Trustee, to withdraw funds, and to
instruct the Trustee to withdraw funds, from the Series 1998-1 Collection
Subaccount for the purpose of carrying out its duties hereunder. All such
instructions from the Servicer to the Trustee shall be in writing;
provided, however, that the Servicer is entitled to give instructions to
-------- -------
the Trustee by facsimile. Funds on deposit in the Series 1998-1 Collection
Subaccount (not required to be deposited in the Finance Charge Account or
the Principal Account pursuant to Section 4.4 hereof) shall at all times be
invested by the Trustee, at the direction of the Servicer, in Permitted
Investments. Any such investment shall mature and such funds shall be
available for withdrawal, on the Transfer Date following the Monthly Period
in which such funds were processed for collection; provided, however, that
-------- -------
any Permitted Investment in short term U.S. treasury securities may mature
one day after such Transfer Date and may be sold on such Transfer Date. All
interest and earnings (net of losses and investment expenses) on funds on
deposit in the Series 1998-1 Collection Subaccount shall be deposited by
the Trustee in a separate deposit account with a Qualified Trust
Institution in the name of the Transferor, which shall not constitute a
part of the Trust, or shall otherwise be turned over to the Transferor not
less frequently than monthly; provided, however, that following the failure
-------- -------
of the Servicer to make a payment or deposit, which failure results in the
occurrence of a Servicer Default with respect to the Series 1998-1 Investor
Certificates, such interest and earnings shall not be paid to the
Transferor or deposited in such separate deposit account during the period
such Servicer Default is continuing, but shall be retained in, or deposited
into, the Finance Charge Account and shall be treated as Finance Charge
Collections allocable to the Series 1998-1 Investor Certificateholders. The
Qualified Trust Institution shall maintain, either on its own or through
its nominee or custodian for the benefit of the Series 1998-1 Investor
Certificateholders, possession of any certificated negotiable instrument or
security (other than certificated securities held by a clearing
corporation) evidencing the Permitted Investments
- 31 -
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
1998-1 Collection Subaccount. For purposes of determining the availability
of funds or the balances in the Series 1998-1 Collection Subaccount for any
reason under this Agreement, all investment earnings on such funds (net of
losses and expenses) shall be deemed not to be available or on deposit so
long as a Servicer Default shall not be continuing pursuant to this Section
4.2B. Permitted Investments shall not be disposed of prior to their
maturity other than as provided above with respect to short term U.S.
treasury securities.
SECTION 4.3 Establishment of Series 1998-1 Investor Accounts. (a)
------------------------------------------------
The Finance Charge Account, the Principal Account and the Principal Funding
---------------------------------------------------------------------------
Account. The Servicer, for the benefit of the Series 1998-1 Investor
-------
Certificateholders, shall establish and maintain with a Qualified Trust
Institution, initially Bankers Trust Company, in the name of the Trustee,
on behalf of the Trust, three segregated trust accounts maintained in the
corporate trust department of such Qualified Trust Institution, and held in
trust by such Qualified Trust Institution (the "Finance Charge Account" 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 1998-1 Investor
Certificateholders. The Servicer, on behalf of the Trustee (or the Trustee
so long as the Finance Charge Account, the Principal Account or the
Principal Funding Account, are established with the Trustee) at all times
shall maintain accurate records reflecting each transaction in the
Principal Account, the Finance Charge Account and the Principal Funding
Account, and that funds held therein shall at all times be held in trust
for the benefit of the Series 1998-1 Investor Certificateholders. Pursuant
to the authority granted to it pursuant to subsection 3.1(b), the Servicer
shall have the power, revocable by the Trustee, to withdraw funds, and to
instruct the Trustee to withdraw funds, from the Finance Charge Account,
Principal Account and the Principal Funding Account for the purpose of
carrying out its duties hereunder. All such instructions from the Servicer
to the Trustee shall be in writing; provided, however, that the Servicer is
-------- -------
- 32 -
entitled to give instructions to the Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the
------------------------
Series 1998-1 Investor Certificateholders, shall cause to be established
and maintained in the name of the Trustee, on behalf of the Trust, with an
office or branch of a Qualified Trust Institution (other than the
Transferor), initially Bankers Trust Company, a non-interest bearing
segregated demand deposit account maintained in the corporate trust
department of such Qualified Trust Institution, and held in trust by such
Qualified Trust Institution (the "Distribution Account") bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Series 1998-1 Investor Certificateholders. The
Paying Agent shall have the revocable authority to make withdrawals from
the Distribution Account. Funds on deposit in the Distribution Account
shall not be invested.
(c) Administration of the Finance Charge Account, Principal Account and
-------------------------------------------------------------------
Principal Funding Account.
-------------------------
(i) Funds on deposit in the Finance Charge Account, the Principal
Account and the Principal Funding Account shall at all times be
invested by the Trustee at the direction of the Servicer in Permitted
Investments. Any such investment shall mature and such funds shall be
available for withdrawal on or prior to the Transfer Date following
the Monthly Period in which such funds were processed for collection.
The Qualified Trust Institution which holds the Finance Charge
Account, the Principal Account and the Principal Funding Account shall
maintain either on its own or through its nominee or custodian for the
benefit of the Series 1998-1 Investor Certificateholders, possession
of any certificated negotiable instrument or security (other than
certificated securities held by a clearing corporation) evidencing the
Permitted Investments relating to the Principal Account, the Finance
Charge Account or the Principal Funding Account, as the case may be,
described in clause (a) of the definition of Permitted Investments
from the time of purchase thereof until the time of maturity;
provided, however, that any Permitted Investment in short term U.S.
-------- -------
treasury securities may mature one day after such Transfer Date and
may be sold on such Transfer Date. Subject to the
- 33 -
restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, shall instruct the Qualified Trust
Institution which holds the Finance Charge Account, the Principal
Account and the Principal Funding Account in writing with respect to
the investment of funds on deposit in the Finance Charge Account and
the Principal Account. Permitted Investments shall not be disposed of
prior to their maturity other than as provided above with respect to
short term U.S. treasury securities.
(ii) At the end of each month, all interest and earnings (net of
losses and investment expenses) on funds on deposit in the Finance
Charge Account and the Principal Account shall be deposited by the
Trustee in a separate deposit account with a Qualified Trust
Institution in the name of the Transferor, or a Person designated in
writing by the Transferor, which shall not constitute a part of the
Trust, or shall otherwise be turned over by the Trustee to the
Transferor not less frequently than monthly. For purposes of
determining the availability of funds or the balances in the Finance
Charge Account or the Principal Account for any reason under this
Agreement, all investment earnings on such funds (net of losses and
expenses) shall be deemed not to be available or on deposit.
(iii) On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each
Transfer Date thereafter with respect to the Controlled Accumulation
Period, prior to the Class A Scheduled Payment Date, the Trustee,
acting at the Servicer's direction given on or before such Transfer
Date, shall transfer from the Principal Funding Account to the Finance
Charge Account the Principal Funding Investment Proceeds on deposit in
the Principal Funding Account, but not in excess of the Class A
Covered Amount, for application as Class A Available Funds applied
pursuant to subsection 4.6(a). Any Excess Principal Funding
Investment Proceeds shall be paid to the Holder of the Exchangeable
Seller Certificate on each Transfer Date. An amount equal to any
Principal Funding Investment Shortfall will be deposited in the
Finance Charge Account on each Transfer Date from the Reserve Account
to the extent funds are available pursuant
- 34 -
to subsection 4.9. Except as otherwise provided in this subsection
4.3(c)(iii), Principal Funding Investment Proceeds (including
reinvested interest) shall not be considered part of the amounts on
deposit in the Principal Funding Account for purposes of this
Agreement.
(d) Termination of Qualified Trust Institution. If the entity
------------------------------------------
with which any of the accounts established pursuant to this Section
4.3 ceases to be a "Qualified Trust Institution," then such entity
shall (i) provide the Trustee and the Servicer with prompt written
notice that it is no longer a "Qualified Trust Institution" and (ii)
transfer the funds deposited in each of the accounts in the manner
directed by the Servicer within 10 Business Days of the day on which
such entity ceased to be a "Qualified Trust Institution."
SECTION 4.4 Allocations.
-----------
(a) [Reserved]
(b) [Reserved]
(c) Allocations During the Revolving Period. During the Revolving
---------------------------------------
Period, the Servicer shall, prior to the close of business on the day
any Collections are deposited in the Collection Account, direct the
Trustee to transfer from the Collection Account (or, if applicable,
the Principal Account or the Principal Funding Account) the following
amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal
to the sum of (x) the product of (A) the Floating Investor
Percentage on the Date of Processing of such Collections and (B)
the aggregate amount of Finance Charge Collections processed on
such Date of Processing and (y) the proceeds of the sale of any
Interest Rate Cap pursuant to subsection 4.11(g) on such Date of
Processing[; provided, however, that with respect to the initial
-------- -------
Interest Accrual Period an additional amount of $[________] shall
be deposited in the Finance Charge Account from proceeds of the
sale of the Series 1998-1 Investor Certificates, and such deposit
shall be deemed to have been made
- 35 -
pursuant to subsection 4.4(c)(i)(x) for all purposes under this
Agreement].
(ii) Deposit in the Principal Account an amount equal to
the product of (A) the Floating Investor Percentage on the Date
of Processing of such Collections and (B) the aggregate amount of
such Principal Collections processed on such Date of Processing;
provided, however, that if the amount deposited into the
-------- -------
Principal Account pursuant to this subsection 4.4(c)(ii) exceeds
the Collateral Interest Surplus, if any, as of such Date of
Processing, then such excess shall not be treated as a Principal
Allocation and shall be treated as Shared Principal Collections
allocable to other Series and applied in accordance with Section
4.2(e) of the Agreement; provided further that, if on any Date of
-------- -------
Processing the aggregate amount of Collections deposited in the
Principal Account on such Date of Processing pursuant to this
subsection 4.4(c)(ii) is less than an amount equal to the
Collateral Interest Surplus, then Shared Principal Collections
from other Series, if any, allocable to the Series 1998-1
Investor Certificates will be deposited to the Principal Account
in accordance with subsection 4.2(e) to the extent of such
shortfall.
(d) Allocations During the Controlled Accumulation Period.
-----------------------------------------------------
During the Controlled Accumulation Period, the Servicer shall, prior
to the close of business on the day any Collections are deposited in
the Collection Account, direct the Trustee to transfer from the
Collection Account (or, if applicable, the Principal Account or the
Principal Funding Account) the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal
to the sum of (x) the product of (A) the Floating Investor
Percentage on the Date of Processing of such Collections and (B)
the aggregate amount of Collections processed in respect of
Finance Charge Receivables on such Date of Processing and (y) the
proceeds of the sale of any
- 36 -
Interest Rate Cap pursuant to subsection 4.11(g) on such Date of
Processing.
(ii) Deposit in the Principal Account an amount, if any,
equal to the product of (A) the Fixed Investor Percentage on the
Date of Processing of such Collections and (B) the aggregate
amount of such Principal Collections processed on such Date of
Processing (for any such Date of Processing, a "Principal
Allocation"); provided, however, that if the Monthly Total
-------- -------
Principal Allocation on such Date of Processing exceeds an amount
equal to the sum of (x) the Controlled Deposit Amount, if such
Date of Processing is during the Controlled Accumulation Period
prior to the beginning of the Monthly Period in which the Class A
Scheduled Payment Date occurs, or the Class B Investor Interest
if such Date of Processing is in the Controlled Accumulation
Period thereafter, and (y) the Collateral Interest Surplus as of
such Date of Processing, then such excess shall not be treated as
a Principal Allocation and shall be treated as Shared Principal
Collections and applied in accordance with Section 4.2(e) of the
Agreement; provided, further, that if on any Date of Processing
-------- -------
the aggregate Principal Allocation for such Date of Processing
and for each prior Date of Processing in such Monthly Period is
less than an amount equal to the sum of the Controlled Deposit
Amount and the Collateral Interest Surplus, then Shared Principal
Collections from other Series, if any, allocable to the Series
1998-1 Investor Certificates will be deposited to the Principal
Account in accordance with Section 4.2(e) of the Agreement to the
extent of such shortfall.
(e) Allocations During the Rapid Amortization Period. During the
------------------------------------------------
Rapid Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection
Account, direct the Trustee to transfer from the Collection Account
the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal
to the sum of (x) the
- 37 -
product of (A) the Floating Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
such Collections processed in respect of Finance Charge
Receivables on such Date of Processing and (y) the proceeds of
the sale of any Interest Rate Cap pursuant to subsection 4.11(g).
(ii) Deposit in the Principal Account an amount equal to
the Principal Allocation; provided, however, that if the
-------- -------
Principal Allocation on any date exceeds the Investor Interest,
the amount of such excess shall be treated as Shared Principal
Collections allocable to other Series and applied in accordance
with Section 4.2(e) of the Agreement; provided, further, that if
-------- -------
on any Date of Processing the Monthly Total Principal Allocation
for such Date of Processing in such Monthly Period is less than
the aggregate outstanding principal amount of the Series 1998-1
Investor Certificates, then Shared Principal Collections from
other Series, if any, allocable to the Series 1998-1 Investor
Certificates pursuant to Section 4.2(e) of the Agreement will be
deposited in the Principal Account to the extent of such
shortfall.
SECTION 4.5 Defaulted Accounts and Charge-Offs.
----------------------------------
(a) On each Determination Date, the Servicer shall calculate the
Class A Investor Default Amount for the preceding Monthly Period. If
on the related Transfer Date, the Class A Investor Default Amount for
such Determination Date exceeds the sum of the amounts allocated with
respect thereto pursuant to subsections 4.6(a)(iii), 4.6(d)(i), 4.6(e)
and 4.12(a) with respect to such preceding Monthly Period, then the
Collateral Interest (after giving effect to reductions for any
Collateral Interest Charge-Offs and any Reallocated Principal
Collections on such Transfer Date) will be reduced by the amount of
such excess, but not by more than the Class A Investor Default Amount
for such Transfer Date. If such reduction would cause the Collateral
Interest to be a negative number, the Collateral Interest will be
reduced to zero, and the Class B Investor
- 38 -
Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal Collections on such
Transfer Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If such reduction would
cause the Class B Investor Interest to be a negative number, the Class
B Investor Interest will be reduced to zero, and the Class A Investor
Interest will be reduced by the amount by which the Class B Investor
Interest would have been reduced below zero (a "Class A Investor
Charge-Off"). If the Class A Investor Interest has been reduced by
the amount of any Class A Investor Charge-Offs, it will be reimbursed
on any Distribution Date (but not by an amount in excess of the
aggregate Class A Investor Charge-Offs) by the amounts allocated and
available for such purpose pursuant to subsections 4.6(a)(iv),
4.6(d)(i), 4.6(e) and 4.12(a).
(b) On each Determination Date, the Servicer shall calculate the
Class B Investor Default Amount for the preceding Monthly Period. If
on any Determination Date, the Class B Investor Default Amount for
such Determination Date exceeds the amount allocated and available to
fund such amount pursuant to subsections 4.6(b)(iii), 4.6(d)(ii),
4.6(f) and 4.12(b), the Collateral Interest (after giving effect to
reductions for any Collateral Interest Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.5(a)) will be reduced by
the amount of such excess but not by more than the Class B Investor
Default Amount for such Transfer Date. If such reduction would cause
the Collateral Interest to be a negative number, the Collateral
Interest shall be reduced to zero and the Class B Investor Interest
shall be reduced by the amount by which the Collateral Interest would
have been reduced below zero (a "Class B Investor Charge-Off"). The
Class B Investor Interest will also be reduced by the amount of
Reallocated Principal Collections in excess of the Collateral Interest
pursuant to subsection 4.12(a) and the amount of any portion of the
Class B Investor Interest allocated to the Class A Certificates to
avoid a reduction in the Class A Investor Interest pursuant to
subsection 4.5(a). The Class B Investor Interest will thereafter be
reimbursed
- 39 -
(but not in the excess of the unpaid principal balance of the Class B
Certificates) on any Transfer Date by amounts allocated and available
for that purpose as described under subsections 4.6(b)(iv), 4.6(d)(ii)
and (v), 4.6(f) and 4.12(b).
(c) On each Determination Date, the Servicer shall calculate the
Collateral Default Amount for the preceding Monthly Period. If on any
Determination Date, the Collateral Default Amount for such
Determination Date exceeds the amount allocated and available to fund
such amount pursuant to subsections 4.6(d)(ix), (x) and (xii) and
4.6(g), the Collateral Interest will be reduced by the amount of such
excess but not by more than the lesser of the Collateral Default
Amount and the Collateral Interest for such Transfer Date (a
"Collateral Interest Charge-Off"). The Collateral Interest will also
be reduced by the amount of Reallocated Principal Collections pursuant
to subsections 4.12(a) and (b) and the amount of any portion of the
Collateral Interest allocated to the Class A Certificates or the Class
B Certificates to avoid a reduction in the Class A Investor Interest,
pursuant to subsection 4.5(a), or the Class B Investor Interest,
pursuant to subsection 4.5(b), respectively. The Collateral Interest
will thereafter be reimbursed (but not in the excess of the unpaid
principal balance of the Collateral Interest) on any Transfer Date by
amounts allocated and available for that purpose as described under
subsections 4.6(d)(ix) and (x) and 4.6(g).
SECTION 4.6 Monthly Payments. On each Determination Date, the Servicer
----------------
shall notify the Trustee that the Servicer will withdraw, or shall instruct
the Trustee to withdraw, and the Trustee acting in accordance with such
instructions shall withdraw, on the succeeding Transfer Date, the amounts
required to be withdrawn from the Finance Charge Account (or from the
finance charge accounts for other Series, as applicable) pursuant to
subsections 4.6(a), (b), (c), (d), (e), (f) and (g). On each Determination
Date, the Servicer shall also notify the Trustee of the amounts to be
withdrawn by the Trustee, acting on instructions from the Servicer, from
the Principal Funding Account and the Reserve Account, pursuant to
subsections 4.3(c), 4.9(b) and 4.9(d).
- 40 -
(a) On each Transfer Date, an amount equal to the Class A
Available Funds will be distributed in the following priority:
(i) Class A Monthly Cap Rate Interest and the Class A
-------------------------------------------------
Covered Amount. On each Transfer Date, the Servicer or the
--------------
Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Finance Charge Account and
deposit to the Distribution Account, to the extent funds are
available from Class A Available Funds (i) first, an amount equal
to the sum of the Class A Monthly Cap Rate Interest and the Class
A Covered Amount for the related Distribution Date; and (ii)
then, an amount equal to the amount of any overdue Class A
Monthly Cap Rate Interest and overdue Class A Covered Amount, for
which a payment has not been made under this subsection 4.6(a)(i)
or otherwise pursuant to this Agreement; provided, however, that
-------- -------
with respect to the first Distribution Date relating to the
Series 1998-1 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
- 41 -
Available Funds after giving effect to the withdrawal pursuant to
subsections 4.6(a)(i) and (ii), an amount equal to the Class A
Investor Default Amount, if any, for the preceding Monthly
Period, and the Servicer or the Trustee, as the case may be,
shall apply such amount, subject to Section 4.12, in accordance
with Section 4.8 as Available Investor Principal Collections.
(iv) Reimbursement of Class A Investor Charge-Offs. On
---------------------------------------------
each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions of the Servicer, shall withdraw from
the Finance Charge Account, to the extent funds are available
from Class A Available Funds after giving effect to the
withdrawals and transfers pursuant to subsections 4.6(a)(i)
through (iii), an amount equal to the aggregate amount of Class A
Investor Charge-Offs, if any, which have not theretofore been
reimbursed pursuant to this subsection 4.6(a)(iv) or otherwise
pursuant to the Agreement and shall apply such amount, subject to
Section 4.12, in accordance with Section 4.8 as Available
Investor Principal Collections. On the date of any such
reimbursement, the Class A Investor Interest shall be increased
by the amount of such reimbursement of Class A Investor Charge-
Offs.
(v) Excess Spread. The remaining Class A Available Funds,
-------------
if any, shall constitute Excess Spread and shall be allocated and
distributed as set forth in subsection 4.6(d).
(b) On each Transfer Date, an amount equal to Class B Available
Funds will be distributed in the following priority:
(i) Class B Monthly Cap Rate Interest. On each Transfer
---------------------------------
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account and deposit to the Distribution Account, to the
extent funds are available from Class B Available Funds, (i)
first, an amount equal to the Class B Monthly Cap Rate Interest
for
- 42 -
the related Distribution Date; and (ii) then, an amount equal to
the amount of any overdue Class B Monthly Cap Rate Interest, for
which a payment has not been made under this subsection 4.6(b)(i)
or otherwise pursuant to the Agreement; provided, however, that
-------- -------
with respect to the first Distribution Date relating to the
Series 1998-1 Investor Certificates, the amount referred to in
(i) above shall be $[________] (reflecting an initial period of
[____] days).
(ii) Class B Monthly Servicing Fee. On each Transfer Date,
-----------------------------
the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Class B
Available Funds after giving effect to the withdrawals pursuant
to subsection 4.6(b)(i), an amount equal to the Class B Monthly
Servicing Fee accrued in respect of the preceding Monthly Period,
plus all accrued and unpaid Class B Monthly Servicing Fees in
respect of previous Monthly Periods, and the Servicer or the
Trustee, as the case may be, shall pay such amount to the
Servicer.
(iii) Class B Investor Default Amount. On each Transfer
-------------------------------
Date, the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Class B
Available Funds after giving effect to the withdrawal pursuant to
subsections 4.6(b)(i) and (ii), an amount equal to the Class B
Investor Default Amount, if any, for the preceding Monthly
Period, and the Servicer or the Trustee, as the case may be,
shall apply such amount, subject to Section 4.12, in accordance
with Section 4.8 as Available Investor Principal Collections.
(iv) Reimbursement of Class B Investor Charge-Offs. On
---------------------------------------------
each Transfer Date, the Servicer or the Trustee, acting in
accordance with instructions of the Servicer, shall withdraw from
the Finance Charge Account, to the extent funds are available
from Class B Available Funds after giving effect to the
- 43 -
withdrawals and transfers pursuant to subsections 4.6(b)(i)
through (iii), an amount equal to the aggregate amount of Class B
Investor Charge-Offs, if any, which have not theretofore been
reimbursed pursuant to this subsection 4.6(b)(iv) or otherwise
pursuant to this Agreement and shall apply such amount, subject
to Section 4.12, in accordance with Section 4.8 as Available
Investor Principal Collections. On the date of any such
reimbursement, the Class B Investor Interest shall be increased
by the amount of such reimbursement of Class B Investor Charge-
Offs.
(v) Excess Spread. The remaining Class B Available Funds,
-------------
if any, 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, Excess Spread will be distributed in
the following priority:
(i) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with
- 44 -
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess
Spread, an amount equal to the Class A Required Amount, if any,
with respect to the related Distribution Date, to be applied,
with respect to each of the components thereof, in accordance
with Section 4.6(a).
(ii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread, after giving effect to the
withdrawal pursuant to subsection 4.6(d)(i), an amount equal to
the Class B Required Amount, if any, with respect to the related
Distribution Date, to be applied, with respect to each of the
components thereof, in accordance with Section 4.6(b).
(iii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) and (ii), and shall
deposit in the Distribution Account for distribution to the Class
A Certificateholders on the next succeeding Distribution Date
pursuant to Section 4.7, an amount equal to the amount of any
accrued and unpaid interest on any overdue Class A Monthly
Interest, calculated on the basis of (x) a default rate of
interest equal to the Class A Certificate Rate plus 0.5% and (y)
the actual number of days such Class A Monthly Interest is or was
at any time overdue, divided by 360.
(iv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to 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
- 45 -
Certificateholders on the next succeeding Distribution Date
pursuant to Section 4.7, an amount equal to the amount of any
accrued and unpaid interest on any overdue Class B Monthly
Interest, calculated on the basis of (x) a default rate of
interest equal to the Class B Certificate Rate plus 0.5% and (y)
the actual number of days such Class B Monthly Interest is or was
at any time overdue, divided by 360.
(v) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (iv), an
amount equal to any unreimbursed reductions in the Class B
Investor Interest in connection with the payment of the Class A
Required Amount, to reinstate the Class B Investor Interest to
the extent of any such reduction, which amount shall be applied,
subject to Section 4.12, in accordance with Section 4.8 as
Available Investor Principal Collections.
(vi) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, and pay to the
Collateral Interest Holder in accordance with the Loan Agreement,
to the extent funds are available from Excess Spread after giving
effect to the withdrawals pursuant to subsections 4.6(d)(i)
through (v), an amount equal to the sum of (x) the Collateral
Monthly Interest for the related Monthly Period and (y) the
amount of any accrued and unpaid Collateral Monthly Interest for
any prior Monthly Periods.
(vii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
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
- 46 -
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, subject to Section
4.12, in accordance with Section 4.8 as Available Investor
Principal Collections.
- 47 -
(x) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (ix), an
amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest
for reasons other than the payment of principal to the Collateral
Interest Holder (but not in excess of the aggregate amount of
such reductions which have not been previously reimbursed), which
amount shall be applied, subject to Section 4.12, in accordance
with Section 4.8 as Available Investor Principal Collections.
(xi) On each Transfer Date from and after the Reserve
Account Funding Date to but excluding the date on which the
Reserve Account shall terminate pursuant to subsection 4.9(f),
the Servicer or the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Finance
Charge Account, to the extent funds are available from Excess
Spread after giving effect to the withdrawals pursuant to
subsections 4.6(d)(i) through (x), and shall deposit in the
Reserve Account, an amount equal to the excess, if any, of the
Required Reserve Account Amount over the Available Reserve
Account Amount (without giving effect to any deposit made on such
date hereunder).
(xii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (xi), an
amount equal to the aggregate amount of any additional amounts
due and payable under the Loan Agreement, which amount shall be
applied and distributed in accordance with and to the extent
specified in the Loan Agreement.
- 48 -
(xiii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (xii), and
shall deposit in the Distribution Account for distribution to the
Class A Certificateholders on the next succeeding Distribution
Date pursuant to Section 4.7, an amount equal to the amount of
any Class A Excess Interest which accrued during the related
Interest Accrual Period.
(xiv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (xiii), and
shall deposit in the Distribution Account for distribution to the
Class B Certificateholders on the next succeeding Distribution
Date pursuant to Section 4.7, an amount equal to the amount of
any Class B Excess Interest which accrued during the related
Interest Accrual Period.
(xv) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account, to the extent funds are
available from Excess Spread after giving effect to the
withdrawals pursuant to subsections 4.6(d)(i) through (xiv), and
shall make such amounts available to be applied as Shared Finance
Charge Collections to pay to Certificateholders of other Series
to the extent of shortfalls, if any, in amounts payable to such
Certificateholders from Finance Charge Collections allocated to
such other Series in accordance with the related Supplements.
(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
- 49 -
Spread after giving effect to the withdrawals pursuant to
subsections 4.6(d)(i) through (xv), the amounts of any accrued
and unpaid expenses of the Trust specified in writing by the
Trustee to the Servicer, and shall make such amounts available to
the Trustee to pay such accrued and unpaid expenses of the Trust,
if any, not otherwise paid pursuant to this Section 4.6.
(xvii) On each Transfer Date, the Servicer or the Trustee,
acting in accordance with instructions from the Servicer, shall
withdraw from the Finance Charge Account the remaining Excess
Spread after giving effect to the withdrawals pursuant to
subsections 4.6(d)(i) through (xvi), and shall pay such amount to
the holder of the Exchangeable Seller Certificate.
(e) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the
"Class A Required Amount"), if any, by which the sum of (i) Class A
Monthly Cap Rate Interest for such Distribution Date, (ii) any Class A
Monthly Cap Rate Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iii) the Class A
Covered Amount for such Distribution Date and Class A Covered Amounts
previously due but not paid to the Class A Certificateholders on a
prior Distribution Date, (iv) the Class A Monthly Servicing Fee for
the related Distribution Date and any accrued and unpaid Class A
Monthly Servicing Fees from prior Monthly Periods, (v) the Class A
Investor Default Amount, if any, for the related Monthly Period and
(vi) the unreimbursed Class A Investor Charge-Offs, exceeds the Class
A Available Funds deposited in the Finance Charge Account for the
related Monthly Period. In the event that the Class A Required Amount
for such Distribution Date is greater than zero, the Servicer shall
give written notice to the Trustee of such positive Class A Required
Amount on the related Determination Date and all or a portion of the
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
- 50 -
4.6(d)(i). In the event that the Class A Required Amount for such
Distribution Date exceeds the amount of Excess Spread with respect to
the related Monthly Period, then the Trustee shall, in accordance with
the related Supplements, withdraw on such Transfer Date from the
finance charge accounts for other Series the amounts of Shared Finance
Charge Collections with respect to the related Monthly Period, if any,
allocable to the Series 1998-1 Investor Certificates from other
Series, in an amount up to the remaining Class A Required Amount, and
such amount shall be deposited into the Distribution Account on such
Transfer Date for distribution on the related Distribution Date in
accordance with the priorities set forth in subsections 4.6(a)(i)
through (iv). In the event that the Class A Required Amount for such
Distribution Date exceeds the amount of Excess Spread and Shared
Finance Charge Collections allocable to the Class A Certificates, all
or a portion of the Reallocated Principal Collections with respect to
such Monthly Period in an amount up to such excess shall be
distributed on such Transfer Date pursuant to subsection 4.12(a).
(f) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the
"Class B Required Amount"), if any, by which the sum of (i) Class B
Monthly Cap Rate Interest for such Distribution Date, (ii) any Class B
Monthly Cap Rate Interest previously due but not paid to the Class B
Certificateholders on a prior Distribution Date, (iii) the Class B
Monthly Servicing Fee for the related Distribution Date and any
accrued and unpaid Class B Monthly Servicing Fees from prior Monthly
Periods, (iv) the Class B Investor Default Amount, if any, for the
related Monthly Period, and (v) the unreimbursed Class B Investor
Charge-Offs, exceeds the Class B Available Funds deposited in the
Finance Charge Account for the related Monthly Period. In the event
that the Class B Required Amount for the related Transfer Date is
greater than zero, the Servicer shall give written notice to the
Trustee of such positive 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
- 51 -
Monthly Period shall be distributed from the Finance Charge Account on
such Distribution Date pursuant to subsection 4.6(d)(ii). In the
event that the Class B Required Amount for such Distribution Date
exceeds the amount of Excess Spread with respect to such Monthly
Period remaining after application thereof to fund the Class A
Required Amount, then the Trustee shall, in accordance with the
related Supplements, withdraw on such Transfer Date from the finance
charge accounts for other Series the amounts of Shared Finance Charge
Collections with respect to the related Monthly Period, if any,
allocable to the Series 1998-1 Investor Certificates from other
Series, after the application thereof pursuant to subsection 4.6(e),
in an amount up to the remaining Class B Required Amount, and such
amount shall be deposited to the Distribution Account on such Transfer
Date on the related Distribution Date in accordance with the
priorities set forth in subsections 4.6(b)(i) through (iv). In the
event that the Class B Required Amount for such Distribution Date
exceeds the amount of Excess Spread and Shared Finance Charge
Collections allocable to the Class B Certificates on such Transfer
Date, all or a portion of the Reallocated Collateral Principal
Collections with respect to such Monthly Period, if any, remaining
after the application thereof pursuant to Section 4.6(e), in an amount
up to such excess, shall be distributed on such Transfer Date pursuant
to Section 4.12(b).
(g) On each Transfer Date, in the event that the amounts due on
such Transfer Date pursuant to subsections 4.6(c)(i) and 4.6(d)(v)
through (xii) exceed in whole or in part the Excess Spread allocable
thereto on to such Transfer Date, then the Trustee shall, in
accordance with the related Supplements, withdraw on such Transfer
Date from the finance charge accounts for other Series the amounts of
Shared Finance Charge Collections with respect to the related Monthly
Period, if any, allocable to the Series 1998-1 Investor Certificates
from other Series, after the application thereof pursuant to
subsections 4.6(e) and (f), in an amount up to such excess or such
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
- 52 -
accordance with the priorities set forth in subsections 4.6(d)(v)
through (xii).
SECTION 4.7 Payment of Investor Certificate Interest. On each
----------------------------------------
Distribution Date, the Paying Agent shall pay in accordance with Section
5.1, (a) to the Class A Certificateholders from the Distribution Account
the amount deposited into the Distribution Account and allocated to the
Class A Certificates pursuant to subsections 4.6(a)(i), 4.6(d)(i), (iii),
(vii) and (xiii), 4.6(e), 4.11(a) and 4.12(a) on the related Transfer Date
and (b) to the Class B Certificateholders from the Distribution Account the
amount deposited into the Distribution Account and allocated to the Class B
Certificates pursuant to subsections 4.6(b)(i), 4.6(d)(ii), (iv), (viii)
and (xiv), 4.6(f), 4.11(a) and 4.12(b) on the related Transfer Date.
SECTION 4.8 Payment of Investor Certificate Principal.
-----------------------------------------
(a) On each Determination Date, the Servicer shall instruct the
Trustee to withdraw, and the Trustee, acting in accordance with such
instructions, shall withdraw on such Transfer Date or the related
Distribution Date, as applicable, to the extent of available funds,
the amounts required to be withdrawn from the Finance Charge Account,
the Principal Account, the Principal Funding Account and the
Distribution Account as follows:
(i) on each Transfer Date with respect to the Revolving
Period, an amount equal to the Available Investor Principal
Collections for the related Monthly Period shall be distributed
on each Transfer Date, to the extent available, in the following
priority:
(A) an amount equal to the Collateral Monthly Principal
with respect to such Transfer Date shall be distributed to the
Collateral Interest Holder in accordance with the Loan Agreement;
and
(B) the remaining Available Investor Principal Collections,
if any, shall constitute Shared Principal Collections to be
deposited and applied in the
- 53 -
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 the
payment in full of the Class A Investor Interest on the
Class A Scheduled Payment Date, an amount equal to the Class
B Monthly Principal with respect to such Transfer Date will
be deposited in the Distribution Account;
(C) on each Transfer Date after giving effect to the
distribution referred to in clauses (A) and (B), if a
reduction in the Required Collateral Interest has occurred
on or prior to such Transfer Date, an amount equal to the
Collateral Monthly Principal with respect to such Transfer
Date will be paid to the Collateral Interest Holder in
accordance with the Loan Agreement; and
(D) the remaining Available Investor Principal
Collections, if any, shall constitute Shared Principal
Collections to be deposited and applied in the manner
specified in subsection 4.2(e) of the Agreement.
(iii) on each Transfer Date with respect to the Rapid
Amortization Period (beginning on the first Transfer Date
following the Monthly Period in which the Rapid Amortization
Period commences), to the extent available, in the following
priority:
- 54 -
(A) an amount equal to the Class A Monthly Principal with
respect to such Transfer Date will be deposited in the
Distribution Account;
(B) upon payment of the Class A Investor Interest in full,
an amount equal to the Class B Monthly Principal with respect to
such Transfer Date will be deposited in the Distribution Account;
(C) upon payment of the Class B Investor Interest in full,
an amount equal to the Collateral Monthly Principal with respect
to such Transfer Date will be paid to the Collateral Interest
Holder in accordance with the Loan Agreement; and
(D) the remaining Available Investor Principal Collections,
if any, 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)(i) On the earlier to occur of (i) the first Transfer Date
with respect to the Rapid Amortization Period and (ii) the Transfer
Date immediately preceding the Class A Scheduled Payment Date, the
Trustee, acting in accordance
- 55 -
with instructions from the Servicer, shall withdraw from the Principal
Funding Account and deposit in the Distribution Account the amount on
deposit in the Principal Funding Account.
(ii) On the Determination Date preceding the Transfer Date
immediately prior to the Series 1998-1 Termination Date, the Servicer
shall determine the amounts to be deposited pursuant to this sentence
and on the final Transfer Date: (x) the Servicer shall, or shall
instruct the Trustee to, and the Trustee shall, withdraw from the
Principal Account and deposit into the Distribution Account, an amount
which is no greater than the Investor Interest as of the immediately
preceding Distribution Date, after giving effect to all payments,
deposits and withdrawals made on such date; and (y) the Servicer
shall, or shall instruct the Trustee to, and the Trustee shall,
withdraw from the Principal Account and deposit into the Collection
Account, for allocation to other Series as Principal Collections
pursuant to Article IV, the amount, if any, remaining in the Principal
Account after giving effect to the withdrawals made pursuant to clause
(x).
(c) On each Distribution Date occurring after a deposit is made
to the Distribution Account pursuant to subsection 4.8(a) or (b) of
the Agreement or Section 5 or 15 of the Series Supplement, the Paying
Agent shall pay, in accordance with Section 5.1 to the Series 1998-1
Investor Certificateholders from the Distribution Account, the amount
so deposited into the Distribution Account.
(d) The Controlled Accumulation Period is scheduled to commence
at the close of business on the Controlled Accumulation Date; provided
that if the Controlled Accumulation Period Length (determined as
described below) on any Determination Date on or after the
Determination Date preceding the Reserve Account Funding Date is less
than fourteen months, the Servicer, at its option, may elect to modify
the date on which the Controlled Accumulation Period actually
commences to the first day of the month that is a number of months
prior to the month in which the Class A Scheduled Payment Date occurs
at least equal to the Controlled Accumulation Period Length (so
- 56 -
that, as a result of such election, the number of Monthly Periods in
the Controlled Accumulation Period will at least equal the Controlled
Accumulation Period Length) and shall provide prompt written notice of
such action to the Trustee; provided that (i) the length of the
Controlled Accumulation Period will not be less than four months; (ii)
such determination of the Controlled Accumulation Period Length shall
be made on each Determination Date prior to the commencement of the
Controlled Accumulation Period, and any election to shorten the
Controlled Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the Controlled
Accumulation Period Length determined on any subsequent Determination
Date, but the Controlled Accumulation Period shall in no event
commence prior to the Controlled Accumulation Date, and (iii)
notwithstanding any other provision of this Series Supplement to the
contrary, no election to postpone the commencement of the Controlled
Accumulation Period shall be made after a Pay Out Event shall have
occurred and be continuing with respect to any other Series. The
"Controlled Accumulation Period Length" will mean a number of months
such that the amount available for distribution of principal on the
Class A Certificates on the Class A Scheduled Payment Date is expected
to equal or exceed the Class A Investor Interest, assuming for this
purpose that (1) the payment rate with respect to Principal
Collections remains constant at the lowest level of such payment rate
during the twelve preceding Monthly Periods (or such lower payment
rate as Servicer may select), (2) the total amount of Principal
Receivables in the Trust (and the principal amount on deposit in the
Excess Funding Account, if any) remains constant at the level on such
date of determination, (3) no Pay Out Event with respect to any Series
will subsequently occur during the Controlled Accumulation Period and
(4) no additional Series (other than any Series being issued on such
date of determination) will subsequently be issued during the
Controlled Accumulation Period.
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SECTION 4.9 Establishment of the Reserve Account.
------------------------------------
(a) Reserve Account. The Servicer, for the benefit of the Class
---------------
A Certificateholders, shall establish and maintain or cause to be
established and maintained with a Qualified Trust Institution (other
than the Servicer) in the name of the Trustee, on behalf of the Class
A Certificateholders, the "Reserve Account", which shall be a
segregated trust account with the corporate trust department of such
Qualified Trust Institution, and held in trust by such Qualified Trust
Institution bearing a designation clearly indicating that the funds
deposited therein are held by the Trustee, on behalf of the Class A
Certificateholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve
Account and in all proceeds thereof. If, at any time, the institution
holding the Reserve Account ceases to be a Qualified Trust
Institution, the Servicer shall within 20 Business Days establish a
new Reserve Account meeting the conditions specified above with a
Qualified Trust Institution and shall transfer any cash and/or any
investments that are on deposit in the existing Reserve Account to
such new Reserve Account. From the date such new Reserve Account is
established, it shall be the "Reserve Account." The Trustee, acting
in accordance with instructions from the Servicer, shall (i) make
withdrawals from the Reserve Account from time to time in an amount up
to the Available Reserve Account Amount at such time, for the purposes
set forth in this Series Supplement, and (ii) on each Transfer Date
(from and after the Reserve Account Funding Date) prior to the
termination of the Reserve Account pursuant to Section 4.9(f) make a
deposit into the Reserve Account in the amount specified in, and
otherwise in accordance with, subsection 4.6(d)(xi).
(b) Administration of the Reserve Account. Funds on deposit in
-------------------------------------
the Reserve Account on any Transfer Date, after giving effect to any
deposits to or withdrawals from the Reserve Account on such Transfer
Date, shall be invested by the Trustee at the direction of the
Servicer in Permitted Investments that will mature so that such funds
will be available for withdrawal on or prior to the following Transfer
Date; and provided, further, that each Permitted Investment shall
-------- -------
- 58 -
mature such that such Permitted Investment shall be available for
withdrawal on or prior to the following Transfer Date. The Trustee
shall maintain, either on its own behalf or through its nominee or
custodian, on behalf of the Class A Certificateholders, possession of
any certificated negotiable instrument or security (other than
certificated securities held by a clearing corporation) evidencing the
Permitted Investments made pursuant to this subsection 4.9(b)
described in clause (a) of the definition of "Permitted Investments"
from the time of purchase thereof until the time of sale or maturity.
No Permitted Investment shall be disposed of prior to its maturity.
On each Transfer Date, all interest and earnings (net of losses and
investment expenses) accrued since the preceding Transfer Date on
funds on deposit in the Reserve Account shall be retained in the
Reserve Account to the extent that the Available Reserve Account
Amount is less than the Required Reserve Account Amount; and the
balance, if any, shall be deposited into the Finance Charge Account
and included in Class A Available Funds for such Transfer Date. For
purposes of determining the availability of funds or the balances in
the Reserve Account for any reason under this Agreement, except as
otherwise provided in the preceding paragraph, all investment earnings
on such funds shall be deemed not to be available or on deposit.
(c) Calculation of Reserve Draw Amount. On or before each
----------------------------------
Transfer Date with respect to the Controlled Accumulation Period prior
to the payment in full of the Class A Investor Interest and on or
before the first Transfer Date with respect to the Rapid Amortization
Period, the Servicer shall calculate the "Reserve Draw Amount" which
shall be equal to the Principal Funding Investment Shortfall with
respect to each Transfer Date with respect to the Controlled
Accumulation Period or the first Transfer Date with respect to the
Rapid Amortization Period less, in each case, the amount of funds
deposited into the Finance Charge Account on such Transfer Date
pursuant to subsection 4.9(b).
(d) Withdrawal of Reserve Draw Amount. If the Reserve Draw
---------------------------------
Amount for any Transfer Date is greater than zero, the Trustee, acting
in accordance with the instructions of the Servicer,
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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 A Available Funds for
such Transfer Date.
(e) Withdrawal of Reserve Account Surplus. If the Reserve
-------------------------------------
Account Surplus for any Transfer Date, after giving effect to all
deposits to and withdrawals from the Reserve Account with respect to
such Transfer Date, is greater than zero, the Trustee, acting in
accordance with the instructions of the Servicer, shall withdraw from
the Reserve Account not later than 1:00 p.m. (New York City time) on
such Transfer Date an amount equal to the Reserve Account Surplus and
pay such amount in accordance with the Loan Agreement.
(f) Termination of the Reserve Account. Upon the earliest to
----------------------------------
occur of (i) the termination of the Trust pursuant to Article XII of
the Agreement, (ii) if the Controlled Accumulation Period has not
commenced, the first Transfer Date relating to the Rapid Amortization
Period, and if the Controlled Accumulation Period has commenced, the
earlier to occur of (I) the first Transfer Date with respect to the
Rapid Amortization Period and (II) the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee, acting in
accordance with the instructions of the Servicer, after the prior
payment of all amounts owing to the Class A Certificateholders that
are payable from the Reserve Account as provided in this Series
Supplement, shall withdraw from the Reserve Account and pay in
accordance with the Loan Agreement, all amounts, if any, on deposit in
the Reserve Account and the Reserve Account shall 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
- 60 -
this Series Supplement (collectively, "Excluded Payments")) relating
to the Series 1998-1 Investor Certificates required to be made or
given by the Servicer on the related Transfer Date at the time
specified in the Agreement (including applicable grace periods), the
Trustee shall make such payment or deposit from the applicable
Investor Account without instruction from the Servicer. The Trustee
shall be required to make any such payment, deposit or withdrawal
hereunder only to the extent that it has sufficient information to
allow the Trustee to determine the amount thereof; provided, however,
-------- -------
that the Trustee shall in all cases be deemed to have sufficient
information to determine the amount of interest (i) required to be
paid or provided for under subsections 4.6(a)(i), (b)(i) and (d)(vi)
on each Transfer Date, and (ii) payable to the Series 1998-1 Investor
Certificateholders on each Distribution Date. The Servicer shall,
upon request of the Trustee, promptly provide the Trustee with all
information necessary to allow the Trustee to make such a payment or
withdrawal. Such funds or the proceeds of such withdrawal shall be
applied by the Trustee in the manner in which such payment or deposit
should have been made by the Transferor or the Servicer, as the case
may be.
SECTION 4.11 Interest Rate Caps.
------------------
(a) The Trustee hereby acknowledges that the Class A Interest
Rate Cap has been obtained for the benefit of the Class A
Certificateholders and the Class B Interest Rate Cap for the benefit
of the Class B Certificateholders. Each of the Interest Rate Caps
provides that (i) the Trust shall not be required to make any payments
thereunder and (ii) the Trust shall be entitled to receive a payment
(determined in accordance with 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 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
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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 the counterparty rating of the Interest
Rate Cap Provider is withdrawn or reduced below Aa3 by Moody's or
below AAA by Standard & Poor's or, with respect only to an Interest
Rate Cap Provider for a Replacement Interest Rate Cap, (i) the long
term unsecured debt or long term certificate of deposit rating of such
Interest Rate Cap Provider is withdrawn or reduced below Aa3 by
Moody's or (ii) the short term unsecured debt or short term
certificate of deposit rating of the Interest Rate Cap Provider is
withdrawn or reduced below A-1+ by Standard & Poor's, then within 30
days after such withdrawal or reduction (notice of which the Interest
Rate Cap Provider is required, under each Interest Rate Cap, to
provide to the Trustee, Moody's and Standard & Poor's promptly upon
obtaining knowledge thereof and notice of which the Trustee shall
provide to the Servicer and Fitch within two Business Days after
receipt thereof), the Interest Rate Cap Provider, at its own expense,
is required, under each Interest Rate Cap, either to (x) obtain a
Replacement Interest Rate Cap for each such Interest Rate Cap to which
it is then currently a party or (y) enter into or establish, with
respect to each such Interest Rate Cap, any other arrangement
satisfactory to Moody's and Standard & Poor's, including collateral,
guarantees or letters of credit, which arrangement will result in
Moody's and Standard & Poor's not reducing or withdrawing the ratings
of the Class A Certificates or the Class B Certificates in effect
immediate prior to the ratings downgrade of the Interest Rate Cap
Provider (a "Qualified Substitute Arrangement"). Upon receipt of
notice
- 62 -
of any such reduction or withdrawal, the Trustee, at the direction of
the Servicer, shall, unless such a Replacement Interest Rate Cap
Provider or Qualified Substitute Arrangement has theretofore been
established or obtained, use its best efforts to establish or obtain
or cause the Interest Rate Cap Provider to establish or obtain, with
respect to each such Interest Rate Cap, a Replacement Interest Rate
Cap or Qualified Substitute Arrangement; provided, however, that in
-------- -------
the event at any time any Qualified Substitute Arrangement established
pursuant to this Section 4.11 or pursuant to the applicable Interest
Rate Cap shall cease to be satisfactory to the Rating Agency or shall
terminate prior to the Class A Scheduled Payment Date (in the case of
a Qualified Substitute Arrangement with respect to the Class A
Interest Rate Cap) or the Class B Scheduled Payment Date (in the case
of a Qualified Substitute Arrangement with respect to the Class B
Interest Rate Cap), then the provisions of this Section 4.11(b) shall
again be applied and in connection therewith the 30-day period
referred to above shall commence on the date the Servicer receives
notice of such cessation or termination, as the case may be. Subject
to Section 4.11(c) below, the Trustee shall, with respect to any
Interest Rate Cap for which a Replacement Interest Rate Cap or
Qualified Substitute Arrangement has been or (with respect to clauses
(A), (C) and (D) below) will be obtained, (A) timely provide any
written notice required thereby to the Interest Rate Cap Provider of
its intention to terminate the Interest Rate Cap within such 30-day
period, (B) terminate such Interest Rate Cap within such 30-day
period, (C) request the payment to it of all amounts due to the Trust
under such Interest Rate Cap through the termination date and (D)
deposit any such amounts so received, on the day of receipt, to the
Collection Account for application as Finance Charge Receivables for
the benefit of the applicable Class of Certificateholders.
(c) The Trustee shall not at any time terminate any Interest Rate
Cap (including any Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect thereto) unless, prior to or
simultaneously with the termination thereof, the Interest Rate Cap
Provider, the Trustee or the Servicer has obtained
- 63 -
or shall obtain (i) a Replacement Interest Rate Cap or Qualified
Substitute Arrangement with respect thereto, (ii) to the extent
applicable, an Opinion of Counsel as to the due authorization,
execution, delivery, validity and enforceability of such Replacement
Interest Rate Cap or Qualified Substitute Arrangement, as the case may
be, and (iii) a letter from each of Moody's and Standard & Poor's
confirming that the termination of such Interest Rate Cap and its
replacement with such Replacement Interest Rate Cap or Qualified
Substitute Arrangement will not result in a reduction or withdrawal of
its rating of the Class A Certificates or the Class B Certificates.
Notwithstanding anything to the contrary in Section 4.11(b) above, the
Trustee shall not at any time terminate any such Interest Rate Cap (or
such Replacement Interest Rate Cap or Qualified Substitute Arrangement
with respect thereto) that comprises all or a portion of any Qualified
Substitute Arrangement established pursuant to subsection 4.11(b)
unless the latter Qualified Substitute Arrangement has been or is
required to be terminated pursuant to this Section 4.11.
(d) The Servicer shall notify the Trustee, the Rating Agency and
the Collateral Interest Holder within five Business Days after
obtaining knowledge that the long term unsecured debt or the long term
certificate of deposit rating of the Interest Rate Cap Provider has
been withdrawn or reduced by Moody's or Standard & Poor's.
(e) Notwithstanding the foregoing, the Servicer may at any time
obtain a Replacement Interest Rate Cap, provided that the Servicer
delivers to the Trustee (i) an Opinion of Counsel as to the due
authorization, execution and delivery and validity and enforceability
of such Replacement Interest Rate Cap and (ii) a letter from each of
Moody's and Standard & Poor's confirming that the termination of the
then current Interest Rate Cap and its replacement with such
Replacement Interest Rate Cap will not adversely affect its rating of
the Class A Certificates or the Class B Certificates.
(f) The Trustee hereby appoints the Interest Rate Cap Provider
to perform the duties of the calculation agent under the Interest Rate
Cap, subject to the terms of the Interest Rate Cap and
- 64 -
to any subsequent replacement of the Interest Rate Cap pursuant to
this Section 4.11, and the Interest Rate Cap Provider accepts such
appointment. The Trustee shall, at the direction of the Servicer,
request a copy of the audited annual consolidated financial statements
of the Interest Cap Provider, prepared in accordance with accounting
principles that are generally accepted in its place of domicile.
(g) The Trustee, on behalf of the Certificateholders, shall have
the right to, and upon notification from the Servicer shall, sell all
or a portion of the Interest Rate Caps subject to the following
conditions having been met:
(i) The Notional Amount of the unsold portion of each
Interest Rate Cap remaining as an asset of the Trust shall at
least equal the Class A Adjusted Investor Interest, in the case
of the Class A Interest Rate Cap, and the Class B Investor
Interest, in the case of the Class B Interest Rate Cap,
outstanding as of the date of such sale; and
(ii) The Trustee shall have received written confirmation
from the Rating Agency that such sale will not result in a
reduction or withdrawal of the then current rating on the
relevant class of Certificates by the Rating Agency.
(h) The Servicer shall have the duty of (i) obtaining a fair
market value price for the sale of the Trust's rights under any
portion of an Interest Rate Cap sold pursuant to the subsection
4.11(g), (ii) notifying the Trustee of prospective purchasers and
bids, (iii) selecting the purchaser of such portion of the Interest
Rate Cap, and (iv) instructing the selected purchaser (and/or the
Trustee) to deposit the purchase price therefor into the Collection
Account. The Trustee, upon receipt of the purchase price into the
Collection Account, shall execute all documentation, prepared by the
Servicer, necessary to effect the transfer of the Trust's rights under
such portion of the Interest Rate Cap and to release the lien of the
Trustee thereon and proceeds thereof.
- 65 -
Funds deposited in the Collection Account in respect of the sale
of all or a portion of a Class A Interest Rate Cap or a Class B
Interest Rate Cap shall be applied on the next Transfer Date as,
respectively, Class A Available Funds or Class B Available Funds in
accordance with subsections 4.6(a) and (b).
SECTION 4.12 Reallocated Principal Collections. On each Transfer
---------------------------------
Date, the Servicer shall apply, or shall cause the Trustee to apply, the
Reallocated Principal Collections (applying all Reallocated Collateral
Principal Collections in accordance with subsections 4.12(a) and (b) prior
to applying any Reallocated Class B Principal Collections in accordance
with subsection 4.12(a) for any amounts still owing after the application
of Reallocated Collateral Principal Collections) with respect to such
Transfer Date, to make the following distributions on each Transfer Date in
the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii)
the amount of Excess Spread and Shared Finance Charge Collections from
other Series with respect to the related Monthly Period, shall be
applied pursuant to subsections 4.6(a)(i) through (iv); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii)
the amount of Excess Spread and Shared Finance Charge Collections from
other Series allocated and available to the Class B Certificates
pursuant to subsection 4.6(d)(ii) and 4.6(f) on such Transfer Date
shall be applied pursuant to subsections 4.6(b)(i) through (iv).
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
- 66 -
amount by which the Collateral Interest would have been reduced below zero.
If the reallocation of Reallocated Principal Collections would cause the
Class B Investor Interest (after giving effect to any Class B Investor
Charge-Offs for such Transfer Date) to be a negative number on any Transfer
Date, Reallocated Principal Collections shall be reallocated on such
Transfer Date in an aggregate amount not to exceed the amount which would
cause the Class B Investor Interest (after giving effect to any Class B
Investor Charge-Offs for such Transfer Date) to be reduced to zero.
SECTION 4.13 Determination of LIBOR. "LIBOR" shall mean, for a specific
----------------------
Interest Accrual Period (other than the initial Interest Accrual Period),
the rate for deposits in United States dollars for one month (commencing on
the first day of the relevant Interest Accrual Period) which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the LIBOR
Determination Date for such Interest Accrual Period. If such rate does not
appear on Telerate Page 3750, the rate for such Interest Accrual Period
will be determined on the basis of the rates at which deposits in the
United States dollars are offered by the Reference Banks at approximately
11:00 a.m., London time, on such LIBOR Determination Date to prime banks in
the London interbank market for a period equal to one month (commencing on
the first day of Interest Accrual Period). The Trustee will request the
principal London office of each such bank to provide a quotation of its
rate. If at least two such quotations are provided, the rate for such
Interest Accrual Period will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for such
Interest Accrual Period will be the arithmetic mean of the rates quoted by
four major banks in New York City, selected by the Trustee, at
approximately 11:00 a.m., New York City time, on the first day of such
Interest Accrual Period for loans in United States dollars to leading
European banks for a period equal to one month (commencing on the first day
of such Interest Accrual Period).
SECTION 4.14 Discount Option.
---------------
(a) The Transferor may at its option (the "Discount Option"), at
any time, upon not less than 20 Business Days prior written notice to
the Servicer, the Trustee, the Interest Rate Cap Provider, the
Collateral Interest Holder, and each Rating Agency, designate a
percentage, which may
- 67 -
be a fixed percentage or a variable percentage based on a formula (the
"Discounted Percentage"), of the amount of Principal Receivables in
Accounts designated in such notice to be treated on and after such
designation, or for the period specified in such notice, as Finance
Charge Receivables (it being understood and agreed that an increase in
the Discount Percentage shall constitute a new exercise of the
Discount Option); provided, however, that no such designation shall
-------- -------
become effective on the date specified in such written notice unless
the following conditions have been satisfied:
(i) on or before the date specified in the written notice,
the Transferor shall have received written confirmation from each
Rating Agency which is then rating an outstanding Series of
Certificates that such designation will not result in a
withdrawal or reduction of its rating of such Series of
Certificates;
(ii) such exercise of the Discount Option shall not, in the
reasonable belief of the Transferor, cause a Pay Out Event to
occur or cause an event which with notice or the lapse of time or
both would constitute a Pay Out Event;
(iii) the Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses
(i) and (ii) above. The Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no
liability in so relying.
On and after the date of satisfaction of each of the above
conditions, in processing Collections of the Principal Receivables of
the Accounts designated pursuant to such notice, the Servicer shall
deem the product of the Discount Percentage and Collections of such
Principal Receivables as Finance Charge Collections.
(b) The Transferor may at its option, at any time, upon not less
than 20 Business Days prior written notice to the Servicer, the
Trustee, the
- 68 -
Collateral Interest Holder, and each Rating Agency, suspend or
terminate the Discount Option or reduce the Discount Percentage to a
percentage specified in such notice; provided, however, that such
-------- -------
notice shall specify the period of time for which the Discount Option
shall be suspended, the effective date of the termination of the
Discount Option or the percentage to which the Discount Option shall
be reduced, as the case may be.
(c) Each Certificateholder by its acceptance of a beneficial
interest in a Certificate and the Collateral Interest Holder by its
acceptance of the Collateral Interest shall be deemed to have
consented to the exercise by the Transferor of the Discount Option at
such time as the Transferor determines to exercise such options.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
[THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1998-1]
SECTION 5.1 Distributions.
-------------
(a) On each Distribution Date, the Paying Agent shall distribute
(in accordance with the certificate delivered by the Servicer to the
Trustee pursuant to subsection 3.4(b)) to each Class A
Certificateholder of record on the immediately preceding Record Date
(other than as provided in subsection 2.4(e) or Section 12.3
respecting a final distribution) such Class A Certificateholder's pro
---
rata share (based on the aggregate Undivided Interests represented by
----
Class A Certificates held by such Class A Certificateholder) of
amounts on deposit in the Distribution Account as are payable to the
Class A Certificateholders pursuant to Sections 4.7 and 4.8 hereof by
check mailed to each Class A Certificateholder except that, with
respect to Class A Certificates registered in the name of the nominee
of a Clearing Agency, such distribution shall be made in immediately
available funds.
(b) On each Distribution Date, the Paying Agent shall distribute
(in accordance with the
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certificate delivered by the Servicer to the Trustee pursuant to
subsection 3.4(b)) to each Class B Certificateholder of record on the
immediately preceding Record Date (other than as provided in
subsection 2.4(e) or Section 12.3 respecting a final distribution)
such Class B Certificateholder's pro rata share (based on the
--- ----
aggregate Undivided Interests represented by Class B Certificates held
by such Class B Certificateholder) of amounts on deposit in the
Distribution Account as are payable to the Class B Certificateholders
pursuant to Sections 4.7 and 4.8 hereof by check mailed to each Class
B Certificateholder except that, with respect to Class B Certificates
registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds.
SECTION 5.2 Monthly Certificateholders' Statement.
-------------------------------------
(a) On or before each Distribution Date, the Paying Agent shall
forward to each Series 1998-1 Investor Certificateholder of record on
the immediately preceding Record Date and the Rating Agencies a
statement substantially in the form of Exhibit 2 to the Series
Supplement relating to Series 1998-1 and the Collateral Interest
prepared by the Servicer setting forth among other things the
following information (which, in the case of subclauses (i), (ii) and
(iii) below, shall be stated on the basis of an original principal
amount of $1,000 per Certificate and, in the case of subclauses (viii)
and (ix) shall be stated on an aggregate basis and on the basis of an
original principal amount of $1,000 per Certificate):
(i) the total amount distributed to the Class A
Certificateholders and the Class B Certificateholders,
respectively, on such Distribution Date, and to the Collateral
Interest Holder on the preceding Transfer Date;
(ii) the amount of such distribution, if any, allocable to
principal with respect to the Class A Certificates, the Class B
Certificates and the Collateral Interest, respectively;
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(iii) the amount of such distribution allocable to Class A
Monthly Interest, Class B Monthly Interest, and Collateral
Monthly Interest, respectively;
(iv) the amount of Principal Collections processed during
the preceding Monthly Period, as appropriate, and allocated in
respect of the Class A Certificates, the Class B Certificates and
the Collateral Interest, respectively;
(v) the aggregate amount of Principal Receivables, the
Investor Interest, the Adjusted Investor Interest, the Class A
Investor Interest, the Class A Adjusted Investor Interest, the
Class B Investor Interest, the Collateral Interest, the Class B
Fixed Allocation, the Collateral Fixed Allocation, the Floating
Investor Percentage, the Class A Floating Allocation, the Class B
Floating Allocation, the Collateral Floating Allocation and the
Fixed Investor Percentage, in each case as of the close of
business on the last day of the preceding Monthly Period;
(vi) the aggregate outstanding balance of Accounts which
are up to 30, 31-60 and 61 or more days delinquent in accordance
with the Servicer's then existing Account Guidelines by class of
delinquency as of the close of business on the last day of the
preceding Monthly Period;
(vii) the Class A Investor Default Amount, the Class B
Investor Default Amount and the Collateral Default Amount for the
preceding Monthly Period;
(viii) the aggregate amount of Class A Investor Charge-
Offs, Class B Investor Charge-Offs and Collateral Interest
Charge-Offs for the preceding Monthly Period;
(ix) the aggregate amount of Investor Charge-Offs
reimbursed to the Class A Certificateholders, the Class B
Certificateholders and the Collateral Interest Holder on the
Transfer Date immediately preceding such Distribution Date;
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(x) the amount of the Class A Monthly Servicing Fee, the Class B
Monthly Servicing Fee and the Collateral Interest Monthly
Servicing Fee for the preceding Monthly Period;
(xi) the Principal Funding Account Balance as of the related
Transfer Date;
(xii) the Accumulation Shortfall with respect to the related
Transfer Date;
(xiii) the amount of the Principal Funding Investment Proceeds
transferred to the Finance Charge Account on the related Transfer
Date;
(xiv) the Class A Principal Funding Investment Shortfall on the
related Transfer Date;
(xv) the amount of Class A Available Funds, Class B Available
Funds and Collateral Available Funds on deposit in the Finance Charge
Account on the related Transfer Date;
(xvi) the Pool Factor as of the end of the last day of the
preceding Monthly Period;
(xvii) the aggregate amount of Finance Charge Collections
during the preceding Monthly Period (including amounts arising
from the sale of either Interest Rate Cap to be treated as
Finance Charge Collections), as appropriate, and allocated in
respect of the Series 1998-1 Investor Certificates;
(xviii) the Class A Required Amount, the Class B Required
Amount, the amount of Reallocated Collateral Principal
Collections and Reallocated Class B Principal 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;
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(xix) the Reserve Account Draw and the Available Reserve
Account Amount with respect to the related Transfer Date; and
(xx) the ratio of the Collateral Interest to the Investor
Interest as of the last day of the preceding Monthly Period.
The Monthly Certificateholders' Statement shall be substantially
in the form of Exhibit 2, with such changes as the Servicer may
determine to be necessary or desirable; provided, however, that no
-------- -------
such change shall serve to exclude information required by this
subsection 5.2(a). The Servicer shall, upon making such
determination, deliver to the Trustee and the Rating Agency an
Officer's Certificate to which shall be annexed the form of Exhibit 2,
as so changed. Upon the delivery of such Officer's Certificate to the
Trustee, Exhibit 2, as so changed, shall for all purposes of this
Agreement constitute Exhibit 2. The Trustee may conclusively rely
upon such Officer's Certificate as to such change conforming to the
requirements of this Agreement.
(b) On or before January 31 of each calendar year, beginning
with calendar year 1998, the Servicer shall furnish to the Paying
Agent, who shall distribute to each Person who at any time during the
preceding calendar year was a Series 1998-1 Certificateholder, a
statement prepared by the Servicer containing the information required
to be contained in the regular monthly report to Series 1998-1
Investor Certificateholders, as set forth in subclauses (i), (ii) and
(iii) above, aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series 1998-1 Investor
Certificateholder, together with such other customary information
(consistent with the treatment of the Certificate as debt) as the
Trustee or the Servicer deems necessary or desirable to enable the
Series 1998-1 Investor 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.
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SECTION 9.A Series 1998-1 Pay Out Events. If any one of the following
----------------------------
events shall occur during the Revolving Period or the Controlled Accumulation
Period with respect to the Series 1998-1 Investor Certificates:
(a) failure on the part of the Transferor or the Holder of the
Exchangeable Seller Certificate (i) to make any payment or deposit required
by the terms of (A) the Agreement relating to the Series 1998-1 Investor
Certificates, or (B) this Series Supplement, in each case on or before the
date occurring five Business Days after the date such payment or deposit is
required to be made herein or (ii) duly to observe or perform in any
material respect any covenants or agreements of the Transferor set forth in
the Agreement, which failure has a material adverse effect on the Series
1998-1 Investor Certificateholders (which determination shall be made
without regard to whether any funds are available pursuant to the Interest
Rate Caps) and which continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by the Holders of Series 1998-1 Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of each of the Class A Investor Interest, the Class B Investor Interest and
the Collateral Interest, and continues to affect materially and adversely
the interests of the Series 1998-1 Investor Certificateholders for such
period;
(b) any representation or warranty made by the Transferor in the
Agreement, including this Series Supplement, or any information contained
in a computer file or microfiche list required to be delivered by the
Transferor pursuant to Section 2.1, 2.6 or 3.4(c) of the Agreement, (i)
shall prove to have been incorrect in any material respect when made or
when delivered, which continues to be incorrect in any material respect for
a period of 60 days, after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by the
Holders of the Series 1998-1 Investor Certificates evidencing Undivided
Interests aggregating not less than 50% of each of the Class A Investor
Interest, the Class B Investor Interest and the Collateral Interest, and
(ii) as a result of which the interests of the Series 1998-1 Investor
Certificateholders are materially and adversely affected (which
determination shall be made without regard to whether any funds are
available pursuant to the Interest Rate Caps) and continue to be materially
and adversely affected for such period; provided, however, that a Series
-------- -------
1998-1 Pay Out Event
- 74 -
pursuant to this subsection 9A(b) shall not be deemed to have occurred
hereunder if the Transferor has accepted reassignment of the related
Receivable, or all of such Receivables, if applicable, during such period
in accordance with the provisions hereof;
(c) with respect to any Determination Date, the average of the
Portfolio Yields for the three consecutive Monthly Periods preceding such
Determination Date is a rate which is less than the average of the Base
Rates for such Monthly Periods;
(d) the Transferor shall fail to convey Receivables arising under
Additional Accounts to the Trust, as required by subsection 2.6(e) of the
Agreement;
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1998-1 Investor Certificateholders (which
determination shall be made without regard to the subordination of the
Collateral Interest or whether funds are available pursuant to the
Enhancement or the Interest Rate Caps);
(f) failure to pay the Class A Certificates in full on the Class A
Scheduled Payment Date;
(g) failure to pay the Class B Certificates in full on the Class B
Scheduled Payment Date; or
(h) failure of the Interest Rate Cap Provider to make any payment
under the Class A Interest Rate Cap or the Class B Interest Rate Cap within
five days of the date on which such payment was due;
then, in the case of any event described in subparagraphs (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1998-1 Investor Certificates evidencing Undivided
Interests aggregating more than 50% of each of the Class A Investor Interest,
the Class B Investor Interest and the Collateral Interest by notice then given
in writing to the Transferor and the Servicer (and to the Trustee if given by
the Certificateholders and the Collateral Interest Holder) may declare that a
pay out event (a "Series 1998-1 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in subparagraphs (c), (d),
(f), (g) or (h) a Series 1998-1 Pay Out Event shall occur without any notice or
other action on the part of the Trustee or the Series 1998-1 Investor
Certificateholders immediately upon the occurrence of such event.
- 75 -
Notwithstanding the foregoing, any failure of performance under Section
9A(a)(i) for a period of up to 60 calendar days with respect to an event
described in clause (i) below or up to 15 calendar days with respect to an event
described in clause (ii) below (in addition to the five Business Days provided
above) shall not constitute a Pay Out Event for purposes of this sentence until
the expiration of such period, if such failure could not be prevented by the
exercise of reasonable diligence by the Transferor and such failure was caused
by (i) an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes or (ii) computer malfunction,
communication malfunction or other electronic system malfunction; the preceding
clause shall not relieve the Transferor from using its best efforts to perform
its respective obligations in a timely manner in accordance with the terms of
this Agreement and any Supplement and the Transferor shall provide the Trustee,
each Rating Agency, the Collateral Interest Holder, and each of the
Certificateholders with an Officer's Certificate giving prompt notice of such
failure, together with a description of its efforts to so perform its
obligations. Notice of any such Pay Out Event shall be given by the Servicer to
the Rating Agencies.
SECTION 10. Series 1998-1 Termination. All principal or interest with
-------------------------
respect to the Series 1998-1 Investor Certificates shall be due and payable no
later than the Scheduled Series 1998-1 Termination Date. In the event that the
Investor Interest is greater than zero on the Scheduled Series 1998-1
Termination Date, after giving effect to all transfers, withdrawals, deposits
and drawings to occur on such date and the payment of principal to be made on
the Certificates on such date, the Trustee will sell or cause to be sold, and
pay the proceeds to the Series 1998-1 Investor Certificateholders pro rata in
final payment of all principal of and accrued interest on the Series 1998-1
Investor Certificates, an amount of Principal Receivables and the related
Finance Charge Receivables (or interests therein) up to 110% of the Investor
Interest at the close of business on such date (but not more than an amount of
Receivables equal to the sum of (1) the product of (A) the Seller Percentage,
(B) the aggregate outstanding Principal Receivables and (C) a fraction the
numerator of which is the related Investor Percentage of Finance Charge
Collections and the denominator of which is the sum of all Investor Percentages
with respect to Finance Charge Collections of all Series outstanding and (2) the
Investor Interest of such Series). The Transferor or any of its Affiliates
shall be permitted to bid for such Receivables. In addition, the Transferor or
any of its Affiliates shall have the right to match any bid by a third person
and be granted the right to purchase the Receivables at such matched bid price.
Any proceeds of such sale in excess of such principal and interest
- 76 -
paid shall be paid to the Collateral Interest Holder to satisfy any amounts
owing under the Loan Agreement and thereafter paid to the Holder of the
Exchangeable Seller Certificate. Upon such Scheduled Series 1998-1 Termination
Date, final payment of all amounts allocable to the Certificates shall be made
in the manner provided in Section 12.3 of the Agreement.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
-------------------------------------------------------
Agreement. As supplemented by this Series Supplement, the Agreement is in all
- ---------
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
-----------------------------------------------------
Warranties. Except as otherwise provided in the Agreement, each of the
- ----------
Transferor, the Servicer and the Trustee hereby ratify and reaffirm its
representations and warranties contained in the Agreement as follows: (a) with
respect to the Transferor, the representations and warranties contained in (i)
Section 2.3 of the Agreement, (ii) Section 2.4(a) of the Agreement (with respect
to the Agreement as supplemented by this Series Supplement) and (iii) Section
2.4(b) of the Agreement, (b) with respect to the Servicer, the representations
and warranties contained in Section 3.3 of the Agreement and (c) with respect to
the Trustee, the representations and warranties contained in Section 11.15 of
the Agreement, as though such representations and warranties were made by such
party as of the Closing Date.
SECTION 13. [RESERVED]
----------
SECTION 14. No Subordination. Notwithstanding the provisions contained
----------------
in Section 13.1 of the Agreement to the contrary, the Agreement may also be
amended from time to time by the Servicer, the Transferor and the Trustee with
the consent of the Series 1998-1 Investor Certificateholders evidencing
Undivided Interests aggregating not less than 100% of the Investor Interest for
the purpose of (i) adding any provisions to or changing in any manner or
eliminating any of the provisions of this Series Supplement or (ii) modifying in
any manner the rights of the Series 1998-1 Investor Certificateholders which
would, in either case, result in the subordination of the rights of the Series
1998-1 Investor Certificateholders to the rights of the Holders of any other
Series.
SECTION 15. Repurchase of the Series 1998-1 Certificates. In the event of
--------------------------------------------
a breach of any of the representations and warranties set forth in Section
12(a)(ii) hereof, either the Trustee or the Holders of Series 1998-1
Certificates evidencing Undivided Interests aggregating more than 50% of each of
the Class A Investor Interest and the Class B Investor Interest, by
- 77 -
notice then given in writing to the Transferor (and to the Trustee and the
Servicer, if given by the Series 1998-1 Certificateholders), may direct the
Transferor to purchase the Series 1998-1 Investor Certificates (as specified
below) within 60 days of such notice, or within such longer period as may be
specified in such notice, which period shall not exceed 120 days, and the
Transferor shall be obligated to purchase on a Distribution Date specified by
the Transferor (such Distribution Date, the "Repurchase Date") occurring within
such applicable period on the terms and conditions set forth below; provided,
--------
however, that no such purchase shall be required to be made if, at any time
- -------
during such applicable period, the representations and warranties contained in
Section 12(a)(ii) hereof, shall then be true and correct in all material
respects. The Transferor shall deposit on the Transfer Date (in New York
Clearing House, next day funds) immediately preceding such Repurchase Date, an
amount equal to the reassignment deposit amount for such Series 1998-1 Investor
Certificates in the Distribution Account, for distribution to the Series 1998-1
Investor Certificateholders pursuant to Article XII of the Agreement and Section
10 hereof. The reassignment deposit amount for such reassignment shall be equal
to the sum of (i) the Investor Interest at the end of the day on the last day of
the Monthly Period preceding the Repurchase Date, less the amount on deposit in
the Principal Account which will be transferred to the Distribution Account
pursuant to 4.8(b)(ii) on the related Transfer Date, (ii) an amount equal to all
interest accrued but unpaid on the Series 1998-1 Investor Certificates through
and including the last day of the Interest Accrual Period in which such Transfer
Date occurs, less the amount on deposit in the Finance Charge Account and, with
respect to the Class A Certificates, Principal Funding Investment Proceeds and
amounts available to be withdrawn from the Reserve Account on the related
Transfer Date, which will be transferred to the Distribution Account to pay
interest pursuant to subsections 4.6(a) through (d), as applicable, on such
Transfer Date and (iii) any additional amounts owing to the Collateral Interest
Holder pursuant to the Loan Agreement. The deposit into the Distribution
Account of the reassignment deposit amount shall be considered a prepayment in
full of the Series 1998-1 Investor Certificates. The Series 1998-1 Termination
Date shall be deemed to have occurred on the Repurchase Date as long as such
amount was deposited in full into the Distribution Account on such Transfer
Date. If the Trustee or the Series 1998-1 Investor Certificateholders give
notice directing the Transferor to purchase the Series 1998-1 Investor
Certificates as provided above, the obligation of the Transferor to purchase the
Series 1998-1 Investor Certificates and to pay the reassignment deposit amount
pursuant to this Section 15 shall constitute the sole remedy respecting a breach
of the representations and warranties referenced in Section 12(a)(ii) hereof
available to
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the Series 1998-1 Investor Certificateholders or the Trustee on behalf of the
Series 1998-1 Investor Certificateholders.
SECTION 16. Counterparts. This Series Supplement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 17. Additional Covenants of Transferor. People's Bank, in its
----------------------------------
capacity as Transferor, hereby covenants that following the occurrence of a
Series Pay Out Event described in Section 9A(c) hereof, except as otherwise
required by any Requirements of Law, it will not reduce the Periodic Finance
Charges assessed on any Receivable, or other fees on any Account, if the
Transferor reasonably believes that, as a result of such reduction, (i) the
weighted average of the Periodic Finance Charges on the last day of the Monthly
Period during which such reduction will be effective (weighted based on the
Transferor's reasonable belief as to the Principal Receivables which will be
outstanding on such last day) will be less than (ii) the sum of (1) 2.00% and
(2) the weighted average of the Certificates Rates of each Series that will be
outstanding on such last day (weighted based on the Transferor's reasonable
belief as to (x) the amount of the Investor Interest of each Series that will be
outstanding on such last day, (y) in the case of Series for which the
Certificate Rate is a floating rate, the Certificate Rate with respect to such
Monthly Period).
SECTION 18. Series 1998-1 Investor Exchange. Pursuant to subsection
-------------------------------
6.9(b) of the Agreement, the Series 1998-1 Investor Certificateholders may
tender their Series 1998-1 Investor Certificates, and the Holders of the
Exchangeable Seller Certificate may tender the Exchangeable Seller Certificate,
in exchange for (i) one or more newly issued Series of Series 1998-1 Investor
Certificates and (ii) a reissued Exchangeable Seller Certificate in accordance
with the terms and conditions contained in a notice of exchange delivered to the
Series 1998-1 Investor Certificateholders. Such notice of exchange will
specify, among other things: (a) the amount of Series 1998-1 Investor
Certificates that may be tendered, (b) the Certificate Rate with respect to the
new Series, (c) the term of the Series, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to the Series
and (f) the time and the manner of the tender and cancellation of the Series
1998-1 Investor Certificates and the issuance of the new Series of Certificates
will be effectuated. Upon satisfaction of the conditions contained in
subsections 6.9(b) and 6.9(c) of the Agreement, and the receipt by the Trustee
of the Exchange Notice and the related Supplement, the Trustee shall cancel the
existing Exchangeable Seller Certificate and the applicable Series 1998-1
Investor Certificates, and shall issue such Series of Series
- 79 -
1998-1 Investor Certificates and a new Exchangeable Seller Certificate, each
dated the Exchange Date.
SECTION 19. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 20. Notification to Luxembourg Stock Exchange. On or prior to
-----------------------------------------
each Distribution Date the Servicer shall, or shall cause the Trustee to, send
written notice to the Luxembourg Stock Exchange specifying (i) the Class A
Certificate Rate for the immediately following Distribution Date, (ii) the
amount of interest to be distributed in respect of the Class A Certificates for
the immediately following Distribution Date and (iii) the Class A Investor
Interest on the Distribution Date on or prior to which such report is being
furnished (after giving effect to all payments of principal to be made on such
Distribution Date). Promptly following each Distribution Date the Servicer shall
cause a notice to be published in a daily newspaper, which initially shall be
the Luxemburger Wort, specifying the information described in clauses (i) and
----------------
(ii) of the preceding sentence.
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IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
PEOPLE'S BANK,
Transferor and Servicer
By:
---------------------------------
Name:
Title:
BANKERS TRUST COMPANY, not in
its individual capacity but
solely as Trustee
By:
---------------------------------
Name:
Title:
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EXHIBIT 1-A
-----------
FORM OF CLASS A INVESTOR CERTIFICATE
$____________
No. 1 CUSIP No. ___________
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS A ASSET BACKED CERTIFICATE, SERIES 1998-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA/1/ and MasterCard/1/ 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
- ---------------
/1/ VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
constituting the Trust pursuant to an Amended and Restated Pooling and Servicing
Agreement, dated as of March 18, 1997, as supplemented by the Series 1998-1
Supplement dated as of April 1, 1998 (collectively, the "Agreement"), by and
between People's Bank, as Transferor and Servicer, and Bankers Trust Company, as
Trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth herein below.
The Transferor has structured the Agreement and the Investor Certificates
with the intention that the Investor Certificates will qualify under applicable
tax law as indebtedness, and the Transferor, the Holder of the Exchangeable
Seller Certificate, the Servicer and each Investor Certificateholder (or
Certificate Owner) by acceptance of its Certificate (or, in the case of a
Certificate Owner, by virtue of such Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat the Investor Certificates (or a
beneficial interest therein) consistently with, and to take no action
inconsistent with, the treatment of the Investor Certificates (or beneficial
interest therein) for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law.
This Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended from
time to time, the Certificateholder by virtue of the acceptance hereof assents
and by which the Certificateholder is bound. Although a summary of certain
provisions of the Agreement is set forth below, this Class A Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Agreement.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge Receivables
which arise generally from Periodic Finance Charges and other fees and charges
as fully specified in the Agreement. The assets of the Trust in which this
Certificate represents an interest, consist of (i)(a) the Receivables now
-2-
existing and hereafter created and arising in connection with the Accounts, and
all Receivables in the Automatic Additional Accounts and Additional Accounts
added to the Trust from time to time (b) all monies due or to become due with
respect thereto (including all Finance Charge Receivables), (c) all proceeds (as
defined in Section 9-306 of the UCC as in effect in the State of New York) of
such Receivables, (d) proceeds of insurance policies relating to the
Receivables, and (e) Interchange and Recoveries pursuant to subsections 2.5(k)
and (l) of the Agreement, (ii) such funds as from time to time are deposited in
the Collection Account, the Excess Funding Account, and the Investor Accounts,
and (iii) the benefit of the Class A Interest Rate Cap between the Trustee and
the Interest Rate Cap Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$343,000,000 Floating Rate Class A Asset Backed Certificates, Series 1998-1 (the
"Class A Certificates"), each of which represents an undivided interest in
certain assets of the Trust, including the right to receive Collections
allocable to the Class A Certificates and other amounts at the times and in the
amounts specified in the Agreement to be deposited in the Investor Accounts or
paid to the Investor Certificateholders. The aggregate interest represented by
the Class A Certificates at any time in the Principal Receivables in the Trust
will not exceed an amount equal to the Class A Investor Interest at such time.
The Class A Initial Investor Interest is $343,000,000 minus the retirement of
any Class A Certificates pursuant to an Investor Exchange. The Class A Investor
Interest on any date of determination will be an amount equal to (a) the Class A
Initial Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class A Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
A Investor Charge-Offs over Class A Investor Charge-Offs reimbursed prior to
such date of determination; provided, however, that the Class A Investor
Interest may not be reduced below zero. In addition to the Class A
Certificates, a class of certificates entitled "People's Bank Credit Card Master
Trust $27,000,000 Floating Rate Class B Asset Backed Certificates, Series 1998-
1" (the "Class B Certificates") and an Undivided Interest in the Trust in the
initial amount of $30,000,000 (the "Collateral Interest," and together with the
Class A Certificates and the Class B Certificates, the "Certificates") will be
issued, and the Exchangeable Seller Certificate will be reissued to the Holder
of the Exchangeable Seller Certificate pursuant to the Agreement, and other
Series of certificates have been, and may from time to time be, issued by the
Trust, which represent or will represent an undivided interest in the Trust.
The Exchangeable Seller Certificate will represent the interest in the Principal
Receivables not represented by the Certificates or any other Series of
certificates.
-3-
Interest on the Class A Certificates will be distributed on April 15, 1998
and on the fifteenth day of each calendar month thereafter, or if such fifteenth
day is not a Business Day, on the next succeeding Business Day (a "Distribution
Date"), to the Class A Certificateholders of record on the Record Date preceding
the related Distribution Date.
No principal will be payable to the Class A Certificateholders during the
Revolving Period, which begins on the date of issuance of this Class A
Certificate or during the Controlled Accumulation Period. During the Controlled
Accumulation Period, which is scheduled to begin November 1, 2002 but which may
be postponed as provided in the Agreement, an amount equal to the Controlled
Deposit Amount will be deposited into the Principal Funding Account on each
Transfer Date commencing with the Transfer Date following the Monthly Period in
which the Controlled Accumulation Period commences. The amount on deposit in
the Principal Funding Account will be distributed as principal to the Class A
Certificateholders on the March 2003 Distribution Date (the "Class A Scheduled
Payment Date"), unless paid earlier as the result of the occurrence of a Pay Out
Event and the commencement of the Rapid Amortization Period, or later in
accordance with the Agreement. During the Rapid Amortization Period, if any, in
addition to monthly payments of interest on the Class A Certificates, principal
will be distributed to the Class A Certificateholders on the Distribution Date
of each calendar month commencing in the month following the month in which the
Rapid Amortization Period commences.
The Servicer will deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in no
event later than the second Business Day following such Date of Processing.
Notwithstanding anything in the Agreement to the contrary, for so long as,
and only so long as, the Transferor shall remain the Servicer hereunder and
(a)(i) the Servicer provides to the Trustee a letter of credit or other
arrangement covering risk of collection of the Servicer acceptable to the Rating
Agency (as evidenced by letters from the Rating Agency) and (ii) the Transferor
shall not have received a notice from the Rating Agency that such letter of
credit or other arrangement would result in the lowering or withdrawal of such
Rating Agency's then-existing rating of any Series of Investor Certificates or
(b) under certain other circumstances permitted under the Agreement, the
Servicer need not deposit Collections into the Collection Account, the Principal
Account or the Finance Charge Account in accordance with the immediately
preceding sentence, or make payments to the Holder of the Exchangeable Seller
Certificate prior to the close of business on the day any Collections are
deposited in the Collection Account, but may make such pay-
-4-
ments on the Transfer Date in the Monthly Period following the Monthly Period in
which such Collections are received in an amount equal to the net amount of such
deposits, payments and withdrawals which would have been made but for the
provisions of this paragraph.
On each Distribution Date, to the extent funds are available on the terms
specified in the Agreement from available Finance Charge Collections, from
payments made pursuant to the Class A Interest Rate Cap and from Excess Spread,
interest will be distributed to the Class A Certificateholders in an amount
equal to the sum of: (i) the product of (a) the Class A Certificate Rate, (b)
the lesser of the Class A Adjusted Investor Interest determined as of the
preceding Distribution Date, after giving effect to all payments, deposits and
withdrawals on such Distribution Date or Closing Date, as applicable, and the
Expected Class A Principal as of the preceding Distribution Date or Closing Date
(or, for the initial Interest Accrual Period, the Class A Initial Investor
Interest), and (c) the actual number of days in the related Interest Accrual
Period divided by 360, plus (ii) the Class A Covered Amounts for such Interest
Accrual Period, plus (iii) the product of (a) the Class A Excess Principal, (b)
the lesser of the Class A Certificate Rate and [____]% per annum, and (c) the
actual number of days in the related Interest Accrual Period divided by 360,
plus (iv) to the extent permitted by applicable law, any interest accrued on the
Class A Certificates (including interest on any overdue Class A Monthly
Interest) during any prior Interest Accrual Period which has not been
distributed to the Class A Certificateholders, plus, (v) to the extent that
there is available Excess Spread, an amount equal to the product of (a) the
amount by which the Class A Certificate Rate exceeds [____]%, (b) the Class A
Excess Principal and (c) the actual number of days in the related Interest
Accrual Period divided by 360.
On each Determination Date during the Revolving Period, the Controlled
Accumulation Period and the Rapid Amortization Period, if any, the Servicer will
determine the Class A Required Amount and the Class B Required Amount. If
either or both of the Required Amounts are greater than zero after application
of available Finance Charge Collections, Excess Spread and Shared Finance Charge
Collections, then Principal Collections allocable to the Collateral Interest
will be reallocated and applied first to fund the remaining Class A Required
Amount, if any, and second to fund the remaining Class B Required Amount, if
any, and to the extent that Reallocated Collateral Principal Collections are
less than such remaining Class A Required Amount, Principal Collections
allocable to the Class B Certificates will then be reallocated and applied to
fund the remaining Class A Required Amount. The Collateral Interest and (if the
Collateral Interest is reduced to zero) the Class B Investor Interest will be
reduced
-5-
by the amount of Reallocated Collateral Principal Collections and Reallocated
Class B Principal Collections applied to fund the Required Amounts.
If, on any Distribution Date, Reallocated Collateral Principal Collections
are insufficient to fund the remaining Class A Required Amount for the related
Monthly Period, then the Collateral Interest (after giving effect to reduction
for any Collateral Interest Charge-Offs and Reallocated Principal Collections)
will be reduced by the amount of such deficiency (but not by more than the Class
A Investor Default Amount for such Monthly Period). In the event that such
reduction would cause the Collateral Interest to be a negative number, the
Collateral Interest will be reduced to zero, and the Class B Investor Interest
(after giving effect to reductions for any Class B Investor Charge-Offs and any
Reallocated Class B Principal Collections in excess of the Collateral Interest
as of such Distribution Date) will be reduced by the amount by which the
Collateral Interest would have been reduced below zero. In the event that such
reduction would cause the Class B Investor Interest to be a negative number, the
Class B Investor Interest will be reduced to zero and the Class A Investor
Interest will be reduced by the amount by which the Class B Investor Interest
would have been reduced below zero.
The Trustee has entered into the Class A Interest Rate Cap with the
Interest Rate Cap Provider for the exclusive benefit of the Class A
Certificateholders. On each Transfer Date that the Class A Certificate Rate for
the related Interest Accrual Period exceeds the Class A Cap Rate, the Interest
Rate Cap Provider will make a payment to the Trustee, on behalf of the Trust,
based on the amount of such excess and the notional amount of the Class A
Interest Rate Cap. The Class A Notional Amount will at all times be equal to or
greater than the amount of the Expected Class A Principal. The Class A Interest
Rate Cap or its Replacement Interest Rate Cap or Qualified Substitute
Arrangement will terminate on the day immediately following the Class A
Scheduled Payment Date.
People's Bank, as Servicer, is entitled to receive as 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 the preceding Monthly Period, payable on each succeeding
Distribution Date. With respect to any Distribution Date, the Class A Monthly
Servicing Fee will equal one-twelfth of the product of 2.00% per annum and the
Class A Adjusted Investor Interest as of the last day of the preceding Monthly
Period; provided that the Class A Monthly Servicing Fee for the first
Distribution Date will be an amount equal to [______ thirtieths] of the
foregoing amount.
-6-
On each Transfer Date, beginning with the Transfer Date following the
Monthly Period in which the Controlled Accumulation Period commences, an amount
equal to the Controlled Deposit Amount will be deposited in the Principal
Funding Account. The amounts on deposit in the Principal Funding Account will
be deposited in the Distribution Account for distribution to the Class A
Certificateholders on the Class A Scheduled Payment Date.
As provided in the Agreement, Principal Collections remaining after funding
of the Required Amounts during the Revolving Period and the Controlled
Accumulation Period and Principal Collections remaining after funding of the
Controlled Deposit Amount during the Controlled Accumulation Period will be
applied as Shared Principal Collections and distributed first to the
certificateholders of other Series to the extent of Principal Shortfalls, if
any, and then to the Holder of the Exchangeable Seller Certificate. In
addition, during the Controlled Accumulation Period and the Rapid Amortization
Period, Shared Principal Collections from other Series available to the
Certificates will be applied to pay the Certificateholders to the extent of
Principal Shortfalls, if any, with respect to Series 1998-1.
On each Distribution Date beginning with the month following the Monthly
Period in which the Rapid Amortization Period commences, the Monthly Total
Principal Allocations from the prior Monthly Period along with Shared Principal
Collections from other Series, if any, and certain other amounts treated as
Available Investor Principal Collections will be distributed to the Class A
Certificateholders until the earlier of the date on which the Class A Investor
Interest is paid in full and the Series 1998-1 Termination Date.
Distributions with respect to this Class A Certificate will be made by the
Paying Agent by check mailed to the address of the holders of record appearing
in the Certificate Register (except for the final distribution in respect of
this Class A Certificate) without the presentation or surrender of this
Certificate or the making of any notation thereon, except that with respect to
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 Transferor or the Servicer, and neither the Class A
Certificates nor the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Class A Certificate is limited in right of payment to certain collections
respecting the Receivables, as more specifically set forth hereinabove and in
the Agreement.
-7-
As provided in the Agreement, withdrawals from the Series 1998-1 Investor
Accounts may be made upon the instructions of the Servicer from time to time for
purposes other than distributions to Class A Certificateholders.
The Transferor may designate (subject to the terms and conditions of the
Agreement) Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust.
The Agreement and any Supplement may be amended by the Transferor, the
Servicer and the Trustee, without the consent of the Certificateholders of any
Series, to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, and to add any other
provisions with respect to matters or questions arising under the Agreement and
any Supplement which are not inconsistent with the provisions of the Agreement
and any Supplement. The Agreement may be amended from time to time by the
Transferor, the Servicer and the Trustee, and without the consent of any
Certificateholders, to (a) provide for the transfer by the Transferor of its
interest in and to all or part of the Accounts in accordance with the provisions
of the Agreement and (b) 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 may not adversely
affect in any material respect the interests of Certificateholders; provided
further that the Servicer and the Trustee shall have received notice from the
Rating Agency that any such amendment will not result in the reduction or
withdrawal of its then-existing rating of the certificates of any Series.
The Agreement and any Supplement may be amended by the Transferor, 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
-8-
without the consent of all certificateholders of all Series adversely affected.
The transfer of this Class A Certificate shall (subject to the limitations
set forth in the Agreement) be registered in the Certificate Register upon
surrender of this Class A Certificate for registration of transfer at any office
or agency maintained by the Transfer Agent and Registrar accompanied by a
written instrument of transfer in a form satisfactory to the Trustee and the
Transfer Agent and Registrar duly executed by the Class A Certificateholder or
such Class A Certificateholder's attorney-in-fact duly authorized in writing,
and thereupon one or more new Class A Certificates of authorized denomination
and for the same aggregate Undivided Interests will be issued to the designated
transferee or transferees.
Pursuant to the Series 1998-1 Supplement, the Transferor has the option
(the "Discount Option"), at any time to designate as Finance Charge Receivables
a fixed or variable percentage of Receivables in designated Accounts which
otherwise would be treated as Principal Receivables. The exercise by the
Transferor of the Discount Option will be subject to, among other things, the
receipt by the Trustee of written confirmation from each Rating Agency that the
exercise of such option will not result in a withdrawal or reduction of its
rating of the Certificates. Each Certificateholder by its acceptance of a
beneficial interest in a Certificate will be deemed to have consented to the
exercise by the Transferor of the Discount Option at such time as the Transferor
determines to exercise such option.
As provided in the Agreement and subject to certain limitations therein set
forth, Class A Certificates are exchangeable for new Class A Certificates
evidencing like aggregate Undivided Interests, as requested by the Class A
Certificateholder surrendering such Class A Certificates. No service charge may
be imposed for any such exchange but the Servicer or Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1998-1, the Agreement provides
that the right of the Class A
-9-
Certificateholders to receive payments from the Trust will terminate on the
Scheduled Series 1998-1 Termination Date. Upon the termination of Trust pursuant
to Section 12.1 of the Agreement (and subject to the exceptions set forth in the
Agreement), the Trustee will assign and convey to the Holder of the Exchangeable
Seller Certificate (without recourse, representation or warranty) all right,
title and interest of the Trust in the Receivables, whether then existing or
thereafter created, and Recoveries allocable to the Trust relating thereto and
Interchange pursuant to subsections 2.5(k) and (l) of the Agreement. The Trustee
will execute and deliver such instruments of transfer and assignment, in each
case without recourse, as shall be reasonably requested by the Holder of the
Exchangeable Seller Certificate to vest in such Holder all right, title and
interest which the Trustee had in the Receivables.
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.
-10-
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: April ___, 1998
-11-
Form of Trustee's Certificate of Authentication
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
BANKERS TRUST COMPANY, not in
its individual capacity,
but solely as Trustee
By:_______________________
(Authorized Officer)
-12-
EXHIBIT 1-B
-----------
FORM OF CLASS B INVESTOR CERTIFICATE
$___________
No. R-1 CUSIP No. ___________
PEOPLE'S BANK CREDIT CARD MASTER TRUST FLOATING RATE
CLASS B ASSET BACKED CERTIFICATE, SERIES 1998-1
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA/1/ and MasterCard/1/ 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
- ---------------
/1/ VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
Finance Charge Receivables), and the other assets and interests constituting the
Trust pursuant to an Amended and Restated Pooling and Servicing Agreement, dated
as of March 18, 1997, and as supplemented by the Series 1998-1 Supplement, dated
as of April 1, 1998, (collectively, the "Agreement"), by and between People's
Bank, as Transferor and Servicer, and Bankers Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth herein below.
The Transferor has structured the Agreement and the Investor Certificates
with the intention that the Investor Certificates will qualify under applicable
tax law as indebtedness, and the Transferor, the Holder of the Exchangeable
Seller Certificate, the Servicer and each Investor Certificateholder (or
Certificate Owner) by acceptance of its Certificate (or, in the case of a
Certificate Owner, by virtue of such Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat the Investor Certificates (or a
beneficial interest therein) consistently with, and to take no action
inconsistent with, the treatment of the Investor Certificates (or beneficial
interest therein) for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law.
This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended from
time to time, the Certificateholder by virtue of the acceptance hereof assents
and by which the Certificateholder is bound. Although a summary of certain
provisions of the Agreement is set forth below, this Class B Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. To the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Agreement.
THE AGREEMENT AND THE CERTIFICATES CREATED THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
The Receivables consist of Principal Receivables which arise from the
purchase of goods, services and cash advances and of Finance Charge Receivables
which arise generally from Periodic Finance Charges and other fees and charges
as fully specified in the Agreement. The assets of the Trust in which this
Certificate
- 2 -
represents an interest, consist of (i)(a) the Receivables now existing and
hereafter created and arising in connection with the Accounts and all
Receivables in Automatic Additional Accounts and Additional Accounts added to
the Trust from time to time, (b) all monies due or to become due with respect
thereto (including all Finance Charge Receivables), (c) all proceeds (as defined
in Section 9-306 of the UCC as in effect in the State of New York) of such
Receivables, (d) proceeds of insurance policies relating to the Receivables, (e)
Interchange and Recoveries pursuant to subsections 2.5(k) and (l) of the
Agreement, (ii) such funds as from time to time are deposited in the Collection
Account, the Excess Funding Account, and the Investor Accounts and (iii) the
benefit of the Class B Interest Rate Cap between the Trustee and the Interest
Rate Cap Provider.
This Certificate is one of the People's Bank Credit Card Master Trust
$27,000,000 Floating Rate Class B Asset Backed Certificates, Series 1998-1 (the
"Class B Certificates"), each of which represents an undivided interest in
certain assets of the Trust, including the right to receive Collections
allocable to the Class B Certificates and other amounts at the times and in the
amounts specified in the Agreement to be deposited in the Investor Accounts or
paid to the Investor Certificateholders. The aggregate interest represented by
the Class B Certificates at any time in the Principal Receivables in the Trust
will not exceed an amount equal to the Class B Investor Interest at such time.
The Class B Initial Investor Interest is $27,000,000 minus the retirement of any
Class B Certificates pursuant to an Investor Exchange. The Class B Investor
Interest on any date of determination will be an amount equal to (a) the Class B
Initial Investor Interest, minus (b) the aggregate amount of payments of
Certificate Principal paid to the Class B Certificateholders prior to such date
of determination, minus (c) the excess, if any, of the aggregate amount of Class
B Investor Charge-Offs, Reallocated Principal Collections and other reductions
of the Class B Investor Interest in respect of the Class A Required Amount over
Class B Investor Charge-Offs, Reallocated Principal Collections and such other
reductions reimbursed prior to such date of determination; provided, however,
that the Class B Investor Interest may not be reduced below zero. In addition
to the Class B Certificates, a class of certificates entitled "People's Bank
Credit Card Master Trust $343,000,000 Floating Rate Class A Asset Backed
Certificates, Series 1998-1" (the "Class A Certificates") and an Undivided
Interest in the Trust in the initial amount of $30,000,000 (the "Collateral
Interest," and together with the Class A Certificates and the Class B
Certificates, the "Certificates") will be issued, and the Exchangeable Seller
Certificate will be issued to the Holder of the Exchangeable Seller Certificate
pursuant to the Agreement, and other Series of certificates have been, and may
from time to time be, issued by the Trust, which represent or will represent an
- 3 -
undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Certificates or any other Series of certificates.
Interest on the Class B Certificates will be distributed on April 15, 1998
and on the fifteenth day of each calendar month thereafter, or if such fifteenth
day is not a Business Day, on the next succeeding Business Day (a "Distribution
Date"), to the Class B Certificateholders of record on the Record Date preceding
the related Distribution Date. Principal with respect to the Class B
certificates is scheduled to be distributed on the April 2003 Distribution Date,
(the "Class B Scheduled Payment Date"), but may be paid earlier or later as
provided in the Agreement. During the Rapid Amortization Period, if any,
interest and principal will be distributed to the Class B Certificateholders on
the Distribution Date of each calendar month until the Class B
Certificateholders have been paid in full.
The Servicer will deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections, but in no
event later than the second Business Day following such Date of Processing.
Notwithstanding anything in the Agreement to the contrary, for so long as,
and only so long as, the Transferor shall remain the Servicer hereunder and
(a)(i) the Servicer provides to the Trustee a letter of credit or other
arrangement covering risk of collection of the Servicer acceptable to the Rating
Agency (as evidenced by letters from the Rating Agency) and (ii) the Transferor
shall not have received a notice from the Rating Agency that such letter of
credit or other arrangement would result in the lowering or withdrawal of such
Rating Agency's then-existing rating of any Series of Investor Certificates or
(b) under certain circumstances permitted under the Agreement, the Servicer need
not deposit 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 Distribution Date, to the extent funds are available on the terms
specified in the Agreement from available Finance Charge Collections, from
payments made pursuant to the Class B Interest Rate Cap and from Excess Spread,
interest will be
- 4 -
distributed to the Class B Certificateholders in an amount equal to the sum of:
(i) the product of (a) the Class B Certificate Rate, (b) the lesser of the Class
B Investor Interest determined as of the preceding Distribution Date, after
giving effect to all payments, deposits and withdrawals on such Distribution
Date and the Expected Class B Principal as of the preceding Distribution Date or
Closing Date (or, for the initial Interest Accrual Period, the Class B Initial
Investor Interest), as applicable, and (c) the actual number of days in the
related Interest Accrual Period divided by 360, plus (ii) the product of (a) the
Class B Excess Principal, (b) the lesser of the Class B Certificate Rate and
[____]%, and (c) the actual number of days in the related Interest Accrual
Period divided by 360, plus (iii) to the extent permitted by applicable law, any
interest accrued on the Class B Certificates (including interest on any overdue
Class B Monthly Interest) during any prior Interest Accrual Period which has not
been distributed to the Class B Certificateholders, plus, (iv) to the extent
that there is available Excess Spread, an amount equal to the product of (a) the
amount by which the Class B Certificate Rate exceeds [____]%, (b) the Class B
Excess Principal and (c) the actual number of days in the related Interest
Accrual Period divided by 360.
On each Determination Date during the Revolving Period, the Controlled
Accumulation Period and the Rapid Amortization Period, if any, the Servicer will
determine the Class A Required Amount and the Class B Required Amount. If
either or both of the Required Amounts are greater than zero after application
of available Finance Charge Collections, Excess Spread and Shared Finance Charge
Collections, then Principal Collections allocable to the Collateral Interest
will be reallocated and applied first to fund the remaining Class A Required
Amount, if any, and second to fund the remaining Class B Required Amount, if
any, and to the extent that Reallocated Collateral Principal Collections are
less than such remaining Class A Required Amount, Principal Collections
allocable to the Class B Certificates will then be reallocated and applied to
fund the remaining Class A Required Amount. The Collateral Interest will be
reduced by the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections applied to fund the Required Amounts.
The Class B Investor Interest will be reduced by the amount of Reallocated Class
B Principal Collections in excess of the Collateral Interest (after giving
effect to reductions for an Collateral Interest Charge-Offs and any reallocated
Collateral Principal Collections as of the related Distribution Date) applied to
fund the Class A Required Amount.
If, on any Distribution Date, Reallocated Collateral Principal Collections
are insufficient to fund the remaining Class A Required Amount for the related
Monthly Period, then the Collateral Interest (after giving effect to reduction
for any
- 5 -
Collateral Interest Charge-Offs and Reallocated Principal Collections) will be
reduced by the amount of such deficiency (but not by more than the Class A
Investor Default Amount for such Monthly Period). In the event that such
reduction would cause the Collateral Interest to be a negative number, the
Collateral Interest will be reduced to zero, and the Class B Investor Interest
(after giving effect to reductions for any Class B Investor Charge-Offs and any
Reallocated Class B Principal Collections in excess of the Collateral Interest
as of such Distribution Date) will be reduced by the amount by which the
Collateral Interest would have been reduced below zero. In the event that such
reduction would cause the Class B Investor Interest to be a negative number, the
Class B Investor Interest will be reduced to zero and the Class A Investor
Interest will be reduced by the amount by which the Class B Investor Interest
would have been reduced below zero.
If, on any Distribution Date, Reallocated Collateral Principal Collections
not required to fund the Class A Required Amount are insufficient to fund the
remaining Class B Required Amount for such Monthly Period, then the Collateral
Interest (after giving effect to reduction for any Collateral Interest Charge-
Offs, Reallocated Principal Collections and any adjustments made thereto for the
benefit of the Class A Certificateholders) will be reduced by the amount of such
deficiency (but not by more than the Class B Investor Default Amount for such
Monthly Period). In the event that such reduction would cause the Collateral
Interest to be a negative number, the Collateral Interest will be reduced to
zero, and the Class B Investor Interest will be reduced by the amount by which
the Collateral Interest would have been reduced below zero.
The Trustee has entered into the Class B Interest Rate Cap with the
Interest Rate Cap Provider for the exclusive benefit of the Class B
Certificateholders. On each Transfer Date that the Class B Certificate Rate for
the related Interest Accrual Period exceeds the Class B Cap Rate, the Interest
Rate Cap Provider will make a payment to the Trustee, on behalf of the Trust,
based on the amount of such excess and the notional amount of the Class B
Interest Rate Cap. The Class B Notional Amount will at all times equal the
amount of the Expected Class B Principal. The Class B Interest Rate Cap, or its
Replacement Interest Rate Cap or Qualified Substitute Arrangement, will
terminate on the day immediately following the Class B Scheduled Payment Date.
People's Bank, as Servicer, is entitled to receive as 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 the preceding Monthly Period, payable on each succeeding
Distribution Date. With respect to any Distribution Date, the Class B Monthly
- 6 -
Servicing Fee will equal one-twelfth of the product of 2.00% per annum and the
Class B Investor Interest as of the last day of the preceding Monthly Period;
provided that the Class B Monthly Servicing Fee for the first Distribution Date
will be an amount equal to [______ thirtieths] of the foregoing amounts.
On the Transfer Date immediately preceding the Class B Scheduled Payment
Date, and on each Transfer Date thereafter until the Class B Investor Interest
has been reduced to zero, the Servicer or the Trustee acting in accordance with
instructions from the Servicer will withdraw all amounts on deposit in the
Principal Account, in respect of Collections processed during the preceding
Monthly Period and deposit such amounts in the Distribution Account for
distribution to the Class B Certificateholders on the next succeeding
Distribution Date, to the extent specified in the Agreement.
As provided in the Agreement, Principal Collections remaining after funding
of the Required Amounts during the Revolving Period and the Controlled
Accumulation Period and Principal Collections remaining after funding of the
Controlled Deposit Amount during the Controlled Accumulation Period will be
applied as Shared Principal Collections and distributed first to the
certificateholders of other Series to the extent of Principal Shortfalls, if
any, and then to the Holder of the Exchangeable Seller Certificate. In
addition, during the Controlled Accumulation Period and the Rapid Amortization
Period, Shared Principal Collections from other Series available to the
Certificates will be applied to pay the Certificateholders to the extent of
Principal Shortfalls, if any, with respect to Series 1998-1.
On each Distribution Date beginning with the month following the Monthly
Period in which the Rapid Amortization Period commences, the Monthly Total
Principal Allocations from the prior Monthly Period along with Shared Principal
Collections from other Series, if any, and certain other amounts treated as
Available Investor Principal Collections will be distributed to the Class A
Certificateholders until the earlier of the date on which the Class A Investor
Interest is paid in full and the Series 1998-1 Termination Date and, following
the final principal payment to the Class A Certificateholders, to the Class B
Certificateholders until the earlier of the date on which the Class B Investor
Interest is paid in full and the Series 1998-1 Termination Date.
Distributions with respect to this Class B Certificate will be made by the
Paying Agent by check mailed to the address of the holder of record appearing in
the Certificate Register (except for the final distribution in respect of this
Class B Certificate) without the presentation or surrender of this Certificate
or the making of any notation thereon, except that with respect to Certificates
registered in the name of the nominee of a Clear-
- 7 -
ing Agency, distributions will be made in the form of immediately available
funds.
This Class B Certificate does not represent an obligation of, or an
interest in, the Transferor or the Servicer, and neither the Class B
Certificates nor the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Class B Certificate is limited in right of payment to certain collections
respecting the Receivables, as more specifically set forth hereinabove and in
the Agreement.
As provided in the Agreement, withdrawals from the Series 1998-1 Investor
Accounts may be made upon the instructions of the Servicer from time to time for
purposes other than distributions to Class B Certificateholders.
The Transferor may designate (subject to the terms and conditions of the
Agreement) Accounts for deletion and removal from the Accounts previously
assigned to and constituting a part of the Trust.
The Agreement and any Supplement may be amended by the Transferor, the
Servicer and the Trustee, without the consent of the Certificateholders of any
Series, to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, to add any other
provisions with respect to matters or questions arising under the Agreement and
any Supplement which are not inconsistent with the provisions of the Agreement
and any Supplement. The Agreement may be amended from time to time by the
Transferor, the Servicer and the Trustee, and without the consent of any
Certificateholders, to (a) provide for the transfer by the Transferor of its
interest in and to all or part of the Accounts in accordance with the 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 may not adversely
affect in any material respect the interests of Certificateholders; provided
further that the Servicer and the Trustee shall have received notice from the
Rating Agency that any such amendment will not result in the reduction or
withdrawal of its then-existing rating of the certificates of any Series.
The Agreement and any Supplement may be amended by the Transferor, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregat-
- 8 -
ing not less than 66-2/3% of the principal amount of each Series adversely
affected, for the purpose of adding any provisions to, changing in any manner or
eliminating any of the provisions of the Agreement or any Supplement or of
modifying in any manner the rights of certificateholders of any Series. No such
amendment, however, may (a) reduce in any manner the amount of, or delay the
timing of, distributions required to be made on such Series, (b) change the
definition of or the manner of calculating the interest of any certificateholder
of such Series or (c) reduce the aforesaid percentage of undivided interests,
the holders of which are required to consent to any such amendment, in each case
without the consent of all certificateholders of all Series adversely affected.
The transfer of this Class B Certificate shall be registered in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form satisfactory
to the Trustee and the Transfer Agent and Registrar duly executed by the Class B
Certificateholder or such Class B Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class B Certificates of
authorized denomination and for the same aggregate Undivided Interests will be
issued to the designated transferee or transferees.
Pursuant to the Series 1998-1 Supplement, the Transferor has the option
(the "Discount Option"), at any time to designate as Finance Charge Receivables
a fixed or variable percentage of Receivables in designated Accounts which
otherwise would be treated as Principal Receivables. The exercise by the
Transferor of the Discount Option will be subject to, among other things, the
receipt by the Trustee of written confirmation from each Rating Agency that the
exercise of such option will not result in a withdrawal or reduction of its
rating of the Certificates. Each Certificateholder by its acceptance of a
beneficial interest in a Certificate will be deemed to have consented to the
exercise by the Transferor of the Discount Option at such time as the Transferor
determines to exercise such option.
As provided in the Agreement and subject to certain 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.
- 9 -
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Class B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Agreement.
Subject to the prior termination of Series 1998-1, the Agreement provides
that the right of the Class B Certificateholders to receive payments from the
Trust will terminate on the Scheduled Series 1998-1 Termination Date. Upon the
termination of Trust pursuant to Section 12.1 of the Agreement, the Trustee will
assign and convey to the Holder of the Exchangeable Seller Certificate (without
recourse, representation or warranty) all right, title and interest of the Trust
in the Receivables, whether then existing or thereafter created, and Recoveries
allocable to the Trust relating thereto and Interchange pursuant to subsections
2.5(k) and (l) of the Agreement. The Trustee will execute and deliver such
instruments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the Holder of the Exchangeable Seller Certificate to
vest in such Holder all right, title and interest which the Trustee had in the
Receivables.
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.
- 10 -
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: April ___, 1998
- 11 -
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)
- 12 -
EXHIBIT 2
---------
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
---------------------------------------------
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
MONTHLY CERTIFICATEHOLDERS' STATEMENT FOR MONTHLY PERIOD # __
Monthly Period - Beginning Date _________
Monthly Period - Ending Date _________
Determination Date _________
Distribution Date _________
(Note: Monthly Period numbers found herein refer solely to Series 1998-1 and
may not correspond to Monthly Period numbers used for other Series of
the Trust.)
21. Information Regarding Distributions to Certificateholders
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 Principal Collections during the Monthly
Period allocated to Certificateholders
---------------------------
23.3 Amount by which Controlled Accumulation
exceeds principal allocated to Investors
---------------------------
23.4 Finance Charge Collections during the Monthly
Period allocated to Certificateholders
---------------------------
23.5 Annualized Gross Portfolio Yield for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
- 2 -
24. Delinquent Balances*
Aggregate Percentage
Account Aggregate
Balances Receivables
---------- ---------------------
24.1 Less than 31 days delinquent __________ ____________________%
24.2 31 - 60 days delinquent __________ ____________________%
24.3 61-90 days delinquent __________ ____________________%
24.4 More than 90 days delinquent __________ ____________________%
24.5 Total __________ ____________________%
25. Default Summary
25.1 Aggregate Investor Default Amount
--------------------
Aggregate Percent of
Account Aggregate
Balances Receivables
--------- -----------
25.2 Investor default percentage for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
25.3 Investor Charge-Offs
(i) Aggregate dollar amount
--------------------
(ii) Per $1,000 of Initial Investor Interest
--------------------
25.4 Reimbursed Investor Charge-Offs
(i) Aggregate dollar amount
--------------------
(ii) Per $1,000 of Initial Investor Interest
--------------------
25.5 Reallocated Principal Collections
(i) Aggregate dollar amount
--------------------
(ii) Per $1,000 of Initial Investor Interest
--------------------
25.6 Base Rate
--------------------
- 3 -
25.7 Portfolio Yield minus Base Rate for:
(i) Period - 1 _________%
(ii) Period - 2 _________%
(iii) Period - 3 _________%
(iv) 3 mo. avg. _________%
26. Monthly Investor Servicing Fee
27. Accumulation Shortfall
28.1 Principal Funding Investment Proceeds
28.2 Principal Funding Investment Shortfall
29. Withdrawal from Reserve Account under Section 4.6
30. Required Reserve Account Amount
31. Available Reserve Account Amount
32. Pool Factor
33. Collateral Interest as a Percentage of Investor
Interest
PEOPLE'S BANK, Servicer
By:_______________________
Calculations
- ------------
Monthly Pay Rate = Aggregate Collections (excluding Interchange)
during the Monthly Period/Aggregate Amount of Receivables at the
end of the prior Monthly Period
Amount by which Controlled Accumulation Amount exceeds Principal
allocated to Investors during the Monthly Period = $________ -
Principal allocated to Investors
Gross Portfolio Yield = Finance Charges allocated to Investors
during the Monthly Period (including Interchange allocated to
Investors and deposited in the Finance Charge Account)/Investor
Interest for the prior Monthly Period #_______
- 4 -
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.
- 5 -
EXHIBIT 3
---------
FORM OF DTC LETTER OF REPRESENTATION
EXHIBIT 4
---------
FORM OF MONTHLY PAYMENT INSTRUCTIONS TO TRUSTEE
BANKERS TRUST COMPANY
ABA #021001033
A/C 01-419-647
CORPORATE TRUST AND AGENCY GROUP
ATTENTION: LOUIS BODI/KEITH SCHOTT
RE: PEOPLE=S BANK 1998-1 FINANCE CHARGE ACCOUNT
ON _________________________ PLEASE PERFORM THE FOLLOWING TRANSACTIONS PURSUANT
TO THE SERIES 1998-1 SUPPLEMENT AND THE AMENDED AND RESTATED POOLING AND
SERVICING AGREEMENT DATED AS OF MARCH 18, 1997:
Per Section Please withdraw $0.00 from Finance
4.6 (a) (i) & Charge Account - 22756 and deposit into the
4.6 (d) (vii) Distribution Account - 22753 to pay Monthly
Certificate Interest to Class A Investors.
Per Section Please withdraw $0.00 from Finance
4.6 (b) (i) & Charge Account - 22756 and deposit into the
4.6 (d) Distribution Account - 22753 to pay Monthly
(viii) Certificate Interest to Class B Investors.
Per Section Please withdraw $0.00 from
4.6 (d) (vi) Finance Charge Account - 22756 and deposit
into the Distribution Account - 22753 to pay
Collateral Monthly Interest to the Collateral
Interest Holder.
Per Section Please withdraw $0.00 from Finance
4.6 (a) (ii), Charge Account - 22756 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 $0.00 from
4.6 (a) Finance Charge Account - 22756 to pay Investor
(iii), Default Amount to People=s Structured Finance
4.6 (c) (iii) Corp.
&
4.6 (d) (ix)
4.6 (d) (ix)
Per Section Please withdraw $0.00 from
4.6 (d) Finance Charge Account - 22756 and wire to
(xvii) People=s Structured Finance.
AUTHORIZED BY: _______________________________
LISA BROOKS, VICE PRESIDENT
- 2 -
EXHIBIT 5
---------
Form of Notification to Trustee Regarding
Completion of Required Deposits and Withdrawals
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
This is to inform you that on the Transfer Date occurring on _________
we have made all deposits and withdrawals for the Monthly Period beginning on
________ and ending on _________.
----------------------------------
Name:
Title:
EXHIBIT 6
---------
Form of Notification to Trustee Regarding
Failure to Make Payment
PEOPLE'S BANK
PEOPLE'S BANK CREDIT CARD MASTER TRUST, SERIES 1998-1
This is to inform you that we have been unable to make a [payment or
deposit] in the amount of __________ for the Monthly Period beginning on
________ and ending on _________. Such payments were to be made from [Account]
on _________ and such payment or deposit was to be made to [Person or Account].
----------------------------------
Name:
Title: