UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 30, 1996
CHEMICAL BANK
(Exact Name of registrant specified in its charter)
(Originator of the Chemical Master Credit Card Trusts)
New York 33-94190 13-49994650
(State or other (Commission File (I.R.S. employer
Jurisdiction of Number) Identification No.)
Incorporation)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 270-6000
<PAGE>
Item 5. Other Events
On May 30, 1996, the Series 1996-3 Supplement, dated as of May 30,
1996, to the Pooling and Servicing Agreement, dated as of October 19, 1995 (the
"Pooling and Servicing Agreement"), between Chemical Bank, as Transferor and
Servicer, and The Bank of New York, as Trustee, was executed and delivered by
the respective parties thereto.
Effective June 1, 1996, The Chase Manhattan Bank (USA) ("Chase USA")
acquired the credit card business of Chemical Bank, an affiliate of Chase USA.
In connection with the transfer of the credit card business of Chemical Bank to
Chase USA, on June 1, 1996 the Pooling and Servicing Agreement was amended and
restated in its entirety in the form of the Amended and Restated Pooling and
Servicing Agreement, dated as of June 1, 1996 (the "Amended and Restated
Pooling and Servicing Agreement"), by and among Chemical Bank, as Transferor
prior to June 1, 1996 and as Servicer, Chase USA, as Transferor on and after
June 1, 1996, and The Bank of New York, as Trustee. The Amended and Restated
Pooling and Servicing Agreement provides for, among other things, the
assumption of the obligations of the Transferor by Chase USA.
Chase USA is incorporated under the laws of Delaware and, as a state
chartered non-member bank, is regulated by the Office of the Delaware State
Bank Commissioner and by the Federal Deposit Insurance Corporation. Chase USA
intends, however, to apply to the United States Comptroller of the Currency
(the "Comptroller") for conversion to a national bank charter. If such
application is approved, Chase USA would become a national bank and would be
regulated primarily by the Comptroller. Chase USA expects that such conversion
would have no material effect on the Chemical Master Credit Card Trust I or the
Certificateholders.
At December 31, 1995, Chase USA's total assets were approximately
$11.1 billion, total liabilities were approximately $9.6 billion, and total
stockholder's equity was approximately $1.5 billion. Such amounts do not
reflect the acquisition of the Chemical Bank credit card business by Chase USA
on June 1, 1996. Such acquisition is expected to substantially increase the
total assets of Chase USA.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
Exhibits
4.1 Pooling and Servicing Agreement dated as of October 19, 1995, between
Chemical Bank, as Transferor and Servicer, and The Bank of New York,
as Trustee (incorporated by reference to Exhibit 4.1 of the
registrant's Report on Form 8-K filed on October 30, 1995).
4.2 Series 1996-3 Supplement dated as of May 30, 1996, to the Pooling and
Servicing Agreement between Chemical Bank, as Transferor and Servicer,
and The Bank of New York, as Trustee.
4.3 Amended and Restated Pooling and Servicing Agreement dated as of June
1, 1996, by and among Chemical Bank, as Transferor prior to June 1,
1996 and as Servicer, Chase USA, as Transferor on and after June 1,
1996, and The Bank of New York, as Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHEMICAL BANK, As Servicer
By: /s/ Richard L. Craig
Name: Richard L. Craig
Title: Managing Director
Date: June 18, 1996
<PAGE>
INDEX TO EXHIBITS
Exhibit Exhibit Sequentially
Number Numbered Pages
4.1 Pooling and Servicing Agreement dated as of
October 19, 1995, between Chemical Bank, as
Transferor and Servicer, and The Bank of
New York, as Trustee (incorporated by reference
to Exhibit 4.1 of the registrant's Report on
Form 8-K filed on October 30, 1995).
4.2 Series 1996-3 Supplement dated as of May 30, 1996, 5
to the Pooling and Servicing Agreement between
Chemical Bank, as Transferor and Servicer, and
The Bank of New York, as Trustee.
4.3 Amended and Restated Pooling and Servicing Agreement 48
dated as of June 1, 1996, by and among Chemical Bank,
as Transferor prior to June 1, 1996 and as Servicer,
Chase USA, as Transferor on and after June 1, 1996,
and The Bank of New York, as Trustee.
CHEMICAL BANK,
Transferor and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Series 1996-3 Certificateholders
Series 1996-3 SUPPLEMENT
Dated as of May 30, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of October 19, 1995
CHEMICAL MASTER CREDIT CARD TRUST I
Series 1996-3
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Designation . . . . . . . . . . . . . . . . . . .
SECTION 2. Definitions . . . . . . . . . . . . . . . . . . .
SECTION 3. Servicing Compensation and Assignment of Interchange
SECTION 4. Reassignment and Transfer Terms . . . . . . . . .
SECTION 5. Delivery and Payment for the Inves-
tor Certificates . . . . . . . . . . . . . . . .
SECTION 6. Depository; Form of Delivery of In-
vestor Certificates . . . . . . . . . . . . . . .
SECTION 7. Article IV of Agreement . . . . . . . . . . . . .
SECTION 4.4 Rights of Certificateholders and the Col-
lateral Interest Holder . . . . . . . . . . . . .
SECTION 4.5 Allocations . . . . . . . . . . . . . . . . . . .
SECTION 4.6 Determination of Monthly Interest . . . . . . . .
SECTION 4.7 Determination of Monthly Principal . . . . . . .
SECTION 4.8 Coverage of Required Amount . . . . . . . . . . .
SECTION 4.9 Monthly Payments . . . . . . . . . . . . . . . .
SECTION 4.10 Investor Charge-Offs . . . . . . . . . . . . . .
SECTION 4.11 Excess Spread . . . . . . . . . . . . . . . . . .
SECTION 4.12 Reallocated Principal Collections . . . . . . . .
SECTION 4.13 Shared Principal Collections . . . . . . . . . .
SECTION 4.14 Principal Funding Account . . . . . . . . . . . .
SECTION 4.15 Reserve Account . . . . . . . . . . . . . . . . .
SECTION 4.16 Determination of LIBOR . . . . . . . . . . . . .
SECTION 4.17 Transferor's or Servicer's Failure to Make a
Deposit or Payment . . . . . . . . . . . . . . .
SECTION 8. Article V of the Agreement . . . . . . . . . . .
SECTION 5.1 Distributions . . . . . . . . . . . . . . . . . .
SECTION 5.2 Monthly Series 1996-3 Certificateholders'
Statement . . . . . . . . . . . . . . . . . . . .
SECTION 9. Series 1996-3 Pay Out Events . . . . . . . . . .
SECTION 10. Issuance of Additional Certificates . . . . . . . .
SECTION 11. Series 1996-3 Termination . . . . . . . . . . . .
SECTION 12. Counterparts . . . . . . . . . . . . . . . . . .
SECTION 13. Governing Law . . . . . . . . . . . . . . . . . .
SECTION 14. No Petition . . . . . . . . . . . . . . . . . . .
SECTION 15. Tax Representation and Covenant . . . . . . . . .
SECTION 16. Amendment to Agreement . . . . . . . . . . . . . .
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to the Trustee
EXHIBIT C Form of Monthly Series 1996-3 Certifi-
cateholders' Statement
SCHEDULE I Schedule to Exhibit C of the Pooling and Servicing
Agreement with respect to the Investor Certificates
<PAGE>
Series 1996-3 SUPPLEMENT, dated as of May 30, 1996 (this "Series
Supplement"), by and between CHEMICAL BANK, a banking corporation organized and
existing under the laws of the State of New York, as Transferor and Servicer,
and THE BANK OF NEW YORK, as Trustee under the Pooling and Servicing Agreement
dated as of October 19, 1995 between Chemical Bank and the Trustee (as may be
amended, modified or supplemented from time to time, the "Agreement").
Section 6.9 of the 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 Agreement for the purpose of authorizing the delivery by the
Trustee to the Transferor for the execution and redelivery to the Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, the Transferor and the Trust
shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. (a) There is hereby created a Series of
Investor Certificates to be issued in two classes pursuant to the Agreement and
this Series Supplement and to be known together as the "Series 1996-3
Certificates." The two classes shall be designated the Class A 7.09% Asset
Backed Certificates, Series 1996-3 (the "Class A Certificates") and the Class B
7.27% Asset Backed Certificates, Series 1996-3 (the "Class B Certificates").
The Class A Certificates and the Class B Certificates shall be substantially in
the form of Exhibits A-1 and A-2 hereto, respectively. In addition, there is
hereby created a third Class of an uncertificated interest in the Trust which
shall be deemed to be an "Investor Certificate" for all purposes under the
Agreement and this Series Supplement, except as expressly provided herein, and
which shall be known as the Collateral Interest, Series 1996-3 (the "Collateral
Interest").
(b) Series 1996-3 shall be included in Group One (as defined below).
Series 1996-3 shall not be subordinated to any other Series.
(c) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral Interest
Holder of amounts owing on the Closing Date pursuant to the Loan Agreement.
Notwithstanding the foregoing, except as expressly provided herein, (i) the
provisions of Article VI and Article XII of the Agreement relating to the
registration, authentication, delivery, presentation, cancellation and
surrender of Registered Certificates shall not be applicable to the Collateral
Interest, (ii) the Opinion of Counsel specified in clause (d) of the sixth
sentence of Section 6.9(b) of the Agreement shall not be required with respect
to the Collateral Interest and (iii) the Tax Opinion specified in clause (e) of
the sixth sentence of Section 6.9(b) of the Agreement shall address the effect
of the issuance of the Collateral Interest but parts (a) and (c) of any such
Tax Opinion shall not address, or be required to address, any tax consequences
that shall result to any Collateral Interest Holder.
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 Agreement,
the terms and provisions of this Series Supplement shall govern. All Article,
Section or subsection references herein shall mean Articles, Sections or
subsections of the Agreement, except as otherwise provided herein. All
<PAGE>
capitalized terms not otherwise defined herein are defined in the Agreement.
Each capitalized term defined herein shall relate only to the Investor
Certificates and no other Series of Certificates issued by the Trust.
"Accumulation Period" shall mean, solely for the purposes of the
definition of Monthly Principal Payment as such term is defined in each
Supplement, the Controlled Accumulation Period.
"Accumulation Period Factor" shall mean, for each Monthly Period, a
fraction, the numerator of which is equal to the sum of the initial investor
interests (or other amounts specified in the applicable Supplement) of all
outstanding Series, and the denominator of which is equal to the sum of (a) the
Initial Investor Interest, (b) the initial investor interests (or other amounts
specified in the applicable Supplement) of all outstanding Series (other than
Series 1996-3) which are not expected to be in their revolving periods, and (c)
the initial investor interests (or other amounts specified in the applicable
Supplement) of all other outstanding Series which are not allocating Shared
Principal Collections to other Series and are in their revolving periods.
"Accumulation Period Length" shall have the meaning assigned such
term in subsection 4.9(i).
"Accumulation Shortfall" shall initially mean zero and shall
thereafter mean, with respect to any Monthly Period during the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit Amount for
the previous Monthly Period over the amount deposited into the Principal
Funding Account pursuant to subsection 4.9(e)(i) with respect to the Class A
Certificates for the previous Monthly Period.
"Additional Certificate Date" shall have the meaning assigned such
term in subsection 10(a).
"Additional Certificates" shall have the meaning assigned such term
in subsection 10(a).
"Adjusted Investor Interest" shall mean, with respect to any date of
determination, an amount equal to the sum of (a) the Class A Adjusted Investor
Interest and (b) the Class B Investor Interest and (c) the Collateral Interest.
"Aggregate Investor Default Amount" shall mean, with respect to any
Monthly Period, the sum of the Investor Default Amounts in respect of such
Monthly Period.
"Available Investor Principal Collections" shall mean with respect to
any Monthly Period, an amount equal to (a) the Investor Principal Collections
for such Monthly Period, minus (b) the amount of Reallocated Collateral
Principal Collections and Reallocated Class B 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, plus (c) the
amount of Shared Principal Collections that are allocated to Series 1996-3 in
accordance with subsection 4.13(b).
"Available Reserve Account Amount" shall mean, with respect 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 4.15(b) on such date, but before
giving effect to any deposit made or to be made pursuant to subsection 4.11(i)
<PAGE>
to the Reserve Account on such date) and (b) the Required Reserve Account
Amount.
"Base Rate" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Monthly Interest, each for the related Interest Period, and the
Investor Servicing Fee with respect to such Monthly Period and the denominator
of which is the Investor Interest as of the close of business on the last day
of such Monthly Period.
"Class A Additional Interest" shall have the meaning specified in
Section 4.6(a).
"Class A Adjusted Investor Interest" shall mean, with respect to 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
the Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or to be deposited in the Finance Charge Account on the related
Transfer Date with respect to the preceding Monthly Period pursuant to the
third paragraph of subsection 4.3(a) and Section 2.8 of the Agreement and
subsection 3(b) of this Series Supplement), excluding the portion of
Collections of Finance Charge Receivables attributable to Servicer Interchange,
(b) with respect to any Monthly Period during the Controlled Accumulation
Period prior to the payment in full of the Class A Investor Interest, the
Principal Funding Investment Proceeds arising pursuant to subsection 4.14(b),
if any, with respect to the related Transfer Date and (c) the Reserve Draw
Amount (up to the Available Reserve Draw Account Amount) plus any amounts of
interest and earnings described in subsections 4.15(b) and 4.15(d) which will
be deposited into the Finance Charge Account on the related Transfer Date.
"Class A Certificate Rate" shall mean 7.09% per annum, calculated on
the basis of a 360-day year consisting of twelve 30-day months.
"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 certificates executed by
the Transferor and authenticated by or on
behalf of the Trustee, substantially in the form of Exhibit A-1 hereto.
"Class A Deficiency Amount" shall have the meaning specified in
subsection 4.6(a).
"Class A Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is
the Class A Investor Interest as of the close of business on the last day of
the Revolving Period and the denominator of which is equal to the Investor
Interest as of the close of business on the last day of the Revolving Period.
"Class A Floating Allocation" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
<PAGE>
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, however, that, with respect to the
first Monthly Period, the Class A Floating Allocation shall mean 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 the
aggregate initial principal amount of the Class A Certificates, which is
$411,983,000.
"Class A 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 A
Floating Allocation, and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Rapid Amortization Period, the Class A Fixed
Allocation.
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(a).
"Class A Investor Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Class A Floating
Allocation applicable for the related Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class A Initial Investor Interest, minus (b) the
aggregate amount of principal payments made to Class A Certificateholders prior
to such date and minus (c) the excess, if any, of the aggregate amount of Class
A Investor Charge-Offs pursuant to subsection 4.10(a) over Class A Investor
Charge-Offs reimbursed pursuant to subsection 4.11(b) prior to such date of
determination; provided, however, that the Class A Investor Interest may not be
reduced below zero.
"Class A Monthly Interest" shall mean the monthly interest
distributable in respect of the Class A Certificates as calculated in
accordance with subsection 4.6(a).
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in
accordance with subsection 4.7(a).
"Class A Required Amount" shall have the meaning specified in
subsection 4.8(a).
"Class A Scheduled Payment Date" shall mean the June 2006
Distribution Date.
"Class A Servicing Fee" shall have the meaning specified in
subsection 3(a) of this Series Supplement.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.6(b).
<PAGE>
"Class B Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the Class B Floating Allocation of the Collections
of Finance Charge Receivables and allocated to the Investor Certificates and
deposited in the Finance Charge Account for such Monthly Period (or to be
deposited in the Finance Charge Account on the related Transfer Date with
respect to the preceding Monthly Period pursuant to the third paragraph of
subsection 4.3(a) of the Agreement and subsection 3(b) of this Series
Supplement), excluding the portion of Collections of Finance Charge Receivables
attributable to Servicer Interchange.
"Class B Certificate Rate" shall mean 7.27% per annum, calculated on
the basis of a 360-day year consisting of twelve 30-day months.
"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 certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-2 hereto.
"Class B Deficiency Amount" shall have the meaning specified in
subsection 4.6(b).
"Class B Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is
the Class B Investor Interest as of the close of business on the last day of
the Revolving Period and the denominator of which is equal to the Investor
Interest as of the close of business on the last day of the Revolving Period.
"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, however, that, with respect to the first
Monthly Period, the Class B Floating Allocation shall mean 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 the aggregate initial
principal amount of the Class B Certificates, which is $23,408,000.
"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 or Principal Receivables during the Revolving Period, the Class B
Floating Allocation, and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Rapid Amortization Period, the Class B Fixed
Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(b).
"Class B Investor Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
<PAGE>
Default Amount for the related Monthly Period and (b) the Class B Floating
Allocation applicable for the related Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class B Initial Investor Interest, minus (b) the
aggregate amount of principal payments made to Class B Certificateholders prior
to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to subsection 4.10(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant to
subsection 4.12(a) on all prior Transfer Dates for which the Collateral
Interest has not been reduced, minus (e) an amount equal to the amount by which
the Class B Investor Interest has been reduced on all prior Transfer Dates
pursuant to subsection 4.10(a) and plus (f) the aggregate amount of Excess
Spread allocated and available on all prior Transfer Dates pursuant to
subsection 4.11(d), for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c), (d) and (e); provided, however, that the Class B
Investor Interest may not be reduced below zero.
"Class B Monthly Interest" shall mean the monthly interest
distributable in respect of the Class B Certificates as calculated in
accordance with subsection 4.6(b).
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in
accordance with subsection 4.7(b).
"Class B Required Amount" shall have the meaning specified in
subsection 4.8(b).
"Class B Scheduled Payment Date" shall mean the July 2006
Distribution Date.
"Class B Servicing Fee" shall have the meaning specified in
subsection 3(a) hereof.
"Closing Date" shall mean May 30, 1996.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time or 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, an amount equal to the Collateral Floating Allocation of the
Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or to be deposited in the Finance Charge Account on the related
Transfer Date with respect to the preceding Monthly Period pursuant to the
third paragraph of subsection 4.3(a) of the Agreement and subsection 3(b) of
this Series Supplement), excluding the portion of Collections of Finance Charge
Receivables attributable to Servicer Interchange.
<PAGE>
"Collateral Charge-Offs" shall have the meaning specified in
subsection 4.10(c).
"Collateral Default Amount" shall mean, with respect to any Transfer
Date, an amount equal to the product of (a) the Aggregate Investor Default
Amount for the related Monthly Period and (b) the Collateral Floating
Allocation applicable for the related Monthly Period.
"Collateral Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is
the Collateral Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the Investor Interest
as of the close of business on the last day of the Revolving Period.
"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, however, that, with respect to the first
Monthly Period, the Collateral Floating Allocation shall mean the percentage
equivalent of a fraction, the numerator of which is the Collateral Initial
Interest and the denominator of which is the Initial Investor Interest.
"Collateral Initial Interest" shall mean the aggregate initial
principal amount of the Collateral Interest, which is $32,772,440.86.
"Collateral Interest" shall mean, on any date of determination, an
amount equal to (a) the Collateral Initial Interest, minus (b) the aggregate
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-offs for all
prior Transfer Dates pursuant to subsection 4.10(c), minus (d) the amount of
Reallocated Principal Collections allocated pursuant to subsections 4.12(a) and
(b) on all prior Transfer Dates, minus (e) an amount equal to the amount by
which the Collateral Interest has been reduced on all prior Transfer Dates
pursuant to subsections 4.10(a) and (b), and plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant to
subsection 4.11(h), for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c), (d) and (e); provided further, however, that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" shall mean the entity so designated in
the Loan Agreement.
"Collateral Interest Servicing Fee" shall have the meaning specified
in subsection 3(a) hereof.
"Collateral Monthly Interest" shall mean the monthly interest
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.6(c).
"Collateral Monthly Principal" shall mean the monthly principal
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.7(c).
<PAGE>
"Collateral Rate" shall mean, for any Interest 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, $34,331,916.67; provided, however, that if
the Accumulation Period Length is determined to be less than 12 months pursuant
to subsection 4.9(i), the Controlled Accumulation Amount for each Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest will be equal to (i) the product of (x) the
Class A Initial Investor Interest and (y) the Accumulation Period Factor for
such Monthly Period divided by (ii) the Required Accumulation Factor Number,
and (b) for any Transfer Date with respect to the Controlled Accumulation
Period after payment in full of the Class A Investor Interest, an amount equal
to the Class B Investor Interest as of such Transfer Date.
"Controlled Accumulation Period" shall mean, unless a Pay Out Event
shall have occurred prior thereto, the period commencing at the close of
business on May 31, 2005 or such later date as is determined in accordance with
subsection 4.9(i) and ending on the first to occur of (a) the commencement of
the Rapid Amortization Period and (b) the Series 1996-3 Termination Date.
"Controlled Deposit Amount" shall mean, with respect to any Transfer
Date, the sum of (a) the Controlled Accumulation Amount for such Transfer Date
and (b) any existing Accumulation
Shortfall.
"Covered Amount" shall mean, as of the Transfer Date with respect to
any Interest Period, an amount equal to one-twelfth of the product of (a) the
Class A Certificate Rate and (b) the Principal Funding Account Balance as of
the close of business on the Distribution Date preceding such Transfer Date
(after giving effect to all of the transactions occurring on such date).
"Credit Enhancement" shall mean (a) with respect to the Class A
Certificates, the subordination of the Class B Certificates and the Collateral
Interest, and (b) with respect to the Class B Certificates, the subordination
of the Collateral Interest.
"Credit Enhancement Provider" shall mean the Collateral Interest
Holder.
"Cumulative Series Principal Shortfall" shall mean the sum of the
Series Principal Shortfalls (as such term is defined in each of the related
Series Supplements) for each Series.
"Daily Principal Shortfall" shall mean, on any date of determination,
the excess of the Monthly Principal Payment for the Monthly Period relating to
such date over the month to date amount of Collections processed in respect of
Principal Receivables for such Monthly Period allocable to investor
certificates of all outstanding Series, not subject to reallocation, which are
on deposit or to be deposited in the Principal Account on such date.
"Deficiency Amount" shall mean, at any time of determination, the sum
of the Class A Deficiency Amount and the Class B Deficiency Amount.
<PAGE>
"Distribution Date" shall mean July 15, 1996 and the fifteenth day of
each calendar month thereafter, or if such fifteenth day is not a Business Day,
the next succeeding Business Day.
"Excess Principal Funding Investment Proceeds" shall mean, with
respect to each Transfer Date relating to the Controlled Accumulation Period,
the amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" shall mean, with respect to any Transfer Date, the
sum of the amounts with respect to such Transfer Date, if any, specified
pursuant to subsections 4.9(a)(iv), 4.9(b)(iii) and 4.9(c)(ii).
"Finance Charge Shortfall" shall mean, with respect to any Transfer
Date, the excess, if any, of the amount distributable pursuant to the
subsections 4.11(a) through (i) over Excess Spread.
"Fitch" shall mean Fitch Investors Service, L.P. or its successors.
"Fixed Investor Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is the
Investor Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of (i) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the last day of the prior Monthly Period and (ii) the
Excess Funding Amount as of the close of business on such last day of the prior
Monthly Period and (b) the sum of the numerators used to calculate the Investor
Percentages (as such term is defined in the Agreement) for allocations with
respect to Principal Receivables for all outstanding Series on such date of
determination; provided, however, that with respect to any Monthly Period in
which an Addition Date occurs or in which a Removal Date occurs, the amount
determined pursuant to clause (a)(i) hereof shall be the sum of (A) the
aggregate amount of Principal Receivables in the Trust as of the close of
business on the last day of the prior Monthly Period for the period from and
including the first day of such Monthly Period to but excluding the related
Addition Date or Removal Date and (B) the aggregate amount of Principal
Receivables in the Trust as of the beginning of the day on the related Addition
Date or Removal Date after adjusting for the aggregate amount of Principal
Receivables added to or removed from the Trust on the related Addition Date or
Removal Date, for the period from and including the related Addition Date or
Removal Date to and including the last day of such Monthly Period.
"Floating Investor Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is the Adjusted Investor Interest as of the close of business on the last day
of the prior Monthly Period (or with respect to the first Monthly Period, the
Initial Investor Interest) and the denominator of which is the greater of (a)
the sum of (i) the aggregate amount of Principal Receivables as of the close of
business on the last day of the prior Monthly Period (or with respect to the
first calendar month in the first Monthly Period, the aggregate amount of
Principal Receivables in the Trust as of the close of business on the day
immediately preceding the Closing Date, and with respect to the second calendar
month in the first Monthly Period, the aggregate amount of Principal
Receivables as of the close of business on the last day of the first calendar
month in the first Monthly Period) and (ii) the Excess Funding Amount as of the
close of business on such last day of the prior Monthly Period and (b) the sum
of the numerators used to calculate the Investor Percentages (as such term is
<PAGE>
defined in the Agreement) for allocations with respect to Finance Charge
Receivables, Default Amounts or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided, however, that with
respect to any Monthly Period in which an Addition Date occurs or in which a
Removal Date occurs, the amount determined pursuant to clause (a)(i) hereof
shall be the sum of (A) the aggregate amount of Principal Receivables in the
Trust as of the close of business on the last day of the prior Monthly Period
for the period from and including the first day of such Monthly Period to but
excluding the related Addition Date or Removal Date and (B) the aggregate
amount of Principal Receivables in the Trust as of the beginning of the day on
the related Addition Date or Removal Date after adjusting for the aggregate
amount of Principal Receivables added to or removed from the Trust on the
related Addition Date or Removal Date, for the period from and including the
related Addition Date or Removal Date to and including the last day of such
Monthly Period.
"Group One" shall mean Series 1996-3 and each other Series specified
in the related Supplement to be included in Group One.
"Initial Investor Interest" shall mean $468,163,440.86.
"Interest Period" shall mean, with respect to any Distribution Date,
the period from and including the previous Distribution Date through the day
preceding such Distribution Date, except that the initial Interest Period shall
be the period from and including the Closing Date through the day preceding the
initial Distribution Date.
"Investor Certificateholder" shall mean (a) with respect to the Class
A Certificates, the holder of record of a Class A Certificate, (b) with respect
to the Class B Certificates, the holder of record of a Class B Certificate and
(c) with respect to the Collateral Interest, the Collateral Interest Holder.
"Investor Certificates" shall mean the Class A Certificates, the
Class B Certificates and the Collateral Interest.
"Investor Default Amount" shall mean, with respect to any Receivable
in a Defaulted Account, an amount equal to the product of (a) the Default
Amount and (b) the Floating Investor Percentage on the day such Account became
a Defaulted Account.
"Investor Interest" shall mean, on any date of determination, an
amount equal to the sum of (a) the Class A Investor Interest, (b) the Class B
Investor Interest and (c) the Collateral Interest, each as of such date.
"Investor Percentage" shall mean for any Monthly Period, (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.
"Investor Principal Collections" shall mean, with respect to any
Monthly Period, the sum of (a) the aggregate amount deposited into the
Principal Account for such Monthly Period pursuant to subsections 4.5(a)(ii),
(iii) and (iv), 4.5(b)(ii), (iii) and (iv) or 4.5(c)(ii), in each case, as
applicable to such Monthly Period and (b) the aggregate amount to be treated as
Investor Principal Collections pursuant to subsections 4.9(a)(iii) and 4.11(a),
<PAGE>
(b), (c), (d), (g) and (h) for such Monthly Period (other than such amount paid
from Reallocated Principal Collections).
"Investor Servicing Fee" shall have the meaning specified in
subsection 3(a) hereof.
"LIBOR" shall mean, for any Interest Period, the London interbank
offered rate for one-month United States dollar deposits determined by the
Trustee for each Interest Period in accordance with the provisions of Section
4.16.
"LIBOR Determination Date" shall mean May 28, 1996 for the period
from the Closing Date through July 14, 1996, and the second London Business Day
prior to the commencement of the second and each subsequent Interest Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee, and the Collateral Interest Holder, dated as of the
Closing Date, as amended or modified from time to time.
"London Business Day" shall mean any Business Day on which dealings
in deposits in United States dollars are transacted in the London interbank
market.
"Minimum Transferor Interest Percentage" shall mean 7%.
"Monthly Period" shall have the meaning specified in the Agreement,
except that the first Monthly Period with respect to the Investor Certificates
shall begin on and include the Closing Date and shall end on and include June
30, 1996.
"Monthly Principal Payment" shall mean with respect to any Monthly
Period, for all Series (including Series 1996-3) which are in an Amortization
Period or Accumulation Period (as such terms are defined in the related
Supplements for all Series, the sum of (a) the Controlled Distribution Amount
for the related Transfer Date for any Series in its Controlled Amortization
Period (as such terms are defined in the related Supplements for all Series),
(b) the Controlled Deposit Amount for the related Transfer Date for any Series
in its Accumulation Period, other than its Rapid Accumulation Period, if
applicable (as such terms are defined in the related Supplements for all
Series), (c) the Investor Interest as of the end of the prior Monthly Period
taking into effect any payments to be made on the following Distribution Date
for any Series in its Principal Amortization Period or Rapid Amortization
Period (as such terms are defined in the related Supplements for all Series),
(d) the Adjusted Investor Interest as of the end of the prior Monthly Period
taking into effect any payments or deposits to be made on the following
Transfer Date and Distribution Date for any Series in its Rapid Accumulation
Period (as such terms are defined in the related Supplements for all Series),
(e) the excess of the Collateral Interest as of the Transfer Date occurring in
such Monthly Period over the Required Collateral Interest for the related
Transfer Date, assuming no Accumulation Shortfall and (f) such other amounts as
may be specified in the related Supplements for all Series.
"Net Servicing Fee Rate" shall mean 1.0% per annum.
"Pay Out Commencement Date" shall mean the date on which a Trust Pay
Out Event is deemed to occur pursuant to Section 9.1 or a Series 1996-3 Pay Out
Event is deemed to occur pursuant to Section 9 hereof.
<PAGE>
"Portfolio Adjusted Yield" shall mean, with respect to any Transfer
Date, the average of the percentages obtained for each of the three preceding
Monthly Periods by subtracting the Base Rate from the Portfolio Yield for such
Monthly Period and deducting 0.5% from the result for each Monthly Period.
"Portfolio Yield" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is an
amount equal to the sum of (a) the amount of Collections of Finance Charge
Receivables deposited into the Finance Charge Account and allocable to the
Investor Certificates for such Monthly Period,(b) the Principal Funding
Investment Proceeds deposited into the Finance Charge Account on the Transfer
Date related to such Monthly Period and (c) the amount of the Reserve Draw
Amount (up to the Available Reserve Account Amount) plus any amounts of
interest and earnings described in subsections 4.15(b) and (d), each deposited
into the Finance Charge Account on the Transfer Date relating to such Monthly
Period, such sum to be calculated on a cash basis after subtracting the
Aggregate Investor Default Amount for such Monthly Period, and the denominator
of which is the Investor Interest as of the close of business on the last day
of such Monthly Period.
"Principal Funding Account" shall have the meaning set forth in
subsection 4.14(a).
"Principal Funding Account Balance" shall mean, with respect to any
date of determination, the principal amount, if any, on deposit in the
Principal Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with respect to
each Transfer Date, the investment earnings on funds in the Principal Funding
Account (net of investment expenses and losses) for the period from and
including the immediately preceding Transfer Date to but excluding such
Transfer Date.
"Principal Funding Investment Shortfall" shall mean, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such Transfer
Date are less than the Covered Amount determined as of such Transfer Date.
"Rapid Amortization Period" shall mean the Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (a) the Series 1996-3 Termination Date and (b) the termination of the Trust
pursuant to Section 12.1.
"Rating Agency" shall mean Moody's, Standard & Poor's and Fitch.
"Reallocated Class B Principal Collections" shall mean, with respect
to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsection 4.12(a) in an amount not to exceed the product of
(a) the Class B Investor Allocation with respect to the Monthly Period relating
to such Transfer Date and (b) the Investor Percentage with respect to the
Monthly Period relating to such Transfer Date and (c) the amount of Collections
of Principal Receivables with respect to the Monthly Period relating to such
Transfer Date; provided, however, 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.
<PAGE>
"Reallocated Collateral Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsections 4.12(a) and (b) in an amount not to exceed the
product of (a) the Collateral Allocation with respect to the Monthly Period
relating to such Transfer Date and (b) the Investor Percentage with respect to
the Monthly Period relating to such Transfer Date and (c) the amount of
Collections of Principal Receivables with respect to the Monthly Period
relating to such Transfer Date; provided, however, that such amount shall not
exceed the Collateral Interest after giving effect to any Collateral Charge-
Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean the sum of (a)
Reallocated Class B Principal Collections and (b) Reallocated Collateral
Principal Collections.
"Reference Banks" shall mean four major banks in the London interbank
market selected by the Servicer.
"Required Accumulation Factor Number" shall be equal to a fraction,
rounded upwards to the nearest whole number, the numerator of which is one and
the denominator of which is equal to the lowest monthly principal payment rate
on the Accounts, expressed as a decimal, for the 12 months preceding the date
of such calculation.
"Required Collateral Interest" shall mean (a) initially,
$32,772,440.86 and (b) on any Transfer Date thereafter, 7.0% of the sum of the
Class A Adjusted Investor Interest, the Class B Investor Interest and the
Collateral Interest on such Transfer Date, after taking into account deposits
into the Principal Funding Account on such Transfer Date and payments to be
made on the related Distribution Date, and the Collateral Interest on the prior
Transfer Date, after any adjustments to be made on such date, but not less than
$14,044,903.23; provided, however, 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 Investor Certificates
has occurred, the Required Collateral Interest for any Transfer Date shall
equal the Required Collateral Interest for the Transfer Date immediately
preceding such reduction or Pay Out Event, (y) in no event shall the Required
Collateral Interest exceed the sum of the outstanding principal amounts of (i)
the Class A Certificates and (ii) the Class B Certificates, each as of the last
day of the Monthly Period preceding such Transfer Date after taking into
account the payments to be made on the related Distribution Date and (z) the
Required Collateral Interest may be reduced at the Transferor's option at any
time if the Transferor, the Servicer, the Collateral Interest Holder and the
Trustee have been provided evidence that the Rating Agency Condition shall have
been satisfied with respect to such reduction.
"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 outstanding principal balance of the Class A Certificates or
(b) any other amount designated by the Transferor; provided, however, that if
such designation is of a lesser amount, the Transferor shall (i) provide the
Servicer, the Collateral Interest Holder and the Trustee with evidence that the
Rating Agency Condition shall have been satisfied 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,
<PAGE>
after the giving of notice or the lapse of time, would cause a Pay Out Event to
occur with respect to Series 1996-3.
"Reserve Account" shall have the meaning specified in subsection
4.15(a).
"Reserve Account Funding Date" shall mean the Transfer Date which
occurs not later than the earliest of (a) the Transfer Date with respect to the
Monthly Period which commences three months prior to the commencement of the
Controlled Accumulation Period; (b) the first Transfer Date for which the
Portfolio Adjusted Yield is less than 2%, 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 12 months prior to the
commencement of the Controlled Accumulation Period; (c) the first Transfer Date
for which the Portfolio Adjusted Yield is less than 3%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier than the
Transfer Date with respect to the Monthly Period which commences six months
prior to the commencement of the Controlled Accumulation Period; and (d) the
first Transfer Date for which the Portfolio Adjusted Yield is less than 4%, 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
4.15(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.
"Series 1996-3" shall mean the Series of the Chemical Master Credit
Card Trust I represented by the Investor Certificates.
"Series 1996-3 Certificateholders" shall mean the holder of record of
a Series 1996-3 Certificate.
"Series 1996-3 Certificates" shall mean the Class A Certificates and
the Class B Certificates.
"Series 1996-3 Pay Out Event" shall have the meaning specified in
Section 9 hereof.
"Series 1996-3 Termination Date" shall mean the earliest to occur of
(a) the Distribution Date on which the Investor Interest is paid in full, (b)
the February 2009 Distribution Date and (c) the Trust Termination Date.
"Series Principal Shortfall" shall mean with respect to any Transfer
Date, the excess, if any, of (a) (i) with respect to any Transfer Date relating
to the Controlled Accumulation Period, the sum of (A) the Controlled Deposit
Amount for such Transfer Date, and (B) the excess, if any, of the Collateral
Interest for such Transfer Date over the Required Collateral Interest for such
<PAGE>
Transfer Date and (ii) with respect to any Transfer Date during the Rapid
Amortization Period, the Adjusted Investor Interest over (b) the Investor
Principal Collections minus the Reallocated Principal Collections for such
Transfer Date.
"Series Servicing Fee Percentage" shall mean 2.0%.
"Servicer Interchange" shall mean, for any Monthly Period, the
portion of Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account with respect to such
Monthly Period that is attributable to Interchange; provided, however, that
Servicer Interchange for a Monthly Period shall not exceed one-twelfth of the
product of (i) the Adjusted Investor Interest as of the last day of such
Monthly Period and (ii) 1.00%.
"Shared Excess Finance Charge Collections" shall mean, with respect
to any Distribution Date, as the context requires, either (x) the amount
described in subsection 4.11(k) allocated to the Series 1996-3 Certificates but
available to cover shortfalls in amounts paid from Collections of Finance
Charge Receivables for other Series, if any or (y) the aggregate amount of
Collections of Finance Charge Receivables allocable to other Series in excess
of the amounts necessary to make required payments with respect to such Series,
if any, and available to cover shortfalls with respect to the Series 1996-3
Certificates.
"Shared Principal Collections" shall mean either (a) the amount
allocated to the Investor Certificates which may be applied to the Series
Principal Shortfall with respect to other outstanding Series or (b) the amounts
allocated to the investor certificates 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 the Series Principal Shortfall
with respect to the 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).
"Unallocated Principal Collections" shall have the meaning specified
in subsection 4.5(d).
SECTION 3. Servicing Compensation and Assignment of Interchange.
(a) The share of the Servicing Fee allocable to Series 1996-3 with respect to
any Transfer Date (the "Investor Servicing Fee") shall be equal to one-twelfth
of the product of (i) the Series Servicing Fee Percentage and (ii) the Adjusted
Investor Interest as of the last day of the Monthly Period preceding such
Transfer Date; provided, however, that with respect to the first Transfer Date,
the Investor Servicing Fee shall be equal to $806,281.48. On each Transfer
Date a portion of Interchange with respect to the related Monthly Period that
is on deposit in the Finance Charge Account shall be withdrawn from the Finance
Charge Account and paid to the Servicer in payment of a portion of the Investor
Servicing Fee with respect to such Monthly Period ("Servicer Interchange").
Should the Servicer Interchange on deposit in the Finance Charge Account on any
Transfer Date with respect to the related Monthly Period be less than one-
twelfth of 1.00% of the Adjusted Investor Interest as of the last day of such
Monthly Period, the Investor Servicing Fee with respect to such Monthly Period
will not be paid to the extent of such insufficiency of Servicer Interchange on
<PAGE>
deposit in the Finance Charge Account. The share of the Investor Servicing Fee
allocable to the Class A Investor Interest with respect to any Transfer Date
(the "Class A Servicing Fee") shall be equal to one-twelfth of the product of
(i) the Class A Floating Allocation, (ii) the Net Servicing Fee Rate and (iii)
the Adjusted Investor Interest as of the last day of the Monthly Period
preceding such Transfer Date; provided, however, that with respect to the first
Transfer Date, the Class A Servicing Fee shall be equal to $354,763.14. The
share of the Investor Servicing Fee allocable to the Class B Investor Interest
with respect to any Transfer Date (the "Class B Servicing Fee") shall be equal
to one-twelfth of the product of (i) the Class B Floating Allocation, (ii) the
Net Servicing Fee Rate and (iii) the Adjusted Investor Interest as of the last
day of the Monthly Period preceding such Transfer Date; provided, however, that
with respect to the first Transfer Date, the Class B Servicing Fee shall be
equal to $20,156.89. The share of the Investor Servicing Fee allocable to the
Collateral Interest with respect to any Transfer Date (the "Collateral Interest
Servicing Fee") shall be equal to one-twelfth of the product of (i) the
Collateral Floating Allocation, (ii) the Net Servicing Fee Rate and (iii) the
Adjusted Investor Interest as of the last day of the Monthly Period preceding
such Transfer Date; provided, however, that with respect to the first Transfer
Date, the Collateral Interest Servicing Fee shall be equal to $28,220.71.
Except as specifically provided above, the Servicing Fee shall be paid by the
cash flows from the Trust allocated to the Transferor or the certificateholders
of other Series (as provided in the related Supplements) and in no event shall
the Trust, the Trustee or the Investor Certificateholders be liable therefor.
The Class A Servicing Fee shall be payable to the Servicer solely to the extent
amounts are available for distribution in respect thereof pursuant to subsec-
tions 4.9(a)(ii) and 4.11(a). The Class B Servicing Fee shall be payable
solely to the extent amounts are available for distribution in respect thereof
pursuant to subsections 4.9(b)(ii) and 4.11(c). The Collateral Interest
Servicing Fee shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to subsection 4.11(f) or, if
applicable, subsection 4.9(c)(i).
(b) On or before each Transfer Date, the Transferor shall notify the
Servicer of the amount of Interchange to be included as Collections of Finance
Charge Receivables and allocable to the Investor Certificateholders with
respect to the preceding Monthly Period as determined pursuant to this subsec-
tion 3(b). Such amount of Interchange shall be equal to the product of (i) the
aggregate amount of Interchange with respect to such Monthly Period and (ii)
the Investor Percentage with respect to Finance Charge Receivables for such
Monthly Period. On each Transfer Date, the Transferor shall pay to the
Servicer, and the Servicer shall deposit into the Finance Charge Account, in
immediately available funds, the amount of Interchange to be so included as
Collections of Finance Charge Receivables allocable to the Investor
Certificates with respect to the preceding Monthly Period.
SECTION 4. Reassignment and Transfer Terms. The Investor
Certificates shall be subject to retransfer to the Transferor at its option, in
accordance with the terms specified in subsection 12.2(a), 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 deposit required in connection with any such repurchase shall include the
amount, if any, on deposit in the Principal Funding Account and will be equal
to the sum of (a) the Investor Interest and (b) accrued and unpaid interest on
the Investor Certificates through the day preceding the Distribution Date on
which the repurchase occurs.
<PAGE>
SECTION 5. Delivery and Payment for the Investor Certificates. The
Transferor shall execute and deliver the Series 1996-3 Certificates to the
Trustee for authentication in accordance with Section 6.1. The Trustee shall
deliver such Certificates when authenticated in accordance with Section 6.2.
SECTION 6. Depository; Form of Delivery of Investor Certificates.
(a) The Class A Certificates and the Class B Certificates shall be
delivered as Book-Entry Certificates as provided in Sections 6.1 and 6.10.
(b) The Depository for Series 1996-3 shall be The Depository Trust
Company, and the Class A Certificates and Class B Certificates shall be
initially registered in the name of Cede & Co., its nominee.
SECTION 7. Article IV of Agreement. Sections 4.1, 4.2 and 4.3 shall
be read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1, 4.2 and 4.3 thereof) shall be read in its entirety as follows and
shall be applicable only to the Investor Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4 Rights of Certificateholders and the Collateral Interest
Holder. The Investor Certificates shall represent undivided interests in the
Trust, consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times and
in the amounts specified in this Agreement, (a) the Floating Investor
Percentage and Fixed Investor Percentage (as applicable from time to time) of
Collections received with respect to the Receivables and (b) funds on deposit
in the Collection Account, the Finance Charge Account, the Excess Funding
Account, the Principal Account, the Principal Funding Account, the Reserve
Account and the Distribution Account. The Collateral Interest shall be
subordinate to the Class A Certificates and the Class B Certificates. The
Class B Certificates shall be subordinate to the Class A Certificates. The
Transferor Certificate shall not represent any interest in the Collection
Account, the Finance Charge Account, the Principal Account, the Excess Funding
Account, the Principal Funding Account, the Reserve Account or the Distribution
Account, except as specifically provided in this Article IV.
SECTION 4.5 Allocations.
(a) 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, allocate to the Investor
Certificateholders or the Holder of the Transferor Certificate and pay or
deposit from the Collection Account the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the 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 to be
applied in accordance with Section 4.9.
(ii) Deposit into the Principal Account an amount equal to the
product of (A) the Collateral Allocation on the Date of Processing of such
<PAGE>
Collections, (B) the Investor Percentage on the Date of Processing of such
Collections and (C) the aggregate amount of Collections processed in
respect of Principal Receivables on such Date of Processing to be applied
first in accordance with Section 4.12 and then in accordance with
subsection 4.9(d).
(iii) Deposit into the Principal Account an amount equal to the
product of (A) the Class B Investor Allocation on the Date of Processing
of such Collections, (B) the Investor Percentage on the Date of Processing
of such Collections and (C) the aggregate amount of Collections processed
in respect of Principal Receivables on such Date of Processing to be
applied first in accordance with Section 4.12 and then in accordance with
subsection 4.9(d).
(iv) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Class A Investor Allocation on the Date of Processing
of such Collections, (2) the Investor Percentage on the Date of Processing
of such Collections and (3) the aggregate amount of Collections processed
in respect of Principal Receivables on such Date of Processing; provided,
however, that the amount deposited into the Principal Account pursuant to
this subsection 4.5(a)(iv)(A) shall not exceed the Daily Principal Short-
fall, and (B) pay to the Holder of the Transferor Certificate an amount
equal to the excess, if any, identified in the proviso to clause (A)
above; provided, however, that the amount to be paid to the Holder of the
Transferor Certificate pursuant to this subsection 4.5(a)(iv)(B) with
respect to any Date of Processing shall be paid to the Holder of the
Transferor Certificate only if the Transferor Interest on such Date of
Processing is greater than the Minimum Transferor Interest (after giving
effect to the inclusion in the Trust of all Receivables created on or
prior to such Date of Processing and the application of payments referred
to in subsection 4.3(b)) and otherwise shall be deposited into the Excess
Funding Account.
(b) 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,
allocate to the Investor Certificateholders or the Holder of the Transferor
Certificate and pay or deposit from the Collection Account the following
amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the 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 to be
applied in accordance with Section 4.9.
(ii) Deposit into the Principal Account an amount equal to the
product of (A) the Collateral Allocation on the Date of Processing of such
Collections, (B) the Investor Percentage on the Date of Processing of such
Collections and (C) the aggregate amount of Collections processed in
respect of Principal Receivables on such Date of Processing to be applied
first in accordance with Section 4.12 and then in accordance with
subsection 4.9(e).
(iii) Deposit into the Principal Account an amount equal to the
product of (A) the Class B Investor Allocation on the Date of Processing
of such Collections, (B) the Investor Percentage on the Date of Processing
<PAGE>
of such Collections and (C) the aggregate amount of Collections processed
in respect of Principal Receivables on such Date of Processing to be
applied first in accordance with Section 4.12 and then in accordance with
subsection 4.9(e).
(iv) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Class A Investor Allocation on the Date of Processing
of such Collections, (2) the Investor Percentage on the Date of Processing
of such Collections and (3) the aggregate amount of Collections processed
in respect of Principal Receivables on such Date of Processing; provided,
however, that the amount deposited into the Principal Account pursuant to
this subsection 4.5(b)(iv)(A) shall not exceed the Daily Principal Short-
fall, and (B) pay to the Holder of the Transferor Certificate an amount
equal to the excess, if any, identified in the proviso to clause (A)
above; provided, however, that the amount to be paid to the Holder of the
Transferor Certificate pursuant to this subsection 4.5(b)(iv)(B) with
respect to any Date of Processing shall be paid to the Holder of the
Transferor Certificate only if the Transferor Interest on such Date of
Processing is greater than the Minimum Transferor Interest (after giving
effect to the inclusion in the Trust of all Receivables created on or
prior to such Date of Processing and the application of payments referred
to in subsection 4.3(b)) and otherwise shall be deposited into the Excess
Funding Account.
(c) 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, allocate to
the Investor Certificateholders and pay or deposit from the Collection Account
the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of such
Collections and (E) the aggregate amount of Collections processed in
respect of Finance Charge Receivables on such Date of Processing to be
applied in accordance with Section 4.9.
(ii) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Investor Percentage on the Date of Processing of such
Collections and (2) the aggregate amount of Collections processed in
respect of Principal Receivables on such Date of Processing; provided,
however, that the amount deposited into the Principal Account pursuant to
this subsection 4.5(c)(ii)(A) shall not exceed the sum of the Investor
Interest as of the close of business on the last day of the prior Monthly
Period (after taking into account any payments to be made on the
Distribution Date relating to such prior Monthly Period and deposits and
any adjustments to be made to the Investor Interest to be made on the
Transfer Date relating to such Monthly Period) and any Reallocated
Principal Collections relating to the Monthly Period in which such deposit
is made and (B) pay to the Holder of the Transferor Certificate an amount
equal to the excess, if any, identified in the proviso to clause (A)
above; provided, however, that the amount to be paid to the Holder of the
Transferor Certificate pursuant to this subsection 4.5(c)(ii)(B) with
respect to any Date of Processing shall be paid to the Holder of the
Transferor Certificate only if the Transferor Interest on such Date of
Processing is greater than the Minimum Transferor Interest (after giving
effect to the inclusion in the Trust of all Receivables created on or
prior to such Date of Processing and the application of payments referred
<PAGE>
to in subsection 4.3(b)) and otherwise shall be deposited into the Excess
Funding Account.
(d) Limitation on Required Deposits. With respect to the Investor
Certificates, and notwithstanding anything in the Agreement or this Series
Supplement to the contrary, whether or not the Servicer is required to make
monthly or daily deposits from the Collection Account into the Finance Charge
Account or the Principal Account pursuant to subsections 4.5(a), 4.5(b) and
4.5(c), with respect to any Monthly Period (i) the Servicer will only be
required to deposit Collections from the Collection Account into the Finance
Charge Account or the Principal Account in an amount equal to the lesser of (x)
the amount required to be deposited into any such deposit account pursuant to
subsection 4.5(a), 4.5(b) or 4.5(c) and (y) the amount required to be
distributed on or prior to the related Distribution Date to the Investor
Certificateholders and (ii) if at any time prior to such Distribution Date the
amount of Collections deposited in the Collection Account exceeds the amount
required to be deposited pursuant to clause (i) above, the Servicer will be
permitted to withdraw the excess from the Collection Account. To the extent
that, in accordance with this subsection 4.5(d), the Servicer has retained
amounts which would otherwise be required to be deposited in the Finance Charge
Account or the Principal Account with respect to any Monthly Period, the
Servicer shall be required to deposit such amounts in the Finance Charge
Account or the Principal Account on the related Transfer Date to the extent
necessary to make required distributions to the Investor Certificateholders on
the related Distribution Date, including any amounts which are required to be
applied as Reallocated Principal Collections.
For so long as the Servicer shall (i) satisfy the conditions
specified in the third paragraph of subsection 4.3(a) of the Agreement and (ii)
be making deposits to the Principal Account and Finance Charge Account on a
monthly basis, all requirements herein to deposit amounts on a daily basis
shall be deemed to be satisfied to the extent that the required monthly deposit
is made and all references to amounts on deposit in such accounts shall be
deemed to include amounts which would otherwise have been deposited therein on
a daily basis.
SECTION 4.6 Determination of Monthly Interest.
(a) The amount of monthly interest distributable to the Class A
Certificates shall be an amount equal to one-twelfth of the product of (i) the
Class A Certificate Rate, times (ii) the outstanding principal balance of the
Class A Certificates as of the Record Date preceding the related Transfer Date
(the "Class A Monthly Interest"); provided, however, that with respect to the
first Distribution Date, Class A Monthly Interest will include accrued interest
at the Class A Certificate Rate from the Closing Date through July 14, 1996
(calculated as though there were 30 days in January and February); provided,
further, that in addition to Class A Monthly Interest an amount equal to the
amount of any unpaid Class A Deficiency Amounts, as defined below, plus an
amount equal to one-twelfth of the product of (A) the sum of the Class A
Certificate Rate, plus 2% per annum, and (B) any Class A Deficiency Amount from
the prior Transfer Date, as defined below (or the portion thereof which has not
theretofore been paid to Class A Certificateholders) (the "Class A Additional
Interest") shall also be distributable to the Class A Certificates, to the
extent available, into the Distribution Account; provided, further, that the
"Class A Deficiency Amount" for any Transfer Date shall be equal to the excess,
if any, of the aggregate amount accrued pursuant to this subsection 4.6(a) as
<PAGE>
of the prior Interest Period over the amount actually transferred to the
Distribution Account for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall be an amount equal to one-twelfth of the product of (i) the
Class B Certificate Rate, times (ii) the outstanding principal balance of the
Class B Certificates as of the Record Date preceding the related Transfer Date
(the "Class B Monthly Interest"); provided, however, that with respect to the
first Distribution Date, Class B Monthly Interest will include accrued interest
at the Class B Certificate Rate from the Closing Date through July 14, 1996
(calculated as though there were 30 days in January and February); provided
further, that in addition to the Class B Monthly Interest an amount equal to
the amount of any unpaid Class B Deficiency Amounts, as defined below, plus an
amount equal to one-twelfth of the product of (A) the sum of the Class B
Certificate Rate, plus 2% per annum, and (B) any Class B Deficiency Amount from
the prior Transfer Date, as defined below (or the portion thereof which has not
theretofore been paid to Class B Certificateholders) (the "Class B Additional
Interest") shall also be distributable to the Class B Certificates, and on such
Transfer Date the Trustee shall deposit such funds, to the extent available,
into the Distribution Account; provided, further, that the "Class B Deficiency
Amount" for any Transfer Date shall be equal to the excess, if any, of the
aggregate amount accrued pursuant to this subsection 4.6(b) as of the prior
Interest Period over the amount actually transferred to the Distribution
Account for payment of such amount.
(c) The amount of monthly interest distributable to the Collateral
Interest, which shall be an amount equal to the product of (i)(A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Collateral Rate in
effect with respect to the related Interest Period, and (ii) the Collateral
Interest determined as of the close of business on the Distribution Date
preceding the related Transfer Date (after giving effect to all of the
transactions occurring on such date) (the "Collateral Monthly Interest");
provided, however, that for the purposes of determining Collateral Monthly
Interest only, the Collateral Rate shall not exceed a per annum rate of 1% in
excess of LIBOR as determined on the related LIBOR Determination Date.
SECTION 4.7 Determination of Monthly Principal.
(a) The amount of monthly principal distributable from the Principal
Account with respect to the Class A Certificates on each Transfer Date ("Class
A Monthly Principal"), beginning with the Transfer Date in the month following
the month in which the Controlled Accumulation Period or, if earlier, the Rapid
Amortization Period, begins, shall be equal to the least of (i) the 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
Controlled Deposit Amount for such Transfer Date and (iii) the Class A Adjusted
Investor Interest on such Transfer Date prior to any deposit into the Principal
Funding Account to be made on such day.
(b) The amount of monthly principal distributable from the Principal
Account with respect to the Class B Certificates on each Transfer Date (the
"Class B Monthly Principal"), for the Controlled Accumulation Period, beginning
with the Transfer Date following the Monthly Period in which the Class A
Investor Interest has been paid in full, and during the Rapid Amortization
Period, beginning with the Transfer Date immediately preceding the Distribution
<PAGE>
Date on which the Class A Investor Interest has been paid in full, shall be an
amount equal to the lesser of (i) the Available Investor Principal Collections
on deposit in the Principal Account with respect to such Transfer Date (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
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.10 and 4.12) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (A) during the Revolving
Period following any reduction of the Required Collateral Interest pursuant to
clause (z) of the proviso in the definition thereof an amount equal to the
lesser of (1) the excess, if any, of the Collateral Interest (after taking into
account any adjustments to be made on such Transfer Date pursuant to Sections
4.10 and 4.12) over the Required Collateral Interest on such Transfer Date and
(2) the Available Investor Principal Collections on such Transfer Date or (B)
during the Controlled Accumulation Period or Rapid Amortization Period, an
amount equal to the lesser of (1) the excess, if any, of the Collateral
Interest (after taking into account any adjustments to be made on such Transfer
Date pursuant to Sections 4.10 and 4.12) over the Required Collateral Interest
on such Transfer Date and (2) the excess, if any, of (i) the Available Investor
Principal Collections on such Transfer Date over (ii) the sum of the Class A
Monthly Principal and the Class B Monthly Principal for such Transfer Date.
SECTION 4.8 Coverage of Required Amount. (a) On or before each
Transfer Date, the Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest for such
Transfer Date, plus (ii) the Class A Deficiency Amount, if any, for such
Transfer Date, plus (iii) the Class A Additional Interest, if any, for such
Transfer Date, plus (iv) the Class A Servicing Fee for the prior Monthly Period
plus (v) the Class A Servicing Fee, if any, due but not paid on any prior
Transfer Date, plus (vi) the Class A Investor Default Amount, if any, for the
prior Monthly Period, exceeds the Class A Available Funds for the related
Monthly Period.
(b) On or before each Transfer Date, the Servicer shall also
determine the amount (the "Class B Required Amount"), if any, equal to the sum
of (i) the amount, if any, by which the sum of (A) the Class B Monthly Interest
for such Transfer Date, plus (B) the Class B Deficiency Amount, if any, for
such Transfer Date plus (C) the Class B Additional Interest, if any, for such
Transfer Date, plus (D) the Class B Servicing Fee for the prior Monthly Period
plus (E) the Class B Servicing Fee, if any, due but not paid on any prior
Transfer Date, exceeds the Class B Available Funds for the related Monthly
Period plus (ii) the Class B Investor Default Amount, if any, for the prior
Monthly Period.
(c) In the event that the sum of the Class A Required Amount and the
Class B Required Amount for such Transfer Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount or Class B Required Amount on or before such Transfer Date. In
the event that the Class A Required Amount for such Transfer Date is greater
than zero, all or a portion of the Excess Spread and Shared Excess Finance
Charge Collections allocable to Series 1996-3 with respect to such Transfer
Date in an amount equal to the Class A Required Amount, to the extent
available, for such Transfer Date shall be distributed from the Finance Charge
Account on such Transfer Date pursuant to subsection 4.11(a). In the event
<PAGE>
that the Class A Required Amount for such Transfer Date exceeds the amount of
Excess Spread and Shared Excess Finance Charge Collections allocable to Series
1996-3 with respect to such Transfer Date, the Collections of Principal
Receivables allocable to the Collateral Interest and the Collections of
Principal Receivables allocable to the Class B Certificates with respect to the
prior Monthly Period shall be applied as specified in Section 4.12. In the
event that the Class B Required Amount for such Transfer Date exceeds the
amount of Excess Spread and Shared Excess Finance Charge Collections allocable
to Series 1996-3 available to fund the Class B Required Amount pursuant to
subsection 4.11(c), the Collections of Principal Receivables allocable to the
Collateral Interest (after application to the Class A Required Amount) shall be
applied as specified in Section 4.12; provided, however, that the sum of any
payments pursuant to this paragraph shall not exceed the sum of the Class A
Required Amount and Class B Required Amount.
SECTION 4.9 Monthly Payments. On or before each Transfer Date, the
Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) 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:
(a) An amount equal to the Class A Available Funds deposited into the
Finance Charge Account for the related Monthly Period shall be distributed on
each Transfer Date in the following priority:
(i) an amount equal to Class A Monthly Interest for such Transfer
Date, plus the amount of any Class A Deficiency Amount for such Transfer
Date, plus the amount of any Class A Additional Interest for such Transfer
Date, shall be deposited by the Servicer or the Trustee into the Distribu-
tion Account;
(ii) an amount equal to the Class A Servicing Fee for such Transfer
Date plus the amount of any Class A Servicing Fee due but not paid to the
Servicer on any prior Transfer Date shall be distributed to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount, if
any, for the preceding Monthly Period shall be treated as a portion of
Investor Principal Collections and deposited into the Principal Account on
such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.11.
(b) An amount equal to the Class B Available Funds deposited into the
Finance Charge Account for the related Monthly Period shall be distributed on
each Transfer Date in the following priority:
(i) an amount equal to the Class B Monthly Interest for such
Transfer Date, plus the amount of any Class B Deficiency Amount for such
Transfer Date, plus the amount of any Class B Additional Interest for such
Transfer Date, shall be deposited by the Servicer or the Trustee into the
Distribution Account;
<PAGE>
(ii) an amount equal to the Class B Servicing Fee for such Transfer
Date, plus the amount of any Class B Servicing Fee due but not paid to the
Servicer on any prior Transfer Date for such Transfer Date shall be
distributed to the
Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.11.
(c) An amount equal to the Collateral Available Funds deposited into
the Finance Charge Account for the related Monthly Period shall be distributed
on each Transfer Date in the following priority:
(i) if none of the Transferor, an Affiliate thereof or the Trustee
is the Servicer, an amount equal to the Collateral Interest Servicing Fee
for such Transfer Date plus the amount of any Collateral Interest
Servicing Fee due but not paid to the Servicer on any prior Transfer Date
shall be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.11.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections deposited into the Principal Account for the
related Monthly Period shall be distributed on each Transfer Date in the
following priority:
(i) an amount equal to the Collateral Monthly Principal for such
Transfer Date shall be distributed to the Collateral Interest Holder in
accordance with the Loan Agreement;
(ii) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsection 4.9(d)(i) above and the denominator of which is equal to the
sum of the Available Investor Principal Collections available for sharing
as specified in the related Supplement for each Series and (2) the
Cumulative Series Principal Shortfall and (B) Available Investor Principal
Collections, shall remain in the Principal Account to be treated as Shared
Principal Collections and applied to Series other than this Series 1996-3;
and
(iii) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections for such Transfer Date over (B) the
applications specified in subsections 4.9(d)(i) and (ii) above shall be
paid to the Holder of the Transferor Certificate; provided, however, that
the amount to be paid to the Holder of the Transferor Certificate pursuant
to this subsection 4.9(d)(iii) with respect to such Transfer Date shall be
paid to the Holder of the Transferor Certificate only if the Transferor
Interest on such Date of Processing is greater than the Minimum Transferor
Interest (after giving effect to the inclusion in the Trust of all
Receivables created on or prior to such Transfer Date and the application
of payments referred to in subsection 4.3(b)) and otherwise deposited into
the Excess Funding Account.
(e) During the Controlled Accumulation Period or the Rapid
Amortization Period, an amount equal to the Available Investor Principal
<PAGE>
Collections deposited into the Principal Account for the related Monthly Period
shall be distributed on each Transfer Date in the following priority:
(i) an amount equal to the Class A Monthly Principal for such
Transfer Date, shall be (A) during the Controlled Accumulation Period,
deposited into the Principal Funding Account, and (B) during the Rapid
Amortization Period, deposited into the Distribution Account;
(ii) after giving effect to the distribution referred to in clause
(i) above, an amount equal to the Class B Monthly Principal, shall be
deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer Date
immediately preceding the Series 1996-3 Termination Date, in which case on
the Series 1996-3 Termination Date) after giving effect to the
distribution referred to in clauses (i) and (ii) above, an amount equal to
Collateral Monthly Principal shall be distributed to the Collateral
Interest Holder in accordance with the Loan Agreement;
(iv) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsections 4.9(e)(i), (ii) and (iii) above and the denominator of which
is equal to the sum of the Available Investor Principal Collections
available for sharing as specified in the related Series Supplement for
each Series and (2) the Cumulative series Principal Shortfall and (B) the
Available Investor Principal Collections, shall remain in the Principal
Account to be treated as Shared Principal Collections and applied to
Series other than this Series 1996-3; and
(v) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections over (B) the applications specified in
subsections 4.9(e)(i) through (iv) above shall be paid to the Holder of
the Transferor Certificate; provided, however, that the amount to be paid
to the Holder of the Transferor Certificate pursuant to this subsection
4.9(e)(v) with respect to such Transfer Date shall be paid to the Holder
of the Transferor Certificate only if the Transferor Interest on such Date
of Processing is greater than the Minimum Transferor Interest (after
giving effect to the inclusion in the Trust of all Receivables created on
or prior to such Transfer Date and the application of payments referred to
in subsection 4.3(b)) and otherwise shall be deposited into the Excess
Funding Account.
(f) on the earlier to occur of (i) the first Transfer Date with
respect to the Rapid Amortization Period and (ii) the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in the
Principal Funding Account.
(g) On each Distribution Date, the Trustee shall pay in accordance
with subsection 5.1(a) to the Class A Certificateholders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.9(a)(i) on the preceding Transfer Date and (b) to the Class B
Certificateholders from the Distribution Account, the amount deposited into the
Distribution Account pursuant to subsection 4.9(b)(i) on the preceding Transfer
Date.
<PAGE>
(h) On the earlier to occur of (i) the first Distribution Date with
respect to the Rapid Amortization Period and (ii) the Class A Scheduled Payment
Date and on each Distribution Date thereafter, the Trustee, acting in
accordance with instructions from the Servicer, shall pay in accordance with
Section 5.1 from the Distribution Account the amount so deposited into the
Distribution Account pursuant to subsections 4.9(e) and (f) on the related
Transfer Date in the following priority:
(i) an amount equal to the lesser of such amount on deposit in the
Distribution Account and the Class A Investor Interest shall be paid to
the Class A Certificateholders; and
(ii) for each Distribution Date with respect to the Rapid
Amortization Period and on the Class B Scheduled Payment Date, after
giving effect to the distributions referred to in clause (i) above, an
amount equal to the lesser of such amount on deposit in the Distribution
Account and the Class B Investor Interest shall be paid to the Class B
Certificateholders.
(i) The Controlled Accumulation Period is scheduled to commence at
the close of business on May 31, 2005; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 12
months, the date on which the Controlled Accumulation Period actually commences
will be delayed to the first Business Day of the month that is the number of
whole months prior to the Class A Scheduled Payment Date at least equal to the
Accumulation Period Length and, as a result, the number of Monthly Periods in
the Controlled Accumulation Period will at least equal the Accumulation Period
Length. On the Determination Date immediately preceding the February 2005
Distribution Date, and each Determination Date thereafter until the Controlled
Accumulation Period begins, the Servicer will determine the "Accumulation
Period Length" which will equal the number of whole months such that the sum of
the Accumulation Period Factors for each month during such period will be equal
to or greater than the Required Accumulation Factor Number; provided, however,
that the Accumulation Period Length will not be determined to be less than one
month.
SECTION 4.10 Investor Charge-Offs.
(a) On or before each Transfer Date, the Servicer shall calculate the
Class A Investor Default Amount. If on any Transfer Date, the Class A Investor
Default Amount for the prior Monthly Period exceeds the sum of the amount
allocated with respect thereto pursuant to subsection 4.9(a)(iii), subsection
4.11(a) and Section 4.12 with respect to such Monthly Period, the Collateral
Interest (after giving effect to reductions for any Collateral Charge-offs and
any Reallocated Principal Collections on such Transfer Date) will be reduced by
the amount of such excess, but not by more than the lesser of the Class A
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date) for such Transfer Date. 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 on such Transfer 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
<PAGE>
which the Class B Investor Interest would have been reduced below zero, but not
by more than the Class A Investor Default Amount for such Transfer Date (a
"Class A Investor Charge-Off"). If the Class A Investor Interest has been
reduced by the amount of any Class A Investor Charge-Offs, it will be
reimbursed on any Transfer Date (but not by an amount in excess of the
aggregate Class A Investor Charge-Offs) by the amount of Excess Spread and
Shared Excess Finance Charge Collections allocable to Series 1996-3 allocated
and available for such purpose pursuant to subsection 4.11(b).
(b) On or before each Transfer Date, the Servicer shall calculate the
Class B Investor Default Amount. If on any Transfer Date, the Class B Investor
Default Amount for the prior Monthly Period exceeds the amount of Excess Spread
and Shared Excess Finance Charge Collections allocable to Series 1996-3 and
Reallocated Collateral Principal Collections which are allocated and available
to fund such amount pursuant to subsection 4.11(c) and Section 4.12, the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer Date and
any adjustments with respect thereto as described in subsection 4.10(a) above)
will be reduced by the amount of such excess but not by more than the lesser of
the Class B Investor Default Amount and the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and any adjustments with respect
thereto as described in subsection 4.10(a) above) for such Transfer Date. In
the event that 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, but not by more than the Class B
Investor Default Amount for such Transfer Date (a "Class B Investor Charge-
Off"). The Class B Investor Interest will also be reduced by the amount of
Reallocated Class B Principal Collections in excess of the Collateral Interest
pursuant to Section 4.12 and the amount of any portion of the Class B Investor
Interest allocated to the Class A Certificates to avoid a reduction in the
Class A Investor Interest pursuant to subsection 4.10(a) above. The Class B
Investor Interest will thereafter be reimbursed (but not to an amount in excess
of the unpaid principal balance of the Class B Certificates) on any Transfer
Date by the amount of Excess Spread and Shared Excess Finance Charge
Collections allocable to Series 1996-3 allocated and available for that purpose
as described under subsection 4.11(d).
(c) On or before each Transfer Date, the Servicer shall calculate
the Collateral Default Amount. If on any Transfer Date, the Collateral Default
Amount for the prior Monthly Period exceeds the amount of Excess Spread and
Shared Excess Finance Charge Collections allocable to Series 1996-3 allocated
and available to fund such amount pursuant to subsection 4.11(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 Charge-Off"). The Collateral
Interest will also be reduced by the amount of Reallocated Principal
Collections pursuant to Section 4.12 and the amount of any portion of the
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 4.10(a), or the Class B Investor Interest, pursuant to subsection
4.10(b), respectively. The Collateral Interest will thereafter be reimbursed
on any Transfer Date by the amount of the Excess Spread and Shared Excess
Finance Charge Collections allocable to Series 1996-3 allocated and available
for that purpose as described under subsection 4.11(h).
<PAGE>
SECTION 4.11 Excess Spread. On or before each Transfer Date, the
Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to apply Excess Spread with
respect to the related Monthly Period to make the following distributions on
each Transfer Date in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date shall be used to fund the Class A Required Amount
and be applied in accordance with, and in the priority set forth in, subsection
4.9(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date shall be used to fund the Class B Required Amount
and be applied first in accordance with, and in the priority set forth in,
subsection 4.9(b) and then any remaining amount available to pay the Class B
Investor Default Amount shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced below the initial Class B Investor Interest
for reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the
amount of any past due Collateral Monthly Interest for such Transfer Date shall
be paid to the Collateral Interest Holder in accordance with the Loan
Agreement;
(f) an amount equal to the aggregate amount of accrued but unpaid
Collateral Interest Servicing Fees shall be paid to the Servicer;
(g) an amount equal to the Collateral Default Amount, if any, for the
prior Monthly Period shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(h) 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) shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(i) on each Transfer Date from and after the Reserve Account Funding
Date, but prior to the date on which the Reserve Account terminates as
described in Section 4.15(f), an amount up to the excess, if any, of the
Required Reserve Account Amount over the Available Reserve Account Amount shall
be deposited into the Reserve Account;
<PAGE>
(j) an amount equal to the amounts determined to be payable pursuant
to subsections 2.11(a)(i), (ii) and (iii) of the Loan Agreement shall be paid
to the Collateral Interest Holder; and
(k) the balance, if any, after giving effect to the payments made
pursuant to subparagraphs (a) through (j) above shall constitute "Shared Excess
Finance Charge Collections" with respect to other Series in Group One.
To the extent of the Finance Charge Shortfall, if any, following the
application on each Transfer Date of Shared Excess Spread as described above,
the servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to apply Shared Excess Finance
Charge Collections with respect to Group One allocable to Series 1996-3 in the
priority set forth above.
SECTION 4.12 Reallocated Principal Collections. On or before each
Transfer Date, the Servicer shall instruct the Trustee in writing (which
writing shall be substantially in the form of Exhibit B hereto) to withdraw
from the Principal Account and apply 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 with respect to the related Monthly Period, shall be
applied pursuant to the priority set forth in subsection 4.9(a); 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 allocated and available to the Class B Certificates
pursuant to subsection 4.11(c) on such Transfer Date shall be applied first
pursuant to the priority set forth in subsection 4.9(b) and then pursuant to
subsection 4.11(c).
(c) 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 for such Transfer Date. In the
event that such reduction would cause the Collateral Interest (after giving
effect to any Collateral Charge-Offs for such Transfer Date) to be a negative
number, the Collateral Interest (after giving effect to any Collateral Charge-
Offs for such Transfer Date) shall be reduced to zero and the Class B Investor
Interest shall be reduced by the amount by which the Collateral Interest would
have been reduced below zero. In the event that 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.
<PAGE>
SECTION 4.13 Shared Principal Collections.
(a) The portion of Shared Principal Collections on deposit in the
Principal Account equal to the amount of Shared Principal Collections allocable
to Series 1996-3 on any Transfer Date shall be applied as Available Investor
Principal Collections pursuant to Section 4.9 and pursuant to such Section 4.9
shall be deposited in the Distribution Account or distributed in accordance
with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1996-3 with
respect to any Transfer Date shall mean an amount equal to the Series Principal
Shortfall, if any, with respect to Series 1996-3 for such Transfer Date;
provided, however, that if the aggregate amount of Shared Principal Collections
for all Series for such Transfer Date is less than the Cumulative Series
Principal Shortfall for such Transfer Date, then Shared Principal Collections
allocable to Series 1996-3 on such Transfer Date shall equal the product of (i)
Shared Principal Collections for all Series for such Transfer Date and (ii) a
fraction, the numerator of which is the Series Principal Shortfall with respect
to Series 1996-3 for such Transfer Date and the denominator of which is the
aggregate amount of Cumulative Series Principal Shortfall for all Series for
such Transfer Date.
SECTION 4.14 Principal Funding Account.
(a) The Trustee shall establish and maintain, in the name of the
Trust, on behalf of the Trust, for the benefit of the Investor
Certificateholders, an Eligible Deposit Account (the "Principal Funding
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Investor Certificateholders. The
Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Principal Funding Account and in all proceeds thereof.
The Principal Funding Account shall be under the sole dominion and control of
the Trustee for the benefit of the Investor Certificateholders. If at any time
the Principal Funding Account ceases to be an Eligible Deposit Account, the
Transferor shall notify the Trustee, and the Trustee upon being notified (or
the Servicer on its behalf) shall, within 10 Business Days, establish a new
Principal Funding Account meeting the conditions specified in the definition of
Eligible Deposit Account, and shall transfer any cash or any investments to
such new Principal Funding Account. The Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Principal Funding Account from
time to time, in the amounts and for the purposes set forth in this Series
Supplement, and (ii) on each Transfer Date (from and after the commencement of
the Controlled Accumulation Period) prior to termination of the Principal
Funding Account make a deposit into the Principal Funding Account in the amount
specified in, and otherwise in accordance with, subsection 4.9(e).
(b) Funds on deposit in the Principal Funding Account shall be
invested at the direction of the Servicer by the Trustee in Permitted
Investments. Funds on deposit in the Principal Funding Account on any Transfer
Date, after giving effect to any withdrawals from the Principal Funding Account
on such Transfer Date, shall be invested in such investments that will mature
so that such funds will be available for withdrawal on or prior to the
following Transfer Date. The Trustee shall maintain for the benefit of the
Investor Certificateholders possession of the negotiable instruments or
securities, if any, evidencing such Permitted Investments. No Permitted
Investment shall be disposed of prior to its maturity.
On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each Transfer Date
<PAGE>
thereafter with respect to the Controlled Accumulation Period, the Trustee,
acting at the Servicer's direction given on or before such Transfer Date, shall
transfer from the Principal Funding Account to the Finance Charge Account the
Principal Funding Investment Proceeds on deposit in the Principal Funding
Account, but not in excess of the Covered Amount, for application as Class A
Available Funds applied pursuant to subsection 4.9(a)(i).
Any Excess Principal Funding Investment Proceeds shall be paid to the
Transferor on each Transfer Date. An amount equal to any Principal Funding
Investment Shortfall shall be deposited in the Finance Charge Account on each
Transfer Date from the Reserve Account to the extent funds are available
pursuant to subsection 4.15(d). Principal Funding Investment Proceeds (in-
cluding reinvested interest) shall not be considered part of the amounts on
deposit in the Principal Funding Account for purposes of this Series
Supplement.
SECTION 4.15 Reserve Account.
(a) The Trustee shall establish and maintain, on behalf of the Trust,
for the benefit of the Investor Certificateholders, an Eligible Deposit Account
(the "Reserve Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Investor
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. The Reserve Account shall be under the sole dominion and
control of the Trustee for the benefit of the Investor Certificateholders. If
at any time the institution holding the Reserve Account ceases to be an
Eligible Deposit Account, the Transferor shall notify the Trustee, and the
Trustee upon being notified (or the Servicer on its behalf) shall, within 10
Business Days, establish a new Reserve Account meeting the conditions specified
in the definition of Eligible Deposit Account, and shall transfer any cash or
any investments to such new Reserve Account. The Trustee, at the direction of
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 termination of
the Reserve Account make a deposit into the Reserve Account in the amount
specified in, and otherwise in accordance with, subsection 4.11(i).
(b) Funds on deposit in the Reserve Account shall be invested at the
direction of the Servicer by the Trustee in Permitted Investments. Funds on
deposit in the Reserve Account on any Transfer Date, after giving effect to any
withdrawals from the Reserve Account on such Transfer Date, shall be invested
in such investments that will mature so that such funds will be available for
withdrawal on or prior to the following Transfer Date. The Trustee shall
maintain for the benefit of the Investor Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Permitted
Investments. 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
balance in the Reserve Account for any reason under this Series Supplement,
<PAGE>
except as otherwise provided in the preceding sentence, investment earnings on
such funds shall be deemed not to be available or on deposit.
(c) 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; provided,
however, that such amount will be reduced to the extent that funds otherwise
would be available for deposit in the Reserve Account under Section 4.11(i)
with respect to such Transfer Date.
(d) In the event that for any Transfer Date the Reserve Draw Amount
is greater than zero, the Reserve Draw Amount, up to the Available Reserve
Account Amount, shall be withdrawn from the Reserve Account on such Transfer
Date by the Trustee (acting in accordance with the instructions of the
Servicer), deposited into the Finance Charge Account and included in Class A
Available Funds for such Transfer Date.
(e) In the event that the Reserve Account Surplus on 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, and pay in accordance with the Loan Agreement, an amount
equal to such Reserve Account Surplus.
(f) 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 (iii) if the Controlled Accumulation Period has
commenced, the earlier of the first Transfer Date with respect to the Rapid
Amortization Period and 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 Series
1996-3 Certificateholders that are payable from the Reserve Account as provided
herein, 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 4.16 Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee shall determine
LIBOR on the basis of the rate for deposits in United States dollars for a
period equal to the relevant Interest Period which appears on Telerate Page
3750 as of 11:00 a.m., London time, on such date. If such rate does not appear
on Telerate Page 3750, the rate for that LIBOR Determination Date shall be
determined on the basis of the rates at which deposits in United States dollars
are offered by the Reference Banks at approximately 11:00 a.m., London time, on
that day to prime banks in the London interbank market for a period equal to
the relevant Interest Period. The Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If
at least two such quotations are provided, the rate for that LIBOR
Determination Date shall be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that LIBOR
<PAGE>
Determination Date will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Servicer, at approximately 11:00 a.m.,
New York City time, on that day for loans in United States dollars to leading
European banks for a period equal to the relevant Interest Period.
(b) On each LIBOR Determination Date prior to 12:00 noon New York
City time, the Trustee shall send to the Servicer by facsimile notification of
LIBOR for the following Interest Period.
SECTION 4.17 Transferor's or Servicer's Failure to Make a Deposit or
Payment.
If the Servicer or the Transferor fails to make, or give instructions
to make, any payment or deposit (other than as required by subsections 2.4(d)
and (e) and 12.2(a) or Sections 10.2 and 12.1) required to be made or given by
the Servicer or Transferor, respectively, 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 or Transferor. The Trustee shall be required to make any
such payment, deposit or withdrawal hereunder only to the extent that the
Trustee has sufficient information to allow it 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 payable to the
Series 1996-3 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 payment, deposit 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 8. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Certificateholders:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, the
Trustee shall distribute (in accordance with the certificate delivered on or
before the related Transfer Date 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 Certificateholder's pro
rata share (based on the aggregate Undivided Interests represented by Class A
Certificates held by such Certificateholder) of amounts on deposit in the
Distribution Account as are payable to the Class A Certificateholders pursuant
to Section 4.9 by check mailed to each Class A Certificateholder (at such
Certificateholder's address as it appears in the Certificate Register), 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 Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
<PAGE>
Date 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 Certificateholder's pro rata share (based on the aggregate
Undivided Interests represented by Class B Certificates held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class B Certificateholders pursuant to Section 4.9 by check
mailed to each Class B Certificateholder (at such Certificateholder's address
as it appears in the Certificate Register), 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 Series 1996-3 Certificateholders' Statement.
(a) On or before each Distribution Date, the Trustee shall forward to
each Series 1996-3 Certificateholder, each Rating Agency and the Collateral
Interest Holder a statement substantially in the form of Exhibit C to this
Series Supplement prepared by the Servicer, delivered to the Trustee and
setting forth, among other things, the following information (which, in the
case of subclauses (i) and (ii) 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, as
applicable):
(i) the amount of the current distribution allocable to Class A
Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal, respectively;
(ii) the amount of the current distribution allocable to Class A
Monthly Interest, Class A Deficiency Amounts, Class A Additional Interest,
Class B Monthly Interest, Class B Deficiency Amounts, Class B Additional
Interest and Collateral Monthly Interest, and any accrued and unpaid
Collateral Monthly Interest, respectively;
(iii) the amount of Collections of Principal Receivables processed
during the related Monthly Period and allocated in respect of the Class A
Certificates, the Class B Certificates and the Collateral Interest,
respectively;
(iv) the amount of Collections of Finance Charge Receivables
processed during the related Monthly Period 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 Floating Investor Percentage, the Class A
Floating Allocation, the Class B Floating Allocation, the Collateral
Floating Allocation and the Fixed Investor Percentage, Class A Fixed
Allocation, the Class B Fixed Allocation and the Collateral Fixed
Allocation with respect to the Principal Receivables in the Trust as of
the close of business on the Distribution Date preceding such Transfer
Date (after giving effect to all of the transactions occurring on such
date);
<PAGE>
(vi) the aggregate outstanding balance of Accounts which were 30 to
59, 60 to 89, and 90 or more days delinquent as of the end of the day on
the Record Date;
(vii) the Aggregate Investor Default Amount, the Class A Investor
Default Amount, the Class B Investor Default Amount and the Collateral
Default Amount for the related Monthly Period;
(viii) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Charge-Offs for the related Monthly
Period;
(ix) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Charge-Offs reimbursed on the Transfer
Date immediately preceding such Distribution Date;
(x) the amount of the Class A Servicing Fee, the Class B Servicing
Fee and the Collateral Servicing Fee for the related Monthly Period;
(xi) the Portfolio Yield for the preceding Monthly Period;
(xii) the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections with respect to such
Distribution Date;
(xiii) the Class B Investor Interest and the Collateral Interest as
of the close of business on such Distribution Date;
(xiv) LIBOR for the Interest Period ending on such Distribution
Date;
(xv) the Principal Funding Account Balance on the Transfer Date;
(xvi) the Accumulation Shortfall;
(xvii) the Principal Funding Investment Proceeds transferred to the
Finance Charge Account on the related Transfer Date;
(xviii) the Principal Funding Investment Shortfall on the related
Transfer Date;
(xix) the amount of Class A Available Funds and Class B Available
Funds on deposit in the Finance Charge Account on the related Transfer
Date;
(xx) the current Class A Certificate Rate, Class B Certificate Rate
and Collateral Rate; and
(xxi) such other items as are set forth in Exhibit C to this Series
Supplement.
(b) Annual Certificateholders' Tax Statement. On or before January
31 of each calendar year, beginning with calendar year 1997, the Trustee shall
distribute to each Person who at any time during the preceding calendar year
was a Series 1996-3 Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular monthly
report to Series 1996-3 Certificateholders, as set forth in subclauses (i) and
<PAGE>
(ii) above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Series 1996-3 Certificateholder, together with
such other customary information (consistent with the treatment of the
Certificates as debt) as the Servicer deems necessary or desirable to enable
the Series 1996-3 Certificateholders to prepare their tax returns. Such
obligations of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Internal Revenue Code as from time to time
in effect.
SECTION 9. Series 1996-3 Pay Out Events. If any one of the
following events shall occur with respect to the Investor Certificates:
(a) failure on the part of the Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five 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 or this Series Supplement, which failure has a
material adverse effect on the Series 1996-3 Certificateholders (which
determination shall be made without reference to the amount of the Collateral
Interest) 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 Investor Certificates evidencing Undivided
Interests aggregating not less than 50% of the Investor Interest of this Series
1996-3, and continues to affect materially and adversely the interests of the
Series 1996-3 Certificateholders (which determination shall be made without
reference to the amount of the Collateral Interest) for such period;
(b) any representation or warranty made by the Transferor in the
Agreement or 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 or 2.6, (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 Investor Certificates evidencing Undivided Interests aggregating not
less than 50% of the Investor Interest of this Series 1996-3, and (ii) as a
result of which the interests of the Series 1996-3 Certificateholders are
materially and adversely affected (which determination shall be made without
reference to the amount of the Collateral Interest) and continue to be
materially and adversely affected for such period; provided, however, that a
Series 1996-3 Pay Out Event pursuant to this subsection 9(b) hereof 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 of the
Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for such
period;
(d) the Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by subsection
2.6(a);
<PAGE>
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1996-3 Certificateholders; or
(f) the Class A Investor Interest shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Investor Interest shall not be
paid in full on the Class B Scheduled Payment Date;
then, in the case of any event described in subsection 9(a), (b) or (e) hereof,
after the applicable grace period set forth in such subparagraphs, either the
Trustee or Holders of Investor Certificates and the Collateral Interest Holder
evidencing Undivided Interests aggregating not less than 50% of the Investor
Interest of this Series 1996-3 by notice then given in writing to the
Transferor and the Servicer (and to the Trustee if given by the
Certificateholders) may declare that a pay out event (a "Series 1996-3 Pay Out
Event") has occurred as of the date of such notice, and in the case of any
event described in subsection 9(c), (d) or (f) hereof, a Series 1996-3 Pay Out
Event shall occur without any notice or other action on the part of the Trustee
or the Investor Certificateholders immediately upon the occurrence of such
event.
SECTION 10. Issuance of Additional Certificates.
(a) During the Revolving Period, the Transferor may, in its
discretion and subject to the terms of subsection (b) below, request the
Trustee to issue additional Investor Certificates of each Class (all such
additional certificates, the "Additional Certificates") in an amount and on the
date (the "Additional Certificate Date") determined by the Transferor. Upon
issuance, the Additional Certificates will be identical in all respects (except
that the principal amount of such Additional Certificates may be different) to
the Investor Certificates currently outstanding and will be equally and ratably
entitled to the benefits of this Series Supplement and the Pooling and
Servicing Agreement. The outstanding principal amounts of all Classes of
Investor Certificates shall be increased pro rata. The Controlled Accumulation
Amount for each Class shall be increased proportionally to reflect the
additional amounts represented by the Additional Certificates.
(b) Additional Certificates shall only be issued upon satisfaction
of all of the following conditions:
(i) On or before the fifth Business Day imme-
diately preceding the date on which the Additional Certificates are to
be issued, the Transferor shall give notice to the Trustee, the
Servicer, the Collateral Interest Holder and the Rating Agencies of
such issuance and the date upon which it is to occur;
(ii) After giving effect to the Additional
Certificates, the total amount of Principal Receivables in the Trust
shall be greater than or equal to the Minimum Aggregate Principal
Receivables;
(iii) The Transferor shall have delivered evi-
dence of the proportional increase in the Collateral Interest to the
Trustee and the Rating Agencies;
(iv) On or before the Additional Certificate
Date, the Trustee shall have been provided evidence that the Rating
<PAGE>
Agency Condition shall have been satisfied with respect to such
issuance;
(v) The Transferor shall have delivered to
the Trustee an Officer's Certificate dated as of the Additional
Certificate Date, stating that the Transferor reasonably believes that
the issuance of such Additional Certificates will not have a material
adverse effect on any outstanding Class of Investor Certificates;
(vi) As of the Additional Certificate Date,
the amount of Investor Charge-Offs for all Classes of Investor
Certificates shall be zero; and
(vii) The Transferor shall have delivered to
the Trustee a Tax Opinion with respect to such issuance.
SECTION 11. Series 1996-3 Termination. The right of the
Investor Certificateholders to receive payments from the Trust will terminate
on the first Business Day following the Series 1996-3 Termination Date.
SECTION 12. 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 13. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND
WITHOUT, LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD OF
CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. No Petition. The Transferor, the Servicer and
the Trustee, by entering into this Series Supplement and each
Certificateholder, by accepting a Series 1996-3 Certificate hereby covenant
and agree that they will not at any time institute against the Trust, or
join in any institution against the Trust of, any bankruptcy proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Investor
Certificateholders, the Agreement or this Series Supplement.
SECTION 15. Tax Representation and Covenant. Any holder of
an interest in the Trust acquired pursuant to Section 12.1(b) in respect of the
Series 1996-3 Certificates shall be required to represent and covenant in
connection with such acquisition that (x) it has neither acquired, nor will it
sell, trade or transfer any interest in the Trust or cause any interest in the
Trust to be marketed on or through either (i) an "established securities
market" within the meaning of Code section 7704(b)(1), including without
limitation an interdealer quotation system that regularly disseminates firm buy
or sell quotations by identified brokers or dealers by electronic means or
otherwise or (ii) a "secondary market" within the meaning of Code section
7704(b)(2), including a market wherein interests in the Trust are regularly
quoted by any person making a market in such interests and a market wherein any
person regularly makes available bid or offer quotes with respect to interests
in the Trust and stands ready to effect buy or sell transactions at the quoted
prices for itself or on behalf of others, (y) unless the Transferor consents
otherwise, such holder (i) is properly classified as, and will remain
<PAGE>
classified as, a "corporation" as described in Code section 7701(a)(3) and (ii)
is not, and will not become, an S corporation as described in Code section
1361, and (z) it will (i) cause any participant with respect to such interest
otherwise permitted hereunder to make similar representations and covenants for
the benefit of the Transferor and the Trust and (ii) forward a copy of such
representations and covenants to the Trustee. Each such holder shall further
agree in connection with its acquisition of such interest that, in the event of
any breach of its (or its participant's) representation and covenant that it
(or its participant) is and shall remain classified as a corporation other than
an S corporation, the Transferor shall have the right to procure a replacement
investor to replace such holder (or its participant), and further that such
holder shall take all actions necessary to permit such replacement investor to
succeed to its rights and obligations as a holder (or to the rights of its
participant).
SECTION 16. Amendment to Agreement. By purchasing
their Series 1996-3 Certificates each Investor Certificateholder shall be
deemed to have consented that Chemical Bank shall be replaced as Servicer with
The Chase Manhattan Bank (USA), a Delaware banking organization, as a successor
servicer pursuant to an amendment of the Agreement to be executed at such time
as shall be agreed to by the parties thereto.
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 1996-3 Supplement to be duly executed by their
respective officers as of the day and year first above written.
CHEMICAL BANK,
Transferor and Servicer
By:/s/ John R. Byers_____________
Name: John R. Byers
Title: Vice President
THE BANK OF NEW YORK,
Trustee
By:/s/ Peter M. Lagatta_________
Name: Peter M. Lagatta
Title: Assistant Treasurer
THE CHASE MANHATTAN BANK (USA),
Transferor on and after June 1, 1996,
CHEMICAL BANK,
Transferor prior to June 1, 1996 and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Certificateholders
of Chemical Master Credit Card Trust I
_________________________________
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1996
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . 18
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES . . . . . . . . . . 19
Section 2.1 Conveyance of Receivables . . . . . . . . . . . . . . . 19
Section 2.2 Acceptance by Trustee . . . . . . . . . . . . . . . . . 20
Section 2.3 Representations and Warranties of the Transferor . . . . 21
Section 2.4 Representations and Warranties of the Transferor Relating
to the Agreement and the Receivables . . . . . . . . . 23
Section 2.5 Covenants of the Transferor . . . . . . . . . . . . . . 27
Section 2.6 Addition of Accounts . . . . . . . . . . . . . . . . . . 29
Section 2.7 Removal of Accounts . . . . . . . . . . . . . . . . . . 32
Section 2.8 Discount Option . . . . . . . . . . . . . . . . . . . . 33
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES . . . . . . . . . . . . . 34
Section 3.1 Acceptance of Appointment and Other Matters Relating to
the Servicer . . . . . . . . . . . . . . . . . . . . . 34
Section 3.2 Servicing Compensation . . . . . . . . . . . . . . . . . 35
Section 3.3 Representations and Warranties of the Servicer . . . . . 36
Section 3.4 Reports and Records for the Trustee . . . . . . . . . . 37
Section 3.5 Annual Servicer's Certificate . . . . . . . . . . . . . 38
Section 3.6 Annual Independent Accountants' Servicing Report . . . . 38
Section 3.7 Tax Treatment . . . . . . . . . . . . . . . . . . . . . 39
Section 3.8 Notices to the Transferor . . . . . . . . . . . . . . . 39
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS . . . . . . . . . 40
Section 4.1 Rights of Certificateholders . . . . . . . . . . . . . . 40
Section 4.2 Establishment of Accounts . . . . . . . . . . . . . . . 40
Section 4.3 Collections and Allocations . . . . . . . . . . . . . . 42
Section 4.4 Allocations During Funding Period . . . . . . . . . . . 44
<PAGE>
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES] . . . . . . . . . . 45
ARTICLE VI
THE CERTIFICATES . . . . . . . . . . . . 46
Section 6.1 The Certificates . . . . . . . . . . . . . . . . . . . . 46
Section 6.2 Authentication of Certificates . . . . . . . . . . . . . 46
Section 6.3 Registration of Transfer and Exchange of Certificates . 47
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates . . . 49
Section 6.5 Persons Deemed Owners . . . . . . . . . . . . . . . . . 49
Section 6.6 Appointment of Paying Agent . . . . . . . . . . . . . . 50
Section 6.7 Access to List of Certificateholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . . 51
Section 6.8 Authenticating Agent . . . . . . . . . . . . . . . . . . 51
Section 6.9 Tender of Transferor Certificate . . . . . . . . . . . . 52
Section 6.10 Book-Entry Certificates . . . . . . . . . . . . . . . . 54
Section 6.11 Notices to Clearing Agency . . . . . . . . . . . . . . . 55
Section 6.12 Definitive Certificates . . . . . . . . . . . . . . . . 55
Section 6.13 Global Certificate . . . . . . . . . . . . . . . . . . . 56
Section 6.14 Meetings of Certificateholders . . . . . . . . . . . . . 56
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR . . . . . . . . . . . . 57
Section 7.1 Liability of the Transferor . . . . . . . . . . . . . . 57
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor . . . . . . . . . . . . 57
Section 7.3 Limitation of Liability . . . . . . . . . . . . . . . . 58
Section 7.4 Liabilities . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER . . . . . . . . . . . . . 60
Section 8.1 Liability of the Servicer . . . . . . . . . . . . . . . 60
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer . . . . . . . . . . . . . 60
Section 8.3 Limitation of Liability of the Servicer and Others . . . 60
Section 8.4 Servicer Indemnification of the Trust and the Trustee . 61
Section 8.5 The Servicer Not to Resign . . . . . . . . . . . . . . . 61
Section 8.6 Access to Certain Documentation and Information Regarding
the Receivables . . . . . . . . . . . . . . . . . . . 62
Section 8.7 Delegation of Duties . . . . . . . . . . . . . . . . . . 62
Section 8.8 Examination of Records . . . . . . . . . . . . . . . . . 62
<PAGE>
ARTICLE IX
PAY OUT EVENTS . . . . . . . . . . . . . 63
Section 9.1 Pay Out Events . . . . . . . . . . . . . . . . . . . . . 63
Section 9.2 Additional Rights Upon the Occurrence of Certain Events 63
ARTICLE X
SERVICER DEFAULTS . . . . . . . . . . . . 65
Section 10.1 Servicer Defaults . . . . . . . . . . . . . . . . . . . 65
Section 10.2 Trustee to Act; Appointment of Successor . . . . . . . . 67
Section 10.3 Notification to Certificateholders . . . . . . . . . . . 68
Section 10.4 Waiver of Past Defaults . . . . . . . . . . . . . . . . 68
ARTICLE XI
THE TRUSTEE . . . . . . . . . . . . . . 69
Section 11.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . 69
Section 11.2 Certain Matters Affecting the Trustee . . . . . . . . . 70
Section 11.3 Trustee Not Liable for Recitals in Certificates . . . . 71
Section 11.4 Trustee May Own Certificates . . . . . . . . . . . . . . 72
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses . . . . 72
Section 11.6 Eligibility Requirements for Trustee . . . . . . . . . . 72
Section 11.7 Resignation or Removal of Trustee . . . . . . . . . . . 72
Section 11.8 Successor Trustee . . . . . . . . . . . . . . . . . . . 73
Section 11.9 Merger or Consolidation of Trustee . . . . . . . . . . . 73
Section 11.10 Appointment of Co-Trustee or Separate Trustee . . . . . 74
Section 11.11 Tax Returns . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.12 Trustee may Enforce Claims Without Possession of
Certificates . . . . . . . . . . . . . . . . . . . . . 75
Section 11.13 Suits for Enforcement . . . . . . . . . . . . . . . . . 75
Section 11.14 Rights of Certificateholders to Direct Trustee . . . . . 75
Section 11.15 Representations and Warranties of Trustee . . . . . . . 76
Section 11.16 Maintenance of Office or Agency . . . . . . . . . . . . 76
ARTICLE XII
TERMINATION . . . . . . . . . . . . . . 77
Section 12.1 Termination of Trust . . . . . . . . . . . . . . . . . . 77
Section 12.2 Optional Purchase . . . . . . . . . . . . . . . . . . . 78
Section 12.3 Final Payment with Respect to any Series . . . . . . . . 78
Section 12.4 Termination Rights of Holder of Transferor Certificate . 79
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS . . . . . . . . . . 81
Section 13.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . 81
Section 13.2 Protection of Right, Title and Interest to Trust . . . . 82
Section 13.3 Limitation on Rights of Certificate . . . . . . . . . . 83
Section 13.4 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 84
Section 13.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 13.6 Severability of Provisions . . . . . . . . . . . . . . . 84
Section 13.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . 84
Section 13.8 Certificates Non-Assessable and Fully Paid . . . . . . . 84
Section 13.9 Further Assurances . . . . . . . . . . . . . . . . . . . 85
Section 13.10 No Waiver; Cumulative Remedies . . . . . . . . . . . . . 85
Section 13.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . 85
Section 13.12 Third-Party Beneficiaries . . . . . . . . . . . . . . . 85
Section 13.13 Actions by Certificateholders . . . . . . . . . . . . . 85
Section 13.14 Rule 144A Information . . . . . . . . . . . . . . . . . 85
Section 13.15 Merger and Integration . . . . . . . . . . . . . . . . . 86
Section 13.16 Headings . . . . . . . . . . . . . . . . . . . . . . . . 86
<PAGE>
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in Additional Accounts
Exhibit C Form of Monthly Servicer's Certificate
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Opinion of Counsel Regarding Additional Accounts
Exhibit F Form of Annual Opinion of Counsel
Exhibit G Form of Reassignment of Receivables
Exhibit H Form of Reconveyance of Receivables
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
<PAGE>
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of
June 1, 1996 by and among THE CHASE MANHATTAN BANK (USA), a banking
corporation organized and existing under the laws of the State of Delaware, as
Transferor on and after June 1, 1996, CHEMICAL BANK, a banking corporation
organized and existing under the laws of the State of New York, as Transferor
prior to June 1, 1996 and as Servicer, and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee.
WHEREAS, Chemical Bank as Transferor and Servicer, and the Trustee
are parties to a Pooling and Servicing Agreement, dated as of October 19, 1995
(the "Original Pooling and Servicing Agreement");
WHEREAS, Chemical Bank as Transferor and Servicer under the Original
Pooling and Servicing Agreement desires to amend and restate the Original
Pooling and Servicing Agreement to read in its entirety as set forth below and
to, among other things, provide for the assumption of the obligations of the
Transferor the date hereof by The Chase Manhattan Bank (USA) ("Chase USA")
concurrently with the transfer of the Transferor Certificate and the Accounts
to Chase USA; and
WHEREAS, Chase USA has entered into the Receivables Asset Purchase
Agreement, dated as of June 1, 1996, between Chemical Bank and Chase USA,
pursuant to which Chemical has transferred to Chase USA and Chase USA has
expressly assumed, among other things, the obligations and duties of Chemical
as Transferor;
NOW, THEREFORE, pursuant to Section 13.1(b) of the Original Pooling
and Servicing Agreement, the parties hereto hereby agree that effective on and
as of the date hereof, the Original Pooling and Servicing Agreement is hereby
amended to read in its entirety as follows:
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other parties and the
Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account Information" shall have the meaning specified in subsection
2.2(b).
"Account" shall mean each VISA (Registered Trademark) and MasterCard
(Registered Trademark)<F1> credit card account established pursuant to a
Credit Card Agreement between the Transferor and any Person identified by
account number and by the Receivable balance as of the Cut-Off Date and as of
each Addition Date in each computer file or microfiche list delivered to the
Trustee by the Transferor pursuant to Section 2.1 or 2.6. The definition of
Account shall include each Transferred Account. The term "Account" shall be
deemed to refer to an Additional Account only from and after the Addition Date
with respect thereto, and the term "Account" shall be deemed to refer to any
Removed Account only prior to the Removal Date with respect thereto.
<PAGE>
"Accumulation Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are accumulated in an account for the
benefit of the Investor Certificateholders of a Series, or a Class within such
Series, which shall be the controlled accumulation period, the rapid
accumulation period or other accumulation period, in each case as defined with
respect to such Series in the related Supplement.
"Addition Date" shall mean each date as of which Additional Accounts will
be included as Accounts pursuant to Section 2.6.
"Additional Accounts" shall have the meaning specified in subsection
2.6(a).
"Affiliate" of any Person shall mean any other Person controlling,
controlled by or under common control with such Person.
"Aggregate Investor Default Amount" shall have, with respect to any
Series of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Interest" shall mean, as of any date of
determination, the sum of the Investor Interests of all Series of Certificates
issued and outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, as the case
may be, shall mean, as of any date of determination, the sum of such Investor
Percentages of all Series of Certificates issued and outstanding on such date
of determination; provided, however, that the Aggregate Investor Percentage
shall not exceed 100%.
"Agreement" shall mean this Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period during which
principal is distributed to Investor Certificateholders, which shall be the
controlled amortization period, the principal amortization period, the rapid
amortization period, or other amortization period, in each case as defined
with respect to such Series in the related Supplement.
"Annual Membership Fee" shall have the meaning specified in the Credit
Card Agreement applicable to each Account for annual membership fees or
similar terms.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in subsection 9.2(a).
"Assignment" shall have the meaning specified in subsection 2.6(c)(ii).
"Authorized Newspaper" shall mean a newspaper of general circulation in
the Borough of Manhattan, The City of New York printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
<PAGE>
"Average Principal Receivables" shall mean, for any period, an amount
equal to (a) the sum of the aggregate amount of Principal Receivables at the
end of each day during such period divided by (b) the number of days in such
period.
"Bank Portfolio" shall mean the MasterCard and VISA accounts owned by the
Transferor.
"Bankruptcy Code" shall mean the United States federal Bankruptcy Code,
Title 11 of the United States Code, as amended.
"Base Rate" shall have the meaning, with respect to any Series, specified
in the related Supplement.
"Bearer Certificates" shall have the meaning specified in Section 6.1.
"Bearer Rules" shall mean the provisions of the Internal Revenue Code, in
effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, Proposed or
Temporary Regulations.
"BIF" shall mean the Bank Insurance Fund administered by the FDIC.
"Book-Entry Certificates" shall mean certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section
6.10; provided, however that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer authorized and Definitive
Certificates are to be issued to the Certificate Owners, such certificates
shall no longer be "Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York (or, with respect to
any Series, any additional city specified in the related Supplement) are
authorized or obligated by law or executive order to be closed.
"Cash Advance Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for cash advance fees or similar terms.
"Cedel" shall mean Cedel Bank, societe anonyme.
"Certificate" shall mean any one of the Investor Certificates of any
Series or the Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Certificate Interest" shall mean interest payable in respect of the
Investor Certificates of any Series pursuant to Article IV of the Supplement
for such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as may
be reflected on the books of the Clearing Agency, or on the books of a Person
<PAGE>
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable in respect of the
Investor Certificates of any Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any Series of Certificates
(or, for any Series with more than one Class, for each Class of such Series),
the percentage (or formula on the basis of which such rate shall be
determined) stated in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Chase USA" shall mean The Chase Manhattan Bank (USA), a banking
corporation organized and existing under the laws of the State of Delaware.
"Chemical Bank" shall mean Chemical Bank, a banking corporation organized
and existing under the laws of the State of New York.
"Chemical Corporate Trust Office" shall mean the principal office of
Chemical Bank at which at any particular time its corporate trust business
shall be administered, which office at the date of the execution of this
Agreement is located at 270 Park Avenue, New York, New York 10017.
"Class" shall mean, with respect to any Series, any one of the classes of
Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of
issuance of such Series of Certificates, as specified in the related
Supplement.
"Collateral Interest" shall have the meaning, with respect to any Series,
specified in the related Supplement.
"Collection Account" shall have the meaning specified in subsection
4.2(a).
"Collections" shall mean all payments (including Insurance Proceeds)
received by the Servicer in respect of the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the Credit Card Agreement in effect from time to time. A Collection
processed on an Account in excess of the aggregate amount of Receivables in
such Account as of the Date of Processing of such Collection shall be deemed
to be a payment in respect of Principal Receivables to the extent of such
excess. Collections with respect to any Monthly Period shall include the
amount of Interchange (if any) and the amount of Recoveries (if any) allocable
<PAGE>
to the Trust with respect to such Monthly Period, to be applied as if such
amounts were Collections of Finance Charge Receivables for all purposes.
Collections with respect to any Monthly Period shall also include the amount
deposited by the Transferor into the Finance Charge Account (or Series Account
if provided in any supplement) pursuant to Section 2.8.
"Companion Series" shall mean (i) each Series which has been paired with
another series (which Series may be prefunded in whole or in part), such that
the reduction of the Investor Interest of such Series results in the increase
of the Investor Interest of such other Series, as described in the related
Supplements, and (ii) such other Series, as described in the related
Supplements.
"Controlled Distribution Amount," with respect to any Series, shall have
the meaning specified in the related Supplement.
"Corporate Trust Office" shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 101 Barclay Street, 21 West, New York, New York 10286.
"Coupon" shall have the meaning specified in Section 6.1.
"Credit Adjustment" shall have the meaning specified in subsection
4.3(c).
"Credit Card Agreement" shall mean the agreement and Federal Truth in
Lending Statement for MasterCard and VISA credit card accounts between any
Obligor and the Transferor, as such agreement may be amended, modified or
otherwise changed from time to time.
"Credit Card Guidelines" shall mean the Transferor's policies and
procedures relating to the operation of its credit card business, including,
without limitation, the policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers, and relating to the maintenance of credit card accounts and
collection of credit card receivables, as such policies and procedures may be
amended from time to time.
"Credit Enhancement" shall mean, with respect to any Series, the
subordination, the cash collateral guaranty or account, collateral interest,
letter of credit, surety bond, insurance policy, spread account, reserve
account, cross-support feature or any other contract or agreement for the
benefit of the Certificateholders of such Series (or Certificateholders of a
Class within such Series) as designated in the applicable Supplement.
"Credit Enhancement Provider" shall mean, with respect to any Series, the
Person, if any, designated as such in the related Supplement.
"Cut-Off Date" shall mean September 26, 1995.
"Date of Processing" shall mean, with respect to any transaction, the
date on which such transaction is first recorded on the Servicer's computer
master file of VISA and MasterCard accounts (without regard to the effective
date of such recordation).
<PAGE>
"Default Amount" shall mean, with respect to any Defaulted Account, the
amount of Principal Receivables (other than Ineligible Receivables) in such
Defaulted Account on the day such Account became a Defaulted Account.
"Defaulted Account" shall mean each Account with respect to which, in
accordance with the Credit Card Guidelines or the Servicer's customary and
usual servicing procedures for servicing credit card receivables comparable to
the Receivables, the Servicer has charged off the Receivables in such Account
as uncollectible. An Account shall become a Defaulted Account on the day on
which such Receivables are recorded as charged off as uncollectible on the
Servicer's computer master file of VISA and MasterCard accounts.
Notwithstanding any other provision hereof, any Receivables in a Defaulted
Account that are Ineligible Receivables shall be treated as Ineligible
Receivables rather than Receivables in Defaulted Accounts.
"Definitive Certificate" shall have the meaning specified in Section
6.10.
"Depository" shall have the meaning specified in Section 6.10.
"Depository Agreement" shall mean, with respect to a Series having Book-
Entry Certificates, the agreement among the Transferor, the Trustee and the
Clearing Agency, or as otherwise provided in the related Supplement.
"Determination Date" shall mean, unless otherwise specified in the
related Series Supplement, the tenth calendar day of each month, or if such
day is not a Business Day, the next preceding Business Day.
"Discount Percentage" shall have the meaning specified in Section 2.8.
"Discount Option Receivables" shall mean, on any date on and after the
date on which the Transferor's exercise of its discount option pursuant to
Section 2.8 takes effect, the sum of (a) the aggregate Discount Option
Receivables at the end of the prior day (which amount, prior to the date on
which the Transferor's exercise of its discount option takes effect and with
respect to Receivables generated prior to such date, shall be zero) plus (b)
any New Discount Option Receivables created on such day minus (c) any Discount
Option Receivables Collections received on such Date of Processing.
"Discount Option Receivables Collections" shall mean on any Date of
Processing on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.8 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option
Receivables and the denominator of which is the sum of the Principal
Receivables plus the amount of Discount Option Receivables in each case (for
both numerator and denominator) at the end of the prior Monthly Period and (b)
Collections of Principal Receivables, prior to any reduction for Finance
Charge Receivables which are Discount Option Receivables, received on such
Date of Processing.
"Distribution Account" shall have the meaning specified in subsection
4.2(c).
"Distribution Date" shall mean, with respect to each Series, the dates
specified in the related Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
<PAGE>
"Eligible Account" shall mean, as of the Cut-Off Date (or, with respect
to Additional Accounts as of the relevant Addition Date), each Account owned
by the Transferor:
(a) which is in existence and maintained with the Transferor;
(b) which is payable in Dollars;
(c) the Obligor on which has provided, as its most recent billing
address, an address which is located in the United States or its
territories or possessions;
(d) which the Transferor has not classified on its electronic
records as counterfeit, deleted, fraudulent, stolen or lost;
(e) which the Transferor has not charged off in its customary and
usual manner for charging off such Accounts as of the Cut-Off Date (or,
with respect to Additional Accounts, as of the relevant Addition Date);
and
(f) the Obligor of which has not been identified by the Transferor
on its electronic records as being involved in a voluntary or involuntary
bankruptcy proceeding.
"Eligible Deposit Account" shall mean either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States or any one of the states thereof, including the
District of Columbia (or any domestic branch of a foreign bank), and acting as
a trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic credit rating categories which signifies
investment grade.
"Eligible Institution" shall mean (a), the Servicer, (b) a depository
institution (which may be the Trustee or an affiliate) organized under the
laws of the United States or any one of the states thereof which at all times
(i) has either (x) a long-term unsecured debt rating of "A2" or better by
Moody's or (y) a certificate of deposit rating of "P-1" by Moody's, (ii) has
either (x) a long-term unsecured debt rating of "AAA" by Standard & Poor's or
(y) a certificate of deposit rating of "A-l+" by Standard & Poor's and (iii)
is a member of the FDIC or (c) any other institution that is acceptable to the
Rating Agencies.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account (in the case of
Accounts conveyed to the Trust on the Initial Closing Date and in the
case of Additional Accounts conveyed to the Trust on the relevant
Addition Date);
(b) which was created in compliance, in all material respects, with
all Requirements of Law applicable to the Transferor and pursuant to a
Credit Card Agreement which complies, in all material respects, with all
Requirements of Law applicable to the Transferor;
<PAGE>
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by the
Transferor in connection with the creation of such Receivable or the
execution, delivery and performance by the Transferor of the Credit Card
Agreement pursuant to which such Receivable was created, have been duly
obtained, effected or given and are in full force and effect as of such
date of creation;
(d) as to which, as of the Closing Date, or in the case of
Receivables in Additional Accounts as of the relevant Addition Date, the
Transferor or the Trust had good title thereto, free and clear of all
Liens arising under or through the Transferor or any of its Affiliates
(other than Liens permitted pursuant to subsection 2.5(b));
(e) which is the legal, valid and binding payment obligation of the
Obligor thereon, enforceable against such Obligor in accordance with its
terms, except as affected by bankruptcy, insolvency, reorganization,
moratorium and other similar laws, now or hereafter in effect, relating
to or affecting creditors' rights generally, general equitable principles
(whether considered in a suit in equity or at law) and an implied
covenant of good faith and fair dealing; and
(f) which constitutes an "account" or "general intangible" under
and as defined in Article 9 of the UCC.
"Enhancement Invested Amount" shall have the meaning, with respect to any
Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Euroclear Operator" shall mean Morgan Guaranty Trust Company of New
York, Brussels, Belgium office, as operator of the Euroclear System.
"Excess Funding Account" shall have the meaning specified in subsection
4.2(d).
"Excess Funding Amount" shall mean, as of any date of determination, the
principal amount on deposit in the Excess Funding Account.
"Exchange" shall mean either of the procedures described under Section
6.9.
"Exchange Date" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in Section 6.9.
"Exchange Notice" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in Section 6.9.
"Extended Trust Termination Date" shall have the meaning specified in
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FDR" shall have the meaning specified in Section 8.7.
<PAGE>
"Finance Charge Account" shall have the meaning specified in subsection
4.2(b).
"Finance Charge Receivables" shall mean Receivables created in respect of
the Periodic Finance Charges, Cash Advance Fees and Late Fees and similar fees
and charges, Annual Membership Fees and Special Fees to the extent such
Special Fees are categorized as Finance Charge Receivables. Finance Charge
Receivables with respect to any Monthly Period shall include the amount of
Interchange (if any), Recoveries (if any), Discount Option Receivables (if
any), Insurance Proceeds and investment earnings from any of the Trust
Accounts, and other amounts allocable to any Series of Certificates pursuant
to any Supplement with respect to such Monthly Period that are to be treated
as Finance Charge Receivables but shall exclude charges for credit insurance.
"Foreign Clearing Agency" shall mean Cedel and the Euroclear Operator.
"Funding Period" shall have the meaning specified in Section 4.4.
"Global Certificate" shall have the meaning specified in Section 6.13.
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" shall mean, with respect to any Series, the group of Series in
which the related Supplement specifies that such Series shall be included.
"Ineligible Receivable" shall have the meaning specified in subsection
2.4(d)(iii).
"Initial Closing Date" shall mean October 19, 1995.
"Initial Investor Interest" shall mean, with respect to any Series of
Certificates, the amount stated in the related Supplement.
"Insolvency Event" shall have the meaning specified in subsection 9.2(a).
"Insurance Proceeds" shall mean any amounts recovered by the Servicer
pursuant to any credit insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"Interchange" shall mean, with respect to any Monthly Period, the product
of amounts recorded by the Transferor as interchange for such Monthly Period
and the Trust Percentage.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time.
"Investor Account" shall mean each of the Finance Charge Account, the
Principal Account, the Excess Funding Account and the Distribution Account.
"Investor Certificate" shall mean any one of the certificates (including,
without limitation, the Bearer Certificates, the Registered Certificates or
<PAGE>
the Global Certificates) issued by the Trust, executed by the Transferor and
authenticated by the Trustee substantially in the form (or forms in the case
of a Series with multiple Classes) of the investor certificate attached to the
related Supplement.
"Investor Certificateholder" shall mean each holder of record of an
Investor Certificate.
"Investor Charge-Off" shall have, with respect to each Series, the
meaning specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in subsection
6.9(b).
"Investor Interest" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Percentage" shall have, with respect to Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, and any
Series of Certificates, the meaning stated in the related Supplement.
"Investor Servicing Fee" shall have, with respect to each Series, the
meaning specified in Section 3.2.
"Late Fees" shall have the meaning specified in the Credit Card Agreement
applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever, including, without limitation, any
conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.2 shall not be deemed to
constitute a Lien.
"Minimum Aggregate Principal Receivables" shall mean, as of any date of
determination, the sum of the numerators used on such date to calculate the
Investor Percentage with respect to Principal Receivables for all Series
outstanding on such date, less the amount on deposit in the Excess Funding
Account as of such date of determination.
"Minimum Transferor Interest" shall mean, with respect to any Monthly
Period, an amount equal to the product of the Minimum Transferor Interest
Percentage and the sum of (i) the Average Principal Receivables for such
Monthly Period, (ii) the Excess Funding Amount and (iii) any amounts on
deposit in any Principal Funding Account and any other Series Account (if so
specified in the applicable Supplement).
"Minimum Transferor Interest Percentage" shall mean the highest
percentage specified as the "Minimum Transferor Interest Percentage" in any
Supplement; provided, however, that the Transferor may reduce the Minimum
Transferor Interest Percentage upon (w) 30 days' prior notice to the Trustee,
<PAGE>
each Rating Agency and any Credit Enhancement Provider entitled to receive
such notice pursuant to the relevant Supplement, (x) written confirmation from
each Rating Agency that such action will satisfy the Rating Agency Condition,
(y) delivery to the Trustee and each such Credit Enhancement Provider of an
Officer's Certificate stating that the Transferor reasonably believes that
such reduction will not, based on the facts known to such officer at the time
of such certification, then or thereafter cause a Pay Out Event to occur with
respect to any Series and (z) delivery to the Trustee of a Tax Opinion;
provided further that the Minimum Transferor Interest Percentage shall not at
any time be less than 2%.
"Monthly Period" shall mean, unless otherwise defined in any Supplement,
the period from and including the first day of a calendar month to and
including the last day of a calendar month.
"Moody's" shall mean Moody's Investors Service, Inc.
"New Discount Option Receivables" shall mean, as of any date of
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting out Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.
"Notice Date" shall have the meaning specified in subsection 2.6(c)(i).
"Obligor" shall mean, with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any
guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any Vice
President or more senior officer of the Transferor or Servicer and delivered
to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
counsel for or an employee of the Person providing the opinion, and who shall
be reasonably acceptable to the Trustee.
"Participation" shall have the meaning specified in subsection
2.6(a)(ii).
"Paying Agent" shall mean any paying agent appointed pursuant to Section
6.6 and shall initially be Chemical Bank.
"Pay Out Commencement Date" shall mean, (a) with respect to each Series,
the date on which a Trust Pay Out Event is deemed to occur pursuant to Section
9.1 or (b) with respect to any Series, a Series Pay Out Event is deemed to
occur pursuant to the Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay Out
Event or a Series Pay Out Event.
"Periodic Finance Charges" shall have the meaning specified in the Credit
Card Agreement applicable to each Account for finance charges (due to periodic
rate) or any similar term.
<PAGE>
"Permitted Investments" shall mean, unless otherwise provided in the
Supplement with respect to any Series
(a) book-entry securities or negotiable instruments or securities
represented by instruments in bearer or registered form which evidence
(i) obligations of or fully guaranteed by the United States of America;
(ii) demand deposits, time deposits or certificates of deposit of any
depositary institution or trust company incorporated under the laws of
the United States of America or any state thereof (or domestic branches
of foreign banks) 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 of such depositary institution or trust company shall have a
credit rating from Moody's and Standard & Poor's of "P-1" and "A-1+",
respectively; (iii) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from
Moody's and Standard & Poor's of "P-1" and "A-l+", respectively and (iv)
bankers' acceptances issued by any depository institution or trust
company described in clause (a)(ii) above;
(b) demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause (a)(ii)
above;
(c) repurchase agreements transacted with either
(i) an entity subject to the United States federal bankruptcy
code, provided that (A) the repurchase agreement matures prior to
the next Distribution Date or is due on demand, (B) the Trustee or a
third party acting solely as agent for the Trustee has possession of
the collateral, (C) the Trustee on behalf of the Trust has a
security interest in the collateral, (D) the market value of the
collateral is maintained at the requisite collateral percentage of
the obligation in accordance with standards of the Rating Agencies,
(E) the failure to maintain the requisite collateral level will
obligate the Trustee to liquidate the collateral immediately, (F)
the securities subject to the repurchase agreement are either
obligations of, or fully guaranteed as to principal and interest by,
the United States of America or any instrumentality or agency
thereof, certificates of deposit or bankers acceptances and (G) the
securities subject to the repurchase agreement are free and clear of
any third party lien or claim; or
(ii) a financial institution insured by the FDIC, or any
broker-dealer with "retail customers" that is under the jurisdiction
of the Securities Investors Protection Corp. ("SIPC"), provided that
(A) the market value of the collateral is maintained at the
requisite collateral percentage of the obligation in accordance with
the standards of the Rating Agencies, (B) the Trustee or a third
party (with a short-term debt rating of P-1 or higher by Moody's)
acting solely as agent for the Trustee has possession of the
collateral, (C) the Trustee on behalf of the Trust has a security
interest in the collateral, (D) the collateral is free and clear of
third party liens and, in the case of an SIPC broker, was not
acquired pursuant to a repurchase or reverse repurchase agreement
<PAGE>
and (E) the failure to maintain the requisite collateral percentage
will obligate the Trustee to liquidate the collateral; provided,
however, that at the time of the Trust's investment or contractual
commitment to invest in any repurchase agreement, the short-term
deposits or commercial paper rating of such entity or institution in
subsections (i) and (ii) shall have a credit rating of "P-1" from
Moody's and "A-1+" from Standard & Poor's; and
(d) any other investment that by its terms converts to cash within
a finite time period if the Rating Agency Condition is satisfied with
respect thereto.
"Person" shall mean any legal person, including any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"Pool Factor" shall mean, except with respect to any Series issued in
more than one Class, a number carried out to seven decimals representing the
ratio of the applicable Investor Interest as of such Record Date (determined
after taking into account any reduction in the Investor Interest which will
occur on the following Distribution Date) to the applicable Initial Investor
Interest, and with respect to a Series having more than one Class, as
specified in the Supplement relating to such Series.
"Portfolio Yield" shall have the meaning, with respect to any Series,
specified in the related Supplement.
"Pre-Funding Account" shall have the meaning specified in Section 4.4.
"Principal Account" shall have the meaning specified in subsection
4.2(b).
"Principal Receivable" shall mean each Receivable other than (i) Finance
Charge Receivables, and (ii) Receivables in Defaulted Accounts. A Receivable
shall be deemed to have been created at the end of the day on the Date of
Processing of such Receivable. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such
day. Any Receivables which the Transferor is unable to transfer as provided
in subsection 2.5(e) shall not be included in calculating the aggregate amount
of Principal Receivables.
"Principal Sharing Series" shall mean a Series, that, pursuant to the
related Supplement, is entitled to Shared Principal Collections.
"Principal Shortfalls" shall mean, with respect to a Transfer Date, the
aggregate amount for all outstanding Series that the related Supplements
specify are "Principal Shortfalls" for such Transfer Date.
"Principal Terms" shall have the meaning, with respect to any Series
issued pursuant to an Exchange, specified in subsection 6.9(c).
"Rating Agency" shall mean, with respect to each Series, the rating
agency or agencies, if any, specified in the related Supplement.
<PAGE>
"Rating Agency Condition" shall mean, at any time with respect to a
Series, the written confirmation of the Rating Agency that a specified event
or modification of the terms of such Series will not result in the withdrawal
or downgrade of the rating of the Certificates of any Series then in effect.
"Reassignment" shall have the meaning specified in subsection 2.7(b)(ii).
"Reassignment Date" shall have the meaning specified in subsection
2.4(e).
"Receivable" shall mean any amount owing by any Obligor including,
without limitation, amounts owing for the payment of goods and services, cash
advances, access checks, Annual Membership Fees, Cash Advance Fees, Periodic
Finance Charges, Late Fees and Special Fees, if any but excluding credit
insurance premiums.
"Record Date" shall mean, with respect to any Distribution Date, the last
Business Day of the preceding Monthly Period.
"Recoveries" shall mean, with respect to any Monthly Period, the product
of all amounts recorded as recoveries on the Bank Portfolio by the Servicer
during such Monthly Period and the Trust Percentage.
"Registered Certificates" shall have the meaning specified in Section
6.1.
"Removal Date" shall mean the date on which Receivables in certain
designated Removed Accounts will be reassigned by the Trustee to the
Transferor.
"Removal Notice Date" shall mean the day no later than the fifth Business
Day prior to a Removal Date.
"Removed Accounts" shall have the meaning specified in subsection 2.7(a).
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and by-laws or other organizational
or governing documents of such Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether federal, state or local (including, without limitation, usury
laws, the federal Truth in Lending Act and Regulation Z and Regulation B of
the Board of Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer within the Corporate Trust
Office (or any successor group of the Trustee), including any Vice President,
any Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any person who at the time
shall be an above-designated officer and also, with any particular officer to
whom any corporate trust matter is referred because of such Officer's
knowledge of and familiarity with the particular subject.
"Revolving Period" shall have, with respect to each Series, the meaning
specified in the related Supplement.
"SAIF" shall mean the Savings Association Insurance Fund administered by
the FDIC.
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series" shall mean any Series of Investor Certificates, which may
include within any such Series a Class or Classes of Investor Certificates
subordinate to another such Class or Classes of Investor Certificates.
"Series Account" shall mean any account or accounts established pursuant
to a Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series, the
meaning specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to any Series,
the amount specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series of
Certificates, the date stated in the related Supplement.
"Servicer" shall mean initially Chemical Bank, and its permitted
successors and assigns and thereafter any Person appointed as successor as
herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 10.1.
"Servicing Fee" shall have the meaning specified in Section 3.2.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall mean, with respect to
any Transfer Date, the aggregate amount for all outstanding Series that the
related supplements specify are to be treated as "Shared Excess Finance Charge
Collections" for such Transfer Date.
"Shared Principal Collections" shall mean, with respect to any Transfer
Date, the aggregate amount for all outstanding Series that the related
Supplements specify are to be treated as "Shared Principal Collections" for
such Transfer Date.
"Special Fees" shall mean any fees which are not now but from time to
time may be assessed on the Accounts. On or after the date on which any of
such Special Fees begin to be assessed on the Accounts, the Transferor may
designate in an Officer's Certificate whether such Special Fees shall be
treated as Principal Receivables or Finance Charge Receivables.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
Division of The McGraw-Hill Companies, Inc.
"Successor Servicer" shall have the meaning specified in subsection
10.2(a).
"Supplement" or "Series Supplement" shall mean, with respect to any
Series, a supplement to this Agreement complying with the terms of Section 6.9
of this Agreement, executed in conjunction with any issuance of any Series of
Certificates (or, in the case of the issuance of Certificates on the Initial
<PAGE>
Closing Date, the supplement executed in connection with the issuance of such
Certificates).
"Tax Opinion" shall mean with respect to any action, an Opinion of
Counsel delivered to the Trust and the Trustee to the effect that, for U.S.
federal income tax purposes, (a) such action will not adversely affect the tax
characterization as debt of Investor Certificates of any outstanding Series or
Class that were characterized as debt at the time of their issuance, (b)
following such action the Trust will not be deemed to be an association (or a
"publicly traded partnership" within the meaning of Section 7704(b) of the
Code) taxable as a corporation and (c) such action will not cause or
constitute a taxable event in which gain or loss would be recognized by any
Investor Certificateholder or the Trust.
"Termination Notice" shall have, with respect to any Series, the meaning
specified in subsection 10.1(d).
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.3 and shall initially be the Chemical Corporate Trust Office.
"Transfer Date" shall mean, unless otherwise specified in the related
Supplement, with respect to any Series, the Business Day immediately prior to
each Distribution Date.
"Transferor" shall mean (i) with respect to the time period prior to June
1, 1996, Chemical Bank and (ii) with respect to the time period beginning on
June 1, 1996, Chase USA and its successors in interest and permitted assigns.
"Transferor Certificate" shall mean the certificate executed by the
Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A and exchangeable as provided in Section 6.9; provided, however, that
at any time there shall be only one Transferor Certificate.
"Transferor Exchange" shall have the meaning specified in subsection
6.9(b).
"Transferor Interest" shall mean, on any date of determination, the
aggregate amount of Principal Receivables and the principal amounts on deposit
in the Excess Funding Account, any Principal Funding Account and any other
Series Account (if so provided in the applicable Supplement) at the end of the
day immediately prior to such date of determination, minus the Aggregate
Investor Interest at the end of such day, minus the aggregate Enhancement
Invested Amounts (if such amounts are not included in the Investor Interest in
the applicable Supplement), if any, for each Series outstanding at the end of
such day.
"Transferor Percentage" shall mean, on any date of determination, when
used with respect to Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts, a percentage equal to 100% minus the
Aggregate Investor Percentage with respect to such categories of Receivables.
"Transferor Servicing Fee" shall have the meaning specified in
Section 3.2.
"Transferred Account" shall mean (a) an Account with respect to which a
new credit account number has been issued by the Servicer or the Transferor
under circumstances resulting from a lost or stolen credit card or from the
<PAGE>
transfer from one affinity group to another affinity group and not requiring
standard application and credit evaluation procedures under the Credit Card
Guidelines or (b) an Eligible Account resulting from the conversion of an
Account that was a standard account to a premium account or from a premium
account to a standard account, and which in either case can be traced or
identified by reference to or by way of the computer files or microfiche lists
delivered to the Trustee pursuant to Section 2.1 or 2.6 as an account into
which an Account has been transferred.
"Trust" shall mean the trust created by this Agreement, the corpus of
which shall consist of the Receivables now existing or hereafter created and
arising in connection with the Accounts, all monies due or to become due with
respect to the Receivables, all proceeds (as defined in Section 9-306 of the
UCC) of the Receivables and Insurance Proceeds relating to the Receivables,
the right to receive certain amounts paid or payable as Interchange and
Recoveries, such funds as from time to time are deposited in the Collection
Account, the Finance Charge Account, the Principal Account, the Distribution
Account, the Excess Funding Account and any Series Account and the rights to
any Credit Enhancement with respect to any Series. The name of such Trust
shall be "The Chemical Master Credit Card Trust I" or any other name at the
option of the Transferor; provided, however, that at least 5 Business Days
prior to any change in the name of Trust, the Transferor shall give written
notice of such change to the Servicer, the Trustee, each Rating Agency, any
Credit Enhancement Provider and all Certificateholders.
"Trust Accounts" shall mean the Collection Account, the Principal
Account, the Finance Charge Account, the Distribution Account and the Excess
Funding Account.
"Trust Extension" shall have the meaning specified in subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect to each Series, the
meaning specified in Section 9.1.
"Trust Percentage" shall mean, with respect to any Monthly Period, a
fraction expressed as a percentage, the numerator of which is the aggregate
principal amount of Principal Receivables (prior to giving effect to any
reduction thereof for Finance Charge Receivables which are Discount Option
Receivables) as of the close of business on the last day of the prior Monthly
Period and the denominator of which is the aggregate principal balance of the
Bank Portfolio as of the close of business on the last day of the prior
Monthly Period.
"Trust Termination Date" shall mean (i) if a Trust Extension shall not
have occurred, the earlier to occur of (a) the first Business Day after the
Distribution Date following the date on which funds shall have been deposited
in the Distribution Account or the applicable Series Account for the payment
of Investor Certificateholders of each Series then issued and outstanding
sufficient to pay in full such certificates, (b) the date specified in
subsection 9.2(b) and (c) August 31, 2016, and (ii) if a Trust Extension shall
have occurred, the Extended Trust Termination Date.
"Trustee" shall mean The Bank of New York, a New York banking
corporation, and its successors and any corporation resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee appointed as herein provided.
<PAGE>
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in either the State of New York or the State of Delaware,
as applicable.
"Undivided Interest" shall mean the undivided interest in the Trust
evidenced by an Investor Certificate.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement shall
have the defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting procedures applicable
to the Transferor, as applicable. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles or such regulatory accounting
procedures, the definitions contained herein shall control.
(c) The agreements, representations and warranties of Chemical Bank
in this Agreement and in any Supplement in each of its capacities as
Transferor and Servicer shall be deemed to be the agreements, representations
and warranties of Chemical Bank solely in each such capacity for the time
periods during which Chemical Bank acts in the respective capacity under this
Agreement and the agreements, representations and warranties of Chase USA in
this Agreement and in any Supplement in its capacity as Transferor shall be
deemed to be the agreements, representations and warranties of Chase USA
solely in such capacity for the time periods and for so long as Chase USA acts
in such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to any Supplement or
this Agreement as a whole and not to any particular provision of this
Agreement or any Supplement; and Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified. The Monthly Servicer Report, the form
of which is attached as Exhibit C, shall be in substantially the form of
Exhibit C, with such changes as the Servicer may determine to be necessary or
desirable; provided, however, that no such change shall serve to exclude
information required by the Agreement or any Supplement. The Servicer shall,
upon making such determination, deliver to the Trustee and each Rating Agency
an Officer's Certificate to which shall be annexed the form of the related
Exhibit, as so changed. Upon the delivery of such Officer's Certificate to
the Trustee, the related Exhibit, as so changed, shall for all purposes of
this Agreement constitute such Exhibit. The Trustee may conclusively rely
upon such Officer's Certificate in determining whether the related Exhibit, as
changed, conforms to the requirements of this Agreement.
[End of Article I]
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. Each of Chemical Bank and
Chase USA does hereby transfer, assign, set over, and otherwise convey to the
Trust for the benefit of the Certificateholders, without recourse, all of its
right, title and interest in and to (i) the Receivables existing as of the
Cut-Off Date and thereafter created and arising in connection with the
Accounts (other than Additional Accounts), (ii) all monies due or to become
due with respect to such Receivables, (iii) all proceeds of such Receivables,
(iv) Insurance Proceeds relating to such Receivables, (v) Recoveries and (vi)
Interchange.
In connection with such transfer, assignment, set-over and
conveyance, each of Chemical Bank and Chase USA agrees to file, at its own
expense, a financing statement (including any continuation statements with
respect to such financing statement when applicable) with respect to the
Receivables now existing and hereafter created for the perfection of a
security interest (as defined in the UCC) in accounts and general intangibles
(as defined in Section 9-106 of the UCC) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect such security interest in favor of the Trust, and to deliver a
file-stamped copy of such financing statement or continuation statement or
other evidence at such filing (which may, for purposes of this Section 2.1,
consist of telephone confirmation of such filing) to the Trustee on or prior
to the date of issuance of the Certificates, and in the case of any
continuation statements filed pursuant to this Section 2.1, as soon as
practicable after receipt thereof by the Transferor. It is understood and
agreed that the description of collateral set forth in such financing
statements will include all credit card accounts of the Transferor. Upon
receipt of written request from the Transferor to release the receivables in
such credit card accounts as are specified in such request, the Trustee is
hereby authorized and hereby agrees to execute promptly, UCC-3 amendments or
releases, releasing such credit card accounts; provided, however, that except
as permitted pursuant to Section 2.7, no such release shall apply to the
Accounts, including any Additional Accounts. In addition, the Trustee is
hereby authorized to execute such intercreditor or other agreements as may be
requested in writing by the Transferor in connection with the foregoing;
provided, however, that except as permitted pursuant to Section 2.7, no such
intercreditor agreements shall apply to the Accounts, including any Additional
Accounts, or any Receivables in such Accounts or Additional Accounts. The
foregoing transfer, assignment, set-over and conveyance to the Trust shall be
made to the Trustee, on behalf of the Trust, and each reference in this
Agreement to such transfer, assignment, set-over and conveyance shall be
construed accordingly.
In connection with such transfer, the Transferor agrees, at its own
expense, on or prior to the Initial Closing Date (i) to indicate in its
computer files that Receivables created in connection with the Accounts have
been transferred to the Trust pursuant to this Agreement for the benefit of
the Certificateholders and (ii) to deliver to the Trustee a computer file or
microfiche list containing a true and complete list of all such Accounts,
identified by account number and setting forth the Receivable balance as of
the Cut-Off Date. Such file or list shall be marked as Schedule 1 to this
<PAGE>
Agreement, delivered to the Trustee as confidential and proprietary, and is
hereby incorporated into and made a part of this Agreement. The Transferor
further agrees not to remove such indication in the file referenced in clause
(i) of this paragraph with respect to any Account during the term of this
Agreement unless and until such Account becomes a Removed Account or a
Defaulted Account.
The Transferor hereby grants to the Trustee a security interest in
all of the Transferor's right, title and interest in, to and under the
Receivables existing as of the Cut-Off Date and thereafter created and arising
in connection with the Accounts (other than Additional Accounts), all moneys
due or to become due with respect to such Receivables, all proceeds of such
Receivables and all Insurance Proceeds relating to such Receivables, all
Recoveries and Interchange and all proceeds thereof to secure a loan in an
amount equal to the unpaid principal amount of the Investor Certificates
issued hereunder or to be issued pursuant to this Agreement and the interest
accrued at the related Certificate Rate, and this Agreement shall constitute a
security agreement under applicable law.
Pursuant to the request of the Transferor, the Trustee shall cause
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.2.
Notwithstanding anything else in this Agreement to the contrary, it
is understood and agreed that the ownership interest or lien conveyed or
granted by Chemical Bank, as Transferor, to the Trustee in Receivables and
other property under the Original Pooling and Servicing Agreement shall remain
in full force and effect and shall in no way be affected by the amendment and
restatement of such Original Pooling and Servicing Agreement by this Amended
and Restated Pooling and Servicing Agreement.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf of
the Trust, of all right, title and interest previously held by the Transferor
in and to the Receivables existing as of the Cut-Off Date and thereafter
created and arising in connection with the Accounts, all monies due or to
become due with respect thereto (including all Finance Charge Receivables),
all proceeds of such Receivables, Insurance Proceeds relating to such
Receivables, all Recoveries and Interchange and the proceeds thereof, and
declares that it shall maintain such right, title and interest, upon the Trust
herein set forth, for the benefit of all Certificateholders. The Trustee
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Agreement, the Transferor delivered to the Trustee the
computer file or microfiche list described in the third paragraph of Section
2.1.
(b) The Trustee hereby agrees not to disclose to any Person any of
the account numbers or other information contained in the computer files or
microfiche lists delivered to the Trustee by the Transferor pursuant to
Sections 2.1, 2.6 and 2.7 ("Account Information") except as required in
connection with the performance of its duties hereunder or in enforcing the
rights of the Certificateholders or to a Successor Servicer appointed pursuant
to Section 10.2, or as mandated pursuant to any Requirement of Law applicable
to the Trustee or as requested by any Person in connection with financing
statements filed with the Trust. The Trustee agrees to take such measures as
<PAGE>
shall be reasonably requested by the Transferor to protect and maintain the
security and confidentiality of such information, and, in connection
therewith, shall allow the Transferor to inspect the Trustee's security and
confidentiality arrangements from time to time during normal business hours.
In the event that the Trustee is required by law to disclose any Account
Information, the Trustee shall provide the Transferor with prompt written
notice, unless such notice is prohibited by law, of any such request or
requirement so that the Transferor may request a protective order or other
appropriate remedy. The Trustee shall use its best efforts to provide the
Transferor with written notice no later than five Business Days prior to any
disclosure pursuant to this subsection 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Trust as of the Initial
Closing Date:
(a) Organization and Good Standing. The Transferor is a banking
corporation duly organized and validly existing in good standing under
the laws of the state of its organization and has full corporate power,
authority and legal right to execute, deliver and perform its obligations
under this Agreement and to execute and deliver to the Trustee the
Certificates pursuant hereto, and, in all material respects, to own its
properties and conduct its business as such properties are presently
owned and such business is presently conducted.
(b) Due Qualification. The Transferor is duly qualified to do
business and is in good standing (or is exempt from such requirement) and
has obtained all necessary licenses and approvals with respect to the
Transferor in each jurisdiction in which failure to so qualify or to
obtain such licenses and approvals would render any Credit Card Agreement
relating to an Account or any Receivable unenforceable by the Transferor
or the Trust or would have a material adverse effect on the Certificate-
holders; provided, however, that no representation or warranty is made
with respect to any qualifications, licenses or approvals which the
Trustee would have to obtain to do business in any state in which the
Trustee seeks to enforce any Account or Receivable.
(c) Due Authorization. The execution and delivery of this
Agreement and the execution and delivery to the Trustee of the
Certificates by the Transferor and the consummation of the transactions
provided for in this Agreement have been duly authorized by the
Transferor by all necessary corporate action on its part and this
Agreement will remain, from the time of its execution, an official record
of the Transferor.
(d) No Conflict. The execution and delivery of this Agreement and
the Certificates, the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict
with, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Transferor is a party or
by which it or any of its properties are bound, except to the extent that
<PAGE>
the same could not reasonably be expected to have a material adverse
effect on the Certificateholders.
(e) No Violation. The execution and delivery of this Agreement,
any Supplement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
will not conflict with or violate any Requirements of Law applicable to
the Transferor, except to the extent that the same could not reasonably
be expected to have a material adverse effect on the Certificateholders.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened against
the Transferor before any court, regulatory body, administrative agency,
or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement or the Certificates, (ii) seeking to prevent
the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement or the Certificates, (iii)
seeking any determination or ruling that, in the reasonable judgment of
the Transferor, would materially and adversely affect the performance by
the Transferor of its obligations under this Agreement, (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or the Certificates or (v)
seeking to affect adversely the income tax attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut-Off Date, each Account
was an Eligible Account and no selection procedures adverse to the
Investor Certificateholders have been employed by the Transferor in
selecting the Accounts from among the Eligible Accounts in the Bank
Portfolio.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
of this Agreement and the Certificates, the performance of the
transactions contemplated by this Agreement and the fulfillment of the
terms hereof, have been obtained, except where the failure to obtain such
approvals, authorizations, consents, orders or other actions could not
reasonably be expected to have a material adverse effect on the
Certificateholders.
For the purposes of the representations and warranties contained in
this Section 2.3 and made by the Transferor on the Initial Closing Date,
"Certificates" shall mean the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall survive
the transfer and assignment of the respective Receivables to the Trust, and
termination of the rights and obligations of the Servicer pursuant to Section
10.1. The Transferor hereby represents and warrants to the Trust, with
respect to any Series of Certificates, as of its Closing Date, unless
otherwise stated in such Supplement, that the representations and warranties
of the Transferor set forth in Section 2.3 are true and correct as of such
date (for the purposes of such representations and warranties, "Certificates"
shall mean the Certificates issued on the related Closing Date). Upon
discovery by the Transferor, the Servicer or the Trustee of a breach of any of
the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the others.
<PAGE>
Section 2.4 Representations and Warranties of the Transferor
Relating to the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. The
Transferor hereby represents and warrants to the Trust that, as of the Initial
Closing Date:
(i) This Agreement constitutes a valid and legally binding
obligation of the Transferor, enforceable against the Transferor in
accordance with its terms, except (A) as may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and the rights of creditors of banking
corporations organized under the laws of the state of its organization,
and (B) as may be limited by general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
(ii) This Agreement constitutes either (A) a valid transfer,
assignment, set-over and conveyance to the Trust of all right, title and
interest of the Transferor in and to the Receivables now existing and
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all proceeds of such Receivables and
Insurance Proceeds relating thereto, and such Receivables and all
proceeds thereof and Insurance Proceeds relating thereto will be held by
the Trust free and clear of any Lien of any Person claiming through or
under the Transferor or any of its Affiliates except for (x) Liens
permitted under subsection 2.5(b), (y) the interest of the Transferor as
Holder of the Transferor Certificate and (z) the Transferor's right, if
any, to interest accruing on, and investment earnings, if any, in respect
of the Finance Charge Account, the Principal Account or any Series
Account, as provided in this Agreement or the related Supplement, or (B)
a grant of a security interest (as defined in the UCC) in such property
to the Trust, which is enforceable with respect to the existing
Receivables, the proceeds thereof and Insurance Proceeds relating thereto
upon execution and delivery of this Agreement, and which will be
enforceable with respect to such Receivables hereafter created, the
proceeds thereof and Insurance Proceeds relating thereto, upon such
creation. If this Agreement constitutes the grant of a security interest
to the Trust in such property, upon the filing of the financing statement
described in Section 2.1 and in the case of the Receivables hereafter
created and proceeds thereof and Insurance Proceeds relating thereto,
upon such creation, the Trust shall have a first priority perfected
security interest in the Transferor's rights in such property (subject to
Section 9-306 of the UCC), except for Liens permitted under subsection
2.5(b). Neither the Transferor nor any Person claiming through or under
the Transferor shall have any claim to or interest in the Principal
Account, the Finance Charge Account, the Distribution Account or any
Series Account, except for the Transferor's rights to receive interest
accruing on, and investment earnings in respect of, the Finance Charge
Account and Principal Account as provided in this Agreement (or, if
applicable, any Series Account as provided in any Supplement) and, if
this Agreement constitutes the grant of a security interest in such
property, except for the interest of the Transferor in such property as a
debtor for purposes of the UCC.
<PAGE>
(b) Eligibility of Receivables. The Transferor hereby represents
and warrants to the Trust as of the Initial Closing Date and as of each
Addition Date, as the case may be, that:
(i) Each Receivable is an Eligible Receivable as of the Cut-Off
Date or the Addition Date, as applicable.
(ii) Each Receivable then existing has been transferred to the Trust
free and clear of any Lien of any Person claiming through or under the
Transferor or any of its Affiliates (other than Liens permitted under
subsection 2.5(b)) and in compliance, in all material respects, with all
Requirements of Law applicable to the Transferor.
(iii) With respect to each Receivable then existing, all consents,
licenses, approvals or authorizations of or registrations or declarations
with any Governmental Authority required to be obtained, effected or
given by the Transferor in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected or given and
are in full force and effect.
(iv) On each day on which any new Receivable is created, the
Transferor shall be deemed to represent and warrant to the Trust that (A)
each Receivable created on such day is an Eligible Receivable, (B) each
Receivable created on such day has been conveyed to the Trust in
compliance, in all material respects, with all Requirements of Law
applicable to the Transferor, (C) with respect to each such Receivable,
all consents, licenses, approvals or authorizations of or registrations
or declarations with, any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given
and are in full force and effect and (D) the representations and
warranties set forth in subsection 2.4(a) are true and correct with
respect to each Receivable created on such day as if made on such day.
(v) As of the Initial Closing Date, Schedule 1 to this Agreement,
and as of the applicable Addition Date with respect to Additional
Accounts designated pursuant to Sections 2.6(a) and (b), the related
computer file or microfiche list referred to in Section 2.6, is an
accurate and complete listing in all material respects of all the
Accounts as of the Cut-Off Date, or with respect to Additional Accounts,
as of the applicable Addition Date and the information contained therein
with respect to the identity of such Accounts and the Receivables
existing thereunder is true and correct in all material respects as of
the Cut-Off Date or such applicable Addition Date. As of September 28,
1995, the aggregate amount of Receivables in all the Accounts was
$5,118,124,136.02 of which $5,016,343,299.38 were Principal Receivables.
(c) Notice of Breach. The representations and warranties set forth
in this Section 2.4 shall survive the transfer and assignment of the
respective Receivables to the Trust. Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the representations and
warranties set forth in this Section 2.4, the party discovering such breach
shall give prompt written notice to the other parties mentioned above. The
Transferor agrees to cooperate with the Servicer and the Trustee in attempting
to cure any such breach.
<PAGE>
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with respect to a
Receivable of any representations and warranties set forth in subsection
2.4(b)(ii), or in the event that a Receivable is not an Eligible
Receivable as a result of the failure to satisfy the conditions set forth
in clause (d) of the definition of Eligible Receivable, and any of the
following three conditions is met: (A) as a result of such breach or
event such Receivable is charged off as uncollectible or the Trust's
rights in, to or under such Receivable or its proceeds are impaired or
the proceeds of such Receivable are not available for any reason to the
Trust free and clear of any Lien; (B) the Lien upon the subject
Receivable (1) arises in favor of the United States of America or any
State or any agency or instrumentality thereof and involves taxes or
liens arising under Title IV of ERISA or (2) has been consented to by the
Transferor; or (C) the unsecured short-term debt rating of the Transferor
is not at least "P-1" by Moody's and "A-1" by Standard & Poor's and the
Lien upon the subject Receivable ranks prior to the Lien created pursuant
to this Agreement; then, upon the earlier to occur of the discovery of
such breach or event by the Transferor or the Servicer or receipt by the
Transferor of written notice of such breach or event given by the
Trustee, each such Receivable shall be automatically removed from the
Trust on the terms and conditions set forth in subsection 2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a breach of any of
the representations and warranties set forth in subsection 2.4(b) other
than a breach or event as set forth in clause (d)(i) above, and as a
result of such breach the related Account becomes a Defaulted Account or
the Trust's rights in, to or under the Receivable or its proceeds are
impaired or the proceeds of such Receivable are not available for any
reason to the Trust free and clear of any Lien, then, upon the expiration
of 60 days (or such longer period as may be agreed to by the Trustee in
its sole discretion, but in no event later than 120 days) from the
earlier to occur of the discovery of any such event by either the
Transferor or the Servicer, or receipt by the Transferor of written
notice of any such event given by the Trustee, each such Receivable shall
be removed from the Trust on the terms and conditions set forth in
subsection 2.4(d)(iii); provided, however, that no such removal shall be
required to be made if, on any day within such applicable period, such
representations and warranties with respect to such Receivable shall then
be true and correct in all material respects as if such Receivable had
been created on such day.
(iii) Procedures for Removal. When the provisions of subsection
2.4(d)(i) or (ii) above require removal of a Receivable, the Transferor
shall accept reassignment of such Receivable (an "Ineligible Receivable")
by directing the Servicer to deduct the principal balance of each such
Ineligible Receivable from the Principal Receivables in the Trust and to
decrease the Transferor Interest by such amount. On and after the date
of such removal, each Ineligible Receivable shall be deducted from the
aggregate amount of Principal Receivables used in the calculation of any
Investor Percentage, the Transferor Percentage or the Transferor
Interest. In the event that the exclusion of an Ineligible Receivable
from the calculation of the Transferor Interest would cause the
Transferor Interest to be reduced below the Minimum Transferor Interest,
the Transferor shall immediately, but in no event later than 10 Business
Days after such event, make a deposit in the Excess Funding Account in
<PAGE>
immediately available funds in an amount equal to the amount by which the
Transferor Interest would be reduced below the Minimum Transferor
Interest. The portion of such deposit allocated to the Investor
Certificates of each Series shall be distributed to the Investor
Certificateholders of each Series in the manner specified in Article IV,
if applicable, on the Distribution Date relating to the Monthly Period in
which such deposit is made. Upon the reassignment to the Transferor of
an Ineligible Receivable, the Trust shall automatically and without
further action be deemed to transfer, assign, set-over and otherwise
convey to the Transferor, without recourse, representation or warranty,
all the right, title and interest of the Trust in and to such Ineligible
Receivable, all monies due or to become due with respect to such
Ineligible Receivable and all proceeds of such Ineligible Receivable and
Insurance Proceeds relating to such Ineligible Receivable allocated to
such Ineligible Receivable pursuant to any Supplement. Such reassigned
Ineligible Receivable shall be treated by the Trust as collected in full
as of the date on which it was transferred. The Trustee shall execute
such documents and instruments of transfer or assignment and take other
actions as shall reasonably be requested by the Transferor to evidence
the conveyance of such Ineligible Receivable pursuant to this subsection
2.4(d)(iii). The obligation of the Transferor set forth in this
subsection 2.4(d)(iii), or the automatic removal of such Receivable from
the Trust, as the case may be, shall constitute the sole remedy
respecting any breach of the representations and warranties set forth in
the above-referenced subsections with respect to such Receivable
available to Certificateholders or the Trustee on behalf of Certificate-
holders.
(iv) Proceeds Held by Servicer. For the purposes of subsections
2.4(d)(i) and (ii) above, proceeds of a Receivable shall not be deemed to
be impaired hereunder solely because such proceeds are held by the
Servicer (if the Servicer is the Transferor) for more than the applicable
period under Section 9-306(3) of the UCC.
(e) Reassignment of Trust Portfolio. In the event of a breach of
any of the representations and warranties set forth in subsection 2.4(a),
either the Trustee or the Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Aggregate Investor
Interest, by notice then given in writing to the Transferor (and to the
Trustee and the Servicer, if given by the Investor Certificateholders), may
direct the Transferor to accept reassignment of an amount of Principal
Receivables (as specified below) within 60 days of such notice (or within such
longer period as may be specified in such notice), and the Transferor shall be
obligated to accept reassignment of such Principal Receivables on a
Distribution Date specified by the Transferor (such Distribution Date, the
"Reassignment Date") occurring within such applicable period on the terms and
conditions set forth below; provided, however, that no such reassignment shall
be required to be made if, at any time during such applicable period, the
representations and warranties contained in subsection 2.4(a) shall then be
true and correct in all material respects. The Transferor shall deposit on
the Transfer Date (in New York Clearing House, next day funds) preceding the
Reassignment Date an amount equal to the reassignment deposit amount for such
Receivables in the Distribution Account or Series Account, as provided in the
related Supplement, for distribution to the Investor Certificateholders
pursuant to Article XII. The reassignment deposit amount with respect to each
Series for such reassignment, unless otherwise stated in the related
Supplement, shall be equal to (i) the Investor Interest of such Series at the
<PAGE>
end of the day on the last day of the Monthly Period preceding the
Reassignment Date, less the amount, if any, previously allocated for payment
of principal to such Certificateholders on the related Distribution Date in
the Monthly Period in which the Reassignment Date occurs, plus (ii) an amount
equal to all interest accrued but unpaid on the Investor Certificates of such
Series at the applicable Certificate Rate through the Reassignment Date, less
the amount, if any, previously allocated for payment of interest to the
Certificateholders of such Series on the related Distribution Date in the
Monthly Period in which the Reassignment Date occurs. Payment of the
reassignment deposit amount with respect to each Series, and all other amounts
in the Distribution Account or the applicable Series Account in respect of the
preceding Monthly Period, shall be considered a prepayment in full of the
Receivables represented by the Investor Certificates on the Distribution Date
following the Transfer Date on which such amount has been deposited in full
into the Distribution Account or the applicable Series Account, the
Receivables and all monies due or to become due with respect to such
Receivables and all proceeds of the Receivables and Insurance Proceeds
relating to such Receivables and Interchange (if any) and Recoveries (if any)
allocable to the Series shall be released to the Transferor after payment of
all amounts otherwise due hereunder on or prior to such dates and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall be prepared by and
as are reasonably requested by the Transferor to vest in the Transferor, or
its designee or assignee, all right, title and interest of the Trust in and to
the Receivables, all monies due or to become due with respect to such
Receivables and all proceeds of the Receivables and Insurance Proceeds
relating to such Receivables and Interchange (if any) and Recoveries (if any)
allocable to the Series. If the Trustee or the Investor Certificateholders
give notice directing the Transferor to accept reassignment as provided above,
the obligation of the Transferor to accept reassignment of the Receivables and
pay the reassignment deposit amount pursuant to this subsection 2.4(e) shall
constitute the sole remedy respecting a breach of the representations and
warranties contained in subsection 2.4(a) available to the Investor
Certificateholders or the Trustee on behalf of the Investor Certificate-
holders.
Section 2.5 Covenants of the Transferor. The Transferor hereby
covenants that:
(a) Receivables to be Accounts or General Intangibles. Except in
connection with the enforcement thereof, the Transferor will take no action to
cause any Receivable to be evidenced by any instrument (as defined in the
UCC). Each Receivable shall be payable pursuant to a contract which does not
create a Lien on any goods purchased thereunder. The Transferor will take no
action to cause any Receivable to be anything other than an "account" or
"general intangible" (as defined in the UCC).
(b) Security Interests. Except for the conveyances hereunder, the
Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Receivable,
whether now existing or hereafter created, or any interest therein; the
Transferor will immediately notify the Trustee of the existence of any Lien on
any Receivable, and the Transferor shall defend the right, title and interest
of the Trust in, to and under the Receivables, whether now existing or
hereafter created, against all claims of third parties claiming through or
under the Transferor; provided, however, that nothing in this subsection
2.5(b) shall prevent or be deemed to prohibit the Transferor from suffering to
<PAGE>
exist upon any of the Receivables any Liens for municipal or other local taxes
if such taxes shall not at the time be due and payable or if the Transferor
shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.
(c) Finance Charges and Other Fees. The Transferor, except as
otherwise required by any Requirement of Law, or as is deemed by the
Transferor to be necessary in order for the Transferor to maintain its credit
card business, based upon a good faith assessment by the Transferor, in its
sole discretion, of the nature of the competition in the credit card business,
shall not at any time reduce the Periodic Finance Charges assessed on any
Receivable or other fees on any Account if, as a result of such reduction, the
Transferor's reasonable expectation of the Portfolio Yield as of such date
(after giving effect to any concurrent exercise of a discount option) would be
less than the Base Rate.
(d) Credit Card Agreements and Account Guidelines. The Transferor
shall comply with and perform its obligations under the Credit Card Agreements
relating to the Accounts and the Credit Card Guidelines and all applicable
rules and regulations of VISA U.S.A., Inc. and MasterCard International Inc.,
except insofar as any failure to comply or perform would not materially and
adversely affect the rights of the Trust or the Certificateholders hereunder
or under the Certificates. The Transferor may change the terms and provisions
of the Credit Card Agreements or the Credit Card Guidelines in any respect
(including, without limitation, the reduction of the required minimum monthly
payment, the calculation of the amount, or the timing, of charge offs and the
Periodic Finance Charges and other fees to be assessed thereon) only if such
change (i) would not, in the reasonable belief of the Transferor, cause a Pay
Out Event to occur, and (ii) is made applicable to the comparable segment of
the revolving credit card accounts owned and serviced by the Transferor which
have characteristics the same as, or substantially similar to, the Accounts
that are the subject of such change, except as otherwise restricted by an
endorsement, sponsorship, or other agreement between the Transferor and an
unrelated third party or by the terms of the Credit Card Agreements.
(e) Account Allocations.
(i) in the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of the
application of the provisions of Section 9.2 or an order by any federal
governmental agency having regulatory authority over the Transferor or
any court of competent jurisdiction that the Transferor not transfer any
additional Principal Receivables to the Trust) then, in any such event,
(A) the Transferor agrees to allocate and pay to the Trust, after the
date of such inability, all Collections with respect to Principal
Receivables, and all amounts which would have constituted Collections
with respect to Principal Receivables but for the Transferor's inability
to transfer such Receivables (up to an aggregate amount equal to the
amount of Principal Receivables in the Trust on such date); (B) the
Transferor agrees to have such amounts applied as Collections in
accordance with Article IV; and (C) for only so long as all Collections
and all amounts which would have constituted Collections are allocated
and applied in accordance with clauses (A) and (B) above, Principal
Receivables (and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to transfer Receivables to
<PAGE>
the Trust) that are written off as uncollectible in accordance with this
Agreement shall continue to be allocated in accordance with Article IV,
and all amounts that would have constituted Principal Receivables but for
the Transferor's inability to transfer Receivables to the Trust shall be
deemed to be Principal Receivables for the purpose of calculating (i) the
applicable Investor Percentage with respect to any Series and (ii) the
Aggregate Investor Percentage thereunder. If the Transferor is unable
pursuant to any Requirement of Law to allocate Collections as described
above, the Transferor agrees that it shall in any such event allocate,
after the occurrence of such event, payments on each Account with respect
to the principal balance of such Account first to the oldest principal
balance of such Account and to have such payments applied as Collections
in accordance with Article IV. The parties hereto agree that Finance
Charge Receivables, whenever created, accrued in respect of Principal
Receivables that have been conveyed to the Trust, or that would have been
conveyed to the Trust but for the above described inability to transfer
such Receivables, shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and that Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV.
(ii) In the event that, pursuant to subsection 2.4(d), the
Transferor accepts reassignment of an Ineligible Receivable as a result
of a breach of the representations and warranties in subsection 2.4(b)
relating to such Receivable, then, in any such event, the Transferor
agrees to account for payments received with respect to such Ineligible
Receivable separately from its accounting for Collections on Principal
Receivables retained by the Trust. If payments received from or on
behalf of an Obligor are not specifically applicable either to an
Ineligible Receivable of such Obligor reassigned to the Transferor or to
the Receivables of such Obligor retained in the Trust, then the
Transferor agrees to allocate payments proportionately based on the total
amount of Principal Receivables of such Obligor retained in the Trust and
the total amount owing by such Obligor on any Ineligible Receivables
reassigned to the Transferor, and the portion allocable to any Principal
Receivables retained in the Trust shall be treated as Collections and
deposited in accordance with the provisions of Article IV.
(f) Conveyance of Accounts. The Transferor may transfer Accounts
(i) directly to any Affiliate that executes an agreement assuming with respect
to such Accounts the obligations and duties of the Transferor or indirectly to
any Affiliate in one or more substantially simultaneous transactions among the
Transferor, such Affiliate and any other Affiliates of the Transferor or (ii)
to any other Person, provided that such other Person executes such an
agreement and the Rating Agency Condition is satisfied; provided, however,
that the Transferor shall not be prohibited hereby from conveying, assigning,
exchanging or otherwise transferring the Accounts in connection with a
transaction complying with the provisions of Section 7.2.
Section 2.6 Addition of Accounts.
(a) (i) If, (A) as of the end of any Monthly Period, the Transferor
Interest is less than the Minimum Transferor Interest for that period the
Transferor shall designate additional eligible MasterCard or VISA
accounts from the Bank Portfolio ("Additional Accounts") to be included
as Accounts in a sufficient amount such that the Transferor Interest
after giving effect to such addition will be at least equal to the
<PAGE>
Minimum Transferor Interest, or (B) as of the end of any Monthly Period,
the sum of the aggregate amount of Principal Receivables is less than the
Minimum Aggregate Principal Receivables (as adjusted for any Series
having a Companion Series as described in the Supplement for such
Series), the Transferor shall designate Additional Accounts to be
included as Accounts in a sufficient amount such that the aggregate
amount of Principal Receivables will be equal to or greater than the
Minimum Aggregate Principal Receivables. Receivables from such
Additional Accounts shall be transferred to the Trust on or before the
tenth Business Day following the end of such Monthly Period.
(ii) In lieu of, or in addition to, designating Additional Accounts
pursuant to clause (i) above, the Transferor may, subject to the
conditions specified in paragraph (c) below, convey to the Trust
participations representing undivided interests in a pool of assets
primarily consisting of receivables arising under revolving credit card
accounts or other revolving credit accounts owned by the Transferor or
any Affiliate of any Transferor and collections thereon
("Participations"). The addition of Participations in the Trust pursuant
to this paragraph (a) or paragraph (b) below shall be effected by an
amendment hereto, dated the applicable Addition Date, pursuant to Section
13.1(a).
(b) In addition to its obligation under subsection 2.6(a), the
Transferor may, but shall not be obligated to, designate from time to time
Additional Accounts of the Transferor to be included as Accounts or
Participations to be included as Trust Assets, in either case as of the
applicable Addition Date.
(c) The Transferor agrees that any such transfer of Receivables
from Additional Accounts, under subsection 2.6(a) or (b) shall satisfy the
following conditions (to the extent provided below):
(i) On or before the fifth Business Day prior to the Addition Date
with respect to additions pursuant to subsection 2.6(a) and on or before
the tenth Business Day prior to the Addition Date with respect to
additions pursuant to subsection 2.6(b) (the "Notice Date"), the
Transferor shall give the Trustee, each Rating Agency and the Servicer
written notice that such Additional Accounts or Participations will be
included, which notice shall specify the approximate aggregate amount of
the Receivables to be transferred.
(ii) On or before the Addition Date, the Transferor shall have
delivered to the Trustee a written assignment (including an acceptance by
the Trustee on behalf of the Trust for the benefit of the Investor
Certificateholders) in substantially the form of Exhibit B (the
"Assignment") and the Transferor shall have indicated in its computer
files that the Receivables created in connection with the Additional
Accounts have been transferred to the Trust and, within five Business
Days thereafter, or as otherwise agreed upon between the Transferor and
the Trustee, the Transferor shall have delivered to the Trustee a
computer file or microfiche list containing a true and complete list of
all Additional Accounts, adequately identified by billing cycle and/or
account number and the aggregate amount of the Receivables in such
Additional Accounts, as of the Addition Date, which computer file or
microfiche list shall be as of the date of such Assignment incorporated
into and made a part of such Assignment and this Agreement.
<PAGE>
(iii) The Transferor shall represent and warrant that (x) each
Additional Account is, as of the Addition Date, an Eligible Account, and
each Receivable in such Additional Account is, as of the Addition Date,
an Eligible Receivable, (y) no selection procedures believed by the
Transferor to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts
from the available Eligible Accounts from the Bank Portfolio, and (z) as
of the Addition Date, the Transferor is not insolvent.
(iv) The Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (x) a valid transfer and
assignment to the Trust of all right, title and interest of the
Transferor in and to the Receivables then existing and thereafter created
in the Additional Accounts, and all proceeds (as defined in the UCC) of
such Receivables and Insurance Proceeds relating thereto and such
Receivables and all proceeds thereof and Insurance Proceeds relating
thereto will be held by the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or any of its Affiliates,
except for (i) Liens permitted under subsection 2.5(b), (ii) the interest
of the Transferor as Holder of the Transferor Certificate and (iii) the
Transferor's right to receive interest accruing on, and investment
earnings in respect of, the Finance Charge Account and the Principal
Account, or any Series Account as provided in this Agreement and any
related Supplement or (y) a grant of a security interest (as defined in
the UCC), in such property to the Trust, which is enforceable with
respect to then existing Receivables of the Additional Accounts, the
proceeds (as defined in the UCC), thereof and Insurance Proceeds relating
thereto upon the conveyance of such Receivables to the Trust, and which
will be enforceable with respect to the Receivables thereafter created in
respect of Additional Accounts conveyed on such Addition Date, the
proceeds (as defined in the UCC), thereof and Insurance Proceeds relating
thereto upon such creation; and (z) if the Assignment constitutes the
grant of a security interest to the Trust in such property, upon the
filing of a financing statement as described in Section 2.1 with respect
to such Additional Accounts and in the case of the Receivables thereafter
created in such Additional Accounts and the proceeds (as defined in the
UCC), thereof, and Insurance Proceeds relating thereto, upon such
creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC), except
for Liens permitted under subsection 2.5(b).
(v) The Transferor shall deliver an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B to the Trustee
confirming the items set forth in paragraph (iii) above.
(vi) The Transferor shall deliver an Opinion of Counsel with respect
to the Receivables in the Additional Accounts to the Trustee
substantially in the form of Exhibit E.
(vii) the Rating Agency Condition shall have been satisfied with
respect to the inclusion of such accounts as Additional Accounts pursuant
to subsection 2.6(b).
(viii) With respect to a Participation included as Trust Assets
pursuant to subsection 2.6(b), the Transferor shall deliver a Tax
Opinion.
<PAGE>
Section 2.7 Removal of Accounts.
(a) Subject to the conditions set forth below, the Transferor may,
but shall not be obligated to, designate Receivables from Accounts for
deletion and removal ("Removed Accounts") from the Trust; provided, however,
that the Transferor shall not make more than one such designation in any
Monthly Period. On or before the fifth Business Day (the "Removal Notice
Date") prior to the date on which the designated Removed Accounts will be
reassigned by the Trustee to the Transferor (the "Removal Date"), the
Transferor shall give the Trustee and the Servicer written notice that the
Receivables from such Removed Accounts are to be reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) The removal of any Receivables of any Removed Accounts on any
Removal Date shall not, in the reasonable belief of the Transferor, (a)
cause a Pay Out Event to occur; provided, however, that for the purposes
of this subsection 2.7(b)(i), the Receivables of each Removed Account
shall be considered to have been removed as of the Removal Date, (b)
cause the Transferor Interest to be less than the Minimum Transferor
Interest on such Removal Date, (c) cause the sum of the aggregate amount
of Principal Receivables and the Excess Funding Amount to be less than
the Minimum Aggregate Principal Receivables, or (d) result in the failure
to make any payment specified in the related Supplement with respect to
any Series.
(ii) On or prior to the Removal Date, the Transferor shall have
delivered to the Trustee for execution a written assignment in
substantially the form of Exhibit G (the "Reassignment") and, within five
Business Days thereafter, or as otherwise agreed upon between the
Transferor and the Trustee, the Transferor shall have delivered to the
Trustee a computer file or microfiche list containing a true and complete
list of all Removed Accounts identified by account number and the
aggregate amount of the Receivables in such Removed Accounts as of the
Removal Date, which computer file or microfiche list shall as of the
Removal Date modify and amend and be made a part of this Agreement.
(iii) The Transferor shall represent and warrant that no selection
procedures believed by the Transferor to be materially adverse to the
interests of the Certificateholders were utilized in selecting the
Removed Accounts to be removed from the Trust.
(iv) As of the Removal Notice Date, either (a) the Receivables are
not more than 15% delinquent by estimated principal amount and the
weighted averaged delinquency of such Receivables is not more than 60
days, or (b) the Receivables are not more than 7% delinquent by estimated
principal amount and the weighted average delinquency of such Receivables
does not exceed 90 days.
(v) On or before the tenth Business Day prior to the Removal Date,
each Rating Agency shall have received notice of such proposed removal of
the Receivables of such Accounts and the Transferor shall have received
written confirmation from each Rating Agency that such removal will
satisfy the Rating Agency Condition; and
<PAGE>
(vi) The Transferor shall have delivered to the Trustee an Officer's
Certificate confirming the items set forth in clauses (i) through (v)
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.
Upon satisfaction of the above conditions, the Trustee shall execute
and deliver the Reassignment to the Transferor, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust.
Section 2.8 Discount Option. The Transferor shall have the option
to designate at any time a fixed or floating percentage (the "Discount
Percentage"), of the amount of Receivables arising in the Accounts on or after
the date such designation becomes effective that would otherwise constitute
Principal Receivables (prior to subtracting from Principal Receivables,
Finance Charge Receivables that are Discount Option Receivables) to be treated
as Finance Charge Receivables. The Transferor may from time to time increase
(subject to the limitations described below), reduce or eliminate the Discount
Percentage for Discount Option Receivables arising in the Accounts on and
after the date of such change. The Transferor must provide 30 days' prior
written notice to the Servicer, the Trustee, each Credit Enhancement Provider
and each Rating Agency of any such exercise of the discount option or
increase, reduction or elimination of the Discount Percentage, and such
exercise of the discount option or increase, reduction or elimination of the
Discount Percentage shall become effective on the date specified therein only
if (i) the Transferor has delivered to the Trustee an Officer's Certificate to
the effect that, based on the facts known to such officer at the time, the
Transferor reasonably believes that such increase, reduction or elimination
shall not at the time of its occurrence cause a Pay Out Event, or an event
which with notice or the lapse of time would constitute a Pay Out Event, to
occur with respect to any Series and (ii) the Transferor, the Servicer and the
Trustee shall have received written confirmation from each Rating Agency that
the Rating Agency Condition is satisfied.
(a) On each Date of Processing after the date on which the
Transferor's exercise of its discount option takes effect, the Transferor
shall treat Discount Option Receivables Collections as Collections of Finance
Charge Receivables.
[End of Article II]
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to
the Servicer.
(a) Chemical Bank agrees to act as the Servicer under this
Agreement. The Investor Certificateholders of each Series by their acceptance
of the related Certificates consent to Chemical Bank acting as Servicer.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing credit card receivables
comparable to the Receivables and in accordance with the Credit Card
Guidelines and shall have full power and authority, acting alone or through
any party properly designated by it hereunder, to do any and all things in
connection with such servicing and administration which it may deem necessary
or desirable. Without limiting the generality of the foregoing and subject to
Section 10.1, the Servicer is hereby authorized and empowered (i) to make
withdrawals from the Collection Account as set forth in this Agreement, (ii)
unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to instruct the
Trustee to make withdrawals and payments, from the Finance Charge Account, the
Principal Account, the Excess Funding Account and any Series Account, in
accordance with such instructions as set forth in this Agreement, (iii) unless
such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to instruct the
Trustee in writing, as set forth in this Agreement, (iv) to execute and
deliver, on behalf of the Trust for the benefit of the Certificateholders, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to
the Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such Receivables and (v) to
make any filings, reports, notices, applications, registrations with, and to
seek any consents or authorizations from the Securities and Exchange
Commission and any state securities authority on behalf of the Trust as may be
necessary or advisable to comply with any federal or state securities or
reporting requirements. The Trustee agrees that it shall promptly follow the
instructions of the Servicer to withdraw funds from the Principal Account, the
Finance Charge Account, the Excess Funding Account, or any Series Account and
to take any action required under any Credit Enhancement at such time as
required under this Agreement. The Trustee shall execute at the Servicer's
written request such documents prepared by the Transferor and acceptable to
the Trustee as may be necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder.
(c) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.2 or the order of any federal governmental agency
having regulatory authority over the Transferor or any court of competent
jurisdiction that the Transferor not transfer any additional Principal
Receivables to the Trust) then, in any such event, (A) the Servicer agrees to
allocate, after such date, all collections with respect to Principal
<PAGE>
Receivables, and all amounts which would have constituted Collections with
respect to Principal Receivables but for the Transferor's inability to
transfer such Receivables (up to an aggregate amount equal to the aggregate
amount of Principal Receivables in the Trust as of such date) in accordance
with subsection 2.5(e); (B) the Servicer agrees to apply such amounts as
Collections in accordance with Article IV, and (C) for only so long as all
Collections and all amounts which would have constituted Collections are
allocated and applied in accordance with clauses (A) and (B) above, Principal
Receivables and all amounts which would have constituted Principal Receivables
but for the Transferor's inability to transfer Receivables to the Trust that
are written off as uncollectible in accordance with this Agreement shall
continue to be allocated in accordance with Article IV and all amounts which
would have constituted Principal Receivables but for the Transferor's
inability to transfer Receivables to the Trust shall be deemed to be Principal
Receivables for the purpose of calculating the applicable Investor Percentage
thereunder. If the Servicer is unable pursuant to any Requirement of Law to
allocate payments on the Accounts as described above, the Servicer agrees that
it shall in any such event allocate, after the occurrence of such event,
payments on each Account with respect to the principal balance of such Account
first to the oldest principal balance of such Account and to have such
payments applied as Collections in accordance with Article IV. The parties
hereto agree that Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables which have been conveyed to the Trust, or
which would have been conveyed to the Trust but for the above described
inability to transfer such Receivables, shall continue to be a part of the
Trust notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and that Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV.
(d) In the event that pursuant to subsection 2.4(d), the Transferor
accepts reassignment of an Ineligible Receivable as a result of a breach of
the representations and warranties in subsection 2.4(b) relating to such
Receivable, then, in any such event, the Servicer agrees to account for
payments received with respect to such Ineligible Receivable separately from
its accounting for Collections on Principal Receivables retained by the Trust.
If payments received from or on behalf of an Obligor are not specifically
applicable either to an Ineligible Receivable of such Obligor reassigned to
the Transferor or to Receivables of such Obligor retained in the Trust, then
the Servicer agrees to allocate payments proportionately based on the total
amount of Principal Receivables of such Obligor retained in the Trust and the
total amount owing by such Obligor on any Ineligible Receivables purchased by
the Transferor, and the portion allocable to any Principal Receivables
retained in the Trust shall be treated as Collections and deposited in
accordance with the provisions of Article IV.
(e) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other credit card receivables.
(f) The Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are
involved in the servicing of credit card receivables covering such actions and
in such amounts as the Servicer believes to be reasonable from time to time.
Section 3.2 Servicing Compensation. As compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
<PAGE>
in the immediately following paragraph, the Servicer shall be entitled to
receive a servicing fee prior to the termination of the Trust pursuant to
Section 12.1. The Servicing Fee shall be payable, with respect to each
Series, at the times and in the amounts set forth in the related Supplement.
The Servicing Fee shall be allocated between the Investor Certificates (the
"Investor Servicing Fee") and the Holder of the Transferor Certificate (the
"Transferor Servicing Fee").
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by the Servicer
in connection with its activities hereunder; provided, however that the
Servicer shall not be liable for any liabilities, costs or expenses of the
Trust, the Investor Certificateholders or the Certificate Owners arising under
any tax law, including without limitation any federal, state or local income
or franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith). The Servicer shall be required to pay such expenses for its own
account and shall not be entitled to any payment therefor other than the
servicing fee specified herein.
Section 3.3 Representations and Warranties of the Servicer.
Chemical Bank, as initial Servicer, hereby makes, and any successor Servicer
by its appointment hereunder shall make the following representations and
warranties on which the Trustee has relied in accepting the Receivables in
Trust and in authenticating the Certificates issued on the Initial Closing
Date:
(a) Organization and Good Standing. The Servicer is a banking
corporation duly organized, validly existing and in good standing under
the laws of the state of its organization and has full corporate power,
authority and legal right to own its properties and conduct its credit
card business as such properties are presently owned and as such business
is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do
business and is in good standing (or is exempt from such requirement) and
has obtained all necessary licenses and approvals, except to the extent
that the failure so to qualify or register would not have a material
adverse effect on the Servicer's ability to perform its obligations
hereunder.
(c) Due Authorization. The execution, delivery, and performance of
this Agreement have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer, enforceable in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereinafter in effect, affecting the enforcement of creditors'
rights in general or the rights of creditors of banking corporations
organized under the laws of the State of New York.
(e) No Violation. The execution and delivery of this Agreement by
the Servicer, and the performance of the transactions contemplated by
<PAGE>
this Agreement and the fulfillment of the terms hereof applicable to the
Servicer, will not conflict with, violate, result in any breach of any of
the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any Requirement of Law
applicable to the Servicer or any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it is bound except to the extent that the same could
not reasonably be expected to have a material adverse effect on the
Certificateholders or any Credit Enhancement Provider.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, seeking any determination or
ruling that, in the reasonable judgment of the Servicer, would materially
and adversely affect the performance by the Servicer of its obligations
under this Agreement, or seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement.
(g) Compliance with Requirements of Law. The Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Account, will maintain in
effect all qualifications required under Requirements of Law in order to
service properly each Receivable and the related Account and will comply
in all material respects with all other Requirements of Law in connection
with servicing each Receivable and the related Account the failure to
comply with which would have a material adverse effect on the
Certificateholders or any Credit Enhancement Provider.
Section 3.4 Reports and Records for the Trustee.
(a) Daily Reports. On each Business Day during any period during
which the Servicer is required to make daily deposits to the Collection
Account pursuant to Section 4.3(a), the Servicer shall prepare and make
available at the office of the Servicer for inspection by the Trustee a record
setting forth (i) the aggregate amount of Collections processed by the
Servicer on the preceding Business Day and (ii) the aggregate amount of
Receivables as of the close of business on the preceding Business Day.
(b) Monthly Servicer's Certificate. Unless otherwise stated in the
related Supplement with respect to any Series, on each Determination Date the
Servicer shall forward, as provided in Section 13.5, to the Trustee, the
Paying Agent, any Credit Enhancement Provider and each Rating Agency, a
certificate of a Servicing Officer in the form of Exhibit C (which includes
the Schedule thereto specified as such in each Supplement) setting forth (i)
the aggregate amount of Collections processed during the preceding Monthly
Period, (ii) the aggregate amount of the applicable Investor Percentage of
Collections of Principal Receivables processed by the Servicer pursuant to
Article IV during the preceding Monthly Period with respect to each Series
then outstanding, (iii) the aggregate amount of the applicable Investor
Percentage of Collections of Finance Charge Receivables processed by the
Servicer pursuant to Article IV during the preceding Monthly Period with
respect to each Series then outstanding, (iv) the aggregate amount of
Receivables processed as of the end of the last day of the preceding Monthly
<PAGE>
Period, (v) the balance on deposit in the Finance Charge Account, the
Principal Account or any Series Account applicable to any Series then
outstanding on such Determination Date with respect to Collections processed
by the Servicer during the preceding Monthly Period, (vi) the aggregate
amount, if any, of withdrawals, drawings or payments under any Credit
Enhancement, if any, for each Series then outstanding required to be made with
respect to the previous Monthly Period in the manner provided in the related
Supplement, (vii) the sum of all amounts payable to the Investor Certificate-
holders of each Series (or for a Series of more than one Class, each such
Class) on the succeeding Distribution Date in respect of Certificate Principal
and Certificate Interest with respect to such preceding monthly Period and
(viii) such other matters as are set forth in Exhibit C.
Section 3.5 Annual Servicer's Certificate. On or before March 31
of each calendar year, beginning with March 31, 1997, the Servicer will
deliver, as provided in Section 13.5, to the Trustee, any Credit Enhancement
Provider and the Rating Agency, an Officer's Certificate substantially in the
form of Exhibit D stating that (a) a review of the activities of the Servicer
during the twelve-month period ending on December 31 of the preceding calendar
year, or for the initial period, from the Closing Date until December 31,
1996, and of its performance under this Agreement was made under the
supervision of the officer signing such certificate and (b) to the best of
such Officer's knowledge, based on such review, the Servicer has fully
performed all its obligations under this Agreement throughout such period, or,
if there has been a default in the performance of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. A copy of such certificate may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust office.
Section 3.6 Annual Independent Accountants' Servicing Report.
(a) On or before March 31 of each calendar year, beginning with
March 31, 1997, the Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other services
to the Servicer or the Transferor) to furnish, as provided in Section 13.5, a
report addressed to the Trustee, any Credit Enhancement Provider and the
Transferor, to the effect that such firm has examined management's assertion
that, as of the date of such report, the system of internal control over
servicing of securitized credit card receivables met the criteria for
effective internal control described in the report entitled "Internal Control
- - Integrated Framework" issued by the Committee of Sponsoring Organizations of
the Treadway Commission ("COSO") and that in their opinion, management's
assertion is fairly stated, in all material respects. A copy of such report
shall be distributed by the Trustee to the Rating Agency and will be available
for distribution to Certificateholders upon written request therefor addressed
to the Trustee at the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with
March 31, 1997, the Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other services
to the Servicer or the Transferor) to furnish, as provided in Section 13.5, a
report, prepared using generally accepted attestation standards, addressed to
the Trustee, any Credit Enhancement Provider and the Transferor, to the effect
that they have compared the amounts set forth in the monthly certificates
forwarded by the Servicer pursuant to subsection 3.4(c) during the period
covered by such report (which shall be the twelve-month period ending on
<PAGE>
December 31 of the preceding calendar year, or for the initial period, from
the Closing Date until December 31, 1996) with the Servicer's computer reports
which were the source of such amounts and found them to be in agreement or
shall disclose any exceptions noted. Additionally, such firm shall
recalculate the mathematical accuracy of amounts derived in the monthly
certificates. A copy of such report shall be distributed by the Trustee to
the Rating Agency and will be available for distribution to Certificateholders
upon written request therefor addressed to the Trustee at the Corporate Trust
Office.
Section 3.7 Tax Treatment. The Transferor has structured this
Agreement and the Investor Certificates with the intention that the Investor
Certificates will qualify under applicable federal, state, local and foreign
tax law as indebtedness. The Transferor, the Servicer, the Holder of the
Transferor Certificate, each Investor Certificateholder, and each Certificate
Owner, agree to treat and to take no action inconsistent with the treatment of
the Investor Certificates (or beneficial interest therein) as indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and
any other tax imposed on or measured by income. Each Investor Certificate-
holder and the Holder of the Transferor Certificate, by acceptance of its
Certificate and each Certificate Owner, by acquisition of a beneficial
interest in a Certificate, agree to be bound by the provisions of this section
3.7. Each Certificateholder agrees that it will cause any Certificate Owner
acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law, as
described in this Section 3.7.
Section 3.8 Notices to the Transferor. In the event that the
Transferor is no longer acting as Servicer, any Successor Servicer appointed
pursuant to Section 10.2 shall deliver or make available to the Transferor
each certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.4, 3.5 and 3.6.
[End of Article III]
<PAGE>
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders. Each Series of Investor
Certificates shall represent Undivided Interests in the Trust, including the
benefits of any Credit Enhancement issued with respect to such Series and the
right to receive the Collections and other amounts at the times and in the
amounts specified in this Article IV to be deposited in the Investor Accounts
and any other Series Account (if so specified in the related Supplement) or to
be paid to the Investor Certificateholders of such Series; provided, however,
that the aggregate interest represented by such Certificates at any time in
the Principal Receivables shall not exceed an amount equal to the Investor
Interest at such time. The Transferor Certificate shall represent the
remaining undivided interest in the Trust, including the right to receive the
Collections and other amounts at the times and in the amounts specified in
this Article IV to be paid to the Holder of the Transferor Certificate;
provided, however, that the aggregate interest represented by such Transferor
Certificate at any time in the Principal Receivables shall not exceed the
Transferor Interest at such time and such Certificate shall not represent any
interest in the Investor Accounts, except as provided in this Agreement, or
the benefits of any Credit Enhancement issued with respect to any Series.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Certificateholders (the "Collection Account"). Pursuant to
authority granted to it pursuant to subsection 3.1(b), the Servicer shall have
the revocable power to withdraw funds from the Collection Account for the
purposes of carrying out its duties hereunder.
(b) The Finance Charge and Principal Accounts. The Trustee, for
the benefit of the Investor Certificateholders, shall establish and maintain
in the State of New York with the Paying Agent in the name of the Trust two
Eligible Deposit Accounts (the "Finance Charge Account" and the "Principal
Account", respectively), bearing a designation clearly indicating that the
funds therein are held for the benefit of the Investor Certificateholders;
provided, however, that each of such accounts may be established as sub-
accounts of the Collection Account. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Finance
Charge Account and the Principal Account and in all proceeds thereof. The
Finance Charge Account and the Principal Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholders. Pursuant to authority granted to it hereunder, the
Servicer shall have the revocable power to instruct the Trustee to withdraw
funds from the Finance Charge Account and Principal Account for the purpose of
carrying out the Servicer's duties hereunder. The Trustee at all times shall
maintain accurate records reflecting each transaction in the Principal Account
and the Finance Charge Account and that funds held therein shall at all times
be held in trust for the benefit of the Investor Certificateholders.
(c) The Distribution Account. The Trustee, for the benefit of the
Investor Certificateholders, shall cause to be established and maintained in
<PAGE>
the name of the Trust, an Eligible Deposit Account bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Investor Certificateholders (the "Distribution Account"). The
Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Distribution Account and in all proceeds thereof.
The Distribution Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders.
(d) The Excess Funding Account. The Trustee, for the benefit of
the Investor Certificateholders, shall establish and maintain an Eligible
Deposit Account bearing a designation clearly indicating that the funds
therein are held for the benefit of the Investor Certificateholders (the
"Excess Funding Account"). The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Excess Funding
Account and in all proceeds thereof. The Excess Funding Account shall be
under the sole dominion and control of the Trustee for the benefit of the
Investor Certificateholders. If, at any time, the Excess Funding Account
ceases to be an Eligible Deposit Account, the Trustee shall notify the Rating
Agency and within 10 Business Days establish a new Eligible Deposit Account
which shall be designated as the new Excess Funding Account and shall transfer
any cash or any investments to such new Excess Funding Account. From the date
such new Excess Funding Account is established, it shall be the "Excess
Funding Account." Pursuant to authority granted to it hereunder, the Servicer
shall have the revocable power to instruct the Trustee to withdraw funds from
the Excess Funding Account for the purpose of carrying out the Servicer's
duties hereunder. The Trustee at all times shall maintain accurate records
reflecting each transaction in the Excess Funding Account and that funds held
therein shall at all times be held in trust for the benefit of the Investor
Certificateholders.
(e) Series Accounts. If so provided in the related Supplement, the
Trustee, for the benefit of the Investor Certificateholders, shall cause to be
established and maintained in the name of the Trust, one or more Series
Accounts. Each such Series Account shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Investor Certificateholders of such Series. Each such Series Account will be
an Eligible Deposit Account, if so provided in the related Supplement and will
have the other features and be applied as set forth in the related Supplement.
(f) Administration of the Finance Charge, Principal Accounts and
Excess Funding Account. Funds on deposit in the Principal Account, the
Finance Charge Account and the Excess Funding Account shall at all times be
invested in Permitted Investments. Any such investment shall mature and such
funds shall be available for withdrawal on or prior to the Transfer Date
related to the Monthly Period in which such funds were processed for
collection, or if so specified in the related Supplement, immediately
preceding a Distribution Date. The Trustee shall maintain for the benefit of
the Investor Certificateholders possession of the negotiable instruments or
securities evidencing the Permitted Investments described in clause (a) of the
definition thereof from the time of purchase thereof until the time of sale or
maturity; provided, however that no such investment shall be disposed of prior
to its maturity date. At the end of each month, all interest and earnings (net
of losses and investment expenses) on funds on deposit in the Principal
Account and the Finance Charge Account shall be deposited by the Trustee in an
Eligible Deposit Account in the name of the Transferor, or a Person designated
in writing by the Servicer, which shall not constitute a part of the Trust, or
shall otherwise be turned over by the Trustee to the Transferor not less
<PAGE>
frequently than monthly, and all interest and earnings (net of losses and
investment expenses) on funds on deposit in the Excess Funding Account shall
be deposited by the Trustee in the Finance Charge Account for application as
Collections of Finance Charge Receivables. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
of which the Trustee shall have received written notification thereof, shall
instruct the Trustee with respect to the investment of funds on deposit in the
Principal Account and the Finance Charge Account. For purposes of determining
the availability of funds or the balances in the Finance Charge Account, the
Principal Account and, except as provided in the second preceding sentence,
the Excess Funding Account, for any reason under this Agreement, all
investment earnings on such funds shall be deemed not to be available or on
deposit.
Section 4.3 Collections and Allocations.
(a) Collections. Except as provided below, the Servicer shall
deposit all Collections in the Collection Account as promptly as possible
after the Date of Processing of such Collections, but in no event later than
the second Business Day following such Date of Processing. In the event of
the insolvency of the Servicer, then, immediately upon the occurrence of such
event and thereafter, the Servicer shall deposit all Collections into the
Collection Account, and in no such event shall the Servicer deposit any
Collections thereafter into any account established, held or maintained with
the Servicer.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Transferor Certificate in accordance
with this Article IV and shall withdraw the required amounts from the
Collection Account or pay such amounts to the Holder of the Transferor
Certificate in accordance with this Article IV, in both cases as modified by
any Supplement. The Servicer shall make such deposits or payments on the date
indicated therein in immediately available funds or as otherwise provided in
the Supplement for any Series of Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, for so
long as, and only so long as, the Transferor shall remain the Servicer
hereunder, and (a)(i) the Servicer provides to the Trustee a letter of credit
covering risk collection of the Servicer, and (ii) the Transferor shall not
have received a notice from any Rating Agency that such a letter of credit
would result in the lowering of such Rating Agency's then-existing rating of
the Investor Certificates, or (b) the Servicer shall have and maintain a
certificate of deposit or short-term deposit rating of "P-1" by Moody's and of
"A-1" by Standard & Poor's, the Servicer need not deposit Collections into the
Collection Account, the Principal Account, the Finance Charge Account, the
Excess Funding Account or any Series Account, as provided in any Supplement,
or make payments to the Holder of the Transferor Certificate as provided in
Article IV, but may make such deposits, payments and withdrawals on each
Transfer Date 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.
Notwithstanding anything else in this Agreement to the contrary,
with respect to any Monthly Period, whether the Servicer is required to make
monthly or daily deposits from the Collection Account into the Finance Charge
Account, the Principal Account, the Excess Funding Account or any Series
Account, as provided in any Supplement, (i) the Servicer will only be required
<PAGE>
to deposit Collections from the Collection Account into the Finance Charge
Account, the Principal Account, the Excess Funding Account or any Series
Account in an amount equal to the lesser of (x) the amount required to be
deposited into any such deposit account pursuant to the terms of this
Agreement or any Supplement and (y) the amount required to be distributed on
or prior to the related Distribution Date to Investor Certificateholders or to
any Credit Enhancement Provider pursuant to the terms of any Supplement or
agreement relating to such Credit Enhancement and (ii) if at any time prior to
such Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from the
Collection Account.
(b) Allocations for the Transferor Certificate. Throughout the
existence of the Trust, unless otherwise stated in any Supplement, the
Servicer shall allocate to the Holder of the Transferor Certificate an amount
equal to the product of (A) the Transferor Percentage and (B) the aggregate
amount of such Collections allocated to Principal Receivables and Finance
Charge Receivables, respectively, in respect of each Monthly Period.
Notwithstanding anything in this Agreement to the contrary, unless otherwise
stated in any Supplement, the Servicer need not deposit this amount or any
other amounts so allocated to the Transferor Certificate pursuant to any
Supplement into the Collection Account and shall pay, or be deemed to pay,
such amounts as collected to the Holder of the Transferor Certificate.
(c) Adjustments for Miscellaneous Credits and Fraudulent Charges.
The Servicer shall be obligated to reduce on a net basis in each Monthly
Period the aggregate amount of Principal Receivables used to calculate the
Transferor Interest as provided in this subsection 4.3(c) (a "Credit
Adjustment") with respect to any Principal Receivable (i) which was created in
respect of merchandise refused or returned by the Obligor thereunder or as to
which the Obligor thereunder has asserted a counterclaim or defense, (ii)
which is reduced by the Servicer by any rebate, refund, charge-back or
adjustment (including Servicer errors) or (iii) which was created as a result
of a fraudulent or counterfeit charge.
In the event that the inclusion of the amount of a Credit Adjustment
in the calculation of the Transferor Interest would cause the Transferor
Interest to be an amount less than the Minimum Transferor Interest, the
Transferor shall make a deposit, no later than the Business Day following the
Date of Processing of such Credit Adjustment, in the Excess Funding Account in
immediately available funds in an amount equal to the amount by which such
Credit Adjustment would cause the Transferor Interest to be less than the
Minimum Transferor Interest on such Date of Processing.
(d) Transfer of Defaulted Accounts. Unless otherwise provided in
any Supplement, on the date on which an Account becomes a Defaulted Account,
the Trust shall automatically and without further action or consideration be
deemed to transfer, set over, and otherwise convey to the Transferor, without
recourse, representation or warranty, all the right, title and interest of the
Trust in and to Receivables in such Defaulted Account, all monies due or to
become due with respect to such Receivables, all proceeds of such Receivables
and Insurance Proceeds relating to such Receivables allocable to the Trust
with respect to such Receivables. Notwithstanding any such transfer of
accounts, amounts recovered with respect to such defaulted accounts may still
be allocated to the Trust to the extent provided for in the definition of
Recoveries.
<PAGE>
(e) Operation of Excess Funding Account. On each Determination
Date on which one or more Series is in its Amortization Period or Accumulation
Period, the Servicer shall determine the aggregate amount of Principal
Shortfalls, if any, with respect to each such Series that is a Principal
Sharing Series, and the Servicer shall instruct the Trustee to withdraw such
amount (up to the Excess Funding Amount) from the Excess Funding Account on
the next succeeding Transfer Date and deposit such amount in the Distribution
Account for allocation among each such Series as Shared Principal Collections
as specified in each related Supplement. On any Business Day on which the
Transferor Interest exceeds the Minimum Transferor Interest, the Servicer
shall instruct the Trustee to withdraw the amount of such excess (up to the
Excess Funding Amount) from the Excess Funding Account on such day and pay
such amount to the Holder of the Transferor Certificate.
Section 4.4 Allocations During Funding Period. To the extent that
the Servicer establishes an Eligible Deposit Account as a pre-funding account
(the "Pre-Funding Account") with respect to any Series, bearing a designation
indicating that the funds deposited therein are for the benefit of such
Series, during the period (the "Funding Period"), as set forth in the related
Supplement, that the Pre-Funding Account maintains a balance, the date upon
which an increase in the Invested Amount of such Series in accordance with the
terms of such related Supplement occurs shall be treated as an Addition Date
solely for the purpose of calculating the applicable Investor Percentages.
Such Addition Date shall be deemed to occur on the date of each such increase
and the applicable Investor Percentages shall be calculated accordingly.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE SPECIFIED IN
ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article IV]
<PAGE>
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article V]
<PAGE>
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and 6.13,
the Investor Certificates of each Series and any Class thereof may be issued
in bearer form (the "Bearer Certificates") with attached interest coupons and
a special coupon (collectively, the "Coupons") or in fully registered form
(the "Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the related Supplement. The
Transferor Certificate shall be substantially in the form of Exhibit A. The
Investor Certificates and the Transferor Certificate shall, upon issue
pursuant hereto or to Section 6.9 or Section 6.10, be executed and delivered
by the Transferor to the Trustee for authentication and redelivery as provided
in Sections 2.1 and 6.2. Any Investor Certificate shall be issuable in a
minimum denomination of $1,000 Undivided Interest and integral multiples
thereof, unless otherwise specified in any Supplement. The Transferor
Certificate shall be issued as a single certificate. Each Certificate shall
be executed by manual or facsimile signature on behalf of the Transferor by
its President or any Vice President. Certificates bearing the manual or
facsimile signature of the individual who was, at the time when such signature
was affixed, authorized to sign on behalf of the Transferor or the Trustee
shall not be rendered invalid, notwithstanding that such individual has ceased
to be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein, executed by
or on behalf of the Trustee by the manual signature of a duly authorized
signatory, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication except Bearer Certificates which shall be dated
the applicable Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates. Contemporaneously with
the initial assignment and transfer of the Receivables, whether now existing
or hereafter created (other than Receivables in Additional Accounts) and the
other components to the Trust, the Trustee shall authenticate and deliver the
initial Series of Investor Certificates, upon the written order of the
Transferor, to the underwriters for the sale of the Book-Entry Certificates
evidenced by such Investor Certificates, and against payment to the Transferor
of the Initial Investor Interest (net of any purchase or underwriting
discount). Upon the receipt of such payment and the issuance of the Investor
Certificates, such Investor Certificates shall be fully paid and
non-assessable. The Trustee shall authenticate and deliver the Transferor
Certificate to the Transferor simultaneously with its delivery to the
Transferor of the initial Series of Investor Certificates. Upon an Exchange
as provided in Section 6.9 and the satisfaction of certain other conditions
specified therein, the Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation provided in the
related Supplement), upon the order of the Transferor, to the Persons
designated in such Supplement. Upon the order of the Transferor, the
Certificates of any Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations. If specified in the related Supplement
for any Series, the Trustee shall authenticate and deliver outside the United
States the Global Certificate that is issued upon original issuance thereof,
<PAGE>
upon the written order of the Transferor, to the Depository against payment of
the purchase price therefor. If specified in the related Supplement for any
Series, the Trustee shall authenticate Book-Entry Certificates that are issued
upon original issuance thereof, upon the written order of the Transferor, to a
Clearing Agency or is nominee as provided in Section 6.10 against payment of
the purchase price thereof.
Section 6.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to
be maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar"), in accordance with the provisions of Section 11.16, a register
(the "Certificate Register") in which, subject to such reasonable regulations
as it may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Chemical Bank is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate is issued as a Global
Certificate, the Trustee may, or if and so long as any Series of Investor
Certificates are listed an the Luxembourg Stock Exchange and such exchange
shall so require, the Trustee shall appoint a co-transfer agent and
co-registrar in Luxembourg or another European city. Any reference in this
Agreement to the Transfer Agent and Registrar shall include any co-transfer
agent and co-registrar unless the context otherwise requires. Chemical Bank
shall be permitted to resign as Transfer Agent and Registrar upon 30 days'
written notice to the Servicer. In the event that Chemical Bank shall no
longer be the Transfer Agent and Registrar, the Trustee shall appoint a
successor Transfer Agent and Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Transfer Agent and Registrar, the Transferor shall
execute, subject to the provisions of subsection 6.3(c), and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Interests; provided, however that the provisions of this
paragraph shall not apply to Bearer Certificates.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency. At the option of any Holder of Registered Certificates, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in
the Trust, upon surrender of the Registered Certificates to be exchanged at
any office or agency of the Transfer Agent and Registrar maintained for such
purpose. At the option of a Bearer Certificateholder, subject to applicable
laws and regulations (including without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of like aggregate
Undivided Interests in the Trust, in the manner specified in the Supplement
for such Series, upon surrender of the Bearer Certificates to be exchanged at
an office or agency of the Transfer Agent and Registrar located outside the
United States. Each Bearer Certificate surrendered pursuant to this Section
6.3 shall have attached thereto (or be accompanied by) all unmatured Coupons,
<PAGE>
provided that any Bearer Certificate so surrendered after the close of
business on the Record Date preceding the relevant Distribution Date after the
related Series Termination Date need not have attached the coupons relating to
such Distribution Date.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Transferor shall execute, and the Trustee shall authenticate
and (unless the Transfer Agent and Registrar is different than the Trustee, in
which case the Transfer Agent and Registrar shall) deliver, the Investor
Certificates of such Series which the Certificateholder making the exchange is
entitled to receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificate holder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Investor Certificate of
any Series for a period of 15 days preceding the due date for any payment with
respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service
charge shall be made for any registration of transfer or exchange of
Certificates, but the Transfer Agent and Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached to
Bearer Certificates) surrendered for registration of transfer and exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee. The Trustee shall cancel and destroy any
Global Certificates upon its exchange in full for Definitive Certificates and
shall deliver a certificate of destruction to the Transferor. Such
certificate shall also state that a certificate or certificates of each
Foreign Clearing Agency to the effect referred to in Section 6.13 was received
with respect to each portion of such Global Certificate exchanged for
Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary to
enable the Trustee to fulfill its responsibilities under this Agreement and
the Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any Supplement,
in no event shall the Transferor Certificate or any interest therein be
transferred hereunder, in whole or in part, unless the Trustee shall have
consented in writing to such transfer; provided, however, that the Trustee may
not withhold such consent if it shall have received (1) written confirmation
from each Rating Agency that such transfer will satisfy the Rating Agency
Condition and (2) a Tax Opinion with respect to such transfer.
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend
relating to the restrictions on transfer of such Registered Certificates
(which legend shall be set forth in the Supplement relating to such Investor
<PAGE>
Certificates) shall be effected only if the conditions set forth in such
related Supplement are satisfied.
Whenever a Registered Certificate containing the legend sat forth in
the related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the Servicer regarding such transfer. The Transfer Agent
and Registrar and the Trustee shall be entitled to receive written
instructions signed by a Servicing Officer prior to registering any such
transfer or authenticating new Registered Certificates, as the case may be.
The Servicer hereby agrees to indemnify the Transfer Agent and Registrar and
the Trustee and to hold each of them harmless against any loss, liability or
expense incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by them in reliance on any such
written instructions furnished pursuant to this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its expense
in the Borough of Manhattan, the City of New York (and subject to this Section
6.3, if specified in the related Supplement for any Series, any other city
designated in such Supplement) an office or offices or an agency or agencies
where Investor Certificates of such Series may be surrendered for registration
of transfer or exchange.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons, if any, appertaining thereto) is surrendered to
the Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be reasonably required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the
Transferor shall execute and the Trustee shall authenticate and (unless the
Transfer Agent and Registrar is different from the Trustee, in which case the
Transfer Agent and Registrar shall) deliver (in compliance with applicable
law), in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and aggregate Undivided
Interest. In connection with the issuance of any new Certificate under this
Section 6.4, the Trustee or the Transfer Agent and Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 6.4
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
certificate shall be found at any time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the Person
in whose name any Certificate is registered as the owner of such Certificate
for the purpose of receiving distributions pursuant to Article V (as described
in any Supplement) and for all other purposes whatsoever, and neither the
Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent of
any of them shall be affected by any notice to the contrary; provided,
however, that in determining whether the holders of Investor Certificates
evidencing the requisite Undivided Interests have given any request, demand,
<PAGE>
authorization, direction, notice, consent or waiver hereunder, unless
otherwise expressly specified herein or in the related Supplement, Investor
Certificates owned by the Transferor, the Servicer or any Affiliate thereof
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the Corporate Trust
Office of the Trustee knows to be so owned shall be so disregarded. Investor
Certificates so owned that have been pledged in good faith shall not be
disregarded as outstanding, if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Investor
Certificates and that the pledgee is not the Transferor, the Servicer or an
Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
holder of a Bearer Certificate or Coupon as the owner of such Bearer
Certificate or Coupon for the purpose of receiving distributions pursuant to
Article IV and Article XII and for all other purposes whatsoever, and neither
the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent
of any of them shall be affected by any notice to the contrary. Certificates
so owned which have been pledged in good faith shall not be disregarded and
may be regarded as outstanding, if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Investor
Certificates and that the pledgee is not the Transferor, the Servicer or an
Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V hereof. Any Paying
Agent shall have the revocable power to withdraw funds from such appropriate
account or accounts for the purpose of making distributions referred to above.
The Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke
such power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is the Paying Agent) determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect or for other good cause. The Trustee (or the Servicer if the
Trustee is the Paying Agent) shall notify the Rating Agency of the removal of
any Paying Agent. The Paying Agent, unless the Supplement with respect to any
Series states otherwise, shall initially be Chemical Bank. If any form of
Investor Certificate is issued as a Global Certificate, or if and so long as
any Series of Investor Certificates are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Trustee shall appoint a
co-paying agent in Luxembourg or another European city. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to
the Servicer. In the event that any Paying Agent shall no longer be the
Paying Agent, the Trustee shall appoint a successor to act as Paying Agent
(which shall be a bank or trust company). The provisions of Sections 11.1,
11.2 and 11.3 shall apply to the Trustee also in the capacity of Paying Agent,
for so long as the Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
<PAGE>
If specified in the related Supplement for any Series, so long as
the Investor Certificates of such Series are outstanding, the Transferor shall
maintain a co-paying agent in New York City (for Registered Certificates only)
or any other city designated in such Supplement which, if and so long as any
Series of Investor Certificates is listed on the Luxembourg Stock Exchange or
other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if
any, held by it for payment to the Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums shall be paid to
such Certificateholders and shall agree, and if the Trustee is the Paying
Agent it hereby agrees, that it shall comply with all requirements of the
Internal Revenue Code regarding the withholding by the Trustee of payments in
respect of federal income taxes due from Certificate Owners.
Section 6.7 Access to List of Certificateholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or
the Paying Agent, respectively, in writing, a list in such form as the
Servicer or the Paying Agent may reasonably require, of the names and
addresses of the Investor Certificateholders as of the most recent Record Date
for payment of distributions to Investor Certificateholders. Unless otherwise
provided in the related Supplement, holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 10% of the Investor
Interest of the Investor Certificates of any Series (the "Applicants") may
apply in writing to the Trustee, and if such application states that the
Applicants desire to communicate with other Investor Certificateholders of any
Series with respect to their rights under this Agreement or under the Investor
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been adequately
indemnified by such Applicants for its costs and expenses, shall afford or
shall cause the Transfer Agent and Registrar to afford such Applicants access
during normal business hours to the most recent list of Certificateholders
held by the Trustee and shall give the Servicer notice that such request has
been made, within five Business Days after the receipt of such application.
Such list shall be as of a date no more than 45 days prior to the date of
receipt of such Applicants' request. Every Certificateholder, by receiving
and holding a Certificate, agrees with the Trustee that neither the Trustee,
the Transfer Agent and Registrar, nor any of their respective agents shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was obtained.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an authenticating agent and a certificate of authentication
<PAGE>
executed on behalf of the Trustee by an authenticating agent. Each
authenticating agent must be acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent without
the execution or filing of any paper or any further act on the part of the
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the
Transferor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Trustee or the Transferor, the Trustee promptly may appoint
a successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like affect as if
originally named as an authenticating agent. No successor authenticating
agent shall be appointed unless acceptable to the Trustee and the Transferor.
(d) The Trustee agrees to pay each authenticating agent from time
to time reasonable compensation for its services under this Section 6.8, and
the Trustee shall be entitled to be reimbursed and the Servicer shall
reimburse the Trustee for such reasonable payments actually made, subject to
the provisions of Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the certificates described in the Pooling and
Servicing Agreement.
______________________________
as Authenticating Agent
for the Trustee,
By:___________________________
Authorized signatory
Section 6.9 Tender of Transferor Certificate.
(a) Upon any Exchange, the Trustee shall issue to the Holder of the
Transferor Certificate under Section 6.1, for execution and redelivery to the
Trustee for authentication under Section 6.2, one or more new Series of
Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the related Supplement and shall bear,
upon its face, the designation for such Series to which it belongs, as
selected by the Transferor. Except as specified in any Supplement for a
related Series, all Investor Certificates of any Series shall rank pari passu
<PAGE>
and be equally and ratably entitled as provided herein to the benefits hereof
(except that the Credit Enhancement provided for any Series shall not be
available for any other Series) without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the related
Supplement.
(b) The Holder of the Transferor Certificate may tender the
Transferor Certificate to the Trustee in exchange for (i) one or more newly
issued Series of Investor Certificates or in connection with a Companion
Series, interests in such Series and (ii) a reissued Transferor Certificate
(any such tender, a "Transferor Exchange"). In addition, to the extent
permitted for any Series of Investor Certificates as specified in the related
Supplement, the Investor Certificateholders of such Series may tender their
Investor Certificates and the Holder of the Transferor Certificate may tender
the Transferor Certificate to the Trustee pursuant to the terms and conditions
set forth in such Supplement in exchange for (i) one or more newly issued
Series of Investor Certificates and (ii) a reissued Transferor Certificate (an
"Investor Exchange"). The Transferor Exchange and Investor Exchange are
referred to collectively herein as an "Exchange." The Holder of the
Transferor Certificate may perform an Exchange by notifying the Trustee, in
writing at least three days in advance (an "Exchange Notice") of the date upon
which the Exchange is to occur (an "Exchange Date"). Any Exchange Notice
shall state the designation of any Series (and Class thereof, if applicable)
to be issued on the Exchange Date and, with respect to each such Series: (a)
its Initial Investor Interest (or the method for calculating such Initial
Investor Interest) (b) its Certificate Rate (or the method for allocating
interest payments or other cash flows to such Series), if any, and (c) the
Credit Enhancement Provider, if any, with respect to such Series. On the
Exchange Date, the Trustee shall authenticate and deliver any such Series of
Investor Certificates only upon delivery to it of the following: (a) a
Supplement satisfying the criteria set forth in subsection 6.9(c) executed by
the Transferor and specifying the Principal Terms of such Series, (b) the
applicable Credit Enhancement, if any, (c) the agreement, if any, pursuant to
which the Credit Enhancement Provider agrees to provide the Credit
Enhancement, if any, (d) an Opinion of Counsel to the effect that, unless
otherwise stated in the related Supplement, the newly issued Series or Class
of Investor Certificates will be treated as debt secured by the Receivables
for United States federal income and Delaware and New York state income and
corporate franchise tax purposes, (e) a Tax Opinion, (f) written confirmation
from each Rating Agency that the Exchange will satisfy the Rating Agency
Condition, (g) an Officer's Certificate signed by a Vice President (or any
more senior officer) of the Transferor, that on the Exchange Date (i) the
Transferor, after giving effect to the Exchange, would not be required to add
Additional Accounts pursuant to subsection 2.6(a), and (ii) after giving
effect to such Exchange, the Transferor Interest would be at least equal to
the Minimum Transferor Interest and (h) the existing Transferor Certificate or
applicable Investor Certificates, as the case may be. Upon satisfaction of
such conditions, the Trustee shall cancel the existing Transferor Certificate
or applicable Investor Certificates, as the case may be, and issue, as
provided above, such Series of Investor Certificates and a new Transferor
Certificate, dated the Exchange Date. There is no limit to the number of
Exchanges that may be performed under the Agreement.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect to
any newly issued Series of Investor Certificates, which may include without
<PAGE>
limitation: (i) its name or designation, (ii) an Initial Investor Interest or
the method of calculating the Initial Investor Interest, (iii) the method of
determining any adjusted Investor Interest, if applicable, (iv) the
Certificate Rate (or formula for the determination thereof), (v) the Closing
Date, (vi) each Rating Agency rating such Series, (vi) the name of the
Clearing Agency, if any, (vii) the rights of the Holder of the Transferor
Certificate that have been transferred to the Holders of such Series pursuant
to such Exchange (including any rights to allocations of Collections of
Finance Charge Receivables and Principal Receivables), (ix) the interest
payment date or dates and the date or dates from which interest shall accrue,
(x) the periods during which or dates on which principal will be paid or
accrued, (xi) the method of allocating Collections with respect to Principal
Receivables for such Series and, if applicable, with respect to other Series
and the method by which the principal amount of Investor Certificates of such
Series shall amortize or accrete and the method for allocating Collections
with respect to Finance Charge Receivables and Receivables in Defaulted
Accounts, (xii) any other Collections with respect to Receivables or other
amounts available to be paid with respect to such Series, (xii) the names of
any accounts to be used by such Series and the terms governing the operation
of any such accounts and use of moneys therein, (xiv) the Series Servicing Fee
and the Series Servicing Fee Percentage, (xv) the Minimum Transferor Interest
and the Series Termination Date, (xvi) the terms of any Credit Enhancement
with respect to such Series, and the Credit Enhancement Provider, if
applicable, (xvii) the base rate applicable to such Series, (xviii) the terms
on which the Certificates of such Series may be repurchased or remarketed to
other investors, (xix) any deposit into any account provided for such Series,
(xx) the number of Classes of such Series, and if more than one Class, the
rights and priorities of each such Class, (xxi) whether Interchange or other
fees will be included in the funds available to be paid for such Series,
(xxii) the priority of any Series with respect to any other Series, (xxiii)
the rights, if any, of the holders of the Transferor Certificate that have
been transferred to the holders of such Series, (xxiv) the Pool Factor, (xxv)
the Minimum Aggregate Principal Receivables, (xxvi) whether such Series will
be part of a Group, (xxvii) whether such Series will or may be a Companion
Series and the Series with which it will be paired, if applicable and (xxviii)
any other relevant terms of such Series (including whether or not such Series
will be pledged as collateral for an issuance of any other securities,
including commercial paper) (all such terms, the "Principal Terms" of such
Series). The terms of such Supplement may modify or amend the terms of this
Agreement solely as applied to such new Series. If on the date of the
issuance of such Series there is issued and outstanding one or more Series of
Investor Certificates and no Series of Investor Certificates is currently
rated by a Rating Agency, then as a condition to such Exchange a nationally
recognized investment banking firm or commercial bank shall also deliver to
the Trustee an Officer's certificate stating, in substance, that the Exchange
will not have an adverse effect on the timing or distribution of payments to
such other Series of Investor Certificates then issued and outstanding.
Section 6.10 Book-Entry Certificates. Unless otherwise provided in
any related Supplement, the Investor Certificates, upon original issuance,
shall be issued in the form of typewritten Certificates representing the
Book-Entry Certificates, to be delivered to the depository specified in such
Supplement (the "Depository") which shall be the Clearing Agency or Foreign
Clearing Agency, by or on behalf of such Series. The Investor Certificates of
each Series shall, unless otherwise provided in the related Supplement,
initially be registered on the Certificate Register in the name of the nominee
of the Clearing Agency or Foreign Clearing Agency. No Certificate Owner will
<PAGE>
receive a definitive certificate representing such Certificate Owner's
interest in the related Series of Investor Certificates, except as provided in
Section 6.12. Unless and until definitive, fully registered Investor
Certificates of any Series ("Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 6.12;
(i) the provisions of this Section 6.10 shall be in full force and
effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes (including the making
of distributions on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10 conflict
with any other provisions of this Agreement, the provisions of this
Section 6.10 shall control with respect to each such Series; and
(iv) the rights of Certificate Owners of each such Series shall be
exercised only through the Clearing Agency or Foreign Clearing Agency and
the applicable Clearing Agency Participants and shall be limited to those
established by law and agreements between such Certificate Owners and the
Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement applicable to a
Series, unless and until Definitive Certificates of such Series are
issued pursuant to Section 6.12, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal and interest on the Investor
Certificates to such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for
distribution to Holders of Investor Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the Transferor
advises the Trustee in writing that the Clearing Agency or Foreign Clearing
Agency is no longer willing or able to discharge properly its responsibilities
under the applicable Depository Agreement, and (B) the Trustee or the
Transferor is unable to locate a qualified successor, (ii) the Transferor, at
its option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or Foreign Clearing Agency with
respect to any Series of Certificates or (iii) after the occurrence of a
Servicer Default, Certificate Owners of a Series representing beneficial
interests aggregating not less than 50% of the Investor Interest of such
Series advise the Trustee and the applicable Clearing Agency or Foreign
Clearing Agency through the applicable Clearing Agency Participants in writing
that the continuation of a book-entry system through the applicable Clearing
Agency or Foreign Clearing Agency is no longer in the best interests of the
Certificate Owners, the Trustee shall notify all Certificate Owners of such
Series, through the applicable Clearing Agency Participants, of the occurrence
of any such event and of the availability of Definitive Certificates to
Certificate Owners of such Series requesting the same. Upon surrender to the
<PAGE>
Trustee of the Investor Certificates of such Series by the applicable Clearing
Agency or Foreign Clearing Agency, accompanied by registration instructions
from the applicable Clearing Agency or Foreign Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates of such
Series. Neither the Transferor nor the Trustee shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates of such Series all references herein to obligations imposed upon
or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Trustee, to the
extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates of such
Series as Certificateholders of such Series hereunder.
Section 6.13 Global Certificate. If specified in the related
Supplement for any Series, the Investor Certificates may be initially issued
in the form of a single temporary Global Certificate (the "Global
Certificate") in bearer form, without interest coupons, in the denomination of
the Initial Investor Interest and substantially in the form attached to the
related Supplement. Unless otherwise specified in the related Supplement, the
provisions of this Section 6.13 shall apply to such Global Certificate. The
Global Certificate will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same effect as the
Definitive Certificates. The Global Certificate may be exchanged in the
manner described in the related Supplement for Registered or Bearer
Certificates in definitive form.
Section 6.14 Meetings of Certificateholders. To the extent
provided by the Supplement for any Series issued in whole or in part in Bearer
Certificates, the Servicer or the Trustee may at any time call a meeting of
the Certificateholders of such Series, to be held at such time and at such
place as the Servicer or the Trustee, as the case may be, shall determine, for
the purpose of approving a modification of or amendment to, or obtaining a
waiver of, any covenant or condition set forth in this Agreement with respect
to such Series or in the Certificates of such Series, subject to Section 13.1
of the Agreement.
[End of Article VI]
<PAGE>
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall be
liable in accordance herewith to the extent of the obligations specifically
undertaken by the Transferor.
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor.
(a) The Transferor shall not consolidate with or merge into any
other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) (A) the Transferor is the surviving entity or (B) if the
Transferor is not the surviving entity, the corporation formed by such
consolidation or into which the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets of the
Transferor substantially as an entirety shall be organized and existing
under the laws of the United States of America or any State or the
District of Columbia, and shall be a national banking association, state
banking corporation or other entity which is not subject to the
bankruptcy laws of the United States of America and shall expressly
assume, by an agreement supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the performance of
every covenant and obligation of the Transferor, as applicable hereunder
and shall benefit from all the rights granted to the Transferor, as
applicable hereunder. To the extent that any right, covenant or
obligation of the Transferor, as applicable hereunder, is inapplicable to
the successor entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as would apply, to
the extent practicable, to such successor entity. In furtherance hereof,
in applying this Section 7.2 to a successor entity, Section 9.2 hereof
shall be applied by reference to events of involuntary liquidation,
receivership or conservatorship applicable to such successor entity as
shall be set forth in the Officer's Certificate described in subsection
7.2(a)(ii);
(ii) the Transferor shall have delivered to the Trustee an Officer's
Certificate signed by a Vice President (or any more senior officer) of
the Transferor stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 7.2 and
that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding; and
(iii) the Transferor shall have delivered notice to the Rating Agency
of such consolidation, merger, conveyance or transfer.
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Transferor
hereunder (i) except for mergers, consolidations, assumptions or transfers in
accordance with the provisions of the foregoing paragraph or (ii) unless the
assignee with respect to such obligations shall be organized and existing
under the laws of the United States of America or any State or the District of
<PAGE>
Columbia, and shall be a national banking association, state banking
corporation or other entity which is not subject to the bankruptcy laws of the
United States of America and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the performance of every covenant and obligation
of the Transferor, as applicable hereunder and shall benefit from all the
rights granted to the Transferor, as applicable hereunder. To the extent that
any right, covenant or obligation of the Transferor, as applicable hereunder,
is inapplicable to the assignee, such assignee shall be subject to such
covenant or obligation, or benefit from such right, as would apply, to the
extent practicable, to such assignee.
Section 7.3 Limitation of Liability. The directors, officers,
employees or agents of the Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders, any Credit Enhancement Provider or
any other Person hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the execution of this
Agreement and any Supplement and the issuance of the Certificates; provided,
however, that this provision shall not protect the officers, directors,
employees, or agents of the Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. Except as provided in Section 7.4, the Transferor shall
not be under any liability to the Trust, the Trustee, the Certificateholders,
any Credit Enhancement Provider or any other Person for any action taken or
for refraining from the taking of any action in its capacity as Transferor
pursuant to this Agreement or any Supplement whether arising from express or
implied duties under this Agreement or any Supplement; provided, however, that
this provision shall not protect the Transferor against any liability which
would otherwise be imposed by reason of willful misfeasance or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Transferor and any director, officer,
employee or agent may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3 (and
notwithstanding Sections 3.2, 8.3, 8.4 and 11.11), or any other provision
herein, the Transferor by entering into this Agreement, and any holder of an
interest in the Transferor Certificate by its acceptance thereof, agree to be
liable, directly to any creditor or claimant for the entire amount of any
liabilities, including without limitation, any taxes imposed on the Trust,
losses, claims or damages (other than those that would be incurred by an
Investor Certificateholder or a Credit Enhancement Provider, if any, if the
Investor Certificates or Collateral Interest, as the case may be, were notes
secured by the Receivables, for example, as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure to make payment under
any Credit Enhancement or other similar market or investment risks associated
with ownership of the Investor Certificates) arising out of or based on the
arrangement created by this Agreement (to the extent that, if the Trust assets
at the time the claim is made were used to pay in full all outstanding
Certificates of all Series, the Trust assets that would remain after the
Investor Certificateholders and Credit Enhancement Providers, if any, were
paid in full would be insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the New York
Revised Limited Partnership Act in which the Transferor and such holder of an
<PAGE>
interest in the Transferor Certificate were the general partners of such
partnership. The rights created by this Section 7.4 shall run directly to and
be enforceable by the injured party subject to the limitations hereof. To the
extent provided in Section 8.4, the Servicer will (from its own assets and not
from the assets of the Trust) indemnify and hold harmless the Transferor and
each holder of an interest in the Transferor Certificate against and from
certain losses, claims, damages and liabilities of the Transferor as described
in this Section arising from the actions or omissions of the Servicer.
[End Of Article VII]
<PAGE>
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) (A) the Servicer is the surviving entity or (B) if the Servicer
is not the surviving entity, the corporation formed by such consolidation
or into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any State or
the District of Columbia, and shall be a state or national banking
association or other entity which is not subject to the bankruptcy laws
of the United States of America and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trustee in
form satisfactory to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder (to the extent that any right,
covenant or obligation of the Servicer, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Trustee an Officer's
Certificate that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 8.2 and that all
conditions precedent herein provided for relating to such transaction
have been complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding with respect to the Servicer; and
(iii) the Servicer shall have delivered notice to the Rating Agency
of such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation of Liability of the Servicer and Others.
The directors, officers, employees or agents of the Servicer shall not be
under any liability to the Trust, the Trustee, the Certificateholders, any
Credit Enhancement Provider or any other Person hereunder or pursuant to any
document delivered hereunder, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this provision shall not
protect the directors, officers, employees and agents of the Servicer against
any liability which would otherwise be imposed by reason of willful
misfeasance or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. Except as provided in
Section 8.4 with respect to the Trust and the Trustee, its officers,
directors, employees and agents, the Servicer shall not be under any liability
to the Trust, the Trustee, its officers, directors, employees and agents, the
Certificateholders or any other Person for any action taken or for refraining
<PAGE>
from the taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement; provided, however, that this provision shall not
protect the Servicer against any liability which would otherwise be imposed by
reason of willful misfeasance or gross negligence in the performance of duties
or by reason of its reckless disregard of its obligations and duties hereunder
or under any Supplement. The Servicer may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Receivables in accordance with this
Agreement which in its reasonable opinion may cause it to incur any expense or
liability.
Section 8.4 Servicer Indemnification of the Trust and the Trustee.
The Servicer shall indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any reasonable
loss, liability, expense, damage or injury suffered or sustained by reason of
any acts or omissions or alleged acts or omissions of the Servicer with
respect to activities of the Trust or the Trustee pursuant to this Agreement
or any Supplement, including, but not limited to any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that the Servicer shall not indemnify the Trustee if
such acts, omissions or alleged acts or omissions constitute or are caused by
fraud, negligence, bad faith or willful misconduct by the Trustee; provided,
further, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust with respect to any action taken by the Trustee at the
request of the Investor Certificateholders; provided, further, that the
Servicer shall not indemnify the Trust, the Investor Certificateholders or the
Certificate owners as to any losses, claims or damages incurred by any of them
in their capacities as investors, including without limitation losses incurred
as a result of Defaulted Accounts or Receivables which are written off as
uncollectible; and provided, further, that the Servicer shall not indemnify
the Trust, the Investor Certificateholders or the Certificate Owners for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders
or the Certificate Owners arising under any tax law, including without
limitation, any federal, state, local or foreign income or franchise taxes or
any other tax imposed on or measured by income (or any interest or penalties
with respect thereto or arising from a failure to comply therewith) required
to be paid by the Trust, the Investor Certificateholders or the Certificate
Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this
Section 8.4 shall survive termination of this Agreement and the resignation or
removal of the Trustee.
Section 8.5 The Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a Successor Servicer
<PAGE>
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 10.2 hereof. If the Trustee is unable within 120 days
of the date of such determination to appoint a Successor Servicer, the Trustee
shall serve as Successor Servicer hereunder.
Section 8.6 Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the Trustee access
to the documentation regarding the Accounts and the Receivables in such cases
where the Trustee is required in connection with the enforcement of the rights
of the Investor Certificateholders, or by applicable statutes or regulations
to review such documentation, such access being afforded without charge but
only (i) upon reasonable request, (ii) during normal business hours, (iii)
subject to the Servicer's normal security and confidentiality procedures and
(iv) at offices designated by the Servicer. Nothing in this Section 8.6 shall
derogate from the obligation of the Transferor, the Trustee or the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors and the failure of the Servicer to provide access as provided in this
Section 8.6 as a result of such obligations shall not constitute a breach of
this Section 8.6.
Section 8.7 Delegation of Duties. It is understood and agreed by
the parties hereto that the Servicer may delegate certain of its duties
hereunder to First Data Resources, Inc. ("FDR"), a credit card processor
located in Omaha, Nebraska. In the ordinary course of business, the Servicer
may at any time delegate any duties hereunder to any Person who agrees to
conduct such duties in accordance with the Credit Card Guidelines. Any such
delegations shall not relieve the Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a resignation within the
meaning of Section 8.5 hereof. If any such delegation is to a party other
than FDR notification thereof shall be given to each Rating Agency.
Section 8.8 Examination of Records. The Servicer shall clearly and
unambiguously identify each Account (including any Additional Account
designated pursuant to Section 2.6) in its computer or other records to
reflect that the Receivables arising in such Account have been conveyed to the
Trust pursuant to this Agreement. The Servicer shall, prior to the sale or
transfer to a third party of any receivable held in its custody, examine its
computer and other records to determine that such receivable is not a
Receivable.
[End of Article VIII]
<PAGE>
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the following events
(each, a "Trust Pay Out Event") shall occur:
(a) (i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Transferor in an involuntary
case under the Bankruptcy Code or any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, which decree or order is
not stayed, or any other similar relief shall be granted under any
applicable federal or state law, (ii) an involuntary case is commenced
against the Transferor under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect which remains undismissed,
undischarged or unbonded for a period of 60 days or (iii) the Transferor
shall have a decree or an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect;
(b) the Transferor shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to all or substantially all of its property, or a decree or
order of a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Transferor; or the Transferor shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or the Transferor shall become unable for any
reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement; or
(c) the Trust shall become subject to regulation by the Securities
and Exchange Commission as an "investment company" within the meaning of
the Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates shall occur
without any notice or other action on the part of the Trustee or the Investor
Certificateholders immediately upon the occurrence of such event.
Section 9.2 Additional Rights Upon the Occurrence of Certain
Events.
(a) If any event set forth in Section 9.1(a) or (b) shall occur
(any such event, an "Insolvency Event"), the Transferor shall on the day of
such Insolvency Event (the "Appointment Day") immediately cease to transfer
Principal Receivables to the Trust and shall promptly give notice to the
Trustee of such Insolvency Event and the arrangement among the parties created
hereby shall be deemed to have been dissolved, subject to the liquidation and
winding up procedures described below. Notwithstanding any cessation of the
transfer to the Trust of additional Principal Receivables, Finance Charge
Receivables, whenever created, accrued in respect of Principal Receivables
<PAGE>
which have been transferred to the Trust shall continue to be a part of the
Trust, and Collections with respect thereto shall continue to be allocated and
paid in accordance with Article IV. Within 15 days of the Appointment Day,
the Trustee shall (i) publish a notice in an Authorized Newspaper that an
Insolvency Event has occurred and that the Trustee intends to sell, dispose of
or otherwise liquidate the Receivables in a commercially reasonable manner and
(ii) send written notice to the Investor Certificateholders describing the
provisions of this Section 9.2 and requesting instructions from such Holders.
Unless within 75 days from the day notice pursuant to clause (i) above is
first published, the Trustee shall have received written instructions of
Holders of Investor Certificates evidencing more than 50% of the Investor
Interest of each Series issued and outstanding (or, if any such Series has two
or more Classes, each Class) to the effect that such Certificateholders
disapprove of the liquidation of the Receivables. If such vote disapproving
of liquidation of the Receivables has not been obtained, the Trustee shall use
its best efforts to sell, dispose of or otherwise liquidate the Receivables in
a commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids. The Trustee may obtain a
prior determination from any such conservator, receiver or liquidator that the
terms and manner of any proposed sale, disposition or liquidation are
commercially reasonable. The provisions of Sections 9.1 and 9.2 shall not be
deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as Collections
on the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided, that the Trustee shall determine
conclusively in its sole discretion the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables. On the day following the last
Distribution Date in the Monthly Period during which such proceeds are
distributed to the Investor Certificateholders of each Series, the Trust shall
terminate.
(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive bids.
[End of Article IX]
<PAGE>
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following events
(a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing,
withdrawal, or payment under any Credit Enhancement on or before the date
occurring ten Business Days after the date such payment, transfer,
deposit withdrawal or drawing or such instruction or notice is required
to be made or given, as the case may be, under the terms of this
Agreement;
(b) failure on the part of the Servicer duly to observe or perform
in any respect any other covenants or agreements of the Servicer set
forth in this Agreement, which has a material adverse effect on the
Investor Certificateholders of any Series and which continues unremedied
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 50% of the Investor Interest of any Series
adversely affected thereby and continues to materially adversely affect
such Investor Certificateholders for such period; or the Servicer shall
delegate its duties under this Agreement, except as permitted by Section
8.7;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been incorrect when made, which has a
material adverse effect an the Investor Certificateholders of any Series
and which continues to be incorrect in any material respect for a period
of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer
by the Trustee, or to the Servicer and the Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating not less
than 50% of the Investor Interest of any Series adversely affected
thereby and continues to materially adversely affect such Investor
Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to all or substantially all of
its property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been entered
against the Servicer, and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or the Servicer
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make any assignment for the benefit
<PAGE>
of its creditors or voluntarily suspend payment of its obligations; then,
so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Aggregate Investor Interest,
by notice then given in writing to the Servicer (and to the Trustee if
given by the Investor Certificateholders) (a "Termination Notice"), may
terminate all of the rights and obligations of the Servicer as Servicer
under this Agreement. After receipt by the Servicer of such Termination
Notice, and on the date that a Successor Servicer shall have been
appointed by the Trustee pursuant to Section 10.2, all authority and
power of the Servicer under this Agreement shall pass to and be vested in
a Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate)
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the
Servicer to execute or deliver such documents or instruments, and to do
and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights and obligations.
The Servicer agrees to cooperate with the Trustee and such Successor
Servicer in effecting the termination of the responsibilities and rights
of the Servicer to conduct servicing hereunder including, without
limitation, the transfer to such Successor Servicer of all authority of
the Servicer to service the Receivables provided for under this
Agreement, including, without limitation, all authority over all
Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the
Collection Account, the Finance Charge Account, the Principal Account,
the Excess Funding Account and any Series Account, or which shall
thereafter be received with respect to the Receivables, and in assisting
the Successor Servicer and in enforcing all rights to Insurance Proceeds
and Interchange (if any) applicable to the Trust. The Servicer shall
promptly transfer its electronic records or electronic copies thereof
relating to the Receivables to the Successor Servicer in such electronic
form as the Successor Servicer may reasonably request and shall promptly
transfer to the Successor Servicer all other records, correspondence and
documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably
request. To the extent that compliance with this Section 10.1 shall
require the Servicer to disclose to the Successor Servicer information of
any kind which the Servicer reasonably deems to be confidential, the
Successor Servicer shall be required to enter into each customary
licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interests. The Servicer shall, on the date of
any servicing transfer, transfer all of its rights and obligations under
the Credit Enhancement with respect to any Series to the Successor
Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.1(a) for a period of 10
Business Days or in subsection 10.1(b) or (c) for a period of
60 Business Days, shall not constitute a Servicer Default if such delay or
failure could not be prevented by the exercise of reasonable diligence by the
Servicer and such delay or failure was caused by an act of God or the public
enemy, acts of declared or undeclared war, public disorder, rebellion, riot or
sabotage, epidemics, landslides, lightning, fire, hurricanes, tornadoes,
earthquakes, nuclear disasters or meltdowns, floods, power outages or similar
causes. The preceding sentence shall not relieve the Servicer from using its
<PAGE>
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Agreement and the Servicer shall provide the Trustee, any
Credit Enhancement Provider, the Transferor and the Holders of Investor
Certificates with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of the cause of such
failure or delay and its efforts so to perform its obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.1, the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in the
Termination Notice or otherwise specified by the Trustee in writing or, if no
such date is specified in such Termination Notice, or otherwise specified by
the Trustee, until a date mutually agreed upon by the Servicer and Trustee.
The Trustee shall notify each Rating Agency of such removal of the Servicer.
The Trustee shall, as promptly as possible after the giving of a Termination
Notice appoint a successor Servicer (the "Successor Servicer"), and such
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the Trustee. The Trustee may obtain bids from any
potential successor Servicer. If the Trustee is unable to obtain any bids
from any potential successor Servicer and the Servicer delivers an Officer's
Certificate to the effect that the Servicer cannot in good faith cure the
Servicer Default which gave rise to a transfer of servicing, and if the
Trustee is legally unable to act as Successor Servicer, then the Trustee shall
notify each Credit Enhancement Provider of the proposed sale of the
Receivables and shall provide each such Credit Enhancement Provider an
opportunity to bid on the Receivables and shall offer the Transferor the right
of first refusal to purchase the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee, but in no event less than an
amount equal to the Aggregate Investor Interest on the date of such purchase
plus all interest accrued but unpaid on all of the outstanding Investor
Certificates at the applicable Certificate Rate through the date of such
purchase. The proceeds of such sale shall be deposited in the Distribution
Account or any Series Account, as provided in the related Supplement, for
distribution to the Investor Certificateholders of each outstanding Series
pursuant to Section 12.3 of the Agreement. In the event that a Successor
Servicer has not been appointed and has not accepted its appointment at the
time when the Servicer ceases to act as Servicer, the Trustee without further
action shall automatically be appointed the Successor Servicer.
Notwithstanding the above, the Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
financial institution having, in the case of an entity that is subject to
risk-based capital adequacy requirements, risk-based capital of at least
$50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and
whose regular business includes the servicing of VISA or MasterCard credit
card receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall
be deemed to refer to the Successor Servicer. Any Successor Servicer, by its
acceptance of its appointment, will automatically agree to be bound by the
terms and provisions of each Credit Enhancement.
<PAGE>
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Servicing Fee permitted to be paid to the Servicer
pursuant to Section 3.2. The Transferor agrees that if the Servicer is
terminated hereunder, it will agree to deposit a portion of the Collections in
respect of Finance Charge Receivables that it is entitled to receive pursuant
to Article IV to pay its share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be vested in the
Transferor and, without limitation, the Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees
to cooperate with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Transferor in such electronic form as the
Transferor may reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the manner and at such times
as the Transferor shall reasonably request. To the extent that compliance
with this Section 10.2 shall require the Successor Servicer to disclose to the
Transferor information of any kind which the Successor Servicer deems to be
confidential, the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
Section 10.3 Notification to Certificateholders. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give written notice thereof to the Trustee and any Credit
Enhancement Provider and the Trustee shall give notice to the Investor
Certificateholders at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor Servicer
pursuant to this Article X, the Trustee shall give prompt written notice
thereof to Investor Certificateholders at their respective addresses appearing
in the Certificate Register.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3%
of the Investor Interest of each Series adversely affected by any default by
the Services or Transferor may, on behalf of all Certificateholders of such
Series, waive any default by the Servicer or Transferor in the performance of
its obligations hereunder and its consequences, except a default in the
failure to make any required deposits or payments of interest or principal
relating to such Series pursuant to Article IV which default does not result
from the failure of the Paying Agent to perform its obligations to make any
required deposits or payments of interest and principal in accordance with
Article IV. Upon any such waiver of a past default, such default shall cease
to exist, and any default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
[End of Article X]
<PAGE>
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer Default
and after the curing of all Servicer Defaults which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If a Responsible Officer has received written notice
that a Servicer Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they substantially conform to the requirements of this Agreement.
(c) Subject to subsection 11.1(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Investor
Interest of any Series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee in relation to
such Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any failure
by the Servicer referred to in clauses (a) and (b) of Section 10.1 unless
a Responsible Officer of the Trustee obtains actual knowledge of such
failure or the Trustee receives written notice of such failure from the
Servicer or any Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 10% of the Investor Interest of any
Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
<PAGE>
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the interests of the
Trust in any Receivable now existing or hereafter created or to impair the
value of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), the Trustee
shall have no power to vary the corpus of the Trust including, without
limitation, the power to (i) accept any substitute obligation for a Receivable
initially assigned to the Trust under Section 2.1 or 2.6 hereof, (ii) add any
other investment, obligation or security to the Trust, except for an addition
permitted under Section 2.6 or (iii) withdraw from the Trust any Receivables,
except for a withdrawal permitted under Sections 2.7, 9.2, 10.2, 12.1 or 12.2
or subsections 2.4(d), 2.4(e) or Article IV.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Registrar, as the case may be, under this Agreement, the
Trustee shall be obligated promptly to perform such obligation, duty or
agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its credit card
receivables (other than the Receivables) to another Person, upon the written
request of the Transferor, the Trustee will enter into such intercreditor
agreements with the transferee of such receivables as are customary and
necessary to identify separately the rights, if any, of the Trust and such
other Person in the Transferor's credit card receivables; provided, however
that the Trustee shall not be required to enter into any intercreditor
agreement which could adversely affect the interests of the Certificateholders
and, upon the request of the Trustee, the Transferor will deliver an Opinion
of Counsel on any matters relating to such intercreditor agreement, reasonably
requested by the Trustee.
Section 11.2 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accord with, any assignment of Receivables
in Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to the Trustee, the monthly Certificate-
holder's statement, any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been
signed or presented to it pursuant to this Agreement by the proper party
or parties;
(b) the Trustee may consult with counsel of its selection, and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
<PAGE>
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Credit
Enhancement, or to institute, conduct or defend any litigation hereunder
or in relation hereto, at the request, order or direction of any of the
Certificateholders or any Credit Enhancement Provider, pursuant to the
provisions of this Agreement, unless such Certificateholders or Credit
Enhancement Provider shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligations, upon the occurrence of
any Servicer Default (which has not been cured), to exercise such of the
rights and powers vested in it by this Agreement and any Credit
Enhancement, and to use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement except to the extent of the Trustee's negligence;
(e) the Trustee shall not be bound to make any investigation into
the facts of matters stated in any assignment of Receivables in
Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to the Trustee, the monthly Certificate-
holder's statement, any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of
Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest of any Series which could be adversely
affected if the Trustee does not perform such acts;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly by or through agents or
attorneys or a custodian appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.1(a), or otherwise
expressly required herein or in any Supplement the Trustee shall not be
required to make any initial or periodic examination of any documents or
records related to the Receivables or the Accounts for the purpose of
establishing the presence or absence of defects, the compliance by the
Transferor with its representations and warranties or for any other
purpose.
Section 11.3 Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15,
the Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee
shall not be accountable for the use or application by the Transferor of any
of the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferor in respect of the Receivables
or deposited in or withdrawn from the Collection Account, the Principal
Account or the Finance Charge Account, or any Series Account by the Servicer.
<PAGE>
Section 11.4 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive such reasonable compensation as shall be
agreed upon from time to time between the Servicer and the Trustee (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) for all services rendered by it in the
execution of the Trust hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and, subject to Section
8.4, the Servicer will pay or reimburse the Trustee (without reimbursement
from any Investor Account, any Series Account or otherwise) upon its request
for all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this Agreement except
any such expense, disbursement or advance as may arise from its own
negligence, bad faith or wilful misfeasance and except as provided in the
following sentence. If the Trustee is appointed Successor Servicer pursuant
to section 10.2, the provisions of this Section 11.5 shall not apply to
expenses, disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.5 shall
survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or any state thereof authorized
under such laws to exercise corporate trust powers, having a long-term
unsecured debt rating of at least "Baa3" by Moody's and "BBB-" by Standard &
Poor's having, in the case of an entity that is subject to risk-based capital
adequacy requirements, risk-based capital of at least $50,000,000 or, in the
case of an entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by federal or state authority. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 11.6, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in the most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.6, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.7.
Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the
Trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
<PAGE>
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 hereof and shall fail to resign
after written request therefor by the Transferor, or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Transferor may, but shall not be required to, remove the
Trustee and promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor trustee
as provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7
hereof shall execute, acknowledge and deliver to the Transferor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as Trustee herein. The predecessor Trustee shall deliver to
the successor trustee all documents and statements held by it hereunder, and
the Transferor and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in
this Section 11.8 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.8, such successor trustee shall mail notice of
such succession hereunder to all Certificateholders at their addresses as
shown in the Certificate Register.
Section 11.9 Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.6 hereof, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
<PAGE>
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the trust, or any part thereof, and, subject to the other provisions
of this Section 11.10, such powers, duties, obligations, rights and trusts as
the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 11.6 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any laws of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect to
<PAGE>
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be
required to file tax returns, the Trustee, as soon as practicable after it is
made aware of such requirement, shall prepare or cause to be prepared any tax
returns required to be filed by the Trust and, to the extent possible, shall
file such returns at least five days before such returns are due to be filed.
The Trustee is hereby authorized to sign any such return on behalf of the
Trust, in the event that the Trustee is determined to be the person required
by law to sign such return. The Servicer shall prepare or shall cause to be
prepared all tax information required by law to be distributed to Certificate-
holders and shall deliver such information to the Trustee at least five days
prior to the date it is required by law to be distributed to Certificate-
holders. The Servicer, upon request, in the event that the Trustee is
determined to be the person required by law to sign such return, will furnish
the Trustee with all such information known to the Servicer as may be
reasonably required in connection with the preparation of all tax returns of
the Trust. In no event shall the Trustee or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders
or the Certificate Owners arising under any tax law, including without
limitation federal, state, local or foreign income or excise taxes or any
other tax imposed on or measured by income (or any interest or penalty with
respect thereto or arising from a failure to comply therewith).
Section 11.12 Trustee may Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by the Trustee without
the possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders any Series of Certificates, as their interests
may appear, in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default shall
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.1, proceed to protect and enforce its rights and the
rights of the Holders of any Series of Certificates under this Agreement by a
suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement
or in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as the Trustee,
being advised by counsel, shall deem most effectual to protect and enforce any
of the rights of the Trustee or the Holders of any Series of Certificates.
Section 11.14 Rights of Certificateholders to Direct Trustee.
Holders of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Aggregate Investor Interest (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the
Aggregate Investor Interest of the Investor Certificates of all Series to
which such remedy, trust or power relates) shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available
<PAGE>
to the Trustee, or exercising any trust or power conferred on the Trustee;
provided, however, that, subject to Section 11.1, the Trustee shall have the
right to decline to follow any such direction if the Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or
if the Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceedings so directed would be
illegal or subject it to personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; and provided
further that nothing in this Agreement shall impair the right of the Trustee
to take any action deemed proper by the Trustee and which is not inconsistent
with such direction of such Holders of Investor Certificates.
Section 11.15 Representations and Warranties of Trustee. The
Trustee represents and warrants that:
(i) the Trustee is a banking corporation organized, existing and
authorized to engage in the business of banking under the laws of the
State of New York;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Agreement; and
(iii) this Agreement has been duly executed and delivered by the
Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will
maintain at its expense in the Borough of Manhattan, the City of New York an
office or offices, or agency or agencies, where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially designates its Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written notice to the
Servicer and to Certificateholders (or in the case of Holders of Bearer
Certificates, in the manner provided for in the related Supplement) of any
change in the location of the Certificate Register or any such office or
agency.
[End of Article XI]
<PAGE>
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of the
Transferor, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as
hereinafter set forth) shall terminate, except with respect to the duties
described in Sections 8.4 and 11.5 and subsections 2.4(c) and 12.3(b), on the
Trust Termination Date; provided, however, that the Trust shall not terminate
on the date specified in clause (i) of the definition of "Trust Termination
Date" if each of the Servicer and the Holder of the Transferor Certificate
notify the Trustee in writing, not later than five Business Days preceding
such date, that they desire that the Trust not terminate on such date, which
notice (such notice, a "Trust Extension") shall specify the date on which the
Trust shall terminate (such date, the "Extended Trust Termination Date");
provided, however, that the Extended Trust Termination Date shall be not later
than the day prior to the expiration of 21 years after the death of the last
survivor of the descendants living on the date of this Agreement of Joseph P.
Kennedy, the late ambassador of the United States of America to the Court of
St. James's. The Servicer and the Holder of the Transferor Certificate may,
on any date following the Trust Extension, so long as no Series of
Certificates is outstanding, deliver a notice in writing to the Trustee
changing the Extended Trust Termination Date.
(b) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Investor Interest of any Series of
Certificates is greater than zero on its Series 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 such Series on such date), the
Trustee will sell or cause to be sold, and pay the proceeds first, to all
Certificateholders of such Series pro rata in final payment of all principal
of and accrued interest on such Series of Certificates, and second, as
provided in the related Supplement, an amount of Principal Receivables and the
related Finance Charge Receivables (or interests therein) up to 110% of the
sum of the Investor Interest of such Series plus the Enhancement Invested
Amount or the Collateral Interest (if not included in the Investor Interest)
of such Series, if any, at the close of business on such date (but not more
than an amount of Principal Receivables and the related Finance Charge
Receivables equal to the sum of (1) the product of (A) the Transferor
Percentage, (B) the aggregate amount of Principal Receivables in the Trust and
(C) a fraction the numerator of which is the applicable Investor Percentage
with respect to Finance Charge Receivables and the denominator of which is the
sum of all Investor Percentages with respect to Finance Charge Receivables of
all Series and (2) the Investor Interest of such Series plus the Enhancement
Invested Amount or the Collateral Interest (if not included in the Investor
Interest) of such Series). The Trustee shall notify each Credit Enhancement
Provider of the proposed sale of such Receivables and shall provide each
Credit Enhancement Provider an opportunity to bid on such Receivables. The
Transferor shall be permitted to purchase such Receivables in such case and
shall have a right of first refusal with respect thereto. Any proceeds of
such sale in excess of such principal and interest paid shall be paid to the
Holder of the Transferor Certificate. Upon such Series Termination Date with
<PAGE>
respect to the applicable Series of Certificates, final payment of all amounts
allocable to any Investor Certificates of such Series shall be made in the
manner provided in Section 12.3.
Section 12.2 Optional Purchase. (a) If so provided in any
Supplement, the Transferor may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series of Certificates on a
Distribution Date specified in such Supplement by depositing into the
Distribution Account or the applicable Series Account, not later than the
Transfer Date preceding such Distribution Date, for application in accordance
with Section 12.3, the amount specified in such Supplement.
(b) The amount deposited pursuant to subsection 12.2(a) shall be
paid to the Investor Certificateholders of the related Series pursuant to
Section 12.3 on the related Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased by the Transferor
pursuant to subsection 12.2(a) shall be delivered by the Transferor upon such
purchase to, and be canceled by, the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the Transferor. The
Investor Interest of each Series which is purchased by the Transferor pursuant
to subsection 12.2(a) shall, for the purposes of the definition of "Transferor
Interest," be deemed to be equal to zero on the Distribution Date following
the making of the deposit, and the Transferor Interest shall thereupon be
deemed to have been increased by the Investor Interest of such Series.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the Distribution
Date upon which the Investor Certificateholders of any Series may surrender
their Certificates for payment of the final distribution with respect to such
Series and cancellation, shall be given by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of such final distribution (subject to at least two Business Days' prior
notice from the Servicer to the Trustee) (or in the manner provided by the
Supplement relating to such Series) specifying (i) the Distribution Date
(which shall be the Distribution Date in the month (x) in which the deposit is
made pursuant to subsection 2.4(e), 9.2(a), 10.2(a) or 12.2(a) of the
Agreement or such other section as may be specified in the related Supplement,
or (y) in which the related Series Termination Date occurs) upon which final
payment of such Investor Certificates will be made upon presentation and
surrender of such Investor Certificates at the office or offices therein
designated (which, in the case of Bearer Certificates, shall be outside the
United States), (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Investor
Certificates at the office or offices therein specified. The Servicer's
notice to the Trustee in accordance with the preceding sentence shall be
accompanied by an Officers' Certificate setting forth the information
specified in Article V of this Agreement covering the period during the then
current calendar year through the date of such notice and setting forth the
date of such final distribution. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the time such notice is
given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.1(a) or the occurrence of the Series Termination Date with
respect to any Series, all funds then on deposit in the Finance Charge
<PAGE>
Account, the Principal Account, the Excess Funding Account, the Distribution
Account or any Series Account applicable to the related Series shall continue
to be held in trust for the benefit of the Certificateholders of the related
Series and the Paying Agent or the Trustee shall pay such funds to the
Certificateholders of the related Series upon surrender of their Certificates
(which surrenders and payments, in the case of Bearer Certificates, shall be
made only outside the United States). In the event that all of the Investor
Certificateholders of any Series shall not surrender their Certificates for
cancellation within six months after the date specified in the above-mentioned
written notice, the Trustee shall give a second written notice (or, in the
case of Bearer Certificates, publication notice) to the remaining Investor
Certificateholders of such Series upon receipt of the appropriate records from
the Transfer Agent and Registrar to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one and one-half years after the second notice with respect to a
Series, all the Investor Certificates of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the remaining Investor
Certificateholders of such Series concerning surrender of their Certificates,
and the cost thereof shall be paid out of the funds in the Distribution
Account or any Series Account held for the benefit of such Investor
Certificateholders. The Trustee and the Paying Agent shall pay to the
Transferor upon request any monies held by them for the payment of principal
or interest which remains unclaimed for two years. After payment to the
Transferor, Investor Certificateholders entitled to the money must look to the
Transferor for payment as general creditors unless an applicable abandoned
property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
Section 12.4 Termination Rights of Holder of Transferor
Certificate. Upon the termination of the Trust pursuant to Section 12.1, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Transferor Certificate, the Trustee shall execute a
written reconveyance substantially in the form of Exhibit H pursuant to which
it shall reconvey to the Holder of the Transferor Certificate, without
recourse, representation or warranty, all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter created, all
moneys due or to become due with respect to such Receivables (including all
accrued interest theretofore posted as Finance Charge Receivables) and all
proceeds of such Receivables and Insurance Proceeds relating to such
Receivables and Interchange (if any) allocable to the Trust, except for
amounts held by the Trustee pursuant to subsection 12.3(b). The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Holder of the
Transferor Certificate to vest in such Holder all right, title and interest
which the Trust had in the Receivables.
<PAGE>
Section 12.5 Defeasance. Notwithstanding anything to the contrary
in this Agreement or any Supplement:
(a) The Transferor may at its option be discharged from its
obligations with respect to all of the Investor Certificates issued by
the Trust or any specified Series thereof on the date the applicable
conditions set forth in Section 12.5(c) are satisfied ("Defeasance");
provided however, that the following rights, obligations, powers, duties
and immunities shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Investor Certificates of the
Trust or any specified Series thereof to receive, solely from the trust
fund provided for in Section 12.5(c), payments in respect of principal of
and interest on such Investor Certificates when such payments are due;
(B) the Transferor's obligations with respect to such Series of
Certificates under Sections 6.3, 6.4 and 12.3; (C) the rights, powers,
trusts, duties and immunities of the Trustee, the Paying Agent and the
Transfer Agent and Registrar hereunder; and (D) this Section 12.5.
(b) Subject to Section 12.5(c), the Transferor at its option may
use Collections to purchase Permitted Investments rather than additional
Receivables for transfer to the Trust until such time as no Receivables
remain in the Trust.
(c) The following shall be the conditions to Defeasance under
Section 12.5(a): (1) the Transferor irrevocably shall have deposited or
caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust for making the payments described below:
(A) Dollars in an amount, or (B) Permitted Investments which through the
scheduled payment of principal and interest in respect thereof will
provide, not later than the due date of payment thereon, money in an
amount, or (C) a combination thereof, in each case sufficient to pay and
discharge, and, which shall be applied by the Trustee to pay and
discharge, all remaining scheduled interest and principal payments on all
outstanding Investor Certificates of the Trust or any specified Series
thereof on the dates scheduled for such payments in this Agreement and
the applicable Supplements and all amounts owed to the Credit Enhancement
Provider for any Series if so provided in the related Supplements or
agreements with such Credit Enhancement Provider; (2) prior to each
exercise of its right to substitute money or Permitted Investments for
Receivables, the Transferor shall deliver to the Trustee a Tax Opinion
with respect to such substitution and an Opinion of Counsel to the effect
that the Trust will not be required to register as an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended; and (3) such deposit and termination of obligations will not
result in a Pay Out Event for any Series.
[End of Article XII]
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement (including any Supplement) may be amended from
time to time by the Bank, the Servicer and the Trustee, without the consent of
any of the Certificateholders, (i) to cure any ambiguity, to revise any
exhibits or schedules (other than Schedule 1), to correct or supplement any
provisions herein or thereon or (ii) to add any other provisions with respect
to matters or questions raised under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any of the Certificateholders unless
such Certificateholders have consented thereto.
(b) This Agreement (including any Supplement) and any schedule or
exhibit thereto may also be amended from time to time by the Transferor, the
Servicer and the Trustee, without the consent of any of the Certificate-
holders, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that (i)
the Servicer shall have provided an Officer's Certificate to the Trustee to
the effect that such amendment will not materially and adversely affect the
interests of any Certificateholder, (ii) the Servicer shall have provided a
Tax Opinion with respect to such amendment and (iii) the Servicer shall have
provided at least ten Business Days' prior written notice to each Rating
Agency of such amendment and shall have received written confirmation from
each Rating Agency that such action will satisfy the Rating Agency Condition;
provided, further, that such amendment shall not, without the consent of each
Certificateholder of each Series affected thereby, (i) reduce in any manner
the amount of, or delay the timing of, distributions which are required to be
made on any Certificate of such Series, (ii) alter the requirements for
changing the Minimum Transferor Interest Percentage for such Series, (iii)
change the definition of or the manner of calculating the interest of any
Certificateholder of such Series, (iv) change the manner in which the
Transferor Interest is determined or (v) reduce the percentage pursuant to
Subsection 13.1(c) required to consent to any such amendment.
(c) This Agreement and any Supplement may also be amended from time
to time by the Transferor, the Servicer and the Trustee with the consent of
Certificateholders evidencing undivided interests aggregating more than 50% of
the Investor Interest of each and every Series adversely affected, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment under this subsection shall (i)
reduce in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Certificate of such Series without the
consent of all of the related Certificateholders; (ii) change the definition
of or the manner of calculating the Investor Interest, the Investor Percentage
or the Investor Default Amount of such Series without the consent of the
related Certificateholders or (iii) reduce the aforesaid percentage required
to consent to any such amendment, in each case without the consent of each
Certificateholder of all Series affected.
<PAGE>
(d) It shall not be necessary to obtain the consent of Certificate-
holders under this Section 13.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(e) Promptly after the execution of any amendment pursuant to
subsections 13.1(a) or 13.1(c) above, the Trustee shall furnish notification
of the substance of such amendment to each Rating Agency providing a rating
for any Series.
(f) Any Supplement executed and delivered pursuant to Section 6.9
and any amendments regarding the addition to or removal of Receivables from
the Trust as provided in Sections 2.6 or 2.7, executed in accordance with the
provisions hereof, shall not be considered amendments to this Agreement for
the purpose of Section 13.1.
(g) In connection with any amendment, the Trustee may request, in
addition to the Opinion of Counsel required by subsection 13.2(d), an Opinion
of Counsel from the Transferor or the Servicer to the effect that the
amendment complies with all requirements of this Agreement. The Trustee may,
but shall not be obligated to, enter into any amendment which affects the
Trustee's rights, duties or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders and the Trustee's right,
title and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect the
right, title and interest of the Certificateholders or the Trustee, as the
case may be, hereunder to all property comprising the Trust. The Servicer
shall deliver to the Trustee file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, promptly after
the same become available following such recording, registration of filing.
The Transferor shall cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its
name, identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, the
Transferor shall give the Trustee notice of any such change and shall file
such financing statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables and the
proceeds thereof.
(c) Each of the Transferor and the Servicer will give the Trustee
prompt written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
<PAGE>
statement and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. Each of the Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee: (i) upon each date
that any Additional Accounts are to be included in the Accounts pursuant to
Section 2.6(a) or (b), an Opinion of Counsel substantially in the form of
Exhibit E; and (ii) on or before March 31 of each year, beginning with March
31, 1996, an Opinion of Counsel, substantially in the form of Exhibit F.
Section 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except with
respect to the Investor Certificateholders as provided in Section 13.1 hereof)
or in any manner otherwise control the operation and management of the Trust,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of
an association; nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given written notice to the Trustee,
and unless the Holders of Certificates evidencing Undivided Interests
aggregating more than 50% of the Investor Interest of any Series which may be
adversely affected but for the institution of such suit, action or proceeding,
shall have made written request upon the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Certificateholders shall have the right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Certificate-
holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Certificateholder, or to enforce
any right under this Agreement, except in the manner herein provided and for
the equal, ratable and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 13.3, each and
every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
<PAGE>
Section 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND
WITHOUT, LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD
OF CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 13.5 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
when personally delivered at, sent by facsimile to, (ii) two Business Days
after being sent by courier at or (iii) five Business Days after being mailed
by registered mail, return receipt requested, to (a) in the case of the
Transferor, to Chase USA, 802 Delaware Avenue, Wilmington, Delaware 19801,
Attention: Corporate Secretary, (b) in the case of the Servicer, to Chemical
Bank, 270 Park Avenue, New York, New York 10017, Attention: Chief Corporate
Finance officer, (c) in the case of the Trustee, to the Corporate Trust
Office, (d) in the case of the Credit Enhancement Provider for a particular
Series, the address, if any, specified in the Supplement relating to such
Series and (e) in the case of the Rating Agency for a particular Series, the
address, if any, specified in the Supplement relating to such Series; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party. Unless otherwise provided with respect to
any Series in the related Supplement any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register, or with respect to any notice required or permitted to be made to
the Holders of Bearer Certificates, by publication in the manner provided in
the related Supplement. If and so long as any Series or Class is listed on
the Luxembourg Stock Exchange and such Exchange shall so require, any Notice
to Investor Certificateholders shall be published in an authorized newspaper
of general circulation in Luxembourg within the time period prescribed in this
Agreement. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
of enforceability of the other provisions of this Agreement or of the
Certificates or rights of the Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66 2/3%
of the Investor Interest of each Series on a Series by Series basis.
Section 13.8 Certificates Non-Assessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders shall
not be personally liable for obligations of the Trust, that the Undivided
Interests represented by the Certificates shall be non-assessable for any
losses or expenses of the Trust or for any reason whatsoever, and that
Certificates upon authentication thereof by the Trustee pursuant to Sections
2.1 and 6.2 are and shall be deemed fully paid.
<PAGE>
Section 13.9 Further Assurances. The Transferor and the Servicer
agree to do and perform, from time to time, any and all acts and to execute
any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
Uniform Commercial Code of any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee, any Credit
Enhancement Provider or the Investor Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Certificate-
holders and, to the extent provided in the related Supplement, to the Credit
Enhancement Provider named therein, and their respective successors and
permitted assigns. Except as otherwise provided in this Article XIII, no
other Person will have any right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an action
may be taken or a notice, demand or instruction given by Investor Certificate-
holders, such action, notice or instruction may be taken or given by any
Investor Certificateholder, unless such provision requires a specific
percentage of Investor Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder
and every subsequent holder of such Certificate issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
Section 13.14 Rule 144A Information. For so long as any of the
Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of the
Transferor, the Servicer, the Trustee and the Enhancement Provider for such
Series agree to cooperate with each other to provide to any Investor
Certificateholders of such Series or Class and to any prospective purchaser of
Certificates designated by such an Investor Certificateholder upon the request
of such Investor Certificateholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
<PAGE>
Section 13.15 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.
Section 13.16 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[End of Article XIII]
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Agreement to be duly executed by their respective officers as
of the day and year first above written.
THE CHASE MANHATTAN BANK (USA),
Transferor on and after June 1, 1996
By: /s/ Keith Schuck__________
Name: Keith Schuck
Title: Vice President
CHEMICAL BANK,
Transferor prior to June 1, 1996 and
Servicer
By: /s/ Richard L. Craig_______
Name: Richard L. Craig
Title: Managing Director
THE BANK OF NEW YORK,
Trustee
By: /s/ Joseph G. Ernst_________
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
____________________
[FN]
<F1> VISA (Registered Trademark) and MasterCard (Registered Trademark) are
registered trademarks of VISA USA, Inc. and of MasterCard International
Incorporated, respectively.
