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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) May 9, 1996
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WORLD FINANCIAL NETWORK NATIONAL BANK
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(Exact Name of Registrant as Specified in its Charter)
United States
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(State or Other Jurisdiction of Incorporation)
333-998 34-1610866
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(Commission File Number) (I.R.S. Employer Identification No.)
4590 East Broad Street, Columbus, Ohio 43213
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(Address of Principal Executive Offices) (Zip Code)
(614) 755-5000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Forme Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
The Registrant is filing final forms of the exhibits listed in Item
7(c) below.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
No. Document Description
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1.1 Class A Underwriting Agreement, Series 1996-A, between World
Financial Network National Bank ("WFN") and CS First Boston
Corporation, as Representative of the Several Underwriters,
dated as of April 25, 1996.
Class B Underwriting Agreement, Series 1996-A, between WFN and
CS First Boston Corporation, as Representative of the Several
Underwriters, dated as of April 25, 1996.
Class A Underwriting Agreement, Series 1996-B, between WFN and
CS First Boston Corporation, as Representative of the Several
Underwriters, dated as of April 25, 1996.
Class B Underwriting Agreement, Series 1996-B, between WFN and
CS First Boston Corporation, as Representative of the Several
Underwriters, dated as of April 25, 1996.
4.2 Series 1996-A Supplement between WFN and the Trustee, dated as
of May 9, 1996.
Series 1996-B Supplement between WFN and the Trustee, dated as
of May 9, 1996.
8.1 Opinion of Mayer, Brown & Platt with respect to tax matters
dated May 9, 1996.
<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.
WORLD FINANCIAL NETWORK NATIONAL BANK
(Registrant)
Dated: May 15, 1996 By:/s/ Dan T. Groomes
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Name: Dan T. Groomes
Title: Vice President - Finance,
Assistant Secretary and Cashier
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INDEX TO EXHIBITS
Exhibit Sequential
No. Document Description Page No.
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1.1 Class A Underwriting Agreement, Series 1996-A,
between World Financial Network National Bank
("WFN") and CS First Boston Corporation, as
Representative of the Several Underwriters, dated
as of April 25, 1996.
Class B Underwriting Agreement, Series 1996-A,
between WFN and CS First Boston Corporation, as
Representative of the Several Underwriters, dated
as of April 25, 1996.
Class A Underwriting Agreement, Series 1996-B,
between WFN and CS First Boston Corporation, as
Representative of the Several Underwriters, dated
as of April 25, 1996.
Class B Underwriting Agreement, Series 1996-B,
between WFN and CS First Boston Corporation, as
Representative of the Several Underwriters, dated
as of April 25, 1996.
4.2 Series 1996-A Supplement between WFN and the
Trustee, dated as of May 9, 1996.
Series 1996-B Supplement between WFN and the
Trustee, dated as of May 9, 1996.
8.1 Opinion of Mayer, Brown & Platt with respect to
tax matters dated May 9, 1996.
$445,500,000
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.70% CLASS A ASSET BACKED
CERTIFICATES, SERIES 1996-A
CLASS A UNDERWRITING AGREEMENT, SERIES 1996-A
---------------------------------------------
April 25, 1996
CS First Boston Corporation,
as Representative of the
Several Underwriters
Ladies and Gentlemen:
Section 1. Introductory. World Financial Network National Bank, a
national banking association ("Transferor"), has conveyed and proposes to
convey the Receivables arising from certain consumer revolving credit card
accounts and other rights to the World Financial Network Card Master Trust
(the "Trust"), and proposes to cause the Trust to sell to the Underwriters
named in Schedule I hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"), $445,500,000 aggregate initial
principal amount of 6.70% Class A Asset Backed Certificates, Series 1996-A
(the "Class A Certificates"), in the Trust. It is understood that
Transferor is currently entering into a Class B Underwriting Agreement
dated the date hereof (the "Class B Underwriting Agreement") among
Transferor and the Underwriters named on Schedule I thereto (the "Class B
Underwriters") providing for the sale of $46,750,000 aggregate initial
principal amount of 7.00% Class B Asset Backed Certificates, Series 1996-A
(the "Class B Certificates"). The Class A Certificates and the Class B
Certificates are referred to herein collectively as the "Certificates".
This Agreement and the Class B Underwriting Agreement are referred to
herein collectively as the "Underwriting Agreements".
The Receivables were conveyed by Transferor to the Trust pursuant to
the Pooling and Servicing Agreement, dated as of January 17, 1996 (the
"P&S") between Transferor, as Transferor and Servicer, and The Bank of New
York, as trustee (the "Trustee"), and the Certificates will be issued
pursuant to the P&S and the Series 1996-A Supplement to the P&S, dated as
of May 9, 1996 (the "Supplement"), between the same parties. The P&S and
the Supplement are referred to herein collectively as the "Pooling and
Servicing Agreement". In addition, Transferor, Servicer, Trustee and a
financial institution identified therein (the "Collateral Interest Holder")
will enter into a Loan Agreement dated as of May 9, 1996 (the "Loan
Agreement") pursuant to which the Collateral Interest Holder will acquire
$57,750,000 aggregate initial principal amount of the Collateral Interest
(the "Collateral Interest"), which will act as Enhancement for the
Certificates. Additional Enhancement for the Certificates will be provided
in the form of the Cash Collateral Account, as described in the Supplement.
Capitalized terms used herein (including in the Introductory hereto)
that are not otherwise defined shall have the meanings ascribed thereto in
the Pooling and Servicing Agreement.
Section 2. Representations and Warranties of Transferor.
(a) Transferor represents and warrants to, and agrees with, each Underwriter
as set forth in this Section 2. Certain terms used in this Section 2 are
defined in paragraph (i) below.
(i) Transferor meets the requirements for use of Form S-3 under
the Securities Act and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration
No. 333-998) and a related preliminary prospectus, on such Form for
the registration under the Securities Act, of the Certificates.
Transferor may have filed one or more amendments thereto and the
related preliminary prospectus, each of which has previously been
furnished to the Representative. Transferor will file with the
Commission (A) prior to the effectiveness of such registration
statement, a further amendment thereto (including the form of final
base prospectus and the form of final prospectus supplement relating
to the Class A Certificates) or (B) after effectiveness of such
registration statement, a final base prospectus and final prospectus
supplement in accordance with Rules 430A and 424(b)(1) or (4) under
the Securities Act or (C) a final base prospectus and a final
prospectus supplement relating to the Class A Certificates in
accordance with Rules 415 and 424(b)(2) or (5) under the Securities
Act. In the case of clause (B), Transferor has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Securities Act and the rules thereunder to be included in the
Prospectus with respect to the Class A Certificates and the offering
thereof. As filed, such amendment and form of final prospectus
supplement, or such final base prospectus or final prospectus
supplement, shall include all Rule 430A Information, together with
all other such required information, with respect to the Class A
Certificates and the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to the Representative
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
preliminary prospectus which has previously been furnished to the
Representative) as Transferor has advised the Representative, prior
to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertakings specified by item
512(a) of Regulation S-K, the Registration Statement, at the
Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
The terms that follow, when used in this Agreement, have the
meanings indicated. The term "Effective Date" means each date that
the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" means
the date and time that this Agreement is executed and delivered by
the parties hereto. "Preliminary Prospectus" means any preliminary
prospectus referred to in the preceding paragraph and any preliminary
prospectus included in the Registration Statement which, at the
Effective Date, omits Rule 430A Information. "Base Prospectus" means
the prospectus referred to above contained in the Registration
Statement at the Effective Date. "Prospectus" means the prospectus
supplement relating to the Class A Certificates that is first filed
with the Commission pursuant to Rule 424(b) after the Execution Time,
together with the Base Prospectus (as such Base Prospectus may have
been amended and together with any supplements thereto) or, if no
filing pursuant to Rule 424(b) is required, means the prospectus
supplement relating to the Class A Certificates, including the Base
Prospectus included in the Registration Statement at the Effective
Date. "Registration Statement" means the registration statement
referred to in the preceding paragraph and any registration statement
required to be filed under the Securities Act or rules thereunder,
including incorporated documents, exhibits and financial statements,
in the form in which it has or shall become effective and, in the
event any post-effective amendment thereto becomes effective prior to
the Closing Date, shall also mean such registration statement as so
amended. Such term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A", "Rule 415" and "Regulation S-K" refer to
such rules or regulations under the Securities Act. "Rule 430A
Information" means information with respect to the Class A
Certificates and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A. Any reference herein to the Registration Statement, the Base
Prospectus or Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the Effective Date of
the Registration Statement or the issue date of the Base Prospectus
or Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus or Prospectus shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement,
or the issue date of the Base Prospectus or Prospectus, as the case
may be, deemed to be incorporated therein by reference.
(ii) On the Effective Date, the Registration Statement did or
will comply in all material respects with the applicable requirements
of the Securities Act and the rules thereunder; on the Effective Date
and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Prospectus (as amended
and together with any supplements thereto) did or will comply in all
material respects with the applicable requirements of the Securities
Act and the rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the
Prospectus (as amended and together with any supplements thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Transferor makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to Transferor by any Underwriter
specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplements
thereto).
(iii) Transferor is a national banking association duly
organized, validly existing and in good standing under the laws of
the United States, and has all requisite power, authority and legal
right to own its properties and conduct its business as described in
the Registration Statement and the Prospectus and to execute, deliver
and perform the Underwriting Agreements, the Pooling and Servicing
Agreement and the Loan Agreement (collectively the "Specified
Agreements"), to authorize the issuance of the Certificates and the
Collateral Interest and to consummate the transactions contemplated
hereby.
(iv) Transferor is duly qualified to do business and is in good
standing (or is exempt from such requirement) in any state required
in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to Transferor required under
Federal and Ohio law.
(v) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary action or proceedings.
(vi) This Agreement has been duly executed and delivered by
Transferor.
(vii) Transferor has authorized the conveyance of the
Receivables to the Trust, and Transferor has authorized the Trust to
issue and sell the Certificates and the Collateral Interest.
(viii) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, or (other than the Lien of
the Pooling and Servicing Agreement) result in the creation or
imposition of any Lien under any material indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
Transferor is a party or by which it or any of its properties are
bound.
(ix) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof, will not conflict with or violate any Requirements of Law
applicable to Transferor.
(x) There are no proceedings or investigations pending or, to
the best knowledge of Transferor, threatened against Transferor
before any court, regulatory body, administrative agency, arbitrator
or other tribunal or governmental instrumentality (A) asserting the
invalidity of any Specified Agreement or the Certificates or the
Collateral Interest, (B) seeking to prevent the issuance of the
Certificates or the Collateral Interest or the consummation of any of
the transactions contemplated by the Specified Agreements, (C)
seeking any determination or ruling that, in the reasonable judgment
of Transferor, would materially and adversely affect the performance
by Transferor of its obligations under any Specified Agreement, (D)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of any Specified
Agreements or the Certificates or the Collateral Interest, or (E)
seeking to affect adversely the income tax attributes of the Trust,
as described in the Prospectus under the heading "U.S. Federal Income
Tax Considerations"; and there are no contracts or documents of
Transferor that are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the rules and
regulations of the Commissioner promulgated under the Securities Act
(the "Rules and Regulations") that have not been so filed.
(xi) All approvals, authorizations, consents, orders and other
actions of any Person or of any governmental body or official
required in connection with the execution and delivery of the
Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the performance of the transactions
contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof, have been obtained.
(xii) Transferor has delivered to the Representative complete
and correct copies of publicly available portions of the Consolidated
Reports of Condition and Income of Transferor for the years ended
December 31, 1993, 1994 and 1995, as submitted to the Comptroller of
the Currency. Except as otherwise set forth therein, during the
period from the most recent date covered by the aforementioned
reports to the date hereof, (x) there has been no material adverse
change in the condition (financial or otherwise) of Transferor and
(y) there have been no transactions entered into by Transferor, other
than those in the ordinary course of business or that are disclosed
in the Prospectus, that are material with respect to Transferor.
(xiii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of the
Specified Agreements and the Certificates and the Collateral
Interest shall have been paid by Transferor or will be paid by
Transferor at or prior to the Closing Date to the extent then due.
(xiv) The Certificates and the Collateral Interest have been
duly and validly authorized. The Certificates, when validly
authenticated, issued and delivered in accordance with the Pooling
and Servicing Agreement and sold to the Underwriters as provided
herein and to the Class B Underwriters pursuant to the Class B
Underwriting Agreement, will be duly and validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing
Agreement, and, together with the Pooling and Servicing Agreement,
the Loan Agreement and the Collateral Interest will conform in all
material respects to the descriptions thereof and the statements in
relation thereto contained in the Prospectus.
(xv) Assuming the due authorization, execution and delivery
thereof by the other parties thereto, the Pooling and Servicing
Agreement and the Loan Agreement constitute and the Certificates and
the Collateral Interest, when validly issued and, in the case of the
Certificates, validly authenticated and delivered in accordance with
the Pooling and Servicing Agreement and sold to the Underwriters as
provided herein and to the Class B Underwriters pursuant to the Class
B Underwriting Agreement will constitute, the legal, valid and
binding agreement of Transferor enforceable in accordance with its
respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting enforcement of creditors' rights generally and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(xvi) On the Closing Date and after giving effect to this
Agreement, the Underwriters and the Class B Underwriters will have
good and marketable title to the Certificates, free and clear of all
Liens when validly authenticated, issued and delivered in accordance
with the Pooling and Servicing Agreement and sold to the Underwriters
as provided herein and to the Class B Underwriters pursuant to the
Class B Underwriting Agreement.
(xvii) At the time of each transfer of Receivables by
Transferor to the Trust, Transferor has had and will have good and
marketable title to all Receivables and the other property being
transferred by it to the Trust on each such day, free and clear of
Liens (other than the Lien of the Pooling and Servicing Agreement),
and will not have sold to any Person (other than the Trustee) any of
its right, title or interest in any of such Receivables or such other
property.
(xviii) Neither Transferor nor the Trust is an "investment
company" or "controlled" by an "investment company" as such terms are
defined in the Investment Company Act.
(xix) As of the Closing Date each of the representations and
warranties of Transferor deemed made pursuant to the Pooling and
Servicing Agreement will be true and correct, and, as of each other
date on which Transferor is deemed, pursuant to the terms of the
Pooling and Servicing Agreement, to make any of the representations
and warranties set forth therein, and in Officer's Certificates of
Transferor delivered on each such date pursuant to the Pooling and
Servicing Agreement, will be true and correct and the Underwriters
may rely on such representations and warranties as if they were set
forth herein in full.
(b) Any Officer's Certificate signed by any officer of Transferor
and delivered to the Representative or its counsel shall be deemed a
representation and warranty of Transferor to the Underwriters as to the
matters covered thereby.
Section 3. Purchase and Sale. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, Transferor agrees to cause the Trust to sell
to each Underwriter, and each Underwriter agrees, severally and not
jointly, except as set forth in Section 9 below, to purchase the respective
initial principal amount of Class A Certificates set forth opposite such
Underwriter's name in Schedule I hereto, at a purchase price of 99.4875% of
the aggregate principal amount thereof.
The Class A Certificates will initially be represented by one or more
certificates representing $445,500,000 aggregate initial principal amount,
each of which will be registered in the name of Cede & Co., the nominee of
The Depository Trust Company ("DTC") (such certificates, the "DTC
Certificates"). The interests of beneficial owners of the DTC Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive certificates evidencing the Class A
Certificates will be available only under the limited circumstances
specified in the Pooling and Servicing Agreement.
Delivery of the DTC Certificates shall be made to the accounts of the
several Underwriters at the office of DTC, 55 Water Street, 49th Floor, New
York, New York 10004, against payment by the several Underwriters of the
purchase price therefor to or upon the order of Transferor in immediately
available funds at the office of Mayer, Brown & Platt, New York, New York
at 9:00 a.m., New York time, on May 9, 1996, or at such other time not
later than seven full business days thereafter as Transferor and the
Underwriters determine, such time being herein referred to as the "Closing
Date". The certificates evidencing the DTC Certificates will be made
available for checking at the offices of Mayer, Brown & Platt in Chicago,
Illinois or such other location specified by Transferor at least 24 hours
prior to the Closing Date.
Section 4. Offering by the Underwriters. (a) It is understood that
the Underwriters propose to offer the Class A Certificates for sale to the
public as set forth in the Prospectus.
(b) Each Underwriter agrees that if it is a foreign broker dealer
not eligible for membership in the National Association of Securities
Dealers, Inc. (the "NASD"), it will not effect any transaction in the Class
A Certificates within the United States or induce or attempt to induce the
purchase of or sale of the Class A Certificates within the United States,
except that it shall be permitted to make sales to other Underwriters or to
its United States affiliates; provided that such sales are made in
compliance with an exemption of certain foreign brokers or dealers under
Rule 15a-6 under the Exchange Act and in conformity with the Rules of Fair
Practice of the NASD as such Rules apply to non-NASD brokers or dealers.
(c) Each Underwriter represents and agrees that (i) it has not
offered or sold and, prior to the expiry of the period of six months from
the Closing Date, will not offer or sell any Class A Certificates to
Persons in the United Kingdom except to Persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom with
respect to anything done by it in relation to the Class A Certificates in,
from or otherwise involving the United Kingdom; (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Class A Certificates to
a Person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 of
the United Kingdom or is a Person to whom the document may otherwise
lawfully be issued or passed on.
Section 5. Certain Agreements of Transferor. Transferor covenants
and agrees with the several Underwriters that:
(a) Transferor will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution
Time, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), Transferor will file the Prospectus,
properly completed, pursuant to Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Underwriters of
such timely filing. Transferor will promptly advise the Underwriters (i)
when the Registration Statement, and any amendment thereto, shall have
become effective, (ii) when the Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b), (iii) of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose and (v) of the receipt by Transferor of any
notification with respect to the suspension of the qualification of the
Class A Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Transferor will not file
any amendment of the Registration Statement or supplement to the Prospectus
unless a copy has been furnished to the Representative for its review prior
to such filing. Transferor will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the lifting thereof.
(b) If, at any time when a Prospectus relating to the Class A
Certificates is required to be delivered under the Securities Act, any
event occurs as a result of which such Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or if
it shall be necessary at any time to amend or supplement such Prospectus to
comply with the Securities Act or the Exchange Act or the Rules and
Regulations thereunder, Transferor promptly will prepare and file with the
Commission an amendment or supplement that will effect such compliance.
Neither the consent of any Underwriter to, nor the delivery by any
Underwriter of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6 hereof.
(c) As soon as practicable, but not later than the Availability Date
(as defined below), Transferor will cause the Trustee to make generally
available to the Holders of the Class A Certificates and to the
Representative an earnings statement with respect to the Trust covering a
period of at least 12 months beginning after the Effective Date that will
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
under the Securities Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of
Transferor's fiscal year, "Availability Date" means the 90th day after the
end of such fourth fiscal quarter.
(d) Transferor will furnish to the Underwriters copies of the
Registration Statement as originally filed and each amendment thereto (in
each case at least two of which will be signed and will include all
exhibits), each related Preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Underwriters may reasonably
request. Transferor will furnish or cause to be furnished to the
Representative copies of all reports on Form SR required by Rule 463 under
the Securities Act.
(e) Transferor will arrange for the qualification of the Class A
Certificates for sale under the laws of such jurisdictions in the United
States as the Underwriters may reasonably designate and will continue such
qualifications in effect so long as required for the distribution of the
Class A Certificates, provided that Transferor shall not be obligated to
qualify to do business nor become subject to service of process generally,
but only to the extent required for such qualification, in any jurisdiction
in which it is not currently so qualified, and will arrange for the
determination of the legality of the Class A Certificates for purchase by
institutional investors.
(f) So long as any of the Class A Certificates are outstanding,
Transferor will deliver or cause to be delivered to the Underwriters (i)
copies of each report mailed to the Trustee or the Series 1996-A Holders,
as soon as such report is mailed to the Trustee or such Holders, (ii) the
annual statement as to compliance and the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to
Sections 3.5 and 3.6 of the Pooling and Servicing Agreement, as soon as
such statements are furnished to the Trustee, (iii) copies of all documents
required to be filed with the Commission pursuant to the Exchange Act or
any order of the Commission thereunder, and (iv) such other information
concerning Transferor, the Certificates or the Trust as the Underwriters
may reasonably request from time to time.
(g) Transferor will pay all expenses incident to the performance of
its obligations under this Agreement, including without limitation, (i)
expenses of preparing, printing, reproducing and distributing the
Registration Statement and each amendment thereto, the preliminary
prospectuses, the Prospectus (including any amendments and supplements
thereto), the Pooling and Servicing Agreement, the Loan Agreement and the
Class A Certificates, (ii) the fees and disbursements of the Trustee and
its counsel, (iii) the fees and disbursements of the independent public
accountants of Transferor and fees and disbursements of counsel to
Transferor and the Underwriters, (iv) the fees charged by Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Ratings Service, a division of
The McGraw Hill Companies, Inc. ("Standard & Poor's") and Fitch Investors
Service, L.P. ("Fitch", and together with Moody's and Standard & Poor's,
the "Rating Agencies") in connection with the rating of the Class A
Certificates, (v) the fees of DTC in connection with the book-entry
registration of the DTC Certificate, (vi) the fees and expenses of Mayer,
Brown & Platt as counsel to the Transferor and in its role as special
Federal tax counsel and (vii) expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters, and will reimburse the Underwriters for any
expenses (including reasonable fees and disbursements of counsel) incurred
by the Underwriters pursuant to Section 5(e) hereof in connection with the
qualification of the Class A Certificates for sale and determination of
their eligibility for investment under the laws of such jurisdictions in
the United States as the Underwriters may designate.
(h) Transferor has caused and will continue to cause its books and
records (including any computer records) to be marked relating to the
Receivables transferred to the Trust, to show the transfer to the Trust of
such Receivables, and Transferor shall not take any action inconsistent
with the transfer to the Trust of such Receivables, other than as permitted
by the Pooling and Servicing Agreement.
(i) For a period of 30 days from the date hereof, none of Transferor
or any of its affiliates or any trust formed by it or any of its affiliates
will, without the prior written consent of the Underwriters, directly or
indirectly, offer, sell or contract to sell or announce the offering of, in
a public or private transaction, any other collateralized securities
similar to the Class A Certificates (other than the Class B Certificates
and the Class A Certificates, Series 1996-B and Class B Certificates,
Series 1996-B) representing interests in consumer credit card receivables.
(j) So long as any Class A Certificates are outstanding, Transferor
will cause to be delivered to the Underwriters a reliance letter relating
to each Opinion of Counsel delivered to the Trustee or any Rating Agency by
counsel to Transferor pursuant to the Pooling and Servicing Agreement at
the time such opinion is delivered.
(k) To the extent, if any, that the rating provided with respect to
the Class A Certificates by any Rating Agency is conditional upon the
furnishing of documents or the taking of any other actions by Transferor,
Transferor shall furnish such documents and take any such other actions as
may be required.
Section 6. Conditions of the Obligations of the Underwriters. The
obligation of the Underwriters to purchase and pay for the Class A
Certificates will be subject to the accuracy of the representations and
warranties on the part of Transferor herein as of the Execution Time and
the Closing Date, to the accuracy of the statements of the officers of
Transferor made pursuant to the provisions hereof, to the performance by
Transferor of its obligations hereunder and to the following additional
conditions precedent:
(a) (i) On the date of this Agreement, the Underwriters and
Transferor shall have received a letter, dated the date of delivery thereof
(which, if the Effective Time is prior to the execution and delivery of
this Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to the
Effective Time), of Coopers & Lybrand confirming that they are independent
public accountants within the meaning of the Securities Act and the Rules
and Regulations, substantially in the form of the draft to which the
Underwriters have previously agreed and otherwise in form and substance
satisfactory to the Underwriters and counsel for the Underwriters, and (ii)
on the Closing Date, the Underwriters and Transferor shall have received a
letter, dated as of the Closing Date, from Coopers & Lybrand updating the
letter referred to in clause (i) above, in form and substance satisfactory
to the Underwriters and counsel for the Underwriters.
(b) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement shall have become effective not later than
10:00 p.m. New York time on the date of this Agreement; if filing of the
Prospectus, or any supplements thereto, is required pursuant to Rule
424(b), the Prospectus shall have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving
a prospective change, in or affecting particularly the business or
properties of Transferor which, in the judgment of the Underwriters
materially impairs the investment quality of the Class A Certificates; (ii)
any suspension or limitation of trading in securities generally on the New
York Stock Exchange or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of Transferor on
any exchange or in the over the counter market; (iii) any banking
moratorium declared by Federal, New York or Delaware authorities; or (iv)
any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Class A Certificates.
(d) The Representative shall have received:
(1) The favorable opinion or opinions of internal counsel of
Transferor and/or of Mayer, Brown & Platt, counsel to Transferor,
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, and in the aggregate substantially to
the effect that:
(i) Transferor has been duly organized as an association
licensed as a national banking association and is validly
existing and in good standing under the laws of the United
States, is duly qualified to do business and is in good standing
under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business, and has full power and authority to
own its properties, to conduct its business as described in the
Registration Statement and the Prospectus, to enter into and
perform its obligations under the Specified Agreements, to
execute the Certificates and to consummate the transactions
contemplated hereby and thereby;
(ii) the Pooling and Servicing Agreement, this Agreement,
the Class B Underwriting Agreement, the Loan Agreement and the
Certificates have each been duly authorized, executed and
delivered by Transferor; the Pooling and Servicing Agreement and
the Loan Agreement constitute and the Certificates and the
Collateral Interest, when validly issued and, in the case of the
Certificates validly authenticated and delivered in accordance
with the Pooling and Servicing Agreement and sold to the
Underwriters as provided herein and to the Class B Underwriters
pursuant to the Class B Underwriting Agreement, will constitute,
the legal, valid and binding agreement of Transferor,
enforceable in accordance with its terms (subject, as to
enforcement or remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to
the application of general principles of equity);
(iii) the Certificates are in due and proper form and
when executed, authenticated and delivered as specified in the
Pooling and Servicing Agreement, when delivered against payment
of the consideration specified herein, will be duly and validly
issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement and the Collateral Interest;
(iv) neither the execution and delivery of the Specified
Agreements, nor the issuance or delivery of the Certificates,
nor the consummation of any of the transactions contemplated
herein or therein, nor the fulfillment of the terms of the
Certificates or the Specified Agreements, will conflict with or
violate, result in a material breach of or constitute a default
under (A) any Requirements of Law applicable to Transferor or
any statute or regulation currently applicable to the Trust, (B)
any term or provision of any order known to such counsel to be
currently applicable to Transferor or the Trust of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over Transferor or the Trust, as the case
may be, or (C) any term or provision of any indenture or other
agreement or instrument known to such counsel to which
Transferor or the Trust is a party or by which either of them or
any of their properties are bound;
(v) except as otherwise disclosed in the Prospectus (and
any supplements thereto) or the Registration Statement, there is
no pending or, to the best knowledge of such counsel, threatened
action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator with respect to the
Trust, the Certificates, the Specified Agreements or any of the
transactions contemplated herein or therein or with respect to
Transferor which, in the case of any such action, suit or
proceeding with respect to Transferor if adversely determined,
would have a material adverse effect on the Certificates or the
Trust or upon the ability of Transferor to perform its
obligations under the Pooling and Servicing Agreement or the
Loan Agreement; and the statements included in the Registration
Statement, the Base Prospectus and the Prospectus describing
statutes, legal proceedings, contracts and other documents
relating to Transferor, the Accounts, the Receivables, the
business of Transferor and the Trust fairly summarize the
matters therein described;
(vi) the Registration Statement has become effective
under the Securities Act, and, to the best of their knowledge
and information, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act, and the Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations. Such counsel has no reason to believe that at the
Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading (other than financial and statistical information
contained therein as to which such counsel need express no
opinion);
(vii) no approval, authorization, consent, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body is required for
the consummation by Transferor or the Trust of the transactions
contemplated in the Specified Agreements, except such as have
been obtained under the Securities Act and such as may be
required under the blue sky laws of any jurisdiction inside the
United States in connection with the purchase and distribution
of the Class A Certificates by the Underwriters and such filings
or other approvals (specified in such opinion) as have been made
or obtained;
(viii) if a court concludes that the assignment of the
Receivables, all documents and instruments relating thereto and
all proceeds thereof to the Trustee pursuant to the Pooling and
Servicing Agreement is a sale, such assignment transferred to
the Trust all the right, title and interest of Transferor in and
to such Receivables and other property in existence on the date
hereof, free and clear of any Liens then existing or thereafter
created except as specifically permitted pursuant to the Pooling
and Servicing Agreement. With respect to Receivables which come
into existence after the date hereof, such sale will transfer to
the Trust all of the right, title and interest of Transferor in
and to such Receivables free and clear of any Liens. If a court
were to conclude that such assignment was not a sale, the
Pooling and Servicing Agreement and the transactions provided
for by the Pooling and Servicing Agreement would constitute a
grant by Transferor to the Trustee, for the benefit of the
Investor Holders, of a valid security interest in all of
Transferor's right, title and interest in all Receivables and
other property from time to time transferred by Transferor to
the Trust;
(ix) the Certificates and the Pooling and Servicing
Agreement and the Loan Agreement each conform in all material
respects with the description thereof contained in the
Registration Statement and the Prospectus;
(x) the Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as
amended, and neither Transferor nor the Trust is required to be
registered under the Investment Company Act; and
(xi) the statements in the Registration Statement under
the heading "Certain Legal Aspects of the Receivables", "U.S.
Federal Income Tax Consequences" and "ERISA Considerations" to
the extent that they constitute statements of matters of law or
legal conclusions with respect thereto, have been prepared or
received by such counsel and are correct in all material
respects.
In rendering such opinion counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Ohio and New York and the United States, to the extent deemed proper and
stated in such opinion, upon the opinion of other counsel of good standing
believed by such counsel to be reliable and acceptable to the
Representative and its counsel, and (B) as to matters of fact, to the
extent deemed proper and as stated therein, on certificates of responsible
officers of the Trust, Transferor and public officials. References to the
Prospectus in this paragraph (d) include any supplements thereto.
(2) The favorable opinion of Mayer, Brown & Platt, special tax
counsel to Transferor, dated the Closing Date and to the effect that
(i) the Certificates will properly be treated as indebtedness for
federal income tax purposes and (ii) the Trust will not be classified
as an association or a publicly traded partnership taxable as a
corporation for federal income tax purposes.
(3) The favorable opinion of Schwartz, Warren & Ramirez,
special Ohio counsel to Transferor, dated the Closing Date and
satisfactory in form and substance to the Representative and its
counsel, and substantially to the effect that:
(i) the Receivables constitute either "general
intangibles" or "accounts" in each case as defined in the
Uniform Commercial Code in effect in the State of Ohio;
(ii) Uniform Commercial Code financing statements with
respect to the Investor Interest in the Receivables and the
proceeds thereof have been filed in the office of the Ohio
Secretary of State. No other filings or other actions, with
respect to the Trustee's interest in the Receivables transferred
and to be transferred by Transferor to the Trust, are necessary
to perfect the interest of the Trustee in the Receivables, and
the proceeds thereof, against third parties, except that
appropriate continuation statements must be filed at five-year
intervals;
(iii) in the event that a court were to conclude that the
assignment of the Receivables, all documents and instruments
relating thereto and all proceeds thereof to the Trustee
pursuant to the Pooling and Servicing Agreement was not a sale,
the Pooling and Servicing Agreement, together with the filing of
the financing statements referred to in paragraph (ii) above,
create a first priority perfected security interest in the
Receivables transferred and to be transferred by Transferor to
the Trustee, all documents and instruments relating thereto and
all proceeds thereof (in rendering such opinion counsel may take
such exceptions as are appropriate and reasonably acceptable
under the circumstances); and
(iv) the Trust as an entity will not be subject to the
corporation franchise tax or to the dealers in intangibles tax
imposed on corporations, financial institutions or dealers in
intangibles by Ohio Revised Code Chapters 5733 or 5725, and for
purposes of the corporation franchise tax and the dealers in
intangibles tax imposed by Ohio Revised Code Chapters 5733 and
5725, respectively, the Certificates will be treated as
indebtedness.
(4) Any reliance letters relating to each opinion rendered to
the Trustee or any Rating Agency by internal counsel of Transferor
and Mayer, Brown & Platt and any other counsel to Transferor in
connection with the rating of the Certificates.
(5) The favorable opinion of counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative and its counsel to the effect that:
(i) The Trustee has been duly incorporated and is validly
existing as a New York banking corporation in good standing
under the laws of the State of New York with full power and
authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to enter
into and perform its obligations under the Pooling and Servicing
Agreement and the Loan Agreement and to issue the Certificates
and the Collateral Interest.
(ii) Each of the Pooling and Servicing Agreement and the
Loan Agreement has been duly authorized, executed and delivered
by the Trustee, and constitutes a legal, valid and binding
obligation of the Trustee, enforceable in accordance with its
terms, except that (y) the enforceability thereof may be subject
to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights and (z) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(iv) Neither the execution and delivery by the Trustee of
the Pooling and Servicing Agreement or the Loan Agreement nor
the consummation of any of the transactions by the Trustee
contemplated thereby required the consent or approval of, the
giving of notice to, the registration with or the taking of any
other action with respect to, any governmental authority or
agency under any existing federal or state law governing the
banking or trust powers of the Trustee.
(v) The execution and delivery of the Pooling and
Servicing Agreement and the Loan Agreement by the Trustee and
the performance by the Trustee of their respective terms do not
conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of New
York governing trust powers of the Trustee, (B) the Articles of
Association or By-Laws of the Trustee, or (C) to the best of
their knowledge, any indenture, lease, or other material
agreement to which the Trustee is a party or to which its assets
are subject.
(6) The favorable opinion of Mayer, Brown & Platt, counsel for
the Underwriters, dated the Closing Date, with respect to the
validity of the Class A Certificates and such other related matters
as the Underwriters shall request, and Transferor shall have
furnished or caused to be furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Mayer, Brown & Platt
may rely on the opinions of Schwartz, Warren & Ramirez, counsel to
Transferor, and the opinion of internal counsel of Transferor, as to
the matters dealt with in such opinions.
(e) The Representative shall have received a certificate dated the
Closing Date of the President, any Vice President, the Treasurer or any
Assistant Treasurer, of Transferor in which such officer shall state that
the representations and warranties of Transferor in this Agreement are true
and correct, and that Transferor has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
subsequent to the date of the most recent financial statements of
Transferor delivered to the Representative hereunder, there has been no
material adverse change in the condition, financial or otherwise, whether
or not arising from transactions in the ordinary course of business, of
Transferor except as set forth in or contemplated by the Registration
Statement and the Prospectus.
(f) The Class A Certificates shall be rated "Aaa" by Moody's and
"AAA" by Standard & Poor's and "AAA" by Fitch, and the Class B Certificates
shall be rated "A2" by Moody's and "A" by Standard & Poor's and "A" by
Fitch.
(g) The Representative shall have received evidence satisfactory to
it and its counsel that, on or before the Closing Date, UCC-1 financing
statements have been filed in the office of the Secretary of State of Ohio
and County Clerk of Franklin County reflecting the interest of the Trust in
the Receivables and the proceeds thereof.
(h) The Representative and Transferor shall have received from
counsel for the Collateral Interest Holder reasonably acceptable to the
Representative and Transferor, a favorable opinion, dated the Closing Date
and satisfactory in form and substance to the Representative, its counsel,
Transferor and its counsel to the effect that:
(1) the Collateral Interest Holder is duly organized and
existing under the laws of its jurisdiction of incorporation and
has the power and authority to execute, deliver and perform its
obligations under the Loan Agreement;
(2) the Loan Agreement has been duly and validly
authorized, executed and delivered by the Collateral Interest
Holder and constitutes the legal, valid and legally binding
obligation of the Collateral Interest Holder enforceable against
the Collateral Interest Holder in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, liquidation, moratorium,
readjustment of debt or other similar laws affecting the
enforcement of creditors' rights generally, as such laws may be
applied in the event of a bankruptcy, insolvency,
reorganization, liquidation, moratorium, readjustment of debt
of, or the appointment of a receiver with respect to the
property of, or a similar event applicable to the Collateral
Interest Holder, and (B) the effect of any moratorium or other
similar occurrence affecting the Collateral Interest Holder;
(3) all consents, approvals, authorizations, licenses,
rulings or orders of or actions by any New York State or federal
governmental authority and all filings, recordings or
publications, if any, required on the part of the Collateral
Interest Holder in connection with the execution, delivery or
performance by the Collateral Interest Holder of the Loan
Agreement have been obtained or made and are in full force and
effect; and
(4) such other customary matters as the Representative
shall request.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not
have been any change, or any development involving a prospective change, in
or affecting the business or properties of the Trust or Transferor the
effect of which, in any case referred to above, is, in the judgment of the
Underwriters, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the Class A
Certificates as contemplated by the Registration Statement and the
Prospectus (and any supplements thereto).
(j) Simultaneously with or prior to the Closing Date, $46,750,000
aggregate initial principal amount of the Class B Certificates shall have
been sold to the Class B Underwriters.
Transferor will provide or cause to be provided to the Underwriters
such conformed copies of such opinions, certificates, letters and documents
as the Underwriters may reasonably request.
Section 7. Indemnification and Contribution. (a) Transferor will
indemnify and hold harmless each Underwriter and each Person who controls
any Underwriter within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which the
Underwriters or any of them may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each Person
who controls any Underwriter within the meaning of the Securities Act for
any actual legal or other expenses reasonably incurred by the Underwriter
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Transferor will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to Transferor by any Underwriter specifically for use
therein.
(b) Each Underwriter, severally, agrees to indemnify and hold
harmless Transferor against any losses, claims, damages or liabilities to
which Transferor may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to Transferor by such Underwriter specifically for
use therein, and will reimburse any actual legal or other expenses
reasonably incurred by Transferor in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action or the assertion by a
third party of a claim, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under subsection (a)
or (b) above, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party except and to
the extent of any prejudice to such indemnifying party arising from such
failure to provide such notice. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by Transferor on the one hand and the Underwriters on the
other from the offering of the Class A Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
Transferor on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by Transferor on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Class A
Certificates (before deducting expenses) received by Transferor bear to the
total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by Transferor or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Class A
Certificates purchased by such Underwriter hereunder. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of Transferor under this Section shall be in
addition to any liability that Transferor may otherwise have and shall
extend, upon the same terms and conditions, to each Person, if any, who
controls any Underwriter within the meaning of the Securities Act; and the
obligations of any Underwriter under this Section shall be in addition to
any liability that such Underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each director of Transferor, to each
officer of Transferor who signed the Registration Statement and to each
Person, if any, who controls Transferor within the meaning of the
Securities Act.
Section 8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of Transferor or its officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation or statement as to the results thereof,
made by or on behalf of the Underwriters, Transferor or any of their
respective representatives, officers or directors or any controlling
Person, and will survive delivery of and payment for the Class A
Certificates. If for any reason the purchase of the Class A Certificates by
the Underwriters is not consummated, Transferor shall remain responsible
for the expenses to be paid or reimbursed by Transferor pursuant to Section
5(g) hereof and the respective obligations of Transferor and the
Underwriters pursuant to Section 7 hereof shall remain in effect. If the
purchase of the Class A Certificates by the Underwriters is not consummated
for any reason other than solely because of the occurrence of any event
specified in clause (ii), (iii) or (iv) of Section 6(c) hereof, Transferor
will reimburse the Underwriters for all actual out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them
in connection with the offering of the Class A Certificates.
Section 9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Class A
Certificates agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Class A Certificates set forth
opposite their names in Schedule I hereto bears to the aggregate amount of
Class A Certificates set forth opposite the names of all the remaining
Underwriters) the Class A Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Class A Certificates which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Class A Certificates set
forth in Schedule I hereto, the remaining Underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of
the Class A Certificates, and if such nondefaulting Underwriters do not
purchase all the Class A Certificates, this Agreement will terminate
without liability to any non-defaulting Underwriter, the Trust or
Transferor. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Underwriters shall determine in order that the
required changes in the Registration Statement and the Prospectus (and any
supplements thereto) or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to Transferor and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
Section 10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to them c/o CS First Boston Corporation, Attention:
Investment Banking Department - Transactions Advisory Group; or if sent to
Transferor will be mailed, delivered or telegraphed and confirmed to it at
World Financial Network National Bank, 4590 East Broad Street, Columbus,
Ohio 43213, Attention: Dan Groomes (facsimile no. 614/755-3418).
Section 11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling Persons referred to in Section 7
hereof, and no other Person will have any right or obligation hereunder.
Section 12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
Agreement.
Section 13. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to any otherwise applicable principles of conflicts of laws.
Section 14. Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
Section 15. Representative. The Representative will act for the
several Underwriters in connection with this Agreement and the transactions
contemplated hereby and any action under this Agreement taken by the
Representative will be binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts duplicate
hereof, whereupon it will become a binding agreement between Transferor and
the several Underwriters in accordance with its terms.
Very truly yours,
WORLD FINANCIAL NETWORK
NATIONAL BANK
By:________________________________
Name: Dan Groomes
Title: Vice President and
Chief Financial Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted,
as of the date first above written:
CS FIRST BOSTON CORPORATION
By:____________________________________________
Name:
Title:
For itself and the other
Underwriters named in Schedule I
to the foregoing Underwriting
Agreement.
Schedule 1
Principal Amount of
Class A Underwriters Class A Certificates
-------------------- --------------------
CS First Boston Corporation..............................$89,100,000
Chase Securities Inc.....................................$89,100,000
Citicorp Securities, Inc.................................$89,100,000
Goldman, Sachs & Co......................................$89,100,000
J.P. Morgan & Co.........................................$89,100,000
<PAGE>
$46,750,000
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.00% CLASS B ASSET BACKED
CERTIFICATES, SERIES 1996-A
CLASS B UNDERWRITING AGREEMENT, SERIES 1996-A
April 25, 1996
CS First Boston Corporation,
as Representative of the
Several Underwriters
Ladies and Gentlemen:
Section 1. Introductory. World Financial Network National
Bank, a national banking association ("Transferor"), has conveyed
and proposes to convey the Receivables arising from certain
consumer revolving credit card accounts and other rights to the
World Financial Network Card Master Trust (the "Trust"), and
proposes to cause the Trust to sell to the Underwriters named in
Schedule I hereto (the "Underwriters"), for whom you are acting
as representative (the "Representative"), $46,750,000 aggregate
initial principal amount of 7.00% Class B Asset Backed
Certificates, Series 1996-A (the "Class B Certificates"), in the
Trust. It is understood that Transferor is currently entering
into a Class A Underwriting Agreement dated the date hereof (the
"Class A Underwriting Agreement") among Transferor and the
Underwriters named on Schedule I thereto (the "Class A
Underwriters") providing for the sale of $445,500,000 aggregate
initial principal amount of 6.70% Class A Asset Backed
Certificates, Series 1996-A (the "Class A Certificates"). The
Class A Certificates and the Class B Certificates are referred to
herein collectively as the "Certificates". This Agreement and
the Class A Underwriting Agreement are referred to herein
collectively as the "Underwriting Agreements".
The Receivables were conveyed by Transferor to the Trust
pursuant to the Pooling and Servicing Agreement, dated as of
January 17, 1996 (the "P&S") between Transferor, as Transferor
and Servicer, and The Bank of New York, as trustee (the
"Trustee"), and the Certificates will be issued pursuant to the
P&S and the Series 1996-A Supplement to the P&S, dated as of May
9, 1996 (the "Supplement"), between the same parties. The P&S and
the Supplement are referred to herein collectively as the
"Pooling and Servicing Agreement". In addition, Transferor,
Servicer, Trustee and the financial institution identified
therein (the "Collateral Interest Holder"), will enter into a
Loan Agreement dated as of May 9, 1996 (the "Loan Agreement")
pursuant to which the Collateral Interest Holder will acquire
$57,750,000 aggregate initial principal amount of the Collateral
Interest (the "Collateral Interest"), which will act as
Enhancement for the Certificates. Additional Enhancement for the
Certificates will be provided in the form of the Cash Collateral
Account, as described in the Supplement.
Capitalized terms used herein (including in the Introductory
hereto) that are not otherwise defined shall have the meanings
ascribed thereto in the Pooling and Servicing Agreement.
Section 2. Representations and Warranties of Transferor.
(a) Transferor represents and warrants to, and agrees with, each
Underwriter as set forth in this Section 2. Certain terms used in
this Section 2 are defined in paragraph (i) below.
(i) Transferor meets the requirements for use of Form
S-3 under the Securities Act and has filed with the
Securities and Exchange Commission (the "Commission") a
registration statement (Registration No. 333-998) and a
related preliminary prospectus, on such Form for the
registration under the Securities Act, of the Certificates.
Transferor may have filed one or more amendments thereto and
the related preliminary prospectus, each of which has
previously been furnished to the Representative. Transferor
will file with the Commission (A) prior to the effectiveness
of such registration statement, a further amendment thereto
(including the form of final base prospectus and the form of
final prospectus supplement relating to the Class B
Certificates) or (B) after effectiveness of such
registration statement, a final base prospectus and final
prospectus supplement in accordance with Rules 430A and
424(b)(1) or (4) under the Securities Act or (C) a final
base prospectus and a final prospectus supplement relating
to the Class B Certificates in accordance with Rules 415 and
424(b)(2) or (5) under the Securities Act. In the case of
clause (B), Transferor has included in such registration
statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the
Securities Act and the rules thereunder to be included in
the Prospectus with respect to the Class B Certificates and
the offering thereof. As filed, such amendment and form of
final prospectus supplement, or such final base prospectus
or final prospectus supplement, shall include all Rule 430A
Information, together with all other such required
information, with respect to the Class B Certificates and
the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to the
Representative prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond
that contained in the latest preliminary prospectus which
has previously been furnished to the Representative) as
Transferor has advised the Representative, prior to the
Execution Time, will be included or made therein. If the
Registration Statement contains the undertakings specified
by item 512(a) of Regulation S-K, the Registration
Statement, at the Execution Time, meets the requirements set
forth in Rule 415(a)(1)(x).
The terms that follow, when used in this Agreement,
have the meanings indicated. The term "Effective Date" means
each date that the Registration Statement and any post-
effective amendment or amendments thereto became or become
effective. "Execution Time" means the date and time that
this Agreement is executed and delivered by the parties
hereto. "Preliminary Prospectus" means any preliminary
prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration
Statement which, at the Effective Date, omits Rule 430A
Information. "Base Prospectus" means the prospectus referred
to above contained in the Registration Statement at the
Effective Date. "Prospectus" means the prospectus
supplement relating to the Class B Certificates that is
first filed with the Commission pursuant to Rule 424(b)
after the Execution Time, together with the Base Prospectus
(as such Base Prospectus may have been amended and together
with any supplements thereto) or, if no filing pursuant to
Rule 424(b) is required, means the prospectus supplement
relating to the Class B Certificates, including the Base
Prospectus included in the Registration Statement at the
Effective Date. "Registration Statement" means the
registration statement referred to in the preceding
paragraph and any registration statement required to be
filed under the Securities Act or rules thereunder,
including incorporated documents, exhibits and financial
statements, in the form in which it has or shall become
effective and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended. Such
term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule
430A. "Rule 424", "Rule 430A", "Rule 415" and "Regulation S-
K" refer to such rules or regulations under the Securities
Act. "Rule 430A Information" means information with respect
to the Class B Certificates and the offering thereof
permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, the Base Prospectus or
Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on or
before the Effective Date of the Registration Statement or
the issue date of the Base Prospectus or Prospectus, as the
case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration
Statement, the Base Prospectus or Prospectus shall be deemed
to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration
Statement, or the issue date of the Base Prospectus or
Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(ii) On the Effective Date, the Registration Statement
did or will comply in all material respects with the
applicable requirements of the Securities Act and the rules
thereunder; on the Effective Date and when the Prospectus is
first filed (if required) in accordance with Rule 424(b) and
on the Closing Date, the Prospectus (as amended and together
with any supplements thereto) did or will comply in all
material respects with the applicable requirements of the
Securities Act and the rules thereunder; on the Effective
Date, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on
the Effective Date, the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the
Prospectus (as amended and together with any supplements
thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that Transferor makes no representations
or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to Transferor by any
Underwriter specifically for use in connection with the
preparation of the Registration Statement or the Prospectus
(or any supplements thereto).
(iii) Transferor is a national banking association
duly organized, validly existing and in good standing under
the laws of the United States, and has all requisite power,
authority and legal right to own its properties and conduct
its business as described in the Registration Statement and
the Prospectus and to execute, deliver and perform the
Underwriting Agreements, the Pooling and Servicing Agreement
and the Loan Agreement (collectively the "Specified
Agreements"), to authorize the issuance of the Certificates
and the Collateral Interest and to consummate the
transactions contemplated hereby.
(iv) Transferor is duly qualified to do business and
is in good standing (or is exempt from such requirement) in
any state required in order to conduct its business, and has
obtained all necessary licenses and approvals with respect
to Transferor required under Federal and Ohio law.
(v) The execution, delivery and performance by
Transferor of the Specified Agreements, the issuance of the
Certificates and the Collateral Interest and the
consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all
necessary action or proceedings.
(vi) This Agreement has been duly executed and
delivered by Transferor.
(vii) Transferor has authorized the conveyance of the
Receivables to the Trust, and Transferor has authorized the
Trust to issue and sell the Certificates and the Collateral
Interest.
(viii) The execution, delivery and performance by
Transferor of the Specified Agreements, the issuance of the
Certificates and the Collateral Interest and the fulfillment
of the terms hereof and thereof will not conflict with,
result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or
both) a default under, or (other than the Lien of the
Pooling and Servicing Agreement) result in the creation or
imposition of any Lien under any material indenture,
contract, agreement, mortgage, deed of trust or other
instrument to which Transferor is a party or by which it or
any of its properties are bound.
(ix) The execution, delivery and performance by
Transferor of the Specified Agreements, the issuance of the
Certificates and the Collateral Interest and the fulfillment
of the terms hereof and thereof, will not conflict with or
violate any Requirements of Law applicable to Transferor.
(x) There are no proceedings or investigations pending
or, to the best knowledge of Transferor, threatened against
Transferor before any court, regulatory body, administrative
agency, arbitrator or other tribunal or governmental
instrumentality (A) asserting the invalidity of any
Specified Agreement or the Certificates or the Collateral
Interest, (B) seeking to prevent the issuance of the
Certificates or the Collateral Interest or the consummation
of any of the transactions contemplated by the Specified
Agreements, (C) seeking any determination or ruling that, in
the reasonable judgment of Transferor, would materially and
adversely affect the performance by Transferor of its
obligations under any Specified Agreement, (D) seeking any
determination or ruling that would materially and adversely
affect the validity or enforceability of any Specified
Agreements or the Certificates or the Collateral Interest,
or (E) seeking to affect adversely the income tax attributes
of the Trust, as described in the Prospectus under the
heading "U.S. Federal Income Tax Considerations"; and there
are no contracts or documents of Transferor that are
required to be filed as exhibits to the Registration
Statement by the Securities Act or by the rules and
regulations of the Commissioner promulgated under the
Securities Act (the "Rules and Regulations") that have not
been so filed.
(xi) All approvals, authorizations, consents, orders
and other actions of any Person or of any governmental body
or official required in connection with the execution and
delivery of the Specified Agreements, the issuance of the
Certificates and the Collateral Interest and the performance
of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof, have been
obtained.
(xii) Transferor has delivered to the Representative
complete and correct copies of publicly available portions
of the Consolidated Reports of Condition and Income of
Transferor for the years ended December 31, 1993, 1994 and
1995, as submitted to the Comptroller of the Currency.
Except as otherwise set forth therein, during the period
from the most recent date covered by the aforementioned
reports to the date hereof, (x) there has been no material
adverse change in the condition (financial or otherwise) of
Transferor and (y) there have been no transactions entered
into by Transferor, other than those in the ordinary course
of business or that are disclosed in the Prospectus, that
are material with respect to Transferor.
(xiii) Any taxes, fees and other governmental charges
in connection with the execution, delivery and performance
of the Specified Agreements and the Certificates and the
Collateral Interest shall have been paid by Transferor or
will be paid by Transferor at or prior to the Closing Date
to the extent then due.
(xiv) The Certificates and the Collateral Interest
have been duly and validly authorized. The Certificates,
when validly authenticated, issued and delivered in
accordance with the Pooling and Servicing Agreement and sold
to the Underwriters as provided herein and to the Class A
Underwriters pursuant to the Class A Underwriting Agreement,
will be duly and validly issued and outstanding and entitled
to the benefits of the Pooling and Servicing Agreement, and,
together with the Pooling and Servicing Agreement, the Loan
Agreement and the Collateral Interest will conform in all
material respects to the descriptions thereof and the
statements in relation thereto contained in the Prospectus.
(xv) Assuming the due authorization, execution and
delivery thereof by the other parties thereto, the Pooling
and Servicing Agreement and the Loan Agreement constitute
and the Certificates and the Collateral Interest, when
validly issued and, in the case of the Certificates, validly
authenticated and delivered in accordance with the Pooling
and Servicing Agreement and sold to the Underwriters as
provided herein and to the Class A Underwriters pursuant to
the Class A Underwriting Agreement will constitute, the
legal, valid and binding agreement of Transferor enforceable
in accordance with its respective terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(xvi) On the Closing Date and after giving effect to
this Agreement, the Underwriters and the Class A
Underwriters will have good and marketable title to the
Certificates, free and clear of all Liens when validly
authenticated, issued and delivered in accordance with the
Pooling and Servicing Agreement and sold to the Underwriters
as provided herein and to the Class A Underwriters pursuant
to the Class A Underwriting Agreement.
(xvii) At the time of each transfer of Receivables by
Transferor to the Trust, Transferor has had and will have
good and marketable title to all Receivables and the other
property being transferred by it to the Trust on each such
day, free and clear of Liens (other than the Lien of the
Pooling and Servicing Agreement), and will not have sold to
any Person (other than the Trustee) any of its right, title
or interest in any of such Receivables or such other
property.
(xviii) Neither Transferor nor the Trust is an
"investment company" or "controlled" by an "investment
company" as such terms are defined in the Investment Company
Act.
(xix) As of the Closing Date each of the
representations and warranties of Transferor deemed made
pursuant to the Pooling and Servicing Agreement will be true
and correct, and, as of each other date on which Transferor
is deemed, pursuant to the terms of the Pooling and
Servicing Agreement, to make any of the representations and
warranties set forth therein, and in Officer's Certificates
of Transferor delivered on each such date pursuant to the
Pooling and Servicing Agreement, will be true and correct
and the Underwriters may rely on such representations and
warranties as if they were set forth herein in full.
(b) Any Officer's Certificate signed by any officer of
Transferor and delivered to the Representative or its counsel
shall be deemed a representation and warranty of Transferor to
the Underwriters as to the matters covered thereby.
Section 3. Purchase and Sale. On the basis of the
representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, Transferor
agrees to cause the Trust to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, except as set
forth in Section 9 below, to purchase the respective initial
principal amount of Class B Certificates set forth opposite such
Underwriter's name in Schedule I hereto, at a purchase price of
99.3750% of the aggregate principal amount thereof.
The Class B Certificates will initially be represented by
one or more certificates representing $46,750,000 aggregate
initial principal amount, each of which will be registered in the
name of Cede & Co., the nominee of The Depository Trust Company
("DTC") (such certificates, the "DTC Certificates"). The
interests of beneficial owners of the DTC Certificates will be
represented by book entries on the records of DTC and
participating members thereof. Definitive certificates evidencing
the Class B Certificates will be available only under the limited
circumstances specified in the Pooling and Servicing Agreement.
Delivery of the DTC Certificates shall be made to the
accounts of the several Underwriters at the office of DTC, 55
Water Street, 49th Floor, New York, New York 10004, against
payment by the several Underwriters of the purchase price
therefor to or upon the order of Transferor in immediately
available funds at the office of Mayer, Brown & Platt New York,
New York at 9:00 a.m., New York time, on May 9, 1996, or at such
other time not later than seven full business days thereafter as
Transferor and the Underwriters determine, such time being herein
referred to as the "Closing Date". The certificates evidencing
the DTC Certificates will be made available for checking at the
offices of Mayer, Brown & Platt in Chicago, Illinois or such
other location specified by Transferor at least 24 hours prior to
the Closing Date.
Section 4. Offering by the Underwriters. (a) It is
understood that the Underwriters propose to offer the Class B
Certificates for sale to the public as set forth in the
Prospectus.
(b) Each Underwriter agrees that if it is a foreign broker
dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it will not effect any
transaction in the Class B Certificates within the United States
or induce or attempt to induce the purchase of or sale of the
Class B Certificates within the United States, except that it
shall be permitted to make sales to other Underwriters or to its
United States affiliates; provided that such sales are made in
compliance with an exemption of certain foreign brokers or
dealers under Rule 15a-6 under the Exchange Act and in conformity
with the Rules of Fair Practice of the NASD as such Rules apply
to non-NASD brokers or dealers.
(c) Each Underwriter represents and agrees that (i) it has
not offered or sold and, prior to the expiry of the period of six
months from the Closing Date, will not offer or sell any Class B
Certificates to Persons in the United Kingdom except to Persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their businesses or otherwise in circumstances
which do not constitute an offer to the public in the United
Kingdom for the purposes of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 of the
United Kingdom with respect to anything done by it in relation to
the Class B Certificates in, from or otherwise involving the
United Kingdom; (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received
by it in connection with the issue of the Class B Certificates to
a Person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1995 of the United Kingdom or is a Person to
whom the document may otherwise lawfully be issued or passed on.
Section 5. Certain Agreements of Transferor. Transferor
covenants and agrees with the several Underwriters that:
(a) Transferor will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not
effective at the Execution Time, to become effective. If the
Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), Transferor will file the Prospectus, properly
completed, pursuant to Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Underwriters of such timely filing. Transferor will promptly
advise the Underwriters (i) when the Registration Statement, and
any amendment thereto, shall have become effective, (ii) when the
Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b), (iii) of any request
by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement
or the institution or threat of any proceeding for that purpose
and (v) of the receipt by Transferor of any notification with
respect to the suspension of the qualification of the Class B
Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Transferor will
not file any amendment of the Registration Statement or
supplement to the Prospectus unless a copy has been furnished to
the Representative for its review prior to such filing.
Transferor will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible
the lifting thereof.
(b) If, at any time when a Prospectus relating to the Class
B Certificates is required to be delivered under the Securities
Act, any event occurs as a result of which such Prospectus as
then amended or supplemented would include any untrue statement
of a material fact or omit to state any material fact necessary
to make the statements therein in light of the circumstances
under which they were made not misleading, or if it shall be
necessary at any time to amend or supplement such Prospectus to
comply with the Securities Act or the Exchange Act or the Rules
and Regulations thereunder, Transferor promptly will prepare and
file with the Commission an amendment or supplement that will
effect such compliance. Neither the consent of any Underwriter
to, nor the delivery by any Underwriter of, any such amendment or
supplement shall constitute a waiver of any of the conditions set
forth in Section 6 hereof.
(c) As soon as practicable, but not later than the
Availability Date (as defined below), Transferor will cause the
Trustee to make generally available to the Holders of the Class B
Certificates and to the Representative an earnings statement with
respect to the Trust covering a period of at least 12 months
beginning after the Effective Date that will satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
under the Securities Act. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of
the fourth fiscal quarter following the fiscal quarter that
includes the Effective Date, except that, if such fourth fiscal
quarter is the last quarter of Transferor's fiscal year,
"Availability Date" means the 90th day after the end of such
fourth fiscal quarter.
(d) Transferor will furnish to the Underwriters copies of
the Registration Statement as originally filed and each amendment
thereto (in each case at least two of which will be signed and
will include all exhibits), each related Preliminary Prospectus,
the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such
quantities as the Underwriters may reasonably request.
Transferor will furnish or cause to be furnished to the
Representative copies of all reports on Form SR required by Rule
463 under the Securities Act.
(e) Transferor will arrange for the qualification of the
Class B Certificates for sale under the laws of such
jurisdictions in the United States as the Underwriters may
reasonably designate and will continue such qualifications in
effect so long as required for the distribution of the Class B
Certificates, provided that Transferor shall not be obligated to
qualify to do business nor become subject to service of process
generally, but only to the extent required for such
qualification, in any jurisdiction in which it is not currently
so qualified, and will arrange for the determination of the
legality of the Class B Certificates for purchase by
institutional investors.
(f) So long as any of the Class B Certificates are
outstanding, Transferor will deliver or cause to be delivered to
the Underwriters (i) copies of each report mailed to the Trustee
or the Series 1996-A Holders, as soon as such report is mailed to
the Trustee or such Holders, (ii) the annual statement as to
compliance and the annual statement of a firm of independent
public accountants furnished to the Trustee pursuant to Sections
3.5 and 3.6 of the Pooling and Servicing Agreement, as soon as
such statements are furnished to the Trustee, (iii) copies of all
documents required to be filed with the Commission pursuant to
the Exchange Act or any order of the Commission thereunder, and
(iv) such other information concerning Transferor, the
Certificates or the Trust as the Underwriters may reasonably
request from time to time.
(g) Transferor will pay all expenses incident to the
performance of its obligations under this Agreement, including
without limitation, (i) expenses of preparing, printing,
reproducing and distributing the Registration Statement and each
amendment thereto, the preliminary prospectuses, the Prospectus
(including any amendments and supplements thereto), the Pooling
and Servicing Agreement, the Loan Agreement and the Class B
Certificates, (ii) the fees and disbursements of the Trustee and
its counsel, (iii) the fees and disbursements of the independent
public accountants of Transferor and fees and disbursements of
counsel to Transferor and the Underwriters, (iv) the fees charged
by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Service, a division of The McGraw Hill Companies, Inc.
("Standard & Poor's") and Fitch Investors Service, L.P. ("Fitch",
and together with Moody's and Standard & Poor's, the "Rating
Agencies") in connection with the rating of the Class B
Certificates, (v) the fees of DTC in connection with the book-
entry registration of the DTC Certificate, (vi) the fees and
expenses of Mayer, Brown & Platt as counsel to the Transferor and
in its role as special Federal tax counsel and (vii) expenses
incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to
the Underwriters, and will reimburse the Underwriters for any
expenses (including reasonable fees and disbursements of counsel)
incurred by the Underwriters pursuant to Section 5(e) hereof in
connection with the qualification of the Class B Certificates for
sale and determination of their eligibility for investment under
the laws of such jurisdictions in the United States as the
Underwriters may designate.
(h) Transferor has caused and will continue to cause its
books and records (including any computer records) to be marked
relating to the Receivables transferred to the Trust, to show the
transfer to the Trust of such Receivables, and Transferor shall
not take any action inconsistent with the transfer to the Trust
of such Receivables, other than as permitted by the Pooling and
Servicing Agreement.
(i) For a period of 30 days from the date hereof, none of
Transferor or any of its affiliates or any trust formed by it or
any of its affiliates will, without the prior written consent of
the Underwriters, directly or indirectly, offer, sell or contract
to sell or announce the offering of, in a public or private
transaction, any other collateralized securities similar to the
Class B Certificates (other than the Class A Certificates and the
Class A Certificates, Series 1996-B and Class B Certificates,
Series 1996-B) representing interests in consumer credit card
receivables.
(j) So long as any Class B Certificates are outstanding,
Transferor will cause to be delivered to the Underwriters a
reliance letter relating to each Opinion of Counsel delivered to
the Trustee or any Rating Agency by counsel to Transferor
pursuant to the Pooling and Servicing Agreement at the time such
opinion is delivered.
(k) To the extent, if any, that the rating provided with
respect to the Class B Certificates by any Rating Agency is
conditional upon the furnishing of documents or the taking of any
other actions by Transferor, Transferor shall furnish such
documents and take any such other actions as may be required.
Section 6. Conditions of the Obligations of the
Underwriters. The obligation of the Underwriters to purchase and
pay for the Class B Certificates will be subject to the accuracy
of the representations and warranties on the part of Transferor
herein as of the Execution Time and the Closing Date, to the
accuracy of the statements of the officers of Transferor made
pursuant to the provisions hereof, to the performance by
Transferor of its obligations hereunder and to the following
additional conditions precedent:
(a) (i) On the date of this Agreement, the Underwriters and
Transferor shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time is prior to the
execution and delivery of this Agreement, shall be on or prior to
the date of this Agreement or, if the Effective Time is
subsequent to the execution and delivery of this Agreement, shall
be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior
to the Effective Time), of Coopers & Lybrand confirming that they
are independent public accountants within the meaning of the
Securities Act and the Rules and Regulations, substantially in
the form of the draft to which the Underwriters have previously
agreed and otherwise in form and substance satisfactory to the
Underwriters and counsel for the Underwriters, and (ii) on the
Closing Date, the Underwriters and Transferor shall have received
a letter, dated as of the Closing Date, from Coopers & Lybrand
updating the letter referred to in clause (i) above, in form and
substance satisfactory to the Underwriters and counsel for the
Underwriters.
(b) If the Registration Statement has not become effective
prior to the Execution Time, unless the Underwriters agree in
writing to a later time, the Registration Statement shall have
become effective not later than 10:00 p.m. New York time on the
date of this Agreement; if filing of the Prospectus, or any
supplements thereto, is required pursuant to Rule 424(b), the
Prospectus shall have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending
the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been
instituted or threatened.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of Transferor which, in
the judgment of the Underwriters materially impairs the
investment quality of the Class B Certificates; (ii) any
suspension or limitation of trading in securities generally on
the New York Stock Exchange or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any
securities of Transferor on any exchange or in the over the
counter market; (iii) any banking moratorium declared by Federal,
New York or Delaware authorities; or (iv) any outbreak or
escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if,
in the judgment of the Underwriters, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale
of and payment for the Class B Certificates.
(d) The Representative shall have received:
(1) The favorable opinion or opinions of internal counsel
of Transferor and/or of Mayer, Brown & Platt, counsel to
Transferor, dated the Closing Date and satisfactory in form
and substance to the Representative and its counsel, and in
the aggregate substantially to the effect that:
(i) Transferor has been duly organized as an
association licensed as a national banking association
and is validly existing and in good standing under the
laws of the United States, is duly qualified to do
business and is in good standing under the laws of each
jurisdiction which requires such qualification wherein
it owns or leases material properties or conducts
material business, and has full power and authority to
own its properties, to conduct its business as
described in the Registration Statement and the
Prospectus, to enter into and perform its obligations
under the Specified Agreements, to execute the
Certificates and to consummate the transactions
contemplated hereby and thereby;
(ii) the Pooling and Servicing Agreement, this
Agreement, the Class A Underwriting Agreement, the Loan
Agreement and the Certificates have each been duly
authorized, executed and delivered by Transferor; the
Pooling and Servicing Agreement and the Loan Agreement
constitute and the Certificates and the Collateral
Interest, when validly issued and, in the case of the
Certificates validly authenticated and delivered in
accordance with the Pooling and Servicing Agreement and
sold to the Underwriters as provided herein and to the
Class A Underwriters pursuant to the Class A
Underwriting Agreement, will constitute, the legal,
valid and binding agreement of Transferor, enforceable
in accordance with its terms (subject, as to
enforcement or remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally from time to time
in effect and to the application of general principles
of equity);
(iii) the Certificates are in due and proper form
and when executed, authenticated and delivered as
specified in the Pooling and Servicing Agreement, when
delivered against payment of the consideration
specified herein, will be duly and validly issued and
outstanding and entitled to the benefits of the Pooling
and Servicing Agreement and the Collateral Interest;
T.TX neither the execution and delivery of the
Specified Agreements, nor the issuance or delivery of
the Certificates, nor the consummation of any of the
transactions contemplated herein or therein, nor the
fulfillment of the terms of the Certificates or the
Specified Agreements, will conflict with or violate,
result in a material breach of or constitute a default
under (A) any Requirements of Law applicable to
Transferor or any statute or regulation currently
applicable to the Trust, (B) any term or provision of
any order known to such counsel to be currently
applicable to Transferor or the Trust of any court,
regulatory body, administrative agency or governmental
body having jurisdiction over Transferor or the Trust,
as the case may be, or (C) any term or provision of any
indenture or other agreement or instrument known to
such counsel to which Transferor or the Trust is a
party or by which either of them or any of their
properties are bound;
(v) except as otherwise disclosed in the
Prospectus (and any supplements thereto) or the
Registration Statement, there is no pending or, to the
best knowledge of such counsel, threatened action, suit
or proceeding before any court or governmental agency,
authority or body or any arbitrator with respect to the
Trust, the Certificates, the Specified Agreements or
any of the transactions contemplated herein or therein
or with respect to Transferor which, in the case of any
such action, suit or proceeding with respect to
Transferor if adversely determined, would have a
material adverse effect on the Certificates or the
Trust or upon the ability of Transferor to perform its
obligations under the Pooling and Servicing Agreement
or the Loan Agreement; and the statements included in
the Registration Statement, the Base Prospectus and the
Prospectus describing statutes, legal proceedings,
contracts and other documents relating to Transferor,
the Accounts, the Receivables, the business of
Transferor and the Trust fairly summarize the matters
therein described;
(vi) the Registration Statement has become
effective under the Securities Act, and, to the best of
their knowledge and information, no stop order
suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose have been instituted or are pending or
contemplated under the Securities Act, and the
Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all
material respects with the requirements of the
Securities Act and the Rules and Regulations. Such
counsel has no reason to believe that at the Effective
Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or
necessary to make the statements therein not misleading
or that the Prospectus includes any untrue statement of
a material fact or omits to state a material fact
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading (other than financial and statistical
information contained therein as to which such counsel
need express no opinion);
(vii) no approval, authorization, consent, order,
registration, filing, qualification, license or permit
of or with any court or governmental agency or body is
required for the consummation by Transferor or the
Trust of the transactions contemplated in the Specified
Agreements, except such as have been obtained under the
Securities Act and such as may be required under the
blue sky laws of any jurisdiction inside the United
States in connection with the purchase and distribution
of the Class B Certificates by the Underwriters and
such filings or other approvals (specified in such
opinion) as have been made or obtained;
(viii) if a court concludes that the assignment
of the Receivables, all documents and instruments
relating thereto and all proceeds thereof to the
Trustee pursuant to the Pooling and Servicing Agreement
is a sale, such assignment transferred to the Trust all
the right, title and interest of Transferor in and to
such Receivables and other property in existence on the
date hereof, free and clear of any Liens then existing
or thereafter created except as specifically permitted
pursuant to the Pooling and Servicing Agreement. With
respect to Receivables which come into existence after
the date hereof, such sale will transfer to the Trust
all of the right, title and interest of Transferor in
and to such Receivables free and clear of any Liens. If
a court were to conclude that such assignment was not a
sale, the Pooling and Servicing Agreement and the
transactions provided for by the Pooling and Servicing
Agreement would constitute a grant by Transferor to the
Trustee, for the benefit of the Investor Holders, of a
valid security interest in all of Transferor's right,
title and interest in all Receivables and other
property from time to time transferred by Transferor to
the Trust;
(ix) the Certificates and the Pooling and
Servicing Agreement and the Loan Agreement each conform
in all material respects with the description thereof
contained in the Registration Statement and the
Prospectus;
(x) the Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act
of 1939, as amended, and neither Transferor nor the
Trust is required to be registered under the Investment
Company Act; and
(xi) the statements in the Registration Statement
under the heading "Certain Legal Aspects of the
Receivables", "U.S. Federal Income Tax Consequences"
and "ERISA Considerations" to the extent that they
constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or
received by such counsel and are correct in all
material respects.
In rendering such opinion counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than
the States of Ohio and New York and the United States, to the
extent deemed proper and stated in such opinion, upon the opinion
of other counsel of good standing believed by such counsel to be
reliable and acceptable to the Representative and its counsel,
and (B) as to matters of fact, to the extent deemed proper and as
stated therein, on certificates of responsible officers of the
Trust, Transferor and public officials. References to the
Prospectus in this paragraph (d) include any supplements thereto.
(2) The favorable opinion of Mayer, Brown & Platt,
special tax counsel to Transferor, dated the Closing Date
and to the effect that (i) the Certificates will properly be
treated as indebtedness for federal income tax purposes and
(ii) the Trust will not be classified as an association or a
publicly traded partnership taxable as a corporation for
federal income tax purposes.
(3) The favorable opinion of Schwartz, Warren &
Ramirez, special Ohio counsel to Transferor, dated the
Closing Date and satisfactory in form and substance to the
Representative and its counsel, and substantially to the
effect that:
(i) the Receivables constitute either "general
intangibles" or "accounts" in each case as defined in
the Uniform Commercial Code in effect in the State of
Ohio;
(ii) Uniform Commercial Code financing statements
with respect to the Investor Interest in the
Receivables and the proceeds thereof have been filed in
the office of the Ohio Secretary of State. No other
filings or other actions, with respect to the Trustee's
interest in the Receivables transferred and to be
transferred by Transferor to the Trust, are necessary
to perfect the interest of the Trustee in the
Receivables, and the proceeds thereof, against third
parties, except that appropriate continuation
statements must be filed at five-year intervals;
(iii) in the event that a court were to conclude
that the assignment of the Receivables, all documents
and instruments relating thereto and all proceeds
thereof to the Trustee pursuant to the Pooling and
Servicing Agreement was not a sale, the Pooling and
Servicing Agreement, together with the filing of the
financing statements referred to in paragraph (ii)
above, create a first priority perfected security
interest in the Receivables transferred and to be
transferred by Transferor to the Trustee, all documents
and instruments relating thereto and all proceeds
thereof (in rendering such opinion counsel may take
such exceptions as are appropriate and reasonably
acceptable under the circumstances; and
(iv) the Trust as an entity will not be subject
to the corporation franchise tax or to the dealers in
intangibles tax imposed on corporations, financial
institutions or dealers in intangibles by Ohio Revised
Code Chapters 5733 or 5725, and for purposes of the
corporation franchise tax and the dealers in
intangibles tax imposed by Ohio Revised Code Chapters
5733 and 5725, respectively, the Certificates will be
treated as indebtedness.
(4) Any reliance letters relating to each opinion
rendered to the Trustee or any Rating Agency by internal
counsel of Transferor and Mayer, Brown & Platt and any other
counsel to Transferor in connection with the rating of the
Certificates.
(5) The favorable opinion of counsel to the Trustee,
dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel to the
effect that:
(i) The Trustee has been duly incorporated and is
validly existing as a New York banking corporation in
good standing under the laws of the State of New York
with full power and authority (corporate and other) to
own its properties and conduct its business, as
presently conducted by it, and to enter into and
perform its obligations under the Pooling and Servicing
Agreement and the Loan Agreement and to issue the
Certificates and the Collateral Interest.
(ii) Each of the Pooling and Servicing Agreement
and the Loan Agreement has been duly authorized,
executed and delivered by the Trustee, and constitutes
a legal, valid and binding obligation of the Trustee,
enforceable in accordance with its terms, except that
(y) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating
to creditors' rights and (z) the remedy of specific
performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding
therefor may be brought.
(iii) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(iv) Neither the execution and delivery by the
Trustee of the Pooling and Servicing Agreement or the
Loan Agreement nor the consummation of any of the
transactions by the Trustee contemplated thereby
required the consent or approval of, the giving of
notice to, the registration with or the taking of any
other action with respect to, any governmental
authority or agency under any existing federal or state
law governing the banking or trust powers of the
Trustee.
(v) The execution and delivery of the Pooling and
Servicing Agreement and the Loan Agreement by the
Trustee and the performance by the Trustee of their
respective terms do not conflict with or result in a
violation of (A) any law or regulation of the United
States of America or the State of New York governing
trust powers of the Trustee, (B) the Articles of
Association or By-Laws of the Trustee, or (C) to the
best of their knowledge, any indenture, lease, or other
material agreement to which the Trustee is a party or
to which its assets are subject.
(6) The favorable opinion of Mayer, Brown & Platt,
counsel for the Underwriters, dated the Closing Date, with
respect to the validity of the Class B Certificates and such
other related matters as the Underwriters shall request, and
Transferor shall have furnished or caused to be furnished to
such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
In rendering such opinion, Mayer, Brown & Platt may rely on
the opinions of Schwartz, Warren & Ramirez, counsel to
Transferor, and the opinion of internal counsel of
Transferor, as to the matters dealt with in such opinions.
(e) The Representative shall have received a certificate
dated the Closing Date of the President, any Vice President, the
Treasurer or any Assistant Treasurer, of Transferor in which such
officer shall state that the representations and warranties of
Transferor in this Agreement are true and correct, and that
Transferor has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are
contemplated by the Commission, and subsequent to the date of the
most recent financial statements of Transferor delivered to the
Representative hereunder, there has been no material adverse
change in the condition, financial or otherwise, whether or not
arising from transactions in the ordinary course of business, of
Transferor except as set forth in or contemplated by the
Registration Statement and the Prospectus.
(f) The Class B Certificates shall be rated "Aaa" by
Moody's and "AAA" by Standard & Poor's and "AAA" by Fitch, and
the Class B Certificates shall be rated "A2" by Moody's and "A"
by Standard & Poor's and "A" by Fitch.
(g) The Representative shall have received evidence
satisfactory to it and its counsel that, on or before the Closing
Date, UCC-1 financing statements have been filed in the office of
the Secretary of State of Ohio and County Clerk of Franklin
County reflecting the interest of the Trust in the Receivables
and the proceeds thereof.
(h) The Representative and Transferor shall have received
from counsel for the Collateral Interest Holder reasonably
acceptable to the Representative and Transferor, a favorable
opinion, dated the Closing Date and satisfactory in form and
substance to the Representative, its counsel, Transferor and its
counsel to the effect that:
(1) the Collateral Interest Holder is duly
organized and existing under the laws of its
jurisdiction of incorporation and has the power and
authority to execute, deliver and perform its
obligations under the Loan Agreement;
(2) the Loan Agreement has been duly and validly
authorized, executed and delivered by the Collateral
Interest Holder and constitutes the legal, valid and
legally binding obligation of the Collateral Interest
Holder enforceable against the Collateral Interest
Holder in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, liquidation, moratorium,
readjustment of debt or other similar laws affecting
the enforcement of creditors' rights generally, as such
laws may be applied in the event of a bankruptcy,
insolvency, reorganization, liquidation, moratorium,
readjustment of debt of, or the appointment of a
receiver with respect to the property of, or a similar
event applicable to the Collateral Interest Holder, and
(B) the effect of any moratorium or other similar
occurrence affecting the Collateral Interest Holder;
(3) all consents, approvals, authorizations,
licenses, rulings or orders of or actions by any New
York State or federal governmental authority and all
filings, recordings or publications, if any, required
on the part of the Collateral Interest Holder in
connection with the execution, delivery or performance
by the Collateral Interest Holder of the Loan Agreement
have been obtained or made and are in full force and
effect; and
(4) such other customary matters as the
Representative shall request.
(i) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there shall not have been any change, or any
development involving a prospective change, in or affecting the
business or properties of the Trust or Transferor the effect of
which, in any case referred to above, is, in the judgment of the
Underwriters, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or the delivery of
the Class B Certificates as contemplated by the Registration
Statement and the Prospectus (and any supplements thereto).
(j) Simultaneously with or prior to the Closing Date,
$445,500,000 aggregate initial principal amount of the Class A
Certificates shall have been sold to the Class A Underwriters.
Transferor will provide or cause to be provided to the
Underwriters such conformed copies of such opinions,
certificates, letters and documents as the Underwriters may
reasonably request.
Section 7. Indemnification and Contribution. (a)
Transferor will indemnify and hold harmless each Underwriter and
each Person who controls any Underwriter within the meaning of
the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which the Underwriters or any
of them may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus or
any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each Person
who controls any Underwriter within the meaning of the Securities
Act for any actual legal or other expenses reasonably incurred by
the Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that Transferor will not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in
conformity with written information furnished to Transferor by
any Underwriter specifically for use therein.
(b) Each Underwriter, severally, agrees to indemnify and
hold harmless Transferor against any losses, claims, damages or
liabilities to which Transferor may become subject, under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the Prospectus or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information
furnished to Transferor by such Underwriter specifically for use
therein, and will reimburse any actual legal or other expenses
reasonably incurred by Transferor in connection with
investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action or the
assertion by a third party of a claim, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except and
to the extent of any prejudice to such indemnifying party arising
from such failure to provide such notice. In case any such action
is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the
subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative
benefits received by Transferor on the one hand and the
Underwriters on the other from the offering of the Class B
Certificates or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of Transferor
on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by
Transferor on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Class B Certificates (before
deducting expenses) received by Transferor bear to the total
underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by
Transferor or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount
applicable to the Class B Certificates purchased by such
Underwriter hereunder. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(e) The obligations of Transferor under this Section shall
be in addition to any liability that Transferor may otherwise
have and shall extend, upon the same terms and conditions, to
each Person, if any, who controls any Underwriter within the
meaning of the Securities Act; and the obligations of any
Underwriter under this Section shall be in addition to any
liability that such Underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each director of
Transferor, to each officer of Transferor who signed the
Registration Statement and to each Person, if any, who controls
Transferor within the meaning of the Securities Act.
Section 8. Survival of Certain Representations and
Obligations. The respective indemnities, agreements,
representations, warranties and other statements of Transferor or
its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation or statement as to the results
thereof, made by or on behalf of the Underwriters, Transferor or
any of their respective representatives, officers or directors or
any controlling Person, and will survive delivery of and payment
for the Class B Certificates. If for any reason the purchase of
the Class B Certificates by the Underwriters is not consummated,
Transferor shall remain responsible for the expenses to be paid
or reimbursed by Transferor pursuant to Section 5(g) hereof and
the respective obligations of Transferor and the Underwriters
pursuant to Section 7 hereof shall remain in effect. If the
purchase of the Class B Certificates by the Underwriters is not
consummated for any reason other than solely because of the
occurrence of any event specified in clause (ii), (iii) or (iv)
of Section 6(c) hereof, Transferor will reimburse the
Underwriters for all actual out-of-pocket expenses (including
fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Class B Certificates.
Section 9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Class
B Certificates agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Class B Certificates
set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Class B Certificates set forth opposite the
names of all the remaining Underwriters) the Class B Certificates
which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the
aggregate amount of Class B Certificates which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Class B
Certificates set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Class B
Certificates, and if such nondefaulting Underwriters do not
purchase all the Class B Certificates, this Agreement will
terminate without liability to any non-defaulting Underwriter,
the Trust or Transferor. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding seven days, as
the Underwriters shall determine in order that the required
changes in the Registration Statement and the Prospectus (and any
supplements thereto) or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to
Transferor and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
Section 10. Notices. All communications hereunder will be
in writing and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to them c/o CS First
Boston Corporation, Attention: Investment Banking Department -
Transactions Advisory Group; or if sent to Transferor will be
mailed, delivered or telegraphed and confirmed to it at World
Financial Network National Bank, 4590 East Broad Street,
Columbus, Ohio 43213, Attention: Dan Groomes (facsimile no.
614/755-3418).
Section 11. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling Persons referred to in Section 7 hereof, and no other
Person will have any right or obligation hereunder.
Section 12. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute
one and the same Agreement.
Section 13. Applicable Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York, without regard to any otherwise applicable
principles of conflicts of laws.
Section 14. Miscellaneous. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
Section 15. Representative. The Representative will act for
the several Underwriters in connection with this Agreement and
the transactions contemplated hereby and any action under this
Agreement taken by the Representative will be binding upon all
the Underwriters.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us one of the
counterparts duplicate hereof, whereupon it will become a binding
agreement between Transferor and the several Underwriters in
accordance with its terms.
Very truly yours,
WORLD FINANCIAL NETWORK
NATIONAL BANK
By: _______________________________
Name: Dan Groomes
Title: Vice President and
Chief Financial
Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted,
as of the date first above written:
CS FIRST BOSTON CORPORATION
By: ____________________________________
Name:
Title:
For itself and the other
Underwriters named in Schedule I
to the foregoing Underwriting
Agreement.
<PAGE>
Schedule 1
-----------
Principal Amount of
Class B Underwriter Class B Certificates
------------------- --------------------
CS First Boston Corporation. . . . . . . . . . . .$46,750,000
<PAGE>
$283,500,000
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.95% CLASS A ASSET BACKED
CERTIFICATES, SERIES 1996-B
CLASS A UNDERWRITING AGREEMENT, SERIES 1996-B
---------------------------------------------
April 25, 1996
CS First Boston Corporation,
as Representative of the
Several Underwriters
Ladies and Gentlemen:
Section 1. Introductory. World Financial Network National Bank, a
national banking association ("Transferor"), has conveyed and proposes to
convey the Receivables arising from certain consumer revolving credit card
accounts and other rights to the World Financial Network Card Master Trust
(the "Trust"), and proposes to cause the Trust to sell to the Underwriters
named in Schedule I hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"), $283,500,000 aggregate initial
principal amount of 6.95% Class A Asset Backed Certificates, Series 1996-B
(the "Class A Certificates"), in the Trust. It is understood that
Transferor is currently entering into a Class B Underwriting Agreement
dated the date hereof (the "Class B Underwriting Agreement") among
Transferor and the Underwriters named on Schedule I thereto (the "Class B
Underwriters") providing for the sale of $29,750,000 aggregate initial
principal amount of 7.20% Class B Asset Backed Certificates, Series 1996-B
(the "Class B Certificates"). The Class A Certificates and the Class B
Certificates are referred to herein collectively as the "Certificates".
This Agreement and the Class B Underwriting Agreement are referred to
herein collectively as the "Underwriting Agreements".
The Receivables were conveyed by Transferor to the Trust pursuant to
the Pooling and Servicing Agreement, dated as of January 17, 1996 (the
"P&S") between Transferor, as Transferor and Servicer, and The Bank of New
York, as trustee (the "Trustee"), and the Certificates will be issued
pursuant to the P&S and the Series 1996-B Supplement to the P&S, dated as
of May 9, 1996 (the "Supplement"), between the same parties. The P&S and
the Supplement are referred to herein collectively as the "Pooling and
Servicing Agreement". In addition, Transferor, Servicer, Trustee and a
financial institution identified therein (the "Collateral Interest
Holder"), will enter into a Loan Agreement dated as of May 9, 1996 (the
"Loan Agreement") pursuant to which the Collateral Interest Holder will
acquire $36,750,000 aggregate initial principal amount of the Collateral
Interest (the "Collateral Interest"), which will act as Enhancement for the
Certificates. Additional Enhancement for the Certificates will be provided
in the form of the Cash Collateral Account, as described in the Supplement.
Capitalized terms used herein (including in the Introductory hereto)
that are not otherwise defined shall have the meanings ascribed thereto in
the Pooling and Servicing Agreement.
Section 2. Representations and Warranties of Transferor.
(a)Transferor represents and warrants to, and agrees with, each Underwriter
as set forth in this Section 2. Certain terms used in this Section 2 are
defined in paragraph (i) below.
(i) Transferor meets the requirements for use of Form S-3 under
the Securities Act and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration
No. 333-998) and a related preliminary prospectus, on such Form for
the registration under the Securities Act, of the Certificates.
Transferor may have filed one or more amendments thereto and the
related preliminary prospectus, each of which has previously been
furnished to the Representative. Transferor will file with the
Commission (A) prior to the effectiveness of such registration
statement, a further amendment thereto (including the form of final
base prospectus and the form of final prospectus supplement relating
to the Class A Certificates) or (B) after effectiveness of such
registration statement, a final base prospectus and final prospectus
supplement in accordance with Rules 430A and 424(b)(1) or (4) under
the Securities Act or (C) a final base prospectus and a final
prospectus supplement relating to the Class A Certificates in
accordance with Rules 415 and 424(b)(2) or (5) under the Securities
Act. In the case of clause (B), Transferor has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Securities Act and the rules thereunder to be included in the
Prospectus with respect to the Class A Certificates and the offering
thereof. As filed, such amendment and form of final prospectus
supplement, or such final base prospectus or final prospectus
supplement, shall include all Rule 430A Information, together with
all other such required information, with respect to the Class A
Certificates and the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to the Representative
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
preliminary prospectus which has previously been furnished to the
Representative) as Transferor has advised the Representative, prior
to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertakings specified by item
512(a) of Regulation S-K, the Registration Statement, at the
Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
The terms that follow, when used in this Agreement, have the
meanings indicated. The term "Effective Date" means each date that
the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" means
the date and time that this Agreement is executed and delivered by
the parties hereto. "Preliminary Prospectus" means any preliminary
prospectus referred to in the preceding paragraph and any preliminary
prospectus included in the Registration Statement which, at the
Effective Date, omits Rule 430A Information. "Base Prospectus" means
the prospectus referred to above contained in the Registration
Statement at the Effective Date. "Prospectus" means the prospectus
supplement relating to the Class A Certificates that is first filed
with the Commission pursuant to Rule 424(b) after the Execution Time,
together with the Base Prospectus (as such Base Prospectus may have
been amended and together with any supplements thereto) or, if no
filing pursuant to Rule 424(b) is required, means the prospectus
supplement relating to the Class A Certificates, including the Base
Prospectus included in the Registration Statement at the Effective
Date. "Registration Statement" means the registration statement
referred to in the preceding paragraph and any registration statement
required to be filed under the Securities Act or rules thereunder,
including incorporated documents, exhibits and financial statements,
in the form in which it has or shall become effective and, in the
event any post-effective amendment thereto becomes effective prior to
the Closing Date, shall also mean such registration statement as so
amended. Such term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A", "Rule 415" and "Regulation S-K" refer to
such rules or regulations under the Securities Act. "Rule 430A
Information" means information with respect to the Class A
Certificates and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A. Any reference herein to the Registration Statement, the Base
Prospectus or Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the Effective Date of
the Registration Statement or the issue date of the Base Prospectus
or Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus or Prospectus shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement,
or the issue date of the Base Prospectus or Prospectus, as the case
may be, deemed to be incorporated therein by reference.
(ii) On the Effective Date, the Registration Statement did or
will comply in all material respects with the applicable requirements
of the Securities Act and the rules thereunder; on the Effective Date
and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Prospectus (as amended
and together with any supplements thereto) did or will comply in all
material respects with the applicable requirements of the Securities
Act and the rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the
Prospectus (as amended and together with any supplements thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Transferor makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to Transferor by any Underwriter
specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplements
thereto).
(iii) Transferor is a national banking association duly
organized, validly existing and in good standing under the laws of
the United States, and has all requisite power, authority and legal
right to own its properties and conduct its business as described in
the Registration Statement and the Prospectus and to execute, deliver
and perform the Underwriting Agreements, the Pooling and Servicing
Agreement and the Loan Agreement (collectively the "Specified
Agreements"), to authorize the issuance of the Certificates and the
Collateral Interest and to consummate the transactions contemplated
hereby.
(iv) Transferor is duly qualified to do business and is in good
standing (or is exempt from such requirement) in any state required
in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to Transferor required under
Federal and Ohio law.
(v) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary action or proceedings.
(vi) This Agreement has been duly executed and delivered by
Transferor.
(vii) Transferor has authorized the conveyance of the
Receivables to the Trust, and Transferor has authorized the Trust to
issue and sell the Certificates and the Collateral Interest.
(viii) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, or (other than the Lien of
the Pooling and Servicing Agreement) result in the creation or
imposition of any Lien under any material indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
Transferor is a party or by which it or any of its properties are
bound.
(ix) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof, will not conflict with or violate any Requirements of Law
applicable to Transferor.
(x) There are no proceedings or investigations pending or, to
the best knowledge of Transferor, threatened against Transferor
before any court, regulatory body, administrative agency, arbitrator
or other tribunal or governmental instrumentality (A) asserting the
invalidity of any Specified Agreement or the Certificates or the
Collateral Interest, (B) seeking to prevent the issuance of the
Certificates or the Collateral Interest or the consummation of any of
the transactions contemplated by the Specified Agreements, (C)
seeking any determination or ruling that, in the reasonable judgment
of Transferor, would materially and adversely affect the performance
by Transferor of its obligations under any Specified Agreement, (D)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of any Specified
Agreements or the Certificates or the Collateral Interest, or (E)
seeking to affect adversely the income tax attributes of the Trust,
as described in the Prospectus under the heading "U.S. Federal Income
Tax Considerations"; and there are no contracts or documents of
Transferor that are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the rules and
regulations of the Commissioner promulgated under the Securities Act
(the "Rules and Regulations") that have not been so filed.
(xi) All approvals, authorizations, consents, orders and other
actions of any Person or of any governmental body or official
required in connection with the execution and delivery of the
Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the performance of the transactions
contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof, have been obtained.
(xii) Transferor has delivered to the Representative complete
and correct copies of publicly available portions of the Consolidated
Reports of Condition and Income of Transferor for the years ended
December 31, 1993, 1994 and 1995, as submitted to the Comptroller of
the Currency. Except as otherwise set forth therein, during the
period from the most recent date covered by the aforementioned
reports to the date hereof, (x) there has been no material adverse
change in the condition (financial or otherwise) of Transferor and
(y) there have been no transactions entered into by Transferor, other
than those in the ordinary course of business or that are disclosed
in the Prospectus, that are material with respect to Transferor.
(xiii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of the
Specified Agreements and the Certificates and the Collateral
Interest shall have been paid by Transferor or will be paid by
Transferor at or prior to the Closing Date to the extent then due.
(xiv) The Certificates and the Collateral Interest have been
duly and validly authorized. The Certificates, when validly
authenticated, issued and delivered in accordance with the Pooling
and Servicing Agreement and sold to the Underwriters as provided
herein and to the Class B Underwriters pursuant to the Class B
Underwriting Agreement, will be duly and validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing
Agreement, and, together with the Pooling and Servicing Agreement,
the Loan Agreement and the Collateral Interest will conform in all
material respects to the descriptions thereof and the statements in
relation thereto contained in the Prospectus.
(xv) Assuming the due authorization, execution and delivery
thereof by the other parties thereto, the Pooling and Servicing
Agreement and the Loan Agreement constitute and the Certificates and
the Collateral Interest, when validly issued and, in the case of the
Certificates, validly authenticated and delivered in accordance with
the Pooling and Servicing Agreement and sold to the Underwriters as
provided herein and to the Class B Underwriters pursuant to the Class
B Underwriting Agreement will constitute, the legal, valid and
binding agreement of Transferor enforceable in accordance with its
respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting enforcement of creditors' rights generally and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(xvi) On the Closing Date and after giving effect to this
Agreement, the Underwriters and the Class B Underwriters will have
good and marketable title to the Certificates, free and clear of all
Liens when validly authenticated, issued and delivered in accordance
with the Pooling and Servicing Agreement and sold to the Underwriters
as provided herein and to the Class B Underwriters pursuant to the
Class B Underwriting Agreement.
(xvii) At the time of each transfer of Receivables by
Transferor to the Trust, Transferor has had and will have good and
marketable title to all Receivables and the other property being
transferred by it to the Trust on each such day, free and clear of
Liens (other than the Lien of the Pooling and Servicing Agreement),
and will not have sold to any Person (other than the Trustee) any of
its right, title or interest in any of such Receivables or such other
property.
(xviii) Neither Transferor nor the Trust is an "investment
company" or "controlled" by an "investment company" as such terms are
defined in the Investment Company Act.
(xix) As of the Closing Date each of the representations and
warranties of Transferor deemed made pursuant to the Pooling and
Servicing Agreement will be true and correct, and, as of each other
date on which Transferor is deemed, pursuant to the terms of the
Pooling and Servicing Agreement, to make any of the representations
and warranties set forth therein, and in Officer's Certificates of
Transferor delivered on each such date pursuant to the Pooling and
Servicing Agreement, will be true and correct and the Underwriters
may rely on such representations and warranties as if they were set
forth herein in full.
(b) Any Officer's Certificate signed by any officer of Transferor
and delivered to the Representative or its counsel shall be deemed a
representation and warranty of Transferor to the Underwriters as to the
matters covered thereby.
Section 3. Purchase and Sale. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, Transferor agrees to cause the Trust to sell
to each Underwriter, and each Underwriter agrees, severally and not
jointly, except as set forth in Section 9 below, to purchase the respective
initial principal amount of Class A Certificates set forth opposite such
Underwriter's name in Schedule I hereto, at a purchase price of 99.356250%
of the aggregate principal amount thereof.
The Class A Certificates will initially be represented by one or more
certificates representing $283,500,000 aggregate initial principal amount,
each of which will be registered in the name of Cede & Co., the nominee of
The Depository Trust Company ("DTC") (such certificates, the "DTC
Certificates"). The interests of beneficial owners of the DTC Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive certificates evidencing the Class A
Certificates will be available only under the limited circumstances
specified in the Pooling and Servicing Agreement.
Delivery of the DTC Certificates shall be made to the accounts of the
several Underwriters at the office of DTC, 55 Water Street, 49th Floor, New
York, New York 10004, against payment by the several Underwriters of the
purchase price therefor to or upon the order of Transferor in immediately
available funds at the office of Mayer, Brown & Platt, New York, New York
at 9:00 a.m., New York time, on May 9, 1996, or at such other time not
later than seven full business days thereafter as Transferor and the
Underwriters determine, such time being herein referred to as the "Closing
Date". The certificates evidencing the DTC Certificates will be made
available for checking at the offices of Mayer, Brown & Platt in Chicago,
Illinois or such other location specified by Transferor at least 24 hours
prior to the Closing Date.
Section 4. Offering by the Underwriters. (a) It is understood that
the Underwriters propose to offer the Class A Certificates for sale to the
public as set forth in the Prospectus.
(b) Each Underwriter agrees that if it is a foreign broker dealer
not eligible for membership in the National Association of Securities
Dealers, Inc. (the "NASD"), it will not effect any transaction in the Class
A Certificates within the United States or induce or attempt to induce the
purchase of or sale of the Class A Certificates within the United States,
except that it shall be permitted to make sales to other Underwriters or to
its United States affiliates; provided that such sales are made in
compliance with an exemption of certain foreign brokers or dealers under
Rule 15a-6 under the Exchange Act and in conformity with the Rules of Fair
Practice of the NASD as such Rules apply to non-NASD brokers or dealers.
(c) Each Underwriter represents and agrees that (i) it has not
offered or sold and, prior to the expiry of the period of six months from
the Closing Date, will not offer or sell any Class A Certificates to
Persons in the United Kingdom except to Persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom with
respect to anything done by it in relation to the Class A Certificates in,
from or otherwise involving the United Kingdom; (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Class A Certificates to
a Person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 of
the United Kingdom or is a Person to whom the document may otherwise
lawfully be issued or passed on.
Section 5. Certain Agreements of Transferor. Transferor covenants
and agrees with the several Underwriters that:
(a) Transferor will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution
Time, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), Transferor will file the Prospectus,
properly completed, pursuant to Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Underwriters of
such timely filing. Transferor will promptly advise the Underwriters (i)
when the Registration Statement, and any amendment thereto, shall have
become effective, (ii) when the Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b), (iii) of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose and (v) of the receipt by Transferor of any
notification with respect to the suspension of the qualification of the
Class A Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Transferor will not file
any amendment of the Registration Statement or supplement to the Prospectus
unless a copy has been furnished to the Representative for its review prior
to such filing. Transferor will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the lifting thereof.
(b) If, at any time when a Prospectus relating to the Class A
Certificates is required to be delivered under the Securities Act, any
event occurs as a result of which such Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or if
it shall be necessary at any time to amend or supplement such Prospectus to
comply with the Securities Act or the Exchange Act or the Rules and
Regulations thereunder, Transferor promptly will prepare and file with the
Commission an amendment or supplement that will effect such compliance.
Neither the consent of any Underwriter to, nor the delivery by any
Underwriter of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6 hereof.
(c) As soon as practicable, but not later than the Availability Date
(as defined below), Transferor will cause the Trustee to make generally
available to the Holders of the Class A Certificates and to the
Representative an earnings statement with respect to the Trust covering a
period of at least 12 months beginning after the Effective Date that will
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
under the Securities Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of
Transferor's fiscal year, "Availability Date" means the 90th day after the
end of such fourth fiscal quarter.
(d) Transferor will furnish to the Underwriters copies of the
Registration Statement as originally filed and each amendment thereto (in
each case at least two of which will be signed and will include all
exhibits), each related Preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Underwriters may reasonably
request. Transferor will furnish or cause to be furnished to the
Representative copies of all reports on Form SR required by Rule 463 under
the Securities Act.
(e) Transferor will arrange for the qualification of the Class A
Certificates for sale under the laws of such jurisdictions in the United
States as the Underwriters may reasonably designate and will continue such
qualifications in effect so long as required for the distribution of the
Class A Certificates, provided that Transferor shall not be obligated to
qualify to do business nor become subject to service of process generally,
but only to the extent required for such qualification, in any jurisdiction
in which it is not currently so qualified, and will arrange for the
determination of the legality of the Class A Certificates for purchase by
institutional investors.
(f) So long as any of the Class A Certificates are outstanding,
Transferor will deliver or cause to be delivered to the Underwriters (i)
copies of each report mailed to the Trustee or the Series 1996-B Holders,
as soon as such report is mailed to the Trustee or such Holders, (ii) the
annual statement as to compliance and the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to
Sections 3.5 and 3.6 of the Pooling and Servicing Agreement, as soon as
such statements are furnished to the Trustee, (iii) copies of all documents
required to be filed with the Commission pursuant to the Exchange Act or
any order of the Commission thereunder, and (iv) such other information
concerning Transferor, the Certificates or the Trust as the Underwriters
may reasonably request from time to time.
(g) Transferor will pay all expenses incident to the performance of
its obligations under this Agreement, including without limitation, (i)
expenses of preparing, printing, reproducing and distributing the
Registration Statement and each amendment thereto, the preliminary
prospectuses, the Prospectus (including any amendments and supplements
thereto), the Pooling and Servicing Agreement, the Loan Agreement and the
Class A Certificates, (ii) the fees and disbursements of the Trustee and
its counsel, (iii) the fees and disbursements of the independent public
accountants of Transferor and fees and disbursements of counsel to
Transferor and the Underwriters, (iv) the fees charged by Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Ratings Service, a division of
The McGraw Hill Companies, Inc. ("Standard & Poor's") and Fitch Investors
Service, L.P. ("Fitch", and together with Moody's and Standard & Poor's,
the "Rating Agencies") in connection with the rating of the Class A
Certificates, (v) the fees of DTC in connection with the book-entry
registration of the DTC Certificate, (vi) the fees and expenses of Mayer,
Brown & Platt as counsel to the Transferor and in its role as special
Federal tax counsel and (vii) expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters, and will reimburse the Underwriters for any
expenses (including reasonable fees and disbursements of counsel) incurred
by the Underwriters pursuant to Section 5(e) hereof in connection with the
qualification of the Class A Certificates for sale and determination of
their eligibility for investment under the laws of such jurisdictions in
the United States as the Underwriters may designate.
(h) Transferor has caused and will continue to cause its books and
records (including any computer records) to be marked relating to the
Receivables transferred to the Trust, to show the transfer to the Trust of
such Receivables, and Transferor shall not take any action inconsistent
with the transfer to the Trust of such Receivables, other than as permitted
by the Pooling and Servicing Agreement.
(i) For a period of 30 days from the date hereof, none of Transferor
or any of its affiliates or any trust formed by it or any of its affiliates
will, without the prior written consent of the Underwriters, directly or
indirectly, offer, sell or contract to sell or announce the offering of, in
a public or private transaction, any other collateralized securities
similar to the Class A Certificates (other than the Class B Certificates
and the Class A Certificates, Series 1996-A and Class B Certificates,
Series 1996-A) representing interests in consumer credit card receivables.
(j) So long as any Class A Certificates are outstanding, Transferor
will cause to be delivered to the Underwriters a reliance letter relating
to each Opinion of Counsel delivered to the Trustee or any Rating Agency by
counsel to Transferor pursuant to the Pooling and Servicing Agreement at
the time such opinion is delivered.
(k) To the extent, if any, that the rating provided with respect to
the Class A Certificates by any Rating Agency is conditional upon the
furnishing of documents or the taking of any other actions by Transferor,
Transferor shall furnish such documents and take any such other actions as
may be required.
Section 6. Conditions of the Obligations of the Underwriters. The
obligation of the Underwriters to purchase and pay for the Class A
Certificates will be subject to the accuracy of the representations and
warranties on the part of Transferor herein as of the Execution Time and
the Closing Date, to the accuracy of the statements of the officers of
Transferor made pursuant to the provisions hereof, to the performance by
Transferor of its obligations hereunder and to the following additional
conditions precedent:
(a) (i) On the date of this Agreement, the Underwriters and
Transferor shall have received a letter, dated the date of delivery thereof
(which, if the Effective Time is prior to the execution and delivery of
this Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to the
Effective Time), of Coopers & Lybrand confirming that they are independent
public accountants within the meaning of the Securities Act and the Rules
and Regulations, substantially in the form of the draft to which the
Underwriters have previously agreed and otherwise in form and substance
satisfactory to the Underwriters and counsel for the Underwriters, and (ii)
on the Closing Date, the Underwriters and Transferor shall have received a
letter, dated as of the Closing Date, from Coopers & Lybrand updating the
letter referred to in clause (i) above, in form and substance satisfactory
to the Underwriters and counsel for the Underwriters.
(b) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement shall have become effective not later than
10:00 p.m. New York time on the date of this Agreement; if filing of the
Prospectus, or any supplements thereto, is required pursuant to Rule
424(b), the Prospectus shall have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving
a prospective change, in or affecting particularly the business or
properties of Transferor which, in the judgment of the Underwriters
materially impairs the investment quality of the Class A Certificates; (ii)
any suspension or limitation of trading in securities generally on the New
York Stock Exchange or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of Transferor on
any exchange or in the over the counter market; (iii) any banking
moratorium declared by Federal, New York or Delaware authorities; or (iv)
any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Class A Certificates.
(d) The Representative shall have received:
(1) The favorable opinion or opinions of internal counsel of
Transferor and/or of Mayer, Brown & Platt, counsel to Transferor,
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, and in the aggregate substantially to
the effect that:
(i) Transferor has been duly organized as an association
licensed as a national banking association and is validly
existing and in good standing under the laws of the United
States, is duly qualified to do business and is in good standing
under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business, and has full power and authority to
own its properties, to conduct its business as described in the
Registration Statement and the Prospectus, to enter into and
perform its obligations under the Specified Agreements, to
execute the Certificates and to consummate the transactions
contemplated hereby and thereby;
(ii) the Pooling and Servicing Agreement, this Agreement,
the Class B Underwriting Agreement, the Loan Agreement and the
Certificates have each been duly authorized, executed and
delivered by Transferor; the Pooling and Servicing Agreement and
the Loan Agreement constitute and the Certificates and the
Collateral Interest, when validly issued and, in the case of the
Certificates validly authenticated and delivered in accordance
with the Pooling and Servicing Agreement and sold to the
Underwriters as provided herein and to the Class B Underwriters
pursuant to the Class B Underwriting Agreement, will constitute,
the legal, valid and binding agreement of Transferor,
enforceable in accordance with its terms (subject, as to
enforcement or remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to
the application of general principles of equity);
(iii) the Certificates are in due and proper form and
when executed, authenticated and delivered as specified in the
Pooling and Servicing Agreement, when delivered against payment
of the consideration specified herein, will be duly and validly
issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement and the Collateral Interest;
(iv) neither the execution and delivery of the Specified
Agreements, nor the issuance or delivery of the Certificates,
nor the consummation of any of the transactions contemplated
herein or therein, nor the fulfillment of the terms of the
Certificates or the Specified Agreements, will conflict with or
violate, result in a material breach of or constitute a default
under (A) any Requirements of Law applicable to Transferor or
any statute or regulation currently applicable to the Trust, (B)
any term or provision of any order known to such counsel to be
currently applicable to Transferor or the Trust of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over Transferor or the Trust, as the case
may be, or (C) any term or provision of any indenture or other
agreement or instrument known to such counsel to which
Transferor or the Trust is a party or by which either of them or
any of their properties are bound;
(v) except as otherwise disclosed in the Prospectus (and
any supplements thereto) or the Registration Statement, there is
no pending or, to the best knowledge of such counsel, threatened
action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator with respect to the
Trust, the Certificates, the Specified Agreements or any of the
transactions contemplated herein or therein or with respect to
Transferor which, in the case of any such action, suit or
proceeding with respect to Transferor if adversely determined,
would have a material adverse effect on the Certificates or the
Trust or upon the ability of Transferor to perform its
obligations under the Pooling and Servicing Agreement or the
Loan Agreement; and the statements included in the Registration
Statement, the Base Prospectus and the Prospectus describing
statutes, legal proceedings, contracts and other documents
relating to Transferor, the Accounts, the Receivables, the
business of Transferor and the Trust fairly summarize the
matters therein described;
(vi) the Registration Statement has become effective
under the Securities Act, and, to the best of their knowledge
and information, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act, and the Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations. Such counsel has no reason to believe that at the
Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading (other than financial and statistical information
contained therein as to which such counsel need express no
opinion);
(vii) no approval, authorization, consent, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body is required for
the consummation by Transferor or the Trust of the transactions
contemplated in the Specified Agreements, except such as have
been obtained under the Securities Act and such as may be
required under the blue sky laws of any jurisdiction inside the
United States in connection with the purchase and distribution
of the Class A Certificates by the Underwriters and such filings
or other approvals (specified in such opinion) as have been made
or obtained;
(viii) if a court concludes that the assignment of the
Receivables, all documents and instruments relating thereto and
all proceeds thereof to the Trustee pursuant to the Pooling and
Servicing Agreement is a sale, such assignment transferred to
the Trust all the right, title and interest of Transferor in and
to such Receivables and other property in existence on the date
hereof, free and clear of any Liens then existing or thereafter
created except as specifically permitted pursuant to the Pooling
and Servicing Agreement. With respect to Receivables which come
into existence after the date hereof, such sale will transfer to
the Trust all of the right, title and interest of Transferor in
and to such Receivables free and clear of any Liens. If a court
were to conclude that such assignment was not a sale, the
Pooling and Servicing Agreement and the transactions provided
for by the Pooling and Servicing Agreement would constitute a
grant by Transferor to the Trustee, for the benefit of the
Investor Holders, of a valid security interest in all of
Transferor's right, title and interest in all Receivables and
other property from time to time transferred by Transferor to
the Trust;
(ix) the Certificates and the Pooling and Servicing
Agreement and the Loan Agreement each conform in all material
respects with the description thereof contained in the
Registration Statement and the Prospectus;
(x) the Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as
amended, and neither Transferor nor the Trust is required to be
registered under the Investment Company Act; and
(xi) the statements in the Registration Statement under
the heading "Certain Legal Aspects of the Receivables", "U.S.
Federal Income Tax Consequences" and "ERISA Considerations" to
the extent that they constitute statements of matters of law or
legal conclusions with respect thereto, have been prepared or
received by such counsel and are correct in all material
respects.
In rendering such opinion counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Ohio and New York and the United States, to the extent deemed proper and
stated in such opinion, upon the opinion of other counsel of good standing
believed by such counsel to be reliable and acceptable to the
Representative and its counsel, and (B) as to matters of fact, to the
extent deemed proper and as stated therein, on certificates of responsible
officers of the Trust, Transferor and public officials. References to the
Prospectus in this paragraph (d) include any supplements thereto.
(2) The favorable opinion of Mayer, Brown & Platt, special tax
counsel to Transferor, dated the Closing Date and to the effect that
(i) the Certificates will properly be treated as indebtedness for
federal income tax purposes and (ii) the Trust will not be classified
as an association or a publicly traded partnership taxable as a
corporation for federal income tax purposes.
(3) The favorable opinion of Schwartz, Warren & Ramirez,
special Ohio counsel to Transferor, dated the Closing Date and
satisfactory in form and substance to the Representative and its
counsel, and substantially to the effect that:
(i) the Receivables constitute either "general
intangibles" or "accounts" in each case as defined in the
Uniform Commercial Code in effect in the State of Ohio;
(ii) Uniform Commercial Code financing statements with
respect to the Investor Interest in the Receivables and the
proceeds thereof have been filed in the office of the Ohio
Secretary of State. No other filings or other actions, with
respect to the Trustee's interest in the Receivables transferred
and to be transferred by Transferor to the Trust, are necessary
to perfect the interest of the Trustee in the Receivables, and
the proceeds thereof, against third parties, except that
appropriate continuation statements must be filed at five-year
intervals;
(iii) in the event that a court were to conclude that the
assignment of the Receivables, all documents and instruments
relating thereto and all proceeds thereof to the Trustee
pursuant to the Pooling and Servicing Agreement was not a sale,
the Pooling and Servicing Agreement, together with the filing of
the financing statements referred to in paragraph (ii) above,
create a first priority perfected security interest in the
Receivables transferred and to be transferred by Transferor to
the Trustee, all documents and instruments relating thereto and
all proceeds thereof (in rendering such opinion counsel may take
such exceptions as are appropriate and reasonably acceptable
under the circumstances); and
(iv) the Trust as an entity will not be subject to the
corporation franchise tax or to the dealers in intangibles tax
imposed on corporations, financial institutions or dealers in
intangibles by Ohio Revised Code Chapters 5733 or 5725, and for
purposes of the corporation franchise tax and the dealers in
intangibles tax imposed by Ohio Revised Code Chapters 5733 and
5725, respectively, the Certificates will be treated as
indebtedness.
(4) Any reliance letters relating to each opinion rendered to
the Trustee or any Rating Agency by internal counsel of Transferor
and Mayer, Brown & Platt and any other counsel to Transferor in
connection with the rating of the Certificates.
(5) The favorable opinion of counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative and its counsel to the effect that:
(i) The Trustee has been duly incorporated and is validly
existing as a New York banking corporation in good standing
under the laws of the State of New York with full power and
authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to enter
into and perform its obligations under the Pooling and Servicing
Agreement and the Loan Agreement and to issue the Certificates
and the Collateral Interest.
(ii) Each of the Pooling and Servicing Agreement and the
Loan Agreement has been duly authorized, executed and delivered
by the Trustee, and constitutes a legal, valid and binding
obligation of the Trustee, enforceable in accordance with its
terms, except that (y) the enforceability thereof may be subject
to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights and (z) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(iv) Neither the execution and delivery by the Trustee of
the Pooling and Servicing Agreement or the Loan Agreement nor
the consummation of any of the transactions by the Trustee
contemplated thereby required the consent or approval of, the
giving of notice to, the registration with or the taking of any
other action with respect to, any governmental authority or
agency under any existing federal or state law governing the
banking or trust powers of the Trustee.
(v) The execution and delivery of the Pooling and
Servicing Agreement and the Loan Agreement by the Trustee and
the performance by the Trustee of their respective terms do not
conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of New
York governing trust powers of the Trustee, (B) the Articles of
Association or By-Laws of the Trustee, or (C) to the best of
their knowledge, any indenture, lease, or other material
agreement to which the Trustee is a party or to which its assets
are subject.
(6) The favorable opinion of Mayer, Brown & Platt, counsel for
the Underwriters, dated the Closing Date, with respect to the
validity of the Class A Certificates and such other related matters
as the Underwriters shall request, and Transferor shall have
furnished or caused to be furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Mayer, Brown & Platt
may rely on the opinions of Schwartz, Warren & Ramirez, counsel to
Transferor, and the opinion of internal counsel of Transferor, as to
the matters dealt with in such opinions.
(e) The Representative shall have received a certificate dated the
Closing Date of the President, any Vice President, the Treasurer or any
Assistant Treasurer, of Transferor in which such officer shall state that
the representations and warranties of Transferor in this Agreement are true
and correct, and that Transferor has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
subsequent to the date of the most recent financial statements of
Transferor delivered to the Representative hereunder, there has been no
material adverse change in the condition, financial or otherwise, whether
or not arising from transactions in the ordinary course of business, of
Transferor except as set forth in or contemplated by the Registration
Statement and the Prospectus.
(f) The Class A Certificates shall be rated "Aaa" by Moody's and
"AAA" by Standard & Poor's and "AAA" by Fitch, and the Class B Certificates
shall be rated "A2" by Moody's and "A" by Standard & Poor's and "A" by
Fitch.
(g) The Representative shall have received evidence satisfactory to
it and its counsel that, on or before the Closing Date, UCC-1 financing
statements have been filed in the office of the Secretary of State of Ohio
and County Clerk of Franklin County reflecting the interest of the Trust in
the Receivables and the proceeds thereof.
(h) The Representative and Transferor shall have received from
counsel for the Collateral Interest Holder reasonably acceptable to the
Representative and Transferor, a favorable opinion, dated the Closing Date
and satisfactory in form and substance to the Representative, its counsel,
Transferor and its counsel to the effect that:
(1) the Collateral Interest Holder is duly organized and
existing under the laws of its jurisdiction of incorporation and
has the power and authority to execute, deliver and perform its
obligations under the Loan Agreement;
(2) the Loan Agreement has been duly and validly
authorized, executed and delivered by the Collateral Interest
Holder and constitutes the legal, valid and legally binding
obligation of the Collateral Interest Holder enforceable against
the Collateral Interest Holder in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, liquidation, moratorium,
readjustment of debt or other similar laws affecting the
enforcement of creditors' rights generally, as such laws may be
applied in the event of a bankruptcy, insolvency,
reorganization, liquidation, moratorium, readjustment of debt
of, or the appointment of a receiver with respect to the
property of, or a similar event applicable to the Collateral
Interest Holder, and (B) the effect of any moratorium or other
similar occurrence affecting the Collateral Interest Holder;
(3) all consents, approvals, authorizations, licenses,
rulings or orders of or actions by any New York State or federal
governmental authority and all filings, recordings or
publications, if any, required on the part of the Collateral
Interest Holder in connection with the execution, delivery or
performance by the Collateral Interest Holder of the Loan
Agreement have been obtained or made and are in full force and
effect; and
(4) such other customary matters as the Representative
shall request.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not
have been any change, or any development involving a prospective change, in
or affecting the business or properties of the Trust or Transferor the
effect of which, in any case referred to above, is, in the judgment of the
Underwriters, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the Class A
Certificates as contemplated by the Registration Statement and the
Prospectus (and any supplements thereto).
(j) Simultaneously with or prior to the Closing Date, $29,750,000
aggregate initial principal amount of the Class B Certificates shall have
been sold to the Class B Underwriters.
Transferor will provide or cause to be provided to the Underwriters
such conformed copies of such opinions, certificates, letters and documents
as the Underwriters may reasonably request.
Section 7. Indemnification and Contribution. (a) Transferor will
indemnify and hold harmless each Underwriter and each Person who controls
any Underwriter within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which the
Underwriters or any of them may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each Person
who controls any Underwriter within the meaning of the Securities Act for
any actual legal or other expenses reasonably incurred by the Underwriter
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Transferor will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to Transferor by any Underwriter specifically for use
therein.
(b) Each Underwriter, severally, agrees to indemnify and hold harmless
Transferor against any losses, claims, damages or liabilities to which
Transferor may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, the Prospectus or any amendment or supplement thereto, based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to Transferor by such Underwriter specifically for use therein, and will
reimburse any actual legal or other expenses reasonably incurred by
Transferor in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action or the assertion by a
third party of a claim, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under subsection (a)
or (b) above, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party except and to
the extent of any prejudice to such indemnifying party arising from such
failure to provide such notice. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by Transferor on the one hand and the Underwriters on the
other from the offering of the Class A Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
Transferor on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by Transferor on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Class A
Certificates (before deducting expenses) received by Transferor bear to the
total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by Transferor or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Class A
Certificates purchased by such Underwriter hereunder. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of Transferor under this Section shall be in
addition to any liability that Transferor may otherwise have and shall
extend, upon the same terms and conditions, to each Person, if any, who
controls any Underwriter within the meaning of the Securities Act; and the
obligations of any Underwriter under this Section shall be in addition to
any liability that such Underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each director of Transferor, to each
officer of Transferor who signed the Registration Statement and to each
Person, if any, who controls Transferor within the meaning of the
Securities Act.
Section 8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of Transferor or its officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation or statement as to the results thereof,
made by or on behalf of the Underwriters, Transferor or any of their
respective representatives, officers or directors or any controlling
Person, and will survive delivery of and payment for the Class A
Certificates. If for any reason the purchase of the Class A Certificates by
the Underwriters is not consummated, Transferor shall remain responsible
for the expenses to be paid or reimbursed by Transferor pursuant to Section
5(g) hereof and the respective obligations of Transferor and the
Underwriters pursuant to Section 7 hereof shall remain in effect. If the
purchase of the Class A Certificates by the Underwriters is not consummated
for any reason other than solely because of the occurrence of any event
specified in clause (ii), (iii) or (iv) of Section 6(c) hereof, Transferor
will reimburse the Underwriters for all actual out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them
in connection with the offering of the Class A Certificates.
Section 9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Class A
Certificates agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Class A Certificates set forth
opposite their names in Schedule I hereto bears to the aggregate amount of
Class A Certificates set forth opposite the names of all the remaining
Underwriters) the Class A Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Class A Certificates which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Class A Certificates set
forth in Schedule I hereto, the remaining Underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of
the Class A Certificates, and if such nondefaulting Underwriters do not
purchase all the Class A Certificates, this Agreement will terminate
without liability to any non-defaulting Underwriter, the Trust or
Transferor. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Underwriters shall determine in order that the
required changes in the Registration Statement and the Prospectus (and any
supplements thereto) or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to Transferor and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
Section 10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to them c/o CS First Boston Corporation, Attention:
Investment Banking Department - Transactions Advisory Group; or if sent to
Transferor will be mailed, delivered or telegraphed and confirmed to it at
World Financial Network National Bank, 4590 East Broad Street, Columbus,
Ohio 43213, Attention: Dan Groomes (facsimile no. 614/755-3418).
Section 11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling Persons referred to in Section 7
hereof, and no other Person will have any right or obligation hereunder.
Section 12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
Agreement.
Section 13. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to any otherwise applicable principles of conflicts of laws.
Section 14. Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
Section 15. Representative. The Representative will act for the
several Underwriters in connection with this Agreement and the transactions
contemplated hereby and any action under this Agreement taken by the
Representative will be binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts duplicate
hereof, whereupon it will become a binding agreement between Transferor and
the several Underwriters in accordance with its terms.
Very truly yours,
WORLD FINANCIAL NETWORK
NATIONAL BANK
By:_____________________________________
Name: Dan Groomes
Title: Vice President and
Chief Financial Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted,
as of the date first above written:
CS FIRST BOSTON CORPORATION
By:_____________________________________
Name:
Title:
For itself and the other
Underwriters named in Schedule I
to the foregoing Underwriting
Agreement.
Schedule 1
Principal Amount of
Class A Underwriters Class A Certificates
-------------------- ---------------------
CS First Boston Corporation..............................$56,700,000
Chase Securities Inc.....................................$56,700,000
Citicorp Securities, Inc.................................$56,700,000
Goldman, Sachs & Co......................................$56,700,000
J.P. Morgan & Co.........................................$56,700,000
<PAGE>
$29,750,000
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.20% CLASS B ASSET BACKED
CERTIFICATES, SERIES 1996-B
CLASS B UNDERWRITING AGREEMENT, SERIES 1996-B
---------------------------------------------
April 25, 1996
CS First Boston Corporation,
as Representative of the
Several Underwriters
Ladies and Gentlemen:
Section 1. Introductory. World Financial Network National Bank, a
national banking association ("Transferor"), has conveyed and proposes to
convey the Receivables arising from certain consumer revolving credit card
accounts and other rights to the World Financial Network Card Master Trust
(the "Trust"), and proposes to cause the Trust to sell to the Underwriters
named in Schedule I hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"), $29,750,000 aggregate initial
principal amount of 7.20% Class B Asset Backed Certificates, Series 1996-B
(the "Class B Certificates"), in the Trust. It is understood that
Transferor is currently entering into a Class A Underwriting Agreement
dated the date hereof (the "Class A Underwriting Agreement") among
Transferor and the Underwriters named on Schedule I thereto (the "Class A
Underwriters") providing for the sale of $283,500,000 aggregate initial
principal amount of 6.95% Class A Asset Backed Certificates, Series 1996-B
(the "Class A Certificates"). The Class A Certificates and the Class B
Certificates are referred to herein collectively as the "Certificates".
This Agreement and the Class A Underwriting Agreement are referred to
herein collectively as the "Underwriting Agreements".
The Receivables were conveyed by Transferor to the Trust pursuant to
the Pooling and Servicing Agreement, dated as of January 17, 1996 (the
"P&S") between Transferor, as Transferor and Servicer, and The Bank of New
York, as trustee (the "Trustee"), and the Certificates will be issued
pursuant to the P&S and the Series 1996-B Supplement to the P&S, dated as
of May 9, 1996 (the "Supplement"), between the same parties. The P&S and
the Supplement are referred to herein collectively as the "Pooling and
Servicing Agreement". In addition, Transferor, Servicer, Trustee and a
financial institution identified therein (the "Collateral Interest
Holder"), will enter into a Loan Agreement dated as of May 9, 1996 (the
"Loan Agreement") pursuant to which the Collateral Interest Holder will
acquire $36,750,000 aggregate initial principal amount of the Collateral
Interest (the "Collateral Interest"), which will act as Enhancement for the
Certificates. Additional Enhancement for the Certificates will be provided
in the form of the Cash Collateral Account, as described in the Supplement.
Capitalized terms used herein (including in the Introductory hereto)
that are not otherwise defined shall have the meanings ascribed thereto in
the Pooling and Servicing Agreement.
Section 2. Representations and Warranties of Transferor.
(a)Transferor represents and warrants to, and agrees with, each Underwriter
as set forth in this Section 2. Certain terms used in this Section 2 are
defined in paragraph (i) below.
(i) Transferor meets the requirements for use of Form S-3 under
the Securities Act and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration
No. 333-998) and a related preliminary prospectus, on such Form for
the registration under the Securities Act, of the Certificates.
Transferor may have filed one or more amendments thereto and the
related preliminary prospectus, each of which has previously been
furnished to the Representative. Transferor will file with the
Commission (A) prior to the effectiveness of such registration
statement, a further amendment thereto (including the form of final
base prospectus and the form of final prospectus supplement relating
to the Class B Certificates) or (B) after effectiveness of such
registration statement, a final base prospectus and final prospectus
supplement in accordance with Rules 430A and 424(b)(1) or (4) under
the Securities Act or (C) a final base prospectus and a final
prospectus supplement relating to the Class B Certificates in
accordance with Rules 415 and 424(b)(2) or (5) under the Securities
Act. In the case of clause (B), Transferor has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Securities Act and the rules thereunder to be included in the
Prospectus with respect to the Class B Certificates and the offering
thereof. As filed, such amendment and form of final prospectus
supplement, or such final base prospectus or final prospectus
supplement, shall include all Rule 430A Information, together with
all other such required information, with respect to the Class B
Certificates and the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to the Representative
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
preliminary prospectus which has previously been furnished to the
Representative) as Transferor has advised the Representative, prior
to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertakings specified by item
512(a) of Regulation S-K, the Registration Statement, at the
Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
The terms that follow, when used in this Agreement, have the
meanings indicated. The term "Effective Date" means each date that
the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" means
the date and time that this Agreement is executed and delivered by
the parties hereto. "Preliminary Prospectus" means any preliminary
prospectus referred to in the preceding paragraph and any preliminary
prospectus included in the Registration Statement which, at the
Effective Date, omits Rule 430A Information. "Base Prospectus" means
the prospectus referred to above contained in the Registration
Statement at the Effective Date. "Prospectus" means the prospectus
supplement relating to the Class B Certificates that is first filed
with the Commission pursuant to Rule 424(b) after the Execution Time,
together with the Base Prospectus (as such Base Prospectus may have
been amended and together with any supplements thereto) or, if no
filing pursuant to Rule 424(b) is required, means the prospectus
supplement relating to the Class B Certificates, including the Base
Prospectus included in the Registration Statement at the Effective
Date. "Registration Statement" means the registration statement
referred to in the preceding paragraph and any registration statement
required to be filed under the Securities Act or rules thereunder,
including incorporated documents, exhibits and financial statements,
in the form in which it has or shall become effective and, in the
event any post-effective amendment thereto becomes effective prior to
the Closing Date, shall also mean such registration statement as so
amended. Such term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A", "Rule 415" and "Regulation S-K" refer to
such rules or regulations under the Securities Act. "Rule 430A
Information" means information with respect to the Class B
Certificates and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A. Any reference herein to the Registration Statement, the Base
Prospectus or Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the Effective Date of
the Registration Statement or the issue date of the Base Prospectus
or Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus or Prospectus shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement,
or the issue date of the Base Prospectus or Prospectus, as the case
may be, deemed to be incorporated therein by reference.
(ii) On the Effective Date, the Registration Statement did or
will comply in all material respects with the applicable requirements
of the Securities Act and the rules thereunder; on the Effective Date
and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Prospectus (as amended
and together with any supplements thereto) did or will comply in all
material respects with the applicable requirements of the Securities
Act and the rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the
Prospectus (as amended and together with any supplements thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Transferor makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to Transferor by any Underwriter
specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplements
thereto).
(iii) Transferor is a national banking association duly
organized, validly existing and in good standing under the laws of
the United States, and has all requisite power, authority and legal
right to own its properties and conduct its business as described in
the Registration Statement and the Prospectus and to execute, deliver
and perform the Underwriting Agreements, the Pooling and Servicing
Agreement and the Loan Agreement (collectively the "Specified
Agreements"), to authorize the issuance of the Certificates and the
Collateral Interest and to consummate the transactions contemplated
hereby.
(iv) Transferor is duly qualified to do business and is in good
standing (or is exempt from such requirement) in any state required
in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to Transferor required under
Federal and Ohio law.
(v) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary action or proceedings.
(vi) This Agreement has been duly executed and delivered by
Transferor.
(vii) Transferor has authorized the conveyance of the
Receivables to the Trust, and Transferor has authorized the Trust to
issue and sell the Certificates and the Collateral Interest.
(viii) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, or (other than the Lien of
the Pooling and Servicing Agreement) result in the creation or
imposition of any Lien under any material indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
Transferor is a party or by which it or any of its properties are
bound.
(ix) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof, will not conflict with or violate any Requirements of Law
applicable to Transferor.
(x) There are no proceedings or investigations pending or, to
the best knowledge of Transferor, threatened against Transferor
before any court, regulatory body, administrative agency, arbitrator
or other tribunal or governmental instrumentality (A) asserting the
invalidity of any Specified Agreement or the Certificates or the
Collateral Interest, (B) seeking to prevent the issuance of the
Certificates or the Collateral Interest or the consummation of any of
the transactions contemplated by the Specified Agreements, (C)
seeking any determination or ruling that, in the reasonable judgment
of Transferor, would materially and adversely affect the performance
by Transferor of its obligations under any Specified Agreement, (D)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of any Specified
Agreements or the Certificates or the Collateral Interest, or (E)
seeking to affect adversely the income tax attributes of the Trust,
as described in the Prospectus under the heading "U.S. Federal Income
Tax Considerations"; and there are no contracts or documents of
Transferor that are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the rules and
regulations of the Commissioner promulgated under the Securities Act
(the "Rules and Regulations") that have not been so filed.
(xi) All approvals, authorizations, consents, orders and other
actions of any Person or of any governmental body or official
required in connection with the execution and delivery of the
Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the performance of the transactions
contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof, have been obtained.
(xii) Transferor has delivered to the Representative complete
and correct copies of publicly available portions of the Consolidated
Reports of Condition and Income of Transferor for the years ended
December 31, 1993, 1994 and 1995, as submitted to the Comptroller of
the Currency. Except as otherwise set forth therein, during the
period from the most recent date covered by the aforementioned
reports to the date hereof, (x) there has been no material adverse
change in the condition (financial or otherwise) of Transferor and
(y) there have been no transactions entered into by Transferor, other
than those in the ordinary course of business or that are disclosed
in the Prospectus, that are material with respect to Transferor.
(xiii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of the
Specified Agreements and the Certificates and the Collateral
Interest shall have been paid by Transferor or will be paid by
Transferor at or prior to the Closing Date to the extent then due.
(xiv) The Certificates and the Collateral Interest have been
duly and validly authorized. The Certificates, when validly
authenticated, issued and delivered in accordance with the Pooling
and Servicing Agreement and sold to the Underwriters as provided
herein and to the Class A Underwriters pursuant to the Class A
Underwriting Agreement, will be duly and validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing
Agreement, and, together with the Pooling and Servicing Agreement,
the Loan Agreement and the Collateral Interest will conform in all
material respects to the descriptions thereof and the statements in
relation thereto contained in the Prospectus.
(xv) Assuming the due authorization, execution and delivery
thereof by the other parties thereto, the Pooling and Servicing
Agreement and the Loan Agreement constitute and the Certificates and
the Collateral Interest, when validly issued and, in the case of the
Certificates, validly authenticated and delivered in accordance with
the Pooling and Servicing Agreement and sold to the Underwriters as
provided herein and to the Class A Underwriters pursuant to the Class
A Underwriting Agreement will constitute, the legal, valid and
binding agreement of Transferor enforceable in accordance with its
respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting enforcement of creditors' rights generally and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(xvi) On the Closing Date and after giving effect to this
Agreement, the Underwriters and the Class A Underwriters will have
good and marketable title to the Certificates, free and clear of all
Liens when validly authenticated, issued and delivered in accordance
with the Pooling and Servicing Agreement and sold to the Underwriters
as provided herein and to the Class A Underwriters pursuant to the
Class A Underwriting Agreement.
(xvii) At the time of each transfer of Receivables by
Transferor to the Trust, Transferor has had and will have good and
marketable title to all Receivables and the other property being
transferred by it to the Trust on each such day, free and clear of
Liens (other than the Lien of the Pooling and Servicing Agreement),
and will not have sold to any Person (other than the Trustee) any of
its right, title or interest in any of such Receivables or such other
property.
(xviii) Neither Transferor nor the Trust is an "investment
company" or "controlled" by an "investment company" as such terms are
defined in the Investment Company Act.
(xix) As of the Closing Date each of the representations and
warranties of Transferor deemed made pursuant to the Pooling and
Servicing Agreement will be true and correct, and, as of each other
date on which Transferor is deemed, pursuant to the terms of the
Pooling and Servicing Agreement, to make any of the representations
and warranties set forth therein, and in Officer's Certificates of
Transferor delivered on each such date pursuant to the Pooling and
Servicing Agreement, will be true and correct and the Underwriters
may rely on such representations and warranties as if they were set
forth herein in full.
(b) Any Officer's Certificate signed by any officer of Transferor
and delivered to the Representative or its counsel shall be deemed a
representation and warranty of Transferor to the Underwriters as to the
matters covered thereby.
Section 3. Purchase and Sale. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, Transferor agrees to cause the Trust to sell
to each Underwriter, and each Underwriter agrees, severally and not
jointly, except as set forth in Section 9 below, to purchase the respective
initial principal amount of Class B Certificates set forth opposite such
Underwriter's name in Schedule I hereto, at a purchase price of 99.228125%
of the aggregate principal amount thereof.
The Class B Certificates will initially be represented by one or more
certificates representing $29,750,000 aggregate initial principal amount,
each of which will be registered in the name of Cede & Co., the nominee of
The Depository Trust Company ("DTC") (such certificates, the "DTC
Certificates"). The interests of beneficial owners of the DTC Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive certificates evidencing the Class B
Certificates will be available only under the limited circumstances
specified in the Pooling and Servicing Agreement.
Delivery of the DTC Certificates shall be made to the accounts of the
several Underwriters at the office of DTC, 55 Water Street, 49th Floor, New
York, New York 10004, against payment by the several Underwriters of the
purchase price therefor to or upon the order of Transferor in immediately
available funds at the office of Mayer, Brown & Platt, New York, New York
at 9:00 a.m., New York time, on May 9, 1996, or at such other time not
later than seven full business days thereafter as Transferor and the
Underwriters determine, such time being herein referred to as the "Closing
Date". The certificates evidencing the DTC Certificates will be made
available for checking at the offices of Mayer, Brown & Platt in Chicago,
Illinois or such other location specified by Transferor at least 24 hours
prior to the Closing Date.
Section 4. Offering by the Underwriters. (a) It is understood that
the Underwriters propose to offer the Class B Certificates for sale to the
public as set forth in the Prospectus.
(b) Each Underwriter agrees that if it is a foreign broker dealer
not eligible for membership in the National Association of Securities
Dealers, Inc. (the "NASD"), it will not effect any transaction in the Class
B Certificates within the United States or induce or attempt to induce the
purchase of or sale of the Class B Certificates within the United States,
except that it shall be permitted to make sales to other Underwriters or to
its United States affiliates; provided that such sales are made in
compliance with an exemption of certain foreign brokers or dealers under
Rule 15a-6 under the Exchange Act and in conformity with the Rules of Fair
Practice of the NASD as such Rules apply to non-NASD brokers or dealers.
(c) Each Underwriter represents and agrees that (i) it has not
offered or sold and, prior to the expiry of the period of six months from
the Closing Date, will not offer or sell any Class B Certificates to
Persons in the United Kingdom except to Persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom with
respect to anything done by it in relation to the Class B Certificates in,
from or otherwise involving the United Kingdom; (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Class B Certificates to
a Person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 of
the United Kingdom or is a Person to whom the document may otherwise
lawfully be issued or passed on.
Section 5. Certain Agreements of Transferor. Transferor covenants
and agrees with the several Underwriters that:
(a) Transferor will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution
Time, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), Transferor will file the Prospectus,
properly completed, pursuant to Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Underwriters of
such timely filing. Transferor will promptly advise the Underwriters (i)
when the Registration Statement, and any amendment thereto, shall have
become effective, (ii) when the Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b), (iii) of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose and (v) of the receipt by Transferor of any
notification with respect to the suspension of the qualification of the
Class B Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Transferor will not file
any amendment of the Registration Statement or supplement to the Prospectus
unless a copy has been furnished to the Representative for its review prior
to such filing. Transferor will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the lifting thereof.
(b) If, at any time when a Prospectus relating to the Class B
Certificates is required to be delivered under the Securities Act, any
event occurs as a result of which such Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or if
it shall be necessary at any time to amend or supplement such Prospectus to
comply with the Securities Act or the Exchange Act or the Rules and
Regulations thereunder, Transferor promptly will prepare and file with the
Commission an amendment or supplement that will effect such compliance.
Neither the consent of any Underwriter to, nor the delivery by any
Underwriter of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6 hereof.
(c) As soon as practicable, but not later than the Availability Date
(as defined below), Transferor will cause the Trustee to make generally
available to the Holders of the Class B Certificates and to the
Representative an earnings statement with respect to the Trust covering a
period of at least 12 months beginning after the Effective Date that will
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
under the Securities Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of
Transferor's fiscal year, "Availability Date" means the 90th day after the
end of such fourth fiscal quarter.
(d) Transferor will furnish to the Underwriters copies of the
Registration Statement as originally filed and each amendment thereto (in
each case at least two of which will be signed and will include all
exhibits), each related Preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Underwriters may reasonably
request. Transferor will furnish or cause to be furnished to the
Representative copies of all reports on Form SR required by Rule 463 under
the Securities Act.
(e) Transferor will arrange for the qualification of the Class B
Certificates for sale under the laws of such jurisdictions in the United
States as the Underwriters may reasonably designate and will continue such
qualifications in effect so long as required for the distribution of the
Class B Certificates, provided that Transferor shall not be obligated to
qualify to do business nor become subject to service of process generally,
but only to the extent required for such qualification, in any jurisdiction
in which it is not currently so qualified, and will arrange for the
determination of the legality of the Class B Certificates for purchase by
institutional investors.
(f) So long as any of the Class B Certificates are outstanding,
Transferor will deliver or cause to be delivered to the Underwriters (i)
copies of each report mailed to the Trustee or the Series 1996-B Holders,
as soon as such report is mailed to the Trustee or such Holders, (ii) the
annual statement as to compliance and the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to
Sections 3.5 and 3.6 of the Pooling and Servicing Agreement, as soon as
such statements are furnished to the Trustee, (iii) copies of all documents
required to be filed with the Commission pursuant to the Exchange Act or
any order of the Commission thereunder, and (iv) such other information
concerning Transferor, the Certificates or the Trust as the Underwriters
may reasonably request from time to time.
(g) Transferor will pay all expenses incident to the performance of
its obligations under this Agreement, including without limitation, (i)
expenses of preparing, printing, reproducing and distributing the
Registration Statement and each amendment thereto, the preliminary
prospectuses, the Prospectus (including any amendments and supplements
thereto), the Pooling and Servicing Agreement, the Loan Agreement and the
Class B Certificates, (ii) the fees and disbursements of the Trustee and
its counsel, (iii) the fees and disbursements of the independent public
accountants of Transferor and fees and disbursements of counsel to
Transferor and the Underwriters, (iv) the fees charged by Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Ratings Service, a division of
The McGraw Hill Companies, Inc. ("Standard & Poor's") and Fitch Investors
Service, L.P. ("Fitch", and together with Moody's and Standard & Poor's,
the "Rating Agencies") in connection with the rating of the Class B
Certificates, (v) the fees of DTC in connection with the book-entry
registration of the DTC Certificate, (vi) the fees and expenses of Mayer,
Brown & Platt as counsel to the Transferor and in its role as special
Federal tax counsel and (vii) expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters, and will reimburse the Underwriters for any
expenses (including reasonable fees and disbursements of counsel) incurred
by the Underwriters pursuant to Section 5(e) hereof in connection with the
qualification of the Class B Certificates for sale and determination of
their eligibility for investment under the laws of such jurisdictions in
the United States as the Underwriters may designate.
(h) Transferor has caused and will continue to cause its books and
records (including any computer records) to be marked relating to the
Receivables transferred to the Trust, to show the transfer to the Trust of
such Receivables, and Transferor shall not take any action inconsistent
with the transfer to the Trust of such Receivables, other than as permitted
by the Pooling and Servicing Agreement.
(i) For a period of 30 days from the date hereof, none of Transferor
or any of its affiliates or any trust formed by it or any of its affiliates
will, without the prior written consent of the Underwriters, directly or
indirectly, offer, sell or contract to sell or announce the offering of, in
a public or private transaction, any other collateralized securities
similar to the Class B Certificates (other than the Class A Certificates
and the Class A Certificates, Series 1996-A and Class B Certificates,
Series 1996-A) representing interests in consumer credit card receivables.
(j) So long as any Class B Certificates are outstanding, Transferor
will cause to be delivered to the Underwriters a reliance letter relating
to each Opinion of Counsel delivered to the Trustee or any Rating Agency by
counsel to Transferor pursuant to the Pooling and Servicing Agreement at
the time such opinion is delivered.
(k) To the extent, if any, that the rating provided with respect to
the Class B Certificates by any Rating Agency is conditional upon the
furnishing of documents or the taking of any other actions by Transferor,
Transferor shall furnish such documents and take any such other actions as
may be required.
Section 6. Conditions of the Obligations of the Underwriters. The
obligation of the Underwriters to purchase and pay for the Class B
Certificates will be subject to the accuracy of the representations and
warranties on the part of Transferor herein as of the Execution Time and
the Closing Date, to the accuracy of the statements of the officers of
Transferor made pursuant to the provisions hereof, to the performance by
Transferor of its obligations hereunder and to the following additional
conditions precedent:
(a) (i) On the date of this Agreement, the Underwriters and
Transferor shall have received a letter, dated the date of delivery thereof
(which, if the Effective Time is prior to the execution and delivery of
this Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to the
Effective Time), of Coopers & Lybrand confirming that they are independent
public accountants within the meaning of the Securities Act and the Rules
and Regulations, substantially in the form of the draft to which the
Underwriters have previously agreed and otherwise in form and substance
satisfactory to the Underwriters and counsel for the Underwriters, and (ii)
on the Closing Date, the Underwriters and Transferor shall have received a
letter, dated as of the Closing Date, from Coopers & Lybrand updating the
letter referred to in clause (i) above, in form and substance satisfactory
to the Underwriters and counsel for the Underwriters.
(b) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement shall have become effective not later than
10:00 p.m. New York time on the date of this Agreement; if filing of the
Prospectus, or any supplements thereto, is required pursuant to Rule
424(b), the Prospectus shall have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving
a prospective change, in or affecting particularly the business or
properties of Transferor which, in the judgment of the Underwriters
materially impairs the investment quality of the Class B Certificates; (ii)
any suspension or limitation of trading in securities generally on the New
York Stock Exchange or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of Transferor on
any exchange or in the over the counter market; (iii) any banking
moratorium declared by Federal, New York or Delaware authorities; or (iv)
any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Class B Certificates.
(d) The Representative shall have received:
(1) The favorable opinion or opinions of internal counsel of
Transferor and/or of Mayer, Brown & Platt, counsel to Transferor,
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, and in the aggregate substantially to
the effect that:
(i) Transferor has been duly organized as an association
licensed as a national banking association and is validly
existing and in good standing under the laws of the United
States, is duly qualified to do business and is in good standing
under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business, and has full power and authority to
own its properties, to conduct its business as described in the
Registration Statement and the Prospectus, to enter into and
perform its obligations under the Specified Agreements, to
execute the Certificates and to consummate the transactions
contemplated hereby and thereby;
(ii) the Pooling and Servicing Agreement, this Agreement,
the Class A Underwriting Agreement, the Loan Agreement and the
Certificates have each been duly authorized, executed and
delivered by Transferor; the Pooling and Servicing Agreement and
the Loan Agreement constitute and the Certificates and the
Collateral Interest, when validly issued and, in the case of the
Certificates validly authenticated and delivered in accordance
with the Pooling and Servicing Agreement and sold to the
Underwriters as provided herein and to the Class A Underwriters
pursuant to the Class A Underwriting Agreement, will constitute,
the legal, valid and binding agreement of Transferor,
enforceable in accordance with its terms (subject, as to
enforcement or remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to
the application of general principles of equity);
(iii) the Certificates are in due and proper form and
when executed, authenticated and delivered as specified in the
Pooling and Servicing Agreement, when delivered against payment
of the consideration specified herein, will be duly and validly
issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement and the Collateral Interest;
(iv) neither the execution and delivery of the Specified
Agreements, nor the issuance or delivery of the Certificates,
nor the consummation of any of the transactions contemplated
herein or therein, nor the fulfillment of the terms of the
Certificates or the Specified Agreements, will conflict with or
violate, result in a material breach of or constitute a default
under (A) any Requirements of Law applicable to Transferor or
any statute or regulation currently applicable to the Trust, (B)
any term or provision of any order known to such counsel to be
currently applicable to Transferor or the Trust of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over Transferor or the Trust, as the case
may be, or (C) any term or provision of any indenture or other
agreement or instrument known to such counsel to which
Transferor or the Trust is a party or by which either of them or
any of their properties are bound;
(v) except as otherwise disclosed in the Prospectus (and
any supplements thereto) or the Registration Statement, there is
no pending or, to the best knowledge of such counsel, threatened
action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator with respect to the
Trust, the Certificates, the Specified Agreements or any of the
transactions contemplated herein or therein or with respect to
Transferor which, in the case of any such action, suit or
proceeding with respect to Transferor if adversely determined,
would have a material adverse effect on the Certificates or the
Trust or upon the ability of Transferor to perform its
obligations under the Pooling and Servicing Agreement or the
Loan Agreement; and the statements included in the Registration
Statement, the Base Prospectus and the Prospectus describing
statutes, legal proceedings, contracts and other documents
relating to Transferor, the Accounts, the Receivables, the
business of Transferor and the Trust fairly summarize the
matters therein described;
(vi) the Registration Statement has become effective
under the Securities Act, and, to the best of their knowledge
and information, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act, and the Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations. Such counsel has no reason to believe that at the
Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading (other than financial and statistical information
contained therein as to which such counsel need express no
opinion);
(vii) no approval, authorization, consent, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body is required for
the consummation by Transferor or the Trust of the transactions
contemplated in the Specified Agreements, except such as have
been obtained under the Securities Act and such as may be
required under the blue sky laws of any jurisdiction inside the
United States in connection with the purchase and distribution
of the Class B Certificates by the Underwriters and such filings
or other approvals (specified in such opinion) as have been made
or obtained;
(viii) if a court concludes that the assignment of the
Receivables, all documents and instruments relating thereto and
all proceeds thereof to the Trustee pursuant to the Pooling and
Servicing Agreement is a sale, such assignment transferred to
the Trust all the right, title and interest of Transferor in and
to such Receivables and other property in existence on the date
hereof, free and clear of any Liens then existing or thereafter
created except as specifically permitted pursuant to the Pooling
and Servicing Agreement. With respect to Receivables which come
into existence after the date hereof, such sale will transfer to
the Trust all of the right, title and interest of Transferor in
and to such Receivables free and clear of any Liens. If a court
were to conclude that such assignment was not a sale, the
Pooling and Servicing Agreement and the transactions provided
for by the Pooling and Servicing Agreement would constitute a
grant by Transferor to the Trustee, for the benefit of the
Investor Holders, of a valid security interest in all of
Transferor's right, title and interest in all Receivables and
other property from time to time transferred by Transferor to
the Trust;
(ix) the Certificates and the Pooling and Servicing
Agreement and the Loan Agreement each conform in all material
respects with the description thereof contained in the
Registration Statement and the Prospectus;
(x) the Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as
amended, and neither Transferor nor the Trust is required to be
registered under the Investment Company Act; and
(xi) the statements in the Registration Statement under
the heading "Certain Legal Aspects of the Receivables", "U.S.
Federal Income Tax Consequences" and "ERISA Considerations" to
the extent that they constitute statements of matters of law or
legal conclusions with respect thereto, have been prepared or
received by such counsel and are correct in all material
respects.
In rendering such opinion counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Ohio and New York and the United States, to the extent deemed proper and
stated in such opinion, upon the opinion of other counsel of good standing
believed by such counsel to be reliable and acceptable to the
Representative and its counsel, and (B) as to matters of fact, to the
extent deemed proper and as stated therein, on certificates of responsible
officers of the Trust, Transferor and public officials. References to the
Prospectus in this paragraph (d) include any supplements thereto.
(2) The favorable opinion of Mayer, Brown & Platt, special tax
counsel to Transferor, dated the Closing Date and to the effect that
(i) the Certificates will properly be treated as indebtedness for
federal income tax purposes and (ii) the Trust will not be classified
as an association or a publicly traded partnership taxable as a
corporation for federal income tax purposes.
(3) The favorable opinion of Schwartz, Warren & Ramirez,
special Ohio counsel to Transferor, dated the Closing Date and
satisfactory in form and substance to the Representative and its
counsel, and substantially to the effect that:
(i) the Receivables constitute either "general
intangibles" or "accounts" in each case as defined in the
Uniform Commercial Code in effect in the State of Ohio;
(ii) Uniform Commercial Code financing statements with
respect to the Investor Interest in the Receivables and the
proceeds thereof have been filed in the office of the Ohio
Secretary of State. No other filings or other actions, with
respect to the Trustee's interest in the Receivables transferred
and to be transferred by Transferor to the Trust, are necessary
to perfect the interest of the Trustee in the Receivables, and
the proceeds thereof, against third parties, except that
appropriate continuation statements must be filed at five-year
intervals;
(iii) in the event that a court were to conclude that the
assignment of the Receivables, all documents and instruments
relating thereto and all proceeds thereof to the Trustee
pursuant to the Pooling and Servicing Agreement was not a sale,
the Pooling and Servicing Agreement, together with the filing of
the financing statements referred to in paragraph (ii) above,
create a first priority perfected security interest in the
Receivables transferred and to be transferred by Transferor to
the Trustee, all documents and instruments relating thereto and
all proceeds thereof (in rendering such opinion counsel may take
such exceptions as are appropriate and reasonably acceptable
under the circumstances); and
(iv) the Trust as an entity will not be subject to the
corporation franchise tax or to the dealers in intangibles tax
imposed on corporations, financial institutions or dealers in
intangibles by Ohio Revised Code Chapters 5733 or 5725, and for
purposes of the corporation franchise tax and the dealers in
intangibles tax imposed by Ohio Revised Code Chapters 5733 and
5725, respectively, the Certificates will be treated as
indebtedness.
(4) Any reliance letters relating to each opinion rendered to
the Trustee or any Rating Agency by internal counsel of Transferor
and Mayer, Brown & Platt and any other counsel to Transferor in
connection with the rating of the Certificates.
(5) The favorable opinion of counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative and its counsel to the effect that:
(i) The Trustee has been duly incorporated and is validly
existing as a New York banking corporation in good standing
under the laws of the State of New York with full power and
authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to enter
into and perform its obligations under the Pooling and Servicing
Agreement and the Loan Agreement and to issue the Certificates
and the Collateral Interest.
(ii) Each of the Pooling and Servicing Agreement and the
Loan Agreement has been duly authorized, executed and delivered
by the Trustee, and constitutes a legal, valid and binding
obligation of the Trustee, enforceable in accordance with its
terms, except that (y) the enforceability thereof may be subject
to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights and (z) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(iv) Neither the execution and delivery by the Trustee of
the Pooling and Servicing Agreement or the Loan Agreement nor
the consummation of any of the transactions by the Trustee
contemplated thereby required the consent or approval of, the
giving of notice to, the registration with or the taking of any
other action with respect to, any governmental authority or
agency under any existing federal or state law governing the
banking or trust powers of the Trustee.
(v) The execution and delivery of the Pooling and
Servicing Agreement and the Loan Agreement by the Trustee and
the performance by the Trustee of their respective terms do not
conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of New
York governing trust powers of the Trustee, (B) the Articles of
Association or By-Laws of the Trustee, or (C) to the best of
their knowledge, any indenture, lease, or other material
agreement to which the Trustee is a party or to which its assets
are subject.
(6) The favorable opinion of Mayer, Brown & Platt, counsel for
the Underwriters, dated the Closing Date, with respect to the
validity of the Class B Certificates and such other related matters
as the Underwriters shall request, and Transferor shall have
furnished or caused to be furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Mayer, Brown & Platt
may rely on the opinions of Schwartz, Warren & Ramirez, counsel to
Transferor, and the opinion of internal counsel of Transferor, as to
the matters dealt with in such opinions.
(e) The Representative shall have received a certificate dated the
Closing Date of the President, any Vice President, the Treasurer or any
Assistant Treasurer, of Transferor in which such officer shall state that
the representations and warranties of Transferor in this Agreement are true
and correct, and that Transferor has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission, and
subsequent to the date of the most recent financial statements of
Transferor delivered to the Representative hereunder, there has been no
material adverse change in the condition, financial or otherwise, whether
or not arising from transactions in the ordinary course of business, of
Transferor except as set forth in or contemplated by the Registration
Statement and the Prospectus.
(f) The Class B Certificates shall be rated "Aaa" by Moody's and
"AAA" by Standard & Poor's and "AAA" by Fitch, and the Class B Certificates
shall be rated "A2" by Moody's and "A" by Standard & Poor's and "A" by
Fitch.
(g) The Representative shall have received evidence satisfactory to
it and its counsel that, on or before the Closing Date, UCC-1 financing
statements have been filed in the office of the Secretary of State of Ohio
and County Clerk of Franklin County reflecting the interest of the Trust in
the Receivables and the proceeds thereof.
(h) The Representative and Transferor shall have received from
counsel for the Collateral Interest Holder reasonably acceptable to the
Representative and Transferor, a favorable opinion, dated the Closing Date
and satisfactory in form and substance to the Representative, its counsel,
Transferor and its counsel to the effect that:
(1) the Collateral Interest Holder is duly organized and
existing under the laws of its jurisdiction of incorporation and
has the power and authority to execute, deliver and perform its
obligations under the Loan Agreement;
(2) the Loan Agreement has been duly and validly
authorized, executed and delivered by the Collateral Interest
Holder and constitutes the legal, valid and legally binding
obligation of the Collateral Interest Holder enforceable against
the Collateral Interest Holder in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, liquidation, moratorium,
readjustment of debt or other similar laws affecting the
enforcement of creditors' rights generally, as such laws may be
applied in the event of a bankruptcy, insolvency,
reorganization, liquidation, moratorium, readjustment of debt
of, or the appointment of a receiver with respect to the
property of, or a similar event applicable to the Collateral
Interest Holder, and (B) the effect of any moratorium or other
similar occurrence affecting the Collateral Interest Holder;
(3) all consents, approvals, authorizations, licenses,
rulings or orders of or actions by any New York State or federal
governmental authority and all filings, recordings or
publications, if any, required on the part of the Collateral
Interest Holder in connection with the execution, delivery or
performance by the Collateral Interest Holder of the Loan
Agreement have been obtained or made and are in full force and
effect; and
(4) such other customary matters as the Representative
shall request.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not
have been any change, or any development involving a prospective change, in
or affecting the business or properties of the Trust or Transferor the
effect of which, in any case referred to above, is, in the judgment of the
Underwriters, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the Class B
Certificates as contemplated by the Registration Statement and the
Prospectus (and any supplements thereto).
(j) Simultaneously with or prior to the Closing Date, $283,500,000
aggregate initial principal amount of the Class A Certificates shall have
been sold to the Class A Underwriters.
Transferor will provide or cause to be provided to the Underwriters
such conformed copies of such opinions, certificates, letters and documents
as the Underwriters may reasonably request.
Section 7. Indemnification and Contribution. (a) Transferor will
indemnify and hold harmless each Underwriter and each Person who controls
any Underwriter within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which the
Underwriters or any of them may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each Person
who controls any Underwriter within the meaning of the Securities Act for
any actual legal or other expenses reasonably incurred by the Underwriter
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Transferor will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to Transferor by any Underwriter specifically for use
therein.
(b) Each Underwriter, severally, agrees to indemnify and hold
harmless Transferor against any losses, claims, damages or liabilities to
which Transferor may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to Transferor by such Underwriter specifically for
use therein, and will reimburse any actual legal or other expenses
reasonably incurred by Transferor in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action or the assertion by a
third party of a claim, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under subsection (a)
or (b) above, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party except and to
the extent of any prejudice to such indemnifying party arising from such
failure to provide such notice. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by Transferor on the one hand and the Underwriters on the
other from the offering of the Class B Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
Transferor on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by Transferor on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Class B
Certificates (before deducting expenses) received by Transferor bear to the
total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by Transferor or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Class B
Certificates purchased by such Underwriter hereunder. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of Transferor under this Section shall be in
addition to any liability that Transferor may otherwise have and shall
extend, upon the same terms and conditions, to each Person, if any, who
controls any Underwriter within the meaning of the Securities Act; and the
obligations of any Underwriter under this Section shall be in addition to
any liability that such Underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each director of Transferor, to each
officer of Transferor who signed the Registration Statement and to each
Person, if any, who controls Transferor within the meaning of the
Securities Act.
Section 8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of Transferor or its officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation or statement as to the results thereof,
made by or on behalf of the Underwriters, Transferor or any of their
respective representatives, officers or directors or any controlling
Person, and will survive delivery of and payment for the Class B
Certificates. If for any reason the purchase of the Class B Certificates by
the Underwriters is not consummated, Transferor shall remain responsible
for the expenses to be paid or reimbursed by Transferor pursuant to Section
5(g) hereof and the respective obligations of Transferor and the
Underwriters pursuant to Section 7 hereof shall remain in effect. If the
purchase of the Class B Certificates by the Underwriters is not consummated
for any reason other than solely because of the occurrence of any event
specified in clause (ii), (iii) or (iv) of Section 6(c) hereof, Transferor
will reimburse the Underwriters for all actual out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them
in connection with the offering of the Class B Certificates.
Section 9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Class B
Certificates agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Class B Certificates set forth
opposite their names in Schedule I hereto bears to the aggregate amount of
Class B Certificates set forth opposite the names of all the remaining
Underwriters) the Class B Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Class B Certificates which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Class B Certificates set
forth in Schedule I hereto, the remaining Underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of
the Class B Certificates, and if such nondefaulting Underwriters do not
purchase all the Class B Certificates, this Agreement will terminate
without liability to any non-defaulting Underwriter, the Trust or
Transferor. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Underwriters shall determine in order that the
required changes in the Registration Statement and the Prospectus (and any
supplements thereto) or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to Transferor and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
Section 10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to them c/o CS First Boston Corporation, Attention:
Investment Banking Department - Transactions Advisory Group; or if sent to
Transferor will be mailed, delivered or telegraphed and confirmed to it at
World Financial Network National Bank, 4590 East Broad Street, Columbus,
Ohio 43213, Attention: Dan Groomes (facsimile no. 614/755-3418).
Section 11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling Persons referred to in Section 7
hereof, and no other Person will have any right or obligation hereunder.
Section 12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
Agreement.
Section 13. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to any otherwise applicable principles of conflicts of laws.
Section 14. Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
Section 15. Representative. The Representative will act for the
several Underwriters in connection with this Agreement and the transactions
contemplated hereby and any action under this Agreement taken by the
Representative will be binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts duplicate
hereof, whereupon it will become a binding agreement between Transferor and
the several Underwriters in accordance with its terms.
Very truly yours,
WORLD FINANCIAL NETWORK
NATIONAL BANK
By:______________________________________
Name: Dan Groomes
Title: Vice President and
Chief Financial Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted,
as of the date first above written:
CS FIRST BOSTON CORPORATION
By:_________________________________________
Name:
Title:
For itself and the other
Underwriters named in Schedule I
to the foregoing Underwriting
Agreement.
Schedule 1
----------
Principal Amount of
Class B Underwriter Class B Certificates
------------------- --------------------
CS First Boston Corporation..................................$29,750,000
EXECUTION COPY
- -----------------------------------------------------------------------------
WORLD FINANCIAL NETWORK NATIONAL BANK
Transferor and Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Investor Holders
- -----------------------------------------------------------------------------
SERIES 1996-A SUPPLEMENT
Dated as of May 9, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
------------------------------------------
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
$445,500,000 6.70% Class A Asset-Backed
Certificates, Series 1996-A
$46,750,000 7.00% Class B Asset-Backed
Certificates, Series 1996-A
- -----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Designation......................................... 1
SECTION 2. Definitions......................................... 2
SECTION 3. Servicing Fee....................................... 18
SECTION 4. Optional Repurchase; Reassignment and
Termination Provisions......................... 18
SECTION 5. Delivery and Payment for the Investor
Certificates................................... 19
SECTION 6. Depository; Form of Delivery of Investor
Certificates................................... 19
SECTION 7. Article IV of Agreement............................. 20
SECTION 4.6 Rights of Holders and the
Collateral Interest Holder................ 20
SECTION 4.7 Allocations.................................... 20
SECTION 4.8 Determination of Monthly Interest.............. 25
SECTION 4.9 Determination of Monthly Principal............. 26
SECTION 4.10 Coverage of Required Amount.................... 27
SECTION 4.11 Monthly Payments............................... 28
SECTION 4.12 Investor Charge-Offs........................... 31
SECTION 4.13 Excess Spread.................................. 33
SECTION 4.14 Reallocated Principal Collections.............. 35
SECTION 4.15 Shared Principal Collections;
Amounts Transferred from the
Excess Funding Account to the
Principal Account......................... 36
SECTION 4.16 Finance Charge Account, Principal
Account and Distribution
Account................................... 37
SECTION 4.17 Cash Collateral Account........................ 38
SECTION 4.18 Determination of LIBOR......................... 40
SECTION 4.19 Transferor's or Servicer's Failure
to Make a Deposit or Payment.............. 40
SECTION 8. Article V of the Agreement.......................... 40
SECTION 5.1 Distributions.................................. 40
SECTION 5.2 Reports........................................ 41
SECTION 9. Series 1996-A Early Amortization Events............. 42
SECTION 10. Series 1996-A Termination........................... 44
SECTION 11. Periodic Finance Charges and Other Fees............. 44
SECTION 12. Limitations on Addition of Approved Portfolios...... 44
SECTION 13. Counterparts........................................ 44
SECTION 14. Governing Law....................................... 45
SECTION 15. Additional Provisions............................... 45
SECTION 16. No Petition......................................... 47
SECTION 17. Amendments.......................................... 47
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 Trustee
EXHIBIT C Form of Monthly Series 1996-A
Holders' Statement
<PAGE>
SERIES 1996-A SUPPLEMENT, dated as of May 9, 1996 (this "Series
Supplement"), between WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Transferor ("Transferor") and Servicer
("Servicer"), and THE BANK OF NEW YORK, as Trustee ("Trustee"), under the
Pooling and Servicing Agreement dated as of January 17, 1996 between the
same parties (the "Agreement").
Section 6.3 of the Agreement provides, among other things, that
Transferor and 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
Trustee to Transferor for the execution and redelivery to Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION I. 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-A
Certificates." The two classes shall be designated the 6.70% Class A
Asset-Backed Certificates, Series 1996-A (the "Class A Certificates") and
the 7.00% Class B Asset-Backed Certificates, Series 1996-A (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, respectively. In
addition, there is hereby created a third Class which constitutes an
uncertificated interest in the Trust, shall be deemed to be an "Investor
Certificate" for all purposes under the Agreement and this Series
Supplement, except as expressly provided in Section 1(c) of this Series
Supplement, and shall be known as the Collateral Interest, Series 1996-A
and have the rights assigned to the Collateral Interest in this Series
Supplement. The Collateral Interest Holder shall be deemed to be an
"Investor Holder" for all purposes under the Agreement and this Series
Supplement, except as expressly provided in Section 1(c) of this Series
Supplement.
(b) Series 1996-A shall be included in Group One (as defined below).
Series 1996-A 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, the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest.
SECTION II. Definitions. If 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.
References to any Article or Section are references to Articles or Sections
of the Agreement, except as otherwise expressly provided. All capitalized
terms not otherwise defined herein are defined in the Agreement, and the
interpretive provisions set out in Section 1.2 of the Agreement apply to
this Series Supplement. Each capitalized term defined herein relates only
to the Investor Certificates and no other Series of Certificates issued by
the Trust.
"Additional Minimum Transferor Amount" means (a) as of any date of
determination falling in November, December and January of each calendar
year, the product of (i) 2% and (ii) the sum of (A) the aggregate Principal
Receivables and (B) amounts on deposit in the Excess Funding Account and
(b) as of any date of determination falling in any other month, zero;
provided that the amount specified in clause (a) shall be without
duplication with the amount specified as the "Additional Minimum Transferor
Amount" in the Supplement relating to the Series 1996-B Certificates issued
by the Trust (or in any future Supplement that specifies such an amount and
indicates that such amount is without duplication of the amount specified
in clause (a)). The Additional Minimum Transferor Amount is specified
pursuant to Section 15(c) of this Series Supplement as an additional amount
to be considered part of the Minimum Transferor Amount.
"Aggregate Investor Default Amount" means, as to any Monthly Period,
the sum of the Investor Default Amounts in respect of such Monthly Period.
"Automatic Addition Limitation Event" is defined in Section 15(b) of
this Series Supplement.
"Available Cash Collateral Amount" means with respect to any Transfer
Date, the lesser of (a) the amount on deposit in the Cash Collateral
Account on such date (before giving effect to any deposit to, or withdrawal
from the Cash Collateral Account to be made with respect to such date) and
(b) the Required Enhancement Amount as of the prior Transfer Date.
"Available Investor Principal Collections" means, as to any Monthly
Period, an amount equal to (a) the Investor Principal Collections for such
Monthly Period, minus (b) the amount of Reallocated Principal Collections
with respect to such Monthly Period which pursuant to Section 4.14 are
required to fund the Class A Required Amount and the Class B Required
Amount (other than any portions thereof that are applied pursuant to (x)
Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such portions
pursuant to Section 4.13(c) are available to pay the Class B Investor
Default Amount or the Class B Uncovered Dilution Amount), which shall,
without duplication, be included as Available Investor Principal
Collections), plus (c) the amount of Shared Principal Collections with
respect to Group One that are allocated to Series 1996-A in accordance with
Section 4.15(b).
"Base Rate" means, as 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 and the
Collateral Monthly Interest, each for the related Distribution Period, and
the Servicing Fee with respect to such Monthly Period and the denominator
of which is the Invested Amount as of the close of business on the last day
of such Monthly Period.
"Cash Collateral Account" is defined in Section 4.17(a).
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Available Funds" means, as to any Monthly Period, an amount
equal to the Class A Floating Allocation Percentage of the sum of (a) the
Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date with respect to the preceding Monthly Period pursuant
to Section 4.7(d), before giving effect to any netting or to the proviso to
such Section) and (b) the interest and earnings on the Cash Collateral
Account to be treated as Collections of Finance Charge Receivables pursuant
to Section 4.17(b) on the related Transfer Date.
"Class A Certificate Rate" means a per annum rate equal to 6.70%.
"Class A Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in Section 4.8(a).
"Class A Final Scheduled Payment Date" means the July 2001
Distribution Date.
"Class A Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Class A Invested Amount as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Class A Invested Amount (less the
balance on deposit in the Principal Account that is not subject to being
treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such Paired
Series).
"Class A Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Invested Amount as of the
close of business on such last day; provided that, with respect to the
first Monthly Period, the Class A Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class A
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class A Holder" means the Person in whose name a Class A Certificate
is registered in the Certificate Register.
"Class A Initial Invested Amount" means the aggregate initial
principal amount of the Class A Certificates, which is $445,500,000.
"Class A Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class A Holders prior to
such date and minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs pursuant to Section 4.12(a) over Class A
Investor Charge-Offs reimbursed pursuant to Section 4.13(b) prior to such
date of determination, minus (d) the amount of any reduction in the Class A
Invested Amount as a result of the purchase by Transferor and subsequent
cancellation of the Class A Certificates pursuant to Section 4(d) of this
Series Supplement; provided that the Class A Invested Amount may not be
reduced below zero.
"Class A Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class A Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Amortization Period
or Early Amortization Period, the Class A Fixed Allocation Percentage.
"Class A Investor Charge-Off" is defined in Section 4.12(a).
"Class A Investor Default Amount" means, as 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
Percentage applicable for the related Monthly Period.
"Class A Monthly Interest" is defined in Section 4.8(a).
"Class A Monthly Principal" is defined in Section 4.9(a).
"Class A Reduction Amount" is defined in Section 4.12(a).
"Class A Required Amount" is defined in Section 4.10(a).
"Class A Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class A Uncovered Dilution Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Uncovered Dilution Amount for the
related Monthly Period and (b) the Class A Investor Allocation Percentage
applicable for the related Monthly Period.
"Class B Additional Interest" is defined in Section 4.8(b).
"Class B Available Funds" means, as to any Monthly Period, an amount
equal to the Class B Floating Allocation Percentage of the sum of (a) the
Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date with respect to the preceding Monthly Period pursuant
to Section 4.7(d), before giving effect to any netting or to the proviso to
such Section) and (b) interest and earnings on the Cash Collateral Account
to be treated as Collections of Finance Charge Receivables pursuant to
Section 4.17(b) on the related Transfer Date.
"Class B Certificate Rate" means a per annum rate equal to 7.00%.
"Class B Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class B Deficiency Amount" is defined in Section 4.8(b).
"Class B Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Class B Invested Amount as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Class B Invested Amount (less, if the
Class A Fixed Allocation Percentage is zero, the balance on deposit in the
Principal Account that is not subject to being treated as Reallocated
Principal Collections or Shared Principal Collections, to the extent not
subtracted in reducing the Class A Fixed Allocation Percentage to zero) as
of the last day of the revolving period for such Paired Series).
"Class B Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Invested Amount as of the
close of business on such last day; provided that, with respect to the
first Monthly Period, the Class B Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class B Holder" means the Person in whose name a Class B Certificate
is registered in the Certificate Register.
"Class B Initial Invested Amount" means the aggregate initial
principal amount of the Class B Certificates, which is $46,750,000.
"Class B Invested Amount" means, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class B Holders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to Section 4.12(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant
to Section 4.14(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 Invested Amount has been reduced on all prior Transfer
Dates pursuant to Section 4.12(a) and plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant
to Section 4.13(d), for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e), minus (g) the amount of
any reduction in the Class B Invested Amount as a result of the purchase by
Transferor and subsequent cancellation of Class B Certificates pursuant to
Section 4(d) of this Series Supplement; provided that the Class B Invested
Amount may not be reduced below zero.
"Class B Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class B Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Amortization Period
or Early Amortization Period, the Class B Fixed Allocation Percentage.
"Class B Investor Charge-Off" is defined in Section 4.12(b).
"Class B Investor Default Amount" means, as 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 B Floating Allocation
Percentage applicable for the related Monthly Period.
"Class B Monthly Interest" is defined in Section 4.8(b).
"Class B Monthly Principal" is defined in Section 4.9(b).
"Class B Reduction Amount" is defined in Section 4.12(b).
"Class B Required Amount" is defined in Section 4.10(b).
"Class B Scheduled Payment Date" means the August 2001 Distribution
Date.
"Class B Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class B Uncovered Dilution Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Uncovered Dilution Amount for the
related Monthly Period and (b) the Class B Investor Allocation Percentage
applicable for the related Monthly Period.
"Closing Date" means May 9, 1996.
"Collateral Available Funds" means, as to any Monthly Period, an
amount equal to the Collateral Floating Allocation Percentage of the sum of
(a) the Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date with respect to the preceding Monthly Period pursuant
to Section 4.7(d), before giving effect to any netting or to the proviso to
such Section) and (b) interest and earnings on the Cash Collateral Account
to be treated as Collections of Finance Charge Receivables pursuant to
Section 4.17(b) on the related Transfer Date.
"Collateral Charge-Off" is defined in Section 4.12(c).
"Collateral Default Amount" means, as 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
Percentage applicable for the related Monthly Period.
"Collateral Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100% or be less than zero) 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 numerator used in determining the related Fixed Allocation
Percentage; provided that if Series 1996-A is paired with a Paired Series
and an Early Amortization Event occurs with respect to such Paired Series
during the Controlled Amortization Period, Transferor may, by written
notice delivered to Trustee and Servicer, designate a different numerator
(provided that such numerator is not less than the Collateral Interest
(less, if the Class A Fixed Allocation Percentage and the Class B Fixed
Allocation Percentage are zero, the balance on deposit in the Principal
Account that is not subject to being treated as Reallocated Principal
Collections or Shared Principal Collections, to the extent not subtracted
in reducing the Class A Fixed Allocation Percentage and/or the Class B
Fixed Allocation Percentage to zero) as of the last day of the revolving
period for such Paired Series).
"Collateral Floating Allocation Percentage" means, for 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 Invested Amount as of the
close of business on such last day; provided that, with respect to the
first Monthly Period, the Collateral Floating Allocation Percentage means
the percentage equivalent of a fraction, the numerator of which is the
Collateral Initial Interest and the denominator of which is the Initial
Invested Amount.
"Collateral Initial Interest" means $57,750,000.
"Collateral Interest" means, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the right
to receive, to the extent necessary to make the required payments to the
Collateral Interest Holder under this Series Supplement, the portion of
Collections allocable thereto under the Agreement and this Series
Supplement, funds on deposit in the Collection Account allocable thereto
pursuant to the Agreement and this Series Supplement and other amounts to
be paid in respect thereof as provided in the Agreement and this Series
Supplement. On any date, for purposes of all calculations in the Agreement
and this Series Supplement, the amount of the Collateral Interest shall be
an amount equal to (a) the 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 Section 4.12(c), minus
(d) the amount of Reallocated Principal Collections allocated pursuant to
Sections 4.14(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 Sections 4.12(a) and (b), and plus (f)
the aggregate amount of Excess Spread allocated and available on all prior
Transfer Dates pursuant to Section 4.13(h), for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e);
provided that the Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" means the entity so designated in the
Loan Agreement.
"Collateral Interest Servicing Fee" is defined in Section 3(a) of
this Series Supplement.
"Collateral Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Collateral Floating Allocation Percentage, and (b)
with respect to Principal Receivables during the Controlled Amortization
Period or Early Amortization Period, the Collateral Fixed Allocation
Percentage.
"Collateral Monthly Interest" is defined in Section 4.8(c).
"Collateral Monthly Principal" is defined in Section 4.9(c).
"Collateral Rate" means, for any Distribution Period, the rate
specified in the Loan Agreement; provided that the Collateral Rate shall
not exceed a per annum rate of 1.1% in excess of LIBOR for such
Distribution Period for purposes of this Supplement and the Agreement.
"Collateral Reduction Amount" is defined in Section 4.12(c).
"Collateral Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution Amount
for the related Monthly Period and (b) the Collateral Investor Allocation
Percentage applicable for the related Monthly Period.
"Controlled Amortization Amount" means $89,100,000.
"Controlled Amortization Period" means, unless an Early Amortization
Event shall have occurred prior thereto, the period commencing at the
beginning of business on February 1, 2001 and ending on the first to occur
of (a) the Early Amortization Commencement Date and (b) the Series 1996-A
Termination Date.
"Controlled Amortization Shortfall" initially means zero and, with
respect to any Monthly Period during the Controlled Amortization Period,
means the excess, if any of the Controlled Payment Amount for the previous
Monthly Period over the amounts distributed pursuant to Section 4.11(e)(i)
with respect to the Class A Certificates for the previous Monthly Period.
"Controlled Payment Amount" means, with respect to any Transfer Date,
the sum of (a) the Controlled Amortization Amount for such Transfer Date
and (b) any existing Controlled Amortization Shortfall.
"Cumulative Principal Shortfall" means the sum of the Principal
Shortfalls (as such term is defined in each of the related Supplements) for
each Series in Group One.
"Default Amount" means, as to any Defaulted Account, the amount of
Principal Receivables (other than Ineligible Receivables, unless there is
an Insolvency Event with respect to Transferor) in such Defaulted Account
on the day it became a Defaulted Account.
"Defaulted Account" means an Account in which there are Defaulted
Receivables.
"Deficiency Amount" means, at any time of determination, the sum of
the Class A Deficiency Amount and the Class B Deficiency Amount.
"Dilution" means any downward adjustment made by Servicer in the
amount of any Receivable (a) because of a rebate, refund, unauthorized
charge, fraudulent or counterfeit charge or billing error to an
accountholder, (b) because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder or (c) for
any other reason other than receiving Collections therefor or charging off
such amount as uncollectible.
"Distribution Account" is defined in Section 4.16(a).
"Distribution Date" means June 17, 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.
"Distribution Period" means, with respect to any Distribution Date,
the period from and including the previous Distribution Date through the
day preceding such Distribution Date, except the initial Distribution
Period will be the period from and including the Closing Date through the
day preceding the initial Distribution Date.
"Early Amortization Commencement Date" means the date on which an
Early Amortization Event is deemed to occur pursuant to Section 9.1 of the
Agreement or a Series 1996-A Early Amortization Event is deemed to occur
pursuant to Section 9 of this Series Supplement.
"Early Amortization Period" means the period commencing on the Early
Amortization Commencement Date and ending on the Series 1996-A Termination
Date.
"Enhancement" means, with respect to the Class A Certificates, the
subordination of the Class B Certificates and the Collateral Interest and
the Cash Collateral Account, and with respect to the Class B Certificates,
the subordination of the Collateral Interest and the Cash Collateral
Account.
"Enhancement Agreement" means the Loan Agreement.
"Enhancement Provider" means the Collateral Interest Holder.
"Enhancement Surplus" means, with respect to any Transfer Date, the
excess, if any, of (a) the amount on deposit in the Cash Collateral
Account, plus the Collateral Interest (in each case after giving effect to
any withdrawals, increases or reductions made with respect to such date
other than as the result of the existence of an Enhancement Surplus) over
(b) the Required Enhancement Amount.
"Excess Spread" means, with respect to any Transfer Date and subject
to Section 4.7(d), the sum of (a) the sum of the amounts, if any, with
respect to such Transfer Date specified pursuant to Sections 4.11(a)(iv),
4.11(b)(iii) and 4.11(c)(ii), plus (b) the Excess Finance Charge
Collections, if any, allocated to Series 1996-A pursuant to Section 4.5 for
the related Distribution Date.
"Finance Charge Account" is defined in Section 4.16(a).
"Finance Charge Shortfall" means, with respect to any Transfer Date,
an amount equal to the excess, if any, of (a) the sum of the amounts
specified in clauses (a) through (j) of Section 4.13 for that Transfer Date
over (b) the sum of the amounts, if any, with respect to such Transfer Date
specified pursuant to Sections 4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii).
"Fitch" means Fitch Investors Service, L.P. or its successors.
"Fixed Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount as of the close of business on the last day of the
Revolving Period and the denominator of which is the greater of (a) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the 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 that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Invested Amount (less the balance on
deposit in the Principal Account that is not subject to being treated as
Reallocated Principal Collections or Shared Principal Collections) as of
the last day of the revolving period for such Paired Series); provided
further that if one or more Reset Dates occur in a Monthly Period, the
Fixed Allocation Percentage for the portion of the Monthly Period falling
on and after each such Reset Date (the "subject Reset Date") and prior to
any subsequent Reset Date will be determined using a denominator equal to
the greater of the amounts specified in clauses (a) and (b) above
determined as of the close of business on the subject Reset Date.
"Floating Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, the
Initial Invested Amount) and the denominator of which is the greater of (a)
the aggregate amount of Principal Receivables as of the close of business
on the last day of the preceding Monthly Period (or with respect to the
first Monthly Period, the aggregate amount of Principal Receivables in the
Trust as of the close of business on the day immediately preceding the
Closing Date), 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 Finance Charge Receivables, Default Amounts,
Uncovered Dilution Amounts or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided that if one or
more Reset Dates occur in a Monthly Period, the Floating Allocation
Percentage for the portion of the Monthly Period falling on and after each
such Reset Date (the "subject Reset Date") and prior to any subsequent
Reset Date will be determined using a denominator equal to the greater of
the amounts specified in clauses (a) and (b) above determined as of the
close of business on the subject Reset Date.
"Group One" means Series 1996-A and each other Series specified in
the related Supplement to be included in Group One.
"Initial Invested Amount" means $550,000,000.
"Invested Amount" means, on any date of determination, an amount
equal to the sum of (a) the Class A Invested Amount, (b) the Class B
Invested Amount and (c) the Collateral Interest, each as of such date.
"Investor Certificates" means the Class A Certificates, the Class B
Certificates and the Collateral Interest.
"Investor Default Amount" means, with respect to any Receivable in a
Defaulted Account, an amount equal to the product of (a) the Default Amount
and (b) the Floating Allocation Percentage on the day such Account became a
Defaulted Account.
"Investor Holder" means, for all purposes of the Agreement and this
Series Supplement, (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 Percentage" means, 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 Allocation Percentage
and (b) with respect to Principal Receivables during the Controlled
Amortization Period or the Early Amortization Period, the Fixed Allocation
Percentage.
"Investor Principal Collections" means, with respect to any Monthly
Period, the sum of (a) the aggregate amount deposited (or required to be
deposited on the related Transfer Date pursuant to Section 4.7(d), before
giving effect to any netting or to the proviso to such Section) into the
Principal Account for such Monthly Period pursuant to Sections 4.7(a)(ii)
and (iii), 4.7(b)(ii), (iii) and (iv), or 4.7(c)(ii), (iii) and (iv), in
each case, as applicable to such Monthly Period, (b) the aggregate amount
to be treated as Investor Principal Collections pursuant to Sections
4.11(a)(iii), and 4.13(a), (b), (c), (d), (g) and (h) for such Monthly
Period (other than such amount paid from Reallocated Principal
Collections), and (c) the aggregate amount transferred or required to be
transferred on the related Transfer Date (before giving effect to any
permitted netting pursuant to Section 4.7(d)) from the Excess Funding
Account into the Principal Account pursuant to Section 4.15(d).
"LIBOR" means, for each Distribution Period, the London interbank
offered rate for one-month United States dollar deposits, as determined by
Trustee in accordance with the Loan Agreement.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of May 9, 1996, as
amended, supplemented or modified from time to time.
"Paired Series" means a Series that has been paired with Series
1996-A (which Series may be prefunded or partially prefunded or may be a
Variable Interest) such that a reduction of the Invested Amount results in
(or permits) an increase of the invested amount of the paired Series.
"Portfolio Yield" means, 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 (or required to be deposited on the related
Transfer Date (before giving effect to any permitted netting), into the
Finance Charge Account and allocable to the Investor Certificates for such
Monthly Period and (b) interest and earnings on the Cash Collateral Account
to be treated as Collections of Finance Charge Receivables allocable to the
Investor Certificates on the Transfer Date related to such Monthly Period,
as described in Section 4.17(b), after subtracting the Aggregate Investor
Default Amount for such Monthly Period, and the denominator of which is the
Invested Amount as of the close of business on the last day of such Monthly
Period.
"Principal Account" is defined in Section 4.16(a).
"Principal Shortfall" means, with respect to any Transfer Date, the
excess, if any, of (a) (i) with respect to any Transfer Date relating to
the Controlled Amortization Period, the sum of (A) the Controlled Payment
Amount for such Transfer Date, (B) on any Transfer Date after the
Distribution Date on which the Class A Invested Amount is reduced to zero,
the Class B Invested Amount and (C) the lesser of the Enhancement Surplus
(if any) and the Collateral Interest for such Transfer Date, (ii) with
respect to any Transfer Date during the Early Amortization Period, the
Invested Amount and (iii) with respect to any Transfer Date relating to the
Revolving Period, the amount specified in clause (a)(i)(C) above over (b)
the Investor Principal Collections minus the Reallocated Principal
Collections (other than any portions thereof that are applied pursuant to
(x) Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such
portions pursuant to Section 4.13(c) are available to pay the Class B
Investor Default Amount or the Class B Uncovered Dilution Amount)) for such
Transfer Date.
"Rating Agency" means Moody's, S&P and Fitch.
"Rating Agency Condition" means the notification in writing by each
Rating Agency to Transferor, Servicer and Trustee that an action will not
result in any Rating Agency reducing or withdrawing its then existing
rating of the Class A Certificates, the Class B Certificates or, to the
extent specified in the Loan Agreement (and with respect to Fitch only),
the Collateral Interest.
"Reallocated Class B Principal Collections" is defined in Section
4.14.
"Reallocated Collateral Principal Collections" is defined in Section
4.14.
"Reallocated Principal Collections" is defined in Section 4.14.
"Record Date" means, with respect to any Distribution Date, the last
Business Day of the calendar month preceding such Distribution Date.
"Required Cash Collateral Amount" means, with respect to any date of
determination, the Required Enhancement Amount less the Collateral
Interest.
"Required Draw Amount" is defined in Section 4.17(c).
"Required Enhancement Amount" means, with respect to each Transfer
Date, the greater of (a) an amount equal to 13% of the Invested Amount on
such Transfer Date, after taking into account any payments (including
payments on the Collateral Interest) to be made on the related Distribution
Date and (b) $16,500,000; provided that (x) if, on or prior to such
Transfer Date, there has been any Required Draw Amount pursuant to Section
4.17(c) or any reductions in the Collateral Interest pursuant to clauses
(c), (d) or (e) of the definition of such term, or an Early Amortization
Event has occurred with respect to Series 1996-A, then the Required
Enhancement Amount for such Transfer Date shall, subject to clauses (y) and
(z), equal the Required Enhancement Amount on the Transfer Date immediately
preceding such reduction, Required Draw Amount or Early Amortization Event,
(y) in no event shall the Required Enhancement Amount 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 Enhancement
Amount may be reduced or increased at Transferor's option at any time if
Transferor, Servicer, the Collateral Interest Holder and Trustee have been
provided evidence that the Rating Agency Condition has been satisfied.
"Required Retained Transferor Percentage" means, for purposes of
Series 1996-A, 7%.
"Reset Date" means each of (a) an Addition Date on which Receivables
from Supplemental Accounts are added to the Trust, (b) a Removal Date on
which, if any Series has been paid in full, Principal Receivables in an
aggregate amount approximately equal to the initial investor interest of
such Series are removed from the Trust, (c) a date on which there is an
increase in the Invested Amount of any Variable Interest issued by the
Trust and (d) any date on which a new Series is issued.
"Revolving Period" means the period from and including the Closing
Date to, but not including, the earlier of (a) the beginning of business on
February 1, 2001 and (b) the Early Amortization Commencement Date.
"Series Account" means, as to Series 1996-A, the Distribution
Account, the Finance Charge Account, the Principal Account and the Cash
Collateral Account.
"Series Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the numerator used in determining the Floating Allocation Percentage for
that Monthly Period and the denominator of which is the sum of the
numerators used to calculate the Investor Percentages (as such term is
defined in the Agreement) for allocations with respect to Finance Charge
Receivables for all outstanding Series on such date of determination;
provided that if one or more Reset Dates occur in a Monthly Period, the
Series Allocation Percentage for the portion of the Monthly Period falling
on and after each such Reset Date (the "subject Reset Date") and prior to
any subsequent Reset Date will be determined using a denominator which is
equal to the sum of the numerators used to calculate the Investor
Percentages for allocations with respect to Finance Charge Receivables for
all outstanding Series as of the close of business on the subject Reset
Date.
"Series 1996-A" means the Series of the World Financial Network
Credit Card Master Trust represented by the Investor Certificates.
"Series 1996-A Certificates" means the Class A Certificates and the
Class B Certificates.
"Series 1996-A Holder" means the holder of record of a Series 1996-A
Certificate.
"Series 1996-A Termination Date" means the earliest to occur of (a)
the Distribution Date on which the Invested Amount is paid in full, (b) the
termination of the Trust pursuant to the Agreement and (c) the February
2004 Distribution Date.
"Series Servicing Fee Percentage" means 2.0%.
"Servicing Fee" is defined in Section 3(a) of this Series Supplement.
"Shared Principal Collections" means, as the context requires, either
(a) the amount allocated to the Investor Certificates which are treated as
Shared Principal Collections pursuant to Sections 4.7(a), 4.7(b)(iv)(B),
4.7(c)(iv)(B), 4.11(d)(ii) and 4.11(e)(iv) and which may be applied to the
principal shortfall with respect to other outstanding Series in Group One
or (b) the amounts allocated to the investor certificates of other Series
in Group One which the applicable Supplements for such Series specify are
to be treated as "Shared Principal Collections" and which may be applied to
cover the Principal Shortfall with respect to the Investor Certificates.
"Specified Transferor Amount" means, at any time, the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) at that time.
"Target Amount" is defined in Section 4.7(d).
"Uncovered Dilution Amount" means an amount equal to the product of
(x) the Series Allocation Percentage for the related Monthly Period
(determined on a weighted average basis, if a Reset Date occurs during that
Monthly Period), times (y) the aggregate Dilutions occurring during that
Monthly Period as to which any deposit is required to made to the Excess
Funding Account pursuant to Section 3.9(a) but has not been made; provided
that, if the Transferor Amount is greater than zero at the time the deposit
referred to in clause (y) is required to be made, the Uncovered Dilution
Amount for such amount to be deposited shall be deemed to be zero.
SECTION III. Servicing Fee. The share of the Servicing Fee allocable
to Series 1996-A with respect to any Transfer Date (the "Servicing Fee")
shall be equal to one-twelfth of the product of (i) the Series Servicing
Fee Percentage and (ii) the Invested Amount as of the last day of the
Monthly Period preceding such Transfer Date; provided that with respect to
the first Transfer Date, the Servicing Fee shall equal $672,222.22. The
share of the Servicing Fee allocable to the Class A Invested Amount (the
"Class A Servicing Fee"), the Class B Invested Amount (the "Class B
Servicing Fee") and the Collateral Interest (the "Collateral Interest
Servicing Fee") with respect to any Transfer Date shall equal the Class A
Floating Allocation Percentage, Class B Floating Allocation Percentage and
Collateral Floating Allocation Percentage, respectively, of such Servicing
Fee. Except as specifically provided above, the Servicing Fee shall be paid
by the cash flows from the Trust allocated to Transferor or the
certificateholders of other Series (as provided in the related Supplements)
and in no event shall the Trust, Trustee or the Investor Holders be liable
therefor. The Class A Servicing Fee shall be payable to Servicer solely to
the extent amounts are available for distribution in respect thereof
pursuant to Sections 4.11(a)(ii) and 4.13(a). The Class B Servicing Fee
shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to Sections 4.11(b)(ii) and
4.13(c). The Collateral Interest Servicing Fee shall be payable solely to
the extent amounts are available for distribution in respect thereof
pursuant to Section 4.13(f) or if applicable Section 4.11(c)(i).
SECTION IV. Optional Repurchase; Reassignment and Termination
Provisions. (a) The Investor Certificates shall be subject to retransfer
to Transferor at its option on any Distribution Date, on or after the
Distribution Date on which the Invested Amount is reduced to an amount less
than or equal to 5% of the Initial Invested Amount by deposit into the
Collection Account for application in accordance with Section 12.2 of an
amount equal to the sum of (i) the Invested Amount, plus (ii) accrued and
unpaid interest on the Investor Certificates through the day preceding the
Distribution Date on which the repurchase occurs. Upon the tender of the
outstanding Series 1996-A Certificates by the Holders (and without tender
in the case of the Collateral Interest), Trustee shall distribute such
amount, together with all funds on deposit in the Principal Account to the
Investor Holders on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Investor
Holders. Following any redemption, the Investor Holders shall have no
further rights with respect to the Receivables. If Transferor fails for any
reason to deposit in the Collection Account the aggregate purchase price
for the Investor Certificates, payments shall continue to be made to the
Investor Holders in accordance with the terms of the Agreement and this
Series Supplement.
(b) The amount required to be deposited by Transferor with respect to
the Investor Certificates in connection with any reassignment of
Receivables pursuant to Section 2.6 shall equal the sum of (i) the Invested
Amount (less any amounts then on deposit in the Principal Account), plus
(ii) accrued and unpaid interest on the Investor Certificates through the
day preceding the Distribution Date on which the repurchase occurs. The
amount so deposited together with the amount then on deposit in the
Principal Account shall be distributed to the Holders of the Investor
Certificates in final payment of the Invested Amount and all such other
amounts on the Distribution Date on which it is deposited.
(c) Proceeds available from the sale of Receivables in accordance
with Section 12.2(c) on the Series 1996-A Termination Date shall be
treated, to the extent of the Invested Amount, as Collections of Principal
Receivables that have been allocated to the Investor Certificates and any
excess shall be treated as Collections of Finance Charge Receivables that
have been allocated to the Investor Certificates, in each case with respect
to the prior Monthly Period.
(d) Transferor may from time to time, purchase Class A and Class B
Certificates on the secondary market and request Trustee to cancel such
Class A and Class B Certificates held by Transferor and reduce the Class A
or Class B Invested Amount, as applicable, by a corresponding amount;
provided that Transferor may make such purchases and requests for
cancellation of Class B Certificates resulting in a reduction of Class B
Invested Amount only to the extent that it has made (or will make
contemporaneously with any such purchase and request for cancellation of
Class B Certificates) purchases and requests for cancellations of Class A
Certificates that result in at least a pro rata reduction of the Class A
Invested Amount.
SECTION V. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1996-A Certificates to
Trustee (in definitive, fully registered form) for authentication in
accordance with Section 6.1. Trustee shall deliver such Certificates when
authenticated in accordance with Section 6.2. The Collateral Interest
shall be issued as provided in this Series Supplement and the Loan
Agreement.
SECTION VI. 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-A 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 VII. Article IV of Agreement. Sections 4.1 through 4.5 shall
read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1 through 4.5 thereof) shall be read in its entirety as follows
and shall be applicable only to the Investor Certificates:
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.6 Rights of Holders 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 applicable Investor
Percentage of Collections received with respect to the Receivables and (b)
funds on deposit in the Collection Account, the Finance Charge Account, the
Principal Account, the Cash Collateral Account and the Distribution
Account. The Collateral Interest shall be subordinate to the Class A
Certificates and the Class B Certificates to the extent described herein.
The Class B Certificates shall be subordinate to the Class A Certificates
to the extent described herein. Transferor shall not have any interest in
the Collection Account, the Finance Charge Account, the Principal Account,
the Cash Collateral Account and the Distribution Account, except as
specifically provided in this Article IV.
SECTION 4.7 Allocations. (a) Allocations During the Revolving
Period. During the Revolving Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders 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;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage 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; and
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage 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.
In addition, an amount equal to the product of (1) the Class A
Investor Allocation Percentage 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 each Date of Processing shall be
treated as Shared Principal Collections.
(b) Allocations During the Controlled Amortization Period. During
the Controlled Amortization Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders 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;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage 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;
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage 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; and
(iv) (A) allocate to the Investor Holders an amount equal to
the product of (1) the Class A Investor Allocation Percentage 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 that the amount allocated
pursuant to this Section 4.7(b)(iv)(A) during any Monthly Period
shall not exceed the Controlled Payment Amount for the related
Transfer Date (after taking into account any payments to be made on
the immediately preceding Distribution Date) and (B) treat as Shared
Principal Collections any amount not allocated as a result of the
proviso to clause (A).
(c) Allocations During the Early Amortization Period. During the
Early Amortization Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders 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;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections and (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;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage 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; and
(iv) (A) allocate to the Investor Holders an amount equal to
the product of (1) the Class A Investor Allocation Percentage on the
Date of Processing of such Collections and (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 that the aggregate
amount allocated pursuant to this Section 4.7(c)(iv)(A) during any
Monthly Period shall not exceed the Invested Amount 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 Invested Amount to be made on the
Transfer Date relating to such Monthly Period) and (B) treat as
Shared Principal Collections any amount not allocated as a result of
the proviso to clause (A).
(d) During any period when Servicer is permitted by Section 4.3 to
make a single monthly deposit to the Collection Account, amounts allocated
to the Investor Holders pursuant to Sections 4.7(a), (b) and (c) with
respect to any Monthly Period need not be deposited into the Collection
Account or any Series Account prior to the related Transfer Date, and, when
so deposited, (x) may be deposited net of any amounts required to be
distributed to Transferor and, if WFN is Servicer, Servicer and (y) shall
be deposited into the Finance Charge Account (in the case of Collections of
Finance Charge Receivables) and the Principal Account (in the case of
Collections of Principal Receivables (not including any Shared Principal
Collections allocated to Series 1996-A pursuant to Section 4.15)), subject
in either case to the proviso to the next sentence. At any other time,
amounts so allocated on each Date of Processing shall be deposited on that
Date of Processing into the Finance Charge Account (in the case of
Collections of Finance Charge Receivables) and the Principal Account (in
the case of Collections of Principal Receivables (not including any Shared
Principal Collections allocated to Series 1996-A pursuant to Section
4.15)), provided that:
(i) with respect to each Monthly Period falling in the Revolving
Period (and with respect to that portion of each Monthly Period in
the Controlled Amortization Period falling on or after the day on
which Collections of Principal Receivables equal to the related
Controlled Payment Amount have been allocated pursuant to Section
4.7(b)(iv) and deposited pursuant to Section 4.7(d)), Collections of
Finance Charge Receivables shall be deposited into the Finance Charge
Account only until such time as the aggregate amount so deposited
equals the sum (the "Target Amount") of (A) the amounts of Class A
Monthly Interest, Class B Monthly Interest, Class A Deficiency Amount
and Class A Additional Interest (if any), Class B Deficiency Amount
and Class B Additional Interest (if any), (B) if WFN is not Servicer,
the Servicing Fee, each due on the related Distribution Date, (C) any
Collateral Monthly Interest due on the related Transfer Date and any
other amounts that Transferor or Servicer knows will be owed under
the Loan Agreement on the related Transfer Date to the extent such
amounts are payable under the Loan Agreement from Available
Non-Principal Funds (as defined in the Loan Agreement) and (D) any
Finance Charge Shortfalls for any other Series in Group One (as
defined in the related Supplement); and
(ii) with respect to each Monthly Period falling in the
Revolving Period, Collections of Principal Receivables allocated to
the Investor Holders pursuant to Section 4.7(a)(ii) and (iii) shall
(after an amount equal to any Collateral Monthly Principal for that
Monthly Period has been deposited into the Principal Account) be paid
to Transferor (or, if the Transferor Amount is less than the
Specified Transferor Amount, deposited into the Excess Funding
Account), but Transferor shall make an amount equal to the
Reallocated Principal Collections for the related Transfer Date
available on that Transfer Date for application in accordance with
Section 4.14.
With respect to any Monthly Period when deposits of Collections of Finance
Charge Receivables into the Finance Charge Account are limited in
accordance with clause (i) of the preceding proviso, notwithstanding such
limitation: (1) "Excess Spread" for the related Transfer Date shall be
calculated as if the full amount of Finance Charge Collections allocated to
the Investor Certificates during that Monthly Period had been deposited in
the Finance Charge Account and applied on such Transfer Date in accordance
with Sections 4.11(a), 4.11(b) and 4.11(c); (2) Collections of Finance
Charge Receivables released to Transferor pursuant to such clause (i) shall
be deemed, for purposes of all calculations under this Supplement and the
Loan Agreement, to have been distributed on account of or otherwise applied
to the items specified in Sections 4.11(a), 4.11(b), 4.11(c) and 4.13 to
which such amounts would have been applied (and in the priority in which
they would have been applied) had such amounts been available in the
Finance Charge Account on such Transfer Date; and (3) for purposes of the
Loan Agreement, "Available Principal Funds" and "Available Non-Principal
Funds" for the related Transfer Date shall be calculated as if the proviso
set forth in Section 4.7(d)(i) and (ii) had not applied and the full amount
of Collections allocated to the Investor Certificates during that Monthly
Period had been deposited in the Finance Charge Account and the Principal
Account and applied on such Transfer Date in accordance with Article IV. If
the amount actually available for application as Available Non-Principal
Funds under the Loan Agreement is insufficient to make all payments,
distributions and deposits required to be made under the Loan Agreement on
such Transfer Date, Transferor shall deposit, on such Transfer Date, an
amount equal to the difference between the Available Non-Principal Funds,
as so calculated, and the amount actually available. If the amount actually
available for application as Available Principal Funds under the Loan
Agreement is insufficient to make all payments, distributions and deposits
required to be made under the Loan Agreement on such Transfer Date,
Transferor shall deposit, on such Transfer Date, an amount equal to the
difference between the Available Principal Funds, as so calculated, and the
amount actually available. In addition, the proviso set forth in Section
4.7(d)(i) and (ii) shall not apply at any time when the most recently
determined Available Cash Collateral Amount is less than the Required Cash
Collateral Amount. To avoid doubt, the calculations referred to in the
preceding clause (2) include the calculations required by clause (c) of the
definition of Class A Invested Amount, clause (f) of the definition of
Class B Invested Amount, clause (f) of the definition of Collateral
Interest and Section 4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the Target
Amount for that Monthly Period as previously calculated by Servicer, then
(x) Servicer shall (on the same Business Day) inform Transferor of such
determination, and (y) within two Business Days of receiving such notice
Transferor shall deposit into the Finance Charge Account funds in an amount
equal to the amount of Collections of Finance Charge Receivables allocated
to the Investor Certificates for that Monthly Period but not deposited into
the Finance Charge Account due to the operation of clause (i) (but not in
excess of the amount required so that the aggregate amount deposited for
the subject Monthly Period equals the Target Amount). In addition, if on
any Transfer Date the Transferor Amount will be less than the Specified
Transferor Amount after giving effect to all transfers and deposits on that
Transfer Date, Transferor shall, on that Transfer Date, deposit into the
Principal Account funds in an amount equal to the amounts of Class A
Available Funds and Excess Spread that are required to be treated as
Investor Principal Collections pursuant to Sections 4.11(a)(iii) and 4.13
but are not available from funds in the Finance Charge Account as a result
of the operation of clause (i).
(e) On any date, Servicer may withdraw from the Collection Account
or any Series Account any amounts inadvertently deposited in such account
that should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount of
monthly interest distributable to the Class A Certificates shall equal the
product of (i) one-twelfth, times (ii) the Class A Certificate Rate, times
(iii) the outstanding principal balance of the Class A Certificates
determined as of the Record Date preceding the related Transfer Date (the
"Class A Monthly Interest"); provided that (x) Class A Monthly Interest for
the first Distribution Period will be $2,984,850 and (y) in addition to
Class A Monthly Interest an amount equal to the amount of any unpaid Class
A Deficiency Amounts, plus an amount equal to the product of (A) (1)
one-twelfth, times (2) the sum of the Class A Certificate Rate, plus 2% per
annum, and (B) any Class A Deficiency Amount from the prior Transfer Date
(or the portion thereof which has not theretofore been paid to Class A
Holders) (the "Class A Additional Interest"), shall also be distributable
to the Class A Certificates, and on such Transfer Date Trustee shall
deposit such funds, to the extent available, into the Distribution Account.
The "Class A Deficiency Amount" for any Transfer Date shall equal the
excess, if any, of the aggregate amount accrued pursuant to this Section
4.8(a) as of the prior Distribution Period over the amount actually
transferred from the Distribution Account for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) one-twelfth, times (ii) the
Class B Certificate Rate, times (iii) the outstanding principal balance of
the Class B Certificates determined as of the Record Date preceding the
related Transfer Date (the "Class B Monthly Interest"); provided that (x)
Class B Monthly Interest for the first Distribution Period will be $327,250
and (y) in addition to the Class B Monthly Interest an amount equal to the
amount of any unpaid Class B Deficiency Amounts, plus an amount equal to
the product of (A) (1) one-twelfth, times (2) the sum of the Class B
Certificate Rate, plus 2% per annum, and (B) any Class B Deficiency Amount
from the prior Transfer Date (or the portion thereof which has not
theretofore been paid to Class B Holders) (the "Class B Additional
Interest"), shall also be distributable to the Class B Certificates, and on
such Transfer Date Trustee shall deposit such funds, to the extent
available, into the Distribution Account. The "Class B Deficiency Amount"
for any Transfer Date shall equal the excess, if any, of the aggregate
amount accrued pursuant to this Section 4.8(b) as of the prior Distribution
Period over the amount actually transferred from the Distribution Account
for payment of such amount.
(c) The amount of monthly interest distributable to the Collateral
Interest (the "Collateral Monthly Interest") shall equal the product of (i)
(A) a fraction, the numerator of which is the actual number of days in the
related Distribution Period and the denominator of which is 360, times (B)
the Collateral Rate in effect with respect to the related Distribution
Period, times (ii) the Collateral Interest determined as of the Record Date
preceding such Transfer Date.
SECTION 4.9 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 Amortization Period or, if earlier, the Early
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 Amortization Period prior to the Class A
Final Scheduled Payment Date, the Controlled Payment Amount for such
Transfer Date and (iii) the Class A Invested Amount on such Transfer Date
prior to any distributions thereon 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 Amortization Period,
beginning with the Transfer Date after the one on which the Class A
Invested Amount is reduced to zero, and for the Early Amortization Period
beginning with the Transfer Date on which the Class A Invested Amount is
reduced to zero (in either case after giving effect to payments to be made
on the related Distribution Date), shall be an amount equal to the lesser
of (i) the excess, if any, of (A) the Available Investor Principal
Collections on such Transfer Date over (B) any Class A Monthly Principal on
such Transfer Date and (ii) the Class B Invested Amount (after taking into
account any adjustments to be made on such Transfer Date pursuant to
Sections 4.12 and 4.14) 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 (i) during the Revolving
Period following any reduction of the Required Enhancement Amount, an
amount equal to the lesser of (A) the Enhancement Surplus on such Transfer
Date and (B) the Available Investor Principal Collections on such Transfer
Date or (ii) during the Controlled Amortization Period or Early
Amortization Period an amount equal to the least of (A) the Enhancement
Surplus on such Transfer Date, (B) the excess, if any, of (1) the Available
Investor Principal Collections on such Transfer Date over (2) the sum of
the Class A Monthly Principal and the Class B Monthly Principal for such
Transfer Date and (C) the Collateral Interest on such Transfer Date (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14).
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, 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 such Transfer Date, plus (vii) the Class A Uncovered Dilution
Amount for the related Monthly Period, exceeds the Class A Available Funds
for the related Monthly Period.
(b) On or before each Transfer Date, 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 sum of (A) the Class B Investor
Default Amount, if any, for such Transfer Date and (B) the Class B
Uncovered Dilution Amount for the related Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B
Required Amount for such Transfer Date is greater than zero, Servicer shall
give written notice to Trustee of such positive Class A Required Amount or
Class B Required Amount on or before such Transfer Date. In addition:
(i) If the Class A Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) 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 (or, in the case of Excess
Spread, deemed, in accordance with Section 4.7(d), to be distributed)
from the Finance Charge Account (and the Cash Collateral Account) on
such Transfer Date pursuant to Section 4.13(a). If the Class A
Required Amount for such Transfer Date exceeds the amount of Excess
Spread (and any Required Draw Amount) with respect to such Transfer
Date, the Collections of Principal Receivables allocable to the
Collateral Interest and the Class B Certificates with respect to the
prior Monthly Period shall be applied as specified in Section 4.14.
(ii) If the Class B Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) with respect to such Transfer Date in an amount
equal to the Class B Required Amount, to the extent available, for
such Transfer Date shall be distributed (or, in the case of Excess
Spread, deemed, in accordance with Section 4.7(d), to be distributed)
from the Finance Charge Account (and the Cash Collateral Account) on
such Transfer Date pursuant to Section 4.13(c). If the Class B
Required Amount for such Transfer Date exceeds the amount of Excess
Spread (and any Required Draw Amount) available to fund the Class B
Required Amount pursuant to Section 4.13(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 4.14;
provided that the sum of any payments pursuant to this paragraph shall not
exceed the sum of the Class A Required Amount and the Class B Required
Amount.
SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to withdraw, and Trustee, acting in
accordance with such instructions, shall withdraw on such Transfer Date or
the related Distribution Date, as applicable, to the extent of available
funds, the amounts required to be withdrawn from the Finance Charge
Account, the Principal Account and the Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to Class A Monthly Interest, plus any Class
A Deficiency Amount, plus any Class A Additional Interest (in each
case for such Transfer Date) shall be deposited by Servicer or
Trustee into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date plus any Class A Servicing Fee due but not paid to
Servicer on any prior Transfer Date (less, if WFN is Servicer,
amounts previously retained towards payment of such fees) shall be
distributed to Servicer;
(iii) an amount equal to the sum of the Class A Investor
Default Amount and the Class A Uncovered Dilution Amount, if any, for
the preceding Monthly Period shall be treated (or deemed, in
accordance with Section 4.7(d), to be treated) as a portion of
Investor Principal Collections and, during the Controlled
Amortization Period or the Early Amortization Period, 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 4.13.
(b) An amount equal to the Class B Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to the Class B Monthly Interest, plus any
Class B Deficiency Amount, plus any Class B Additional Interest (in
each case for such Transfer Date) shall be deposited by Servicer or
Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus any Class B Servicing Fee due but not paid to
Servicer on any prior Transfer Date for such Transfer Date (less, if
WFN is Servicer, amounts previously retained towards payment of such
fees) shall be distributed to Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(c) An amount equal to the Collateral Available Funds for the
related Monthly Period will be distributed on each Transfer Date, to the
extent available, in the following priority:
(i) if neither Transferor nor any of its Affiliates is
Servicer, an amount equal to the Collateral Interest Servicing Fee
for such Transfer Date, plus any Collateral Interest Servicing Fee
due but not paid to Servicer on any prior Transfer Date shall be
distributed to Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on each Transfer Date, to the extent available, 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; and
(ii) an amount equal to the Available Investor Principal
Collections remaining after the application specified in Section
4.11(d)(i) shall be treated as Shared Principal Collections.
(e) On each Transfer Date commencing with the Transfer Date falling
in the calendar month following the one in which the Controlled
Amortization Period or the Early Amortization Period (whichever is earlier)
commences, an amount equal to the Available Investor Principal Collections
for the related Monthly Period will be distributed on such Transfer Date,
to the extent available, in the following priority:
(i) an amount equal to the Class A Monthly Principal for such
Transfer Date, shall be deposited into the Distribution Account;
(ii) after giving effect to the distribution referred to in
clause (i), 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-A Termination Date, in which
case on the Series 1996-A 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; and
(iv) an amount equal to the Available Investor Principal
Collections remaining after the applications specified in clauses
(i), (ii) and (iii) above shall be treated as Shared Principal
Collections.
(f) On each Distribution Date, Trustee shall pay in accordance with
Section 5.1(a) to the Class A Holders from the Distribution Account, the
amount deposited into the Distribution Account pursuant to Section
4.11(a)(i) on the preceding Transfer Date and to the Class B Holders from
the Distribution Account, the amount deposited into the Distribution
Account pursuant to Section 4.11(b)(i) on the preceding Transfer Date.
(g) On the first Distribution Date with respect to the earlier to
occur of the Controlled Amortization Period and the Early Amortization
Period and on each Distribution Date thereafter, Trustee, acting in
accordance with instructions from Servicer, shall pay in accordance with
Section 5.1 from the Distribution Account the amount so deposited into the
Distribution Account pursuant to Sections 4.11(e) 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 Invested Amount shall be
paid to the Class A Holders; and
(ii) for each Distribution Date with respect to the Early
Amortization Period and on or after 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 Invested Amount shall be
paid to the Class B Holders.
SECTION 4.12 Investor Charge-Offs. (a) On or before each Transfer
Date, Servicer shall calculate the sum of the Class A Investor Default
Amount and the Class A Uncovered Dilution Amount (such sum being the "Class
A Reduction Amount"). If on any Transfer Date, the Class A Reduction Amount
for the prior Monthly Period exceeds the sum of the amount allocated with
respect thereto pursuant to Section 4.11(a)(iii), Section 4.13(a)
(including amounts withdrawn from the Cash Collateral Account for such
allocation) and Section 4.14 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 Reduction 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. If such reduction would cause the Collateral Interest to be a
negative number, the Collateral Interest will be reduced to zero, and the
Class B Invested Amount (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections on
such Transfer Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If such reduction would cause
the Class B Invested Amount to be a negative number, the Class B Invested
Amount will be reduced to zero, and the Class A Invested Amount will be
reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not by more than the Class A Reduction Amount for
such Transfer Date (a "Class A Investor Charge-Off"). If the Class A
Invested Amount 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 allocated and available for such purpose pursuant
to Section 4.13(b).
(b) On or before each Transfer Date, Servicer shall calculate the
sum of the Class B Investor Default Amount and the Class B Uncovered
Dilution Amount (such sum being the "Class B Reduction Amount"). If on any
Transfer Date, the Class B Reduction Amount for the prior Monthly Period
exceeds the amount of Excess Spread and Reallocated Collateral Principal
Collections which are allocated and available to fund such amount pursuant
to Section 4.13(c) (including amounts withdrawn from the Cash Collateral
Account for such allocation) and Section 4.14, 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 Section 4.12(a)) will be reduced by
the amount of such excess but not by more than the lesser of the Class B
Reduction 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 Section 4.12(a)) for such Transfer Date. If such reduction
would cause the Collateral Interest to be a negative number, the Collateral
Interest shall be reduced to zero and the Class B Invested Amount 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 Reduction Amount for
such Transfer Date (a "Class B Investor Charge-Off"). The Class B Invested
Amount will also be reduced by the amount of Reallocated Class B Principal
Collections in excess of the Collateral Interest pursuant to Section 4.14
and the amount of any portion of the Class B Invested Amount allocated to
the Class A Certificates to avoid a reduction in the Class A Invested
Amount pursuant to Section 4.12(a). The Class B Invested Amount 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 allocated and available for that purpose as
described under Section 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate the
sum of the Collateral Default Amount and the Collateral Uncovered Dilution
Amount (such sum being the "Collateral Reduction Amount"). If on any
Transfer Date, the Collateral Reduction Amount for the prior Monthly Period
exceeds the amount of Excess Spread which is allocated and available to
fund such amount pursuant to Section 4.13(g), the Collateral Interest will
be reduced by the amount of such excess but not by more than the lesser of
the Collateral Reduction 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 4.14 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 Invested Amount, pursuant to Section 4.12(a), or
the Class B Invested Amount, pursuant to Section 4.12(b), respectively. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of the Excess Spread allocated and available for that purpose as
described under Section 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to apply, and Trustee, acting in
accordance with such instructions shall apply (or be deemed, in accordance
with Section 4.7(d), 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 will be used to fund the Class A Required
Amount and be applied in accordance with, and in the priority set forth in,
Section 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed will be treated as a
portion of Investor Principal Collections and, during the Controlled
Amortization Period or the Early Amortization Period, 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 will be used to fund the Class B Required
Amount and be applied first in accordance with, and in the priority set
forth in, Section 4.11(b) and then any remaining amount available to pay
the Class B Reduction Amount shall be treated as a portion of Investor
Principal Collections and, during the Controlled Amortization Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced below the initial Class B Invested Amount
for reasons other than the payment of principal to the Class B Holders (but
not in excess of the aggregate amount of such reductions which have not
been previously reimbursed) will be treated as a portion of Investor
Principal Collections and, during the Controlled Amortization Period or the
Early Amortization Period, 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
will be paid to the Collateral Interest Holder in accordance with the Loan
Agreement;
(f) if Transferor or any of its Affiliates is Servicer, an amount
equal to the aggregate amount of accrued but unpaid Collateral Interest
Servicing Fees (less, if WFN is Servicer, amounts previously retained
towards payment of such fee) will be paid to Servicer;
(g) an amount equal to the Collateral Reduction Amount, if any, for
the related Monthly Period will be treated as a portion of Investor
Principal Collections and, during the Controlled Amortization Period or the
Early Amortization Period, 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 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) will
be treated as a portion of Investor Principal Collections and, during the
Controlled Amortization Period or the Early Amortization Period, deposited
into the Principal Account on such Transfer Date;
(i) an amount up to the excess, if any, of the Required Cash
Collateral Amount (determined after all deposits, withdrawals, reductions,
payments and adjustments to be made with respect to such date) over the
Available Cash Collateral Amount (without giving effect to any deposit made
on such date hereunder) shall be deposited in the Cash Collateral Account;
(j) an amount equal to all other amounts due under the Loan Agreement
shall be distributed in accordance with the Loan Agreement; and
(k) the balance, if any, after giving effect to the payments made
pursuant to clauses (a) through (j) shall constitute "Excess Finance Charge
Collections" to be applied with respect to other Series in accordance with
Section 4.5 of the Agreement.
SECTION 4.14 Reallocated Principal Collections. On or before each
Transfer Date, Servicer shall instruct Trustee in writing (which writing
shall be substantially in the form of Exhibit B) to, and Trustee in
accordance with such instructions shall, withdraw from the Principal
Account and apply Collections of Principal Receivables 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 sum of (x) the amount of Excess Spread with respect to the
related Monthly Period and (y) the Available Cash Collateral Amount
with respect to such Transfer Date, shall be applied pursuant to
Sections 4.11(a)(i), (ii) and (iii); 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 sum of (x) the amount of Excess Spread allocated and available to
the Class B Certificates pursuant to Section 4.13(c) on such Transfer
Date and (y) the amount withdrawn from the Cash Collateral Account
pursuant to Section 4.17(c) which is remaining after application
pursuant to Section 4.13(c) with respect to such Transfer Date shall
be applied first pursuant to Sections 4.11(b)(i) and (ii) and then
pursuant to Section 4.13(c);
provided, that:
(1) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clauses (a) and (b) (the
"Reallocated Principal Collections") shall not exceed the lesser of
(A) the product of (x) the sum of the Collateral Investor Allocation
Percentage and the Class B Investor Allocation Percentage for the
Monthly Period relating to such Transfer Date and (y) the Investor
Percentage for the Monthly Period relating to such Transfer Date and
(z) the amount of Collections of Principal Receivables for the
Monthly Period relating to such Transfer Date and (B) the sum of the
Collateral Interest and the Class B Invested Amount after giving
effect to any Collateral Charge-Offs and Class B Investor Charge-Offs
for such Transfer Date; and
(2) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clause (b) shall not exceed the
lesser of (A) the product of (x) the Collateral Investor Allocation
Percentage for the Monthly Period relating to such Transfer Date and
(y) the Investor Percentage for the Monthly Period relating to such
Transfer Date and (z) the amount of Collections of Principal
Receivables for the Monthly Period relating to such Transfer Date and
(B) the Collateral Interest after giving effect to any Collateral
Charge-Offs for such Transfer Date.
With respect to any Transfer Date, any Reallocated Principal
Collections up to and including the amount specified in clause (2)(A) above
shall constitute "Reallocated Collateral Principal Collections," and any
Reallocated Principal Collections in excess of such amount shall constitute
"Reallocated Class B Principal Collections."
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.
If 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 Invested Amount shall be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If the reallocation of
Reallocated Principal Collections would cause the Class B Invested Amount
(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 Invested
Amount (after giving effect to any Class B Investor Charge-Offs for such
Transfer Date) to be reduced to zero.
SECTION 4.15 Shared Principal Collections; Amounts Transferred from
the Excess Funding Account to the Principal Account. (a) The Shared
Principal Collections allocable to Series 1996-A on any Transfer Date
pursuant to Section 4.15(b) shall be applied as Available Investor
Principal Collections pursuant to Section 4.11 and pursuant to such Section
4.11 shall be deposited in the Distribution Account or distributed in
accordance with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1996-A with
respect to any Transfer Date means an amount equal to the Principal
Shortfall, if any, with respect to Series 1996-A for such Transfer Date;
provided that if the aggregate amount of Shared Principal Collections for
all Series in Group One for such Transfer Date is less than the Cumulative
Principal Shortfall for such Transfer Date, then Shared Principal
Collections allocable to Series 1996-A on such Transfer Date shall equal
the product of (i) Shared Principal Collections for all Series in Group One
for such Transfer Date and (ii) a fraction, the numerator of which is the
Principal Shortfall with respect to Series 1996-A for such Transfer Date
and the denominator of which is the aggregate amount of Cumulative
Principal Shortfall for all Series in Group One for such Transfer Date. On
each Transfer Date, Trustee (in accordance with instructions from Servicer)
shall withdraw Shared Principal Collections allocable to Series 1996-A from
the Collection Account and deposit the same into the Principal Account.
(c) Solely for the purpose of determining the amount of Available
Investor Principal Collections to be treated as Shared Principal
Collections on any Transfer Date allocable to other Series in Group One, on
each Determination Date, Servicer shall determine the Class A Required
Amount, Class B Required Amount, Excess Spread and Reallocated Principal
Collections as of such Determination Date for the following Transfer Date.
(d) The aggregate amount allocable to Series 1996-A and required to
be transferred from the Excess Funding Account into the Principal Account
with respect to any Transfer Date for purposes of the definition of
"Investor Principal Collections" means an amount equal to the Principal
Shortfall, if any, with respect to Series 1996-A for such Transfer Date
minus the amount of Shared Principal Collections allocated to Series 1996-A
from other Series in Group One on that Transfer Date; provided that if the
aggregate amount required to be withdrawn from the Excess Funding Account
pursuant to Section 4.2 for all Series (whether or not included in Group
One) for such Transfer Date is less than the cumulative Principal Shortfall
minus available Shared Principal Collections for all Series (whether or not
included in Group One) for such Transfer Date, then the aggregate amount
allocable to Series 1996-A and required to be transferred on such Transfer
Date shall equal the product of (i) the aggregate amount required to be
withdrawn from the Excess Funding Account pursuant to Section 4.2 for all
Series for such Transfer Date and (ii) a fraction, (A) the numerator of
which is (A) the Principal Shortfall with respect to Series 1996-A for such
Transfer Date minus the amount of Shared Principal Collections allocated to
Series 1996-A from other Series in Group One on that Transfer Date and (B)
the denominator of which is the cumulative Principal Shortfall for all
Series minus available Shared Principal Collections for all Series (whether
or not included in Group One) for such Transfer Date.
SECTION 4.16 Finance Charge Account, Principal Account and
Distribution Account. (a) Trustee shall establish and maintain with an
Eligible Institution, which may be Trustee, in the name of the Trust, on
behalf of the Trust, for the benefit of the Investor Holders, three
segregated trust accounts (the "Finance Charge Account", the "Principal
Account", and the "Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Investor Holders. Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Finance Charge Account, the
Principal Account and the Distribution Account and in all proceeds thereof.
The Finance Charge Account, the Principal Account and the Distribution
Account shall be under the sole dominion and control of Trustee for the
benefit of the Investor Holders. If at any time the institution holding the
Finance Charge Account, the Principal Account and the Distribution Account
ceases to be an Eligible Institution, Transferor shall notify Trustee, and
Trustee upon being notified (or Servicer on its behalf) shall, within 10
Business Days, establish a new Finance Charge Account, a new Principal
Account and a new Distribution Account meeting the conditions specified
above, and shall transfer any cash or any investments to such new Finance
Charge Account, Principal Account, and Distribution Account. Trustee, at
the direction of Servicer, shall make withdrawals from the Finance Charge
Account, the Principal Account and the Distribution Account from time to
time, in the amounts and for the purposes set forth in this Series
Supplement and the Agreement. Trustee at all times shall maintain accurate
records reflecting each transaction in the Finance Charge Account, the
Principal Account and the Distribution Account and that the funds held
therein shall at all times be held in trust for the benefit of the Investor
Holders.
(b) Funds on deposit in the Finance Charge Account and the Principal
Account from time to time shall be invested and reinvested at the direction
of Servicer by Trustee in Eligible Investments that will mature so that
such funds will be available for withdrawal on the following Transfer Date.
Trustee shall maintain for the benefit of the Investor Holders possession
of the negotiable instruments or securities, if any, evidencing such
Eligible Investments. No Eligible Investment shall be disposed of prior to
its maturity unless Servicer so directs and either (i) such disposal will
not result in a loss of all or part of the principal portion of such
Eligible Investment or (ii) prior to the maturity of such Eligible
Investment, a default occurs in the payment of principal, interest or any
other amount with respect to such Eligible Investment. On each Distribution
Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Finance Charge Account and
the Principal Account shall be treated as Collections of Finance Charge
Receivables allocated to the Invested Amount for purposes of this Series
Supplement.
SECTION 4.17 Cash Collateral Account. (a) Servicer shall establish
and maintain with an Eligible Institution, which may be Trustee, in the
name of Trustee, on behalf of the Trust, a segregated trust account (the
"Cash Collateral Account") bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Investor
Holders. Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Cash Collateral Account and in all
proceeds thereof. The Cash Collateral Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders.
If at any time an Eligible Institution holding the Cash Collateral Account
ceases to be an Eligible Institution, Transferor shall notify Trustee, and
Trustee upon being notified (or Servicer on its behalf) shall within 10
Business Days establish a new Cash Collateral Account meeting the
conditions specified above, and shall transfer any cash or any investments
to such new Cash Collateral Account. Trustee, at the direction of
Servicer, shall make deposits to and withdrawals from the Cash Collateral
Account in the amounts and at the times set forth in this Series Supplement
and the Loan Agreement. All withdrawals from the Cash Collateral Account
shall be made in the priority set forth below.
(b) On the Closing Date, Transferor shall deposit $13,750,000 in
immediately available funds into the Cash Collateral Account. Funds on
deposit in the Cash Collateral Account from time to time shall be invested
and/or reinvested at the direction of Servicer by Trustee in Eligible
Investments that will mature so that such funds will be available for
withdrawal on the following Transfer Date. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and either (i)
such disposal will not result in a loss of all or part of the principal
portion of such Eligible Investment or (ii) prior to the maturity of such
Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. Trustee
shall maintain for the benefit of the Investor Holders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. 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 Cash Collateral Account shall be treated as
Collections of Finance Charge Receivables allocated to the Invested Amount
and shall be part of Class A Available Funds, Class B Available Funds and
Collateral Available Funds for such Transfer Date. For purposes of
determining the availability of funds or the balances in the Cash
Collateral Account for any reason under this Series Supplement, all
investment earnings on such funds shall be deemed not to be available or on
deposit.
(c) On each Determination Date, Servicer shall calculate the amount
(the "Required Draw Amount") by which the sum of the amounts specified in
clauses (a) through (d) of Section 4.13 with respect to the related
Transfer Date exceeds the amount of Excess Spread allocated with respect to
the related Monthly Period. In the event that for any Transfer Date the
Required Draw Amount is greater than zero, Servicer shall give written
notice to Trustee and the Collateral Interest Holder of such positive
Required Draw Amount on the related Determination Date. On the related
Transfer Date, the Required Draw Amount, if any, up to the Available Cash
Collateral Amount, shall be withdrawn from the Cash Collateral Account and
distributed to fund any deficiency pursuant to Section 4.13(a) through (d)
(in the order of priority set forth in Section 4.13).
(d) If, after giving effect to all deposits to and withdrawals from
the Cash Collateral Account and adjustments to the Collateral Interest with
respect to any Transfer Date, the Collateral Interest has been reduced to
zero and there is an Enhancement Surplus (after giving effect to such
reduction), Trustee, acting in accordance with the instructions of
Servicer, shall withdraw an amount equal to such Enhancement Surplus from
the Cash Collateral Account, and apply it in accordance with the Loan
Agreement.
SECTION 4.18 Determination of LIBOR. As needed for the determination
of Collateral Rate, Trustee will determine LIBOR pursuant to the terms of
the Loan Agreement.
SECTION 4.19 Transferor's or Servicer's Failure to Make a Deposit or
Payment. If Servicer or Transferor fails to make, or give instructions to
make, any payment or deposit (other than as required by Sections 2.5, 2.6
or 12.2) required to be made or given by Servicer or Transferor,
respectively, at the time specified in the Agreement (including applicable
grace periods), Trustee shall make such payment or deposit from the Finance
Charge Account, the Principal Account, the Cash Collateral Account and/or
the Distribution Account, as applicable, without instruction from Servicer
or Transferor. Trustee shall be required to make any such payment, deposit
or withdrawal hereunder only to the extent that Trustee has sufficient
information to allow it to determine the amount thereof; provided that
Trustee shall in all cases be deemed to have sufficient information to
determine the amount of interest payable to the Investor Holders on each
Distribution Date. Servicer shall, upon request of Trustee, promptly
provide Trustee with all information necessary to allow Trustee to make
such payment, deposit or withdrawal. Such funds or the proceeds of such
withdrawal shall be applied by Trustee in the manner in which such payment
or deposit should have been made by Transferor or Servicer, as the case may
be.
SECTION VIII. 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 Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, Trustee
shall distribute (in accordance with the certificate delivered on or before
the related Transfer Date by Servicer to Trustee pursuant to Section
3.4(b)) to each Class A Holder of record on the immediately preceding
Record Date (other than as provided in Section 2.6 or Section 12.2
respecting a final distribution) such Holder's pro rata share (based on the
share of the aggregate outstanding principal balance of all Class A
Certificates represented by the Class A Certificates held by such Holder)
of amounts on deposit in the Distribution Account as are payable to the
Class A Holders pursuant to Section 4.11 by check mailed to each Class A
Holder (at such Holder'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 by wire transfer in immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
Date by Servicer to Trustee pursuant to Section 3.4(b)) to each Class B
Holder of record on the immediately preceding Record Date (other than as
provided in Section 2.6 or Section 12.2 respecting a final distribution)
such Holder's pro rata share (based on the share of the aggregate
outstanding principal balance of all Class B Certificates represented by
the Class B Certificates held by such Holder) of amounts on deposit in the
Distribution Account as are payable to the Class B Holders pursuant to
Section 4.11 by check mailed to each Class B Holder (at such Holder'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 by wire transfer in
immediately available funds.
SECTION 5.2 Reports. (a) Monthly Series 1996-A Servicer's
Certificate. On or before each Distribution Date, Trustee shall forward to
each Investor Holder and each Rating Agency a statement substantially in
the form of Exhibit C prepared by Servicer and delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 1997, Trustee shall distribute
to each Person who at any time during the preceding calendar year was an
Investor Holder, a statement prepared by Servicer containing the following
information:
(i) the amount of the current distribution allocable to Class A
Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal, respectively; and
(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.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was an Investor Holder,
together with such other customary information (consistent with the
treatment of the Certificates as debt) as Trustee or Servicer deems
necessary or desirable to enable the Investor Holders to prepare their tax
returns. Such obligations of Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided
by Trustee pursuant to any requirements of the Internal Revenue Code.
SECTION IX. Series 1996-A Early Amortization Events. If any one of
the following events shall occur with respect to the Investor Certificates:
A. failure on the part of 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 Transferor
set forth in the Agreement or this Series Supplement (including the
covenant of Transferor contained in Section 11 of this Series Supplement),
which failure has a material adverse effect on the Series 1996-A Holders
(which determination shall be made without reference to whether any funds
are available under the Collateral Interest or the Cash Collateral Account)
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 Transferor by Trustee, or to Transferor and
Trustee by Investor Holders representing more than 50% of the Invested
Amount of this Series 1996-A, and continues to affect materially and
adversely the interests of the Series 1996-A Holders (which determination
shall be made without reference to whether any funds are available under
the Collateral Interest or the Cash Collateral Account) for such period;
B. any representation or warranty made by Transferor in the
Agreement or this Series Supplement, or any information contained in an
Account Schedule required to be delivered by Transferor pursuant to Section
2.1 or 2.8, (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 Transferor by Trustee, or to Transferor and Trustee by Investor
Holders representing more than 50% of the Invested Amount of this Series
1996-A, and (ii) as a result of which the interests of the Series 1996-A
Holders are materially and adversely affected (which determination shall be
made without reference to whether any funds are available under the
Collateral Interest or the Cash Collateral Account) and continue to be
materially and adversely affected for such period; provided that a Series
1996-A Early Amortization Event pursuant to this Section 9(b) shall not be
deemed to have occurred hereunder if 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. Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
Section 2.8(b); provided that such failure shall not give rise to an Early
Amortization Event if, prior to the date on which such conveyance was
required to be completed, Transferor causes a reduction in the invested
amount of any Variable Interest to occur, so that, after giving effect to
that reduction (i) the Transferor Amount is not less than the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) and (ii) the sum of the aggregate amount of Principal Receivables plus
amounts on deposit in the Excess Funding Account is not less than the
Required Principal Balance;
E. any Servicer Default shall occur which would have a material
adverse effect on the Series 1996-A Holders (which determination shall be
made without reference to whether any funds are available under the
Collateral Interest or the Cash Collateral Account);
F. the Class A Invested Amount shall not be paid in full on or prior
to the Class A Final Scheduled Payment Date or the Class B Invested Amount
shall not be paid in full on or prior to the Class B Scheduled Payment
Date; or
(g) The Limited shall fail generally to, or admit in writing its
inability to, pay its debts as they become due; or a proceeding shall have
been instituted in a court having jurisdiction in the premises seeking a
decree or order for relief in respect of The Limited in an involuntary case
under any Debtor Relief Law, or for the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of The Limited or for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and any such
proceeding shall continue undismissed or unstayed and in effect, for a
period of 60 consecutive days, or any of the actions sought in such
proceeding shall occur; or the commencement by The Limited of a voluntary
case under any Debtor Relief Law, or The Limited's consent to the entry of
an order for relief in an involuntary case under any Debtor Relief Law, or
consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of The Limited or for any substantial part of its
property, or any general assignment for the benefit of creditors; or The
Limited shall have taken any corporate action in furtherance of any of the
foregoing actions;
then, in the case of any event described in Section 9(a), (b) or (e)
hereof, after the applicable grace period set forth in such Sections,
either Trustee or Investor Holders representing more than 50% of the
Invested Amount of this Series 1996-A by notice then given in writing to
Transferor and Servicer (and to Trustee if given by the Holders) may
declare that an early amortization event (a "Series 1996-A Early
Amortization Event") has occurred as of the date of such notice, and in the
case of any event described in Section 9(c), (d), (f) or (g) hereof, a
Series 1996-A Early Amortization Event shall occur without any notice or
other action on the part of Trustee or the Investor Holders immediately
upon the occurrence of such event.
SECTION X. Series 1996-A Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1996-A Termination Date.
SECTION XI. Periodic Finance Charges and Other Fees. Transferor
hereby agrees that, except as otherwise required by any Requirement of Law,
or as is deemed by Transferor to be necessary in order for Transferor to
maintain its credit card business, based upon a good faith assessment by
Transferor, in its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time reduce the Periodic Finance
Charges assessed on any Receivable or other fees on any Account if, as a
result of such reduction, Transferor's reasonable expectation of the
Portfolio Yield as of such date would be less than the then Base Rate.
SECTION XII. Limitations on Addition of Approved Portfolios.
Transferor may designate additional Approved Portfolios if (a) the Rating
Agency Condition is satisfied with respect to that designation and (b)
Transferor delivers to Trustee an Opinion of Counsel that all UCC financing
statements or amendments required to perfect the interest of the Trust in
Receivables arising in accounts included in each such Additional Portfolio
have been made.
SECTION XIII. 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 XIV. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
SECTION XV. Additional Provisions. (a) Notwithstanding the
provisions of Section 2.10(a), the Discount Percentage may exceed 3%, so
long as the Rating Agency Condition is satisfied.
(b) Notwithstanding the provisions of Section 2.8, no new accounts
that would otherwise be Automatic Additional Accounts shall be treated as
such on any Addition Date if both of the following statements are true:
(i) an Automatic Addition Limitation Event has occurred, and
the Rating Agency Condition has not been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts;
and
(ii) the number of such Automatic Additional Accounts would
exceed an amount equal to the excess (if any) of (A) 20% of the
aggregate number of Accounts determined as of the first day of the
fiscal year of Transferor in which the Addition Date occurs over (B)
the aggregate amount of Automatic Additional Accounts and
Supplemental Accounts the Addition Date for which has occurred since
the first day of such fiscal year.
An "Automatic Addition Limitation Event" will be deemed to occur on
any Determination Date if:
(1) the average of the default ratio for that Determination Date
and the preceding two Determination Dates is greater than 1.5%, where
the "default ratio" for any Determination Date equals the percentage
equivalent of a fraction (A) the numerator of which is the aggregate
of the Default Amounts for all Accounts that became Defaulted
Accounts during the related Monthly Period and (B) the denominator of
which is the total Receivables as of the end of the sixth preceding
Monthly Period; or
(2) the average of the payment rate for that Determination Date
and the preceding two Determination Dates is less than 10%, where the
"payment rate" for any Determination Date equals the percentage
equivalent of a fraction (A) the numerator of which is the aggregate
Collections received during the related Monthly Period and (B) the
denominator of which is equal to the total Receivables held by the
Trust at the close of business for the Monthly Period immediately
prior to such related Monthly Period.
(c) The Additional Minimum Transferor Amount is hereby specified as
an additional amount to be considered part of the Minimum Transferor Amount
pursuant to clause (b) of the definition of Minimum Transferor Amount.
(d) Notwithstanding the provisions of Section 3.9(a), so long as any
of the Investor Certificates remain outstanding, Transferor shall make
deposits of the type referred to in that Section as if the antepenultimate
and penultimate sentences of the first grammatical paragraph of that
Section read as follows:
"Any adjustment required pursuant to either of the two preceding
sentences shall be made on the first Business Day after the Date of
Processing for the event giving rise to such adjustment. If,
following the exclusion of such Principal Receivables from the
calculation of the Transferor Amount, the Transferor Amount would be
less than the Specified Transferor Amount, not later than the close
of business on such first Business Day, Transferor shall make a
deposit into the Excess Funding Account in immediately available
funds in an amount equal to the amount by which the Transferor Amount
would be less than the Specified Transferor Amount (up to the amount
of such Principal Receivables).".
Amounts deposited in the Excess Funding Account pursuant to this Section
15(d) shall be deemed for all purposes of the Agreement to have been
deposited pursuant to such penultimate sentence.
(e) Notwithstanding the definition of "Identified Portfolio"
appearing in Section 1.1, for purposes of Series 1996-A, the definition of
"Identified Portfolio" shall be as follows:
""Identified Portfolio" means any Accounts owned from time to
time by WFN and included in the private label credit card programs of
Bath & Body Works, Inc., Cacique, Inc., Lane Bryant, Inc., Lerner New
York, Inc., Express, Inc., Structure, Inc., Victoria's Secret Stores,
Inc., Victoria's Secret Catalogue, Inc., The Limited Stores, Inc.,
Limited Too, Inc., Abercrombie & Fitch, Inc., Henri Bendel, Inc. and
Brylane, L.P. (but limited, in the case of Brylane, L.P., to accounts
related to the Lane Bryant, Lerner New York and Roamans catalogues).
To avoid doubt, the foregoing programs include all cards issued under
the insignia of "Limited Fashion Group."".
(f) Notwithstanding Section 3.6, Servicer shall, in lieu of
delivering any annual report by a firm of nationally recognized independent
public accountants required to be delivered pursuant to such Section on or
before the 90th day following the end of 1996 and each subsequent calendar
year, deliver any such annual report on or before the 90th day following
the end of its 1996 fiscal year and each of its subsequent fiscal years.
(g) Notwithstanding Section 4.4: (i) during the Controlled
Amortization Period and the Early Amortization Period, Transferor may not
apply Shared Principal Collections as principal with respect to any
Variable Interest, unless such application of principal is made on any
Transfer Date or related Distribution Date after the application of Shared
Principal Collections pursuant to Section 4.15 and (ii) Shared Principal
Collections allocable to Series 1996-A pursuant to Section 4.4 shall be
withdrawn on each Transfer Date, rather than each Distribution Date.
Notwithstanding Section 4.5, Excess Finance Charge Collections allocable to
Series 1996-A pursuant to Section 4.5 shall be withdrawn on each Transfer
Date, rather than each Distribution Date.
SECTION XVI. No Petition. Transferor, Servicer and Trustee, by
entering into this Series Supplement and each Holder, by accepting a Series
1996-A 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 Holders, the Agreement or this Series Supplement.
SECTION XVII. Amendments. This Series Supplement may be amended
pursuant to Section 13.1 of the Agreement. This Series Supplement may also
be amended by Transferor without the consent of Servicer, Trustee or any
Investor Holder if Transferor provides Trustee with: (i) an Opinion of
Counsel to the effect that such amendment or modification would (A) reduce
the risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Internal Revenue Code section 7704 or (B) permit
the Trust or a relevant portion thereof to be treated as a "financial asset
securitization investment trust" and (C) in either case, (1) would not
cause the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and
(2) would not cause or constitute an event in which gain or loss would be
recognized by any Investor Holder; and (ii) a certificate that such
amendment or modification would not materially and adversely affect any
Investor Holder; provided that no such amendment shall be deemed effective
without Trustee's consent, if Trustee's rights, duties and obligations
hereunder are thereby modified. Prior to the execution of any such
amendment (other than an amendment pursuant to Section 13.1(a) of the
Agreement), Trustee shall furnish notification of the substance of such
amendment to each Rating Agency.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Series 1996-A Supplement to be duly executed by their respective officers
as of the day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
Transferor and Servicer
By:___________________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By:____________________________________
Name:
Title:
EXHIBIT A-1
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $_____________
CUSIP No. ____________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.70% CLASS A
ASSET-BACKED CERTIFICATE, SERIES 1996-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-A Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-A Certificates are issued in two classes, the Class A
Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-A
Certificates with the intention that the Series 1996-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-A
Holder (or Series 1996-A Certificate Owner) by acceptance of its Series
1996-A Certificate (or in the case of a Series 1996-A Certificate Owner, by
virtue of such Series 1996-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-A Certificates (or any
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, value of intangible property or net
worth. Each Series 1996-A Holder agrees that it will cause any Series
1996-A Certificate Owner acquiring an interest in a Series 1996-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class A
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class A Holder by virtue of the acceptance hereof assents and by
which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-A Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-A Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class A Certificate to be duly executed under its official
seal.
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
DATED:____________________
This is one of the 6.70% Class A Asset-Backed Certificates,
Series 1996-A referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:_______________________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
-------------------
CLASS B
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $____________
CUSIP No. ___________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.00% CLASS B
ASSET-BACKED CERTIFICATE, SERIES 1996-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-A Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-A Certificates are issued in two classes, the Class A
Certificates and the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights
of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-A
Certificates with the intention that the Series 1996-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-A
Holder (or Series 1996-A Certificate Owner) by acceptance of its Series
1996-A Certificate (or in the case of a Series 1996-A Certificate Owner, by
virtue of such Series 1996-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-A Certificates (or any
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, value of intangible property or net
worth. Each Series 1996-A Holder agrees that it will cause any Series
1996-A Certificate Owner acquiring an interest in a Series 1996-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class B
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class B Holder by virtue of the acceptance hereof assents and by
which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-A Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-A Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class B Certificate to be duly executed under its official
seal.
By:______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
DATED:______________________
This is one of the 7.00% Class B Asset-Backed Certificates, Series
1996-A referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:_______________________________
Authorized Signatory
EXHIBIT B
---------
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO TRUSTEE
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
SERIES 1996-A
MONTHLY PERIOD ENDING ______________, ____
EXHIBIT C
FORM OF MONTHLY SERIES 1996-A
-----------------------------
HOLDERS' STATEMENT
------------------
SERIES 1996-A
WORLD FINANCIAL NETWORK NATIONAL BANK
________________________________________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
________________________________________
<PAGE>
EXECUTION COPY
- -----------------------------------------------------------------------------
WORLD FINANCIAL NETWORK NATIONAL BANK
Transferor and Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Investor Holders
- ------------------------------------------------------------------------------
SERIES 1996-B SUPPLEMENT
Dated as of May 9, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
-------------------------------------
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
$283,500,000 6.95% Class A Asset-Backed
Certificates, Series 1996-B
$29,750,000 7.20% Class B Asset-Backed
Certificates, Series 1996-B
- -----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Designation....................................... 1
SECTION 2. Definitions....................................... 2
SECTION 3. Servicing Fee..................................... 20
SECTION 4. Optional Repurchase; Reassignment and
Termination Provisions........................ 21
SECTION 5. Delivery and Payment for the Investor
Certificates...................................22
SECTION 6. Depository; Form of Delivery of Investor
Certificates.................................. 22
SECTION 7. Article IV of Agreement........................... 22
SECTION 4.6 Rights of Holders and the
Collateral Interest Holder................ 22
SECTION 4.7 Allocations................................. 23
SECTION 4.8 Determination of Monthly Interest........... 27
SECTION 4.9 Determination of Monthly Principal.......... 28
SECTION 4.10 Coverage of Required Amount................. 29
SECTION 4.11 Monthly Payments............................ 31
SECTION 4.12 Investor Charge-Offs........................ 35
SECTION 4.13 Excess Spread............................... 36
SECTION 4.14 Reallocated Principal Collections........... 38
SECTION 4.15 Shared Principal Collections; Amounts
Transferred from the Excess Funding
Account to the Principal Account.......... 40
SECTION 4.16 Finance Charge Account, Principal
Account, Principal Funding Account and
Distribution Account...................... 41
SECTION 4.17 Reserve Account............................. 43
SECTION 4.18 Cash Collateral Account..................... 44
SECTION 4.19 Determination of LIBOR...................... 46
SECTION 4.20 Transferor's or Servicer's Failure to
Make a Deposit or Payment................. 46
SECTION 8. Article V of the Agreement........................ 46
SECTION 5.1 Distributions............................... 47
SECTION 5.2 Reports..................................... 47
SECTION 9. Series 1996-B Early Amortization Events........... 48
SECTION 10. Series 1996-B Termination......................... 50
SECTION 11. Periodic Finance Charges and Other Fees........... 50
SECTION 12. Limitations on Addition of Approved
Portfolios...................................... 50
SECTION 13. Counterparts...................................... 51
SECTION 14. Governing Law..................................... 51
SECTION 15. Additional Provisions............................. 51
SECTION 16. No Petition....................................... 53
SECTION 17. Amendments........................................ 53
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 Trustee
EXHIBIT C Form of Monthly Series 1996-B
Holders' Statement
SERIES 1996-B SUPPLEMENT, dated as of May 9, 1996 (this "Series
Supplement"), between WORLD FINANCIAL NETWORK NATIONAL BANK, a
national banking association, as Transferor ("Transferor") and
Servicer ("Servicer"), and THE BANK OF NEW YORK, as Trustee
("Trustee"), under the Pooling and Servicing Agreement dated as of
January 17, 1996 between the same parties (the "Agreement").
Section 6.3 of the Agreement provides, among other things, that
Transferor and 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 Trustee to Transferor for the execution and redelivery to
Trustee for authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, 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-B Certificates." The two classes shall be designated the
6.95% Class A Asset-Backed Certificates, Series 1996-B (the "Class A
Certificates") and the 7.20% Class B Asset-Backed Certificates, Series
1996-B (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, respectively. In addition, there is hereby created a
third Class which constitutes an uncertificated interest in the Trust,
shall be deemed to be an "Investor Certificate" for all purposes under
the Agreement and this Series Supplement, except as expressly provided
in Section 1(c) of this Series Supplement, and shall be known as the
Collateral Interest, Series 1996-B and have the rights assigned to the
Collateral Interest in this Series Supplement. The Collateral
Interest Holder shall be deemed to be an "Investor Holder" for all
purposes under the Agreement and this Series Supplement, except as
expressly provided in Section 1(c) of this Series Supplement.
(b) Series 1996-B shall be included in Group One (as defined
below). Series 1996-B 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, the provisions of Article VI and Article
XII of the Agreement relating to the registration, authentication,
delivery, presentation, cancellation and surrender of Registered
Certificates shall not be applicable to the Collateral Interest.
SECTION 2. Definitions. If 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. References to any Article or Section are
references to Articles or Sections of the Agreement, except as
otherwise expressly provided. All capitalized terms not otherwise
defined herein are defined in the Agreement, and the interpretive
provisions set out in Section 1.2 of the Agreement apply to this
Series Supplement. Each capitalized term defined herein relates only
to the Investor Certificates and no other Series of Certificates
issued by the Trust.
"Accumulation Shortfall" initially means zero and thereafter
means, with respect to any Monthly Period during the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit
Amount for the previous Monthly Period over the amount deposited into
the Principal Funding Account pursuant to Section 4.11(e)(i) with
respect to the Class A Certificates for the previous Monthly Period.
"Additional Minimum Transferor Amount" means (a) as of any date
of determination falling in November, December and January of each
calendar year, the product of (i) 2% and (ii) the sum of (A) the
aggregate Principal Receivables and (B) amounts on deposit in the
Excess Funding Account and (b) as of any date of determination falling
in any other month, zero; provided that the amount specified in clause
(a) shall be without duplication with the amount specified as the
"Additional Minimum Transferor Amount" in the Supplement relating to
the Series 1996-A Certificates issued by the Trust (or in any future
Supplement that specifies such an amount and indicates that such
amount is without duplication of the amount specified in clause (a)).
The Additional Minimum Transferor Amount is specified pursuant to
Section 15(c) of this Series supplement as an additional amount to be
considered part of the Minimum Transferor Amount.
"Adjusted Invested Amount" means, on any date of determination,
an amount equal to the sum of (a) the Class A Adjusted Invested Amount
and (b) the Class B Invested Amount and (c) the Collateral Interest.
"Aggregate Investor Default Amount" means, as to any Monthly
Period, the sum of the Investor Default Amounts in respect of such
Monthly Period.
"Automatic Addition Limitation Event" is defined in Section 15(b)
of this Series Supplement.
"Available Cash Collateral Amount" means with respect to any
Transfer Date, the lesser of (a) the amount on deposit in the Cash
Collateral Account on such date (before giving effect to any deposit
to, or withdrawal from the Cash Collateral Account to be made with
respect to such date) and (b) the Required Enhancement Amount as of
the prior Transfer Date.
"Available Investor Principal Collections" means, as to any
Monthly Period, an amount equal to (a) the Investor Principal
Collections for such Monthly Period, minus (b) the amount of
Reallocated Principal Collections with respect to such Monthly Period
which pursuant to Section 4.14 are required to fund the Class A
Required Amount and the Class B Required Amount (other than any
portions thereof that are applied pursuant to (x) Section 4.11(a)(iii)
and (y) Section 4.13(c) (to the extent such portions pursuant to
Section 4.13(c) are available to pay the Class B Investor Default
Amount or the Class B Uncovered Dilution Amount), which shall, without
duplication, be included as Available Investor Principal Collections),
plus (c) the amount of Shared Principal Collections with respect to
Group One that are allocated to Series 1996-B in accordance with
Section 4.15(b).
"Available Reserve Account Amount" means, as to any Transfer
Date, the lesser of (a) the amount on deposit in the Reserve Account
on such date (after taking into account any interest and earnings
retained in the Reserve Account pursuant to Section 4.17(b) on such
date, but before giving effect to any deposit made or to be made
pursuant to Section 4.13(i) to the Reserve Account on such date) and
(b) the Required Reserve Account Amount.
"Base Rate" means, as 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 and the Collateral Monthly Interest, each for the related
Distribution Period, and the Servicing Fee with respect to such
Monthly Period and the denominator of which is the Invested Amount as
of the close of business on the last day of such Monthly Period.
"Cash Collateral Account" is defined in Section 4.18(a).
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Adjusted Invested Amount" means, on any date of
determination, an amount equal to the Class A Invested Amount minus
the Principal Funding Account Balance on such date of determination.
"Class A Available Funds" means, as to any Monthly Period, an
amount equal to the sum of (a) the Class A Floating Allocation
Percentage of the sum of (i) the Collections of Finance Charge
Receivables allocated to the Investor Certificates and deposited in
the Finance Charge Account for such Monthly Period (or required to be
deposited in the Finance Charge Account on the related Transfer Date
(before giving effect to any netting) with respect to the preceding
Monthly Period pursuant to Section 4.7(d)) and (ii) the interest and
earnings on the Cash Collateral Account to be treated as Collections
of Finance Charge Receivables pursuant to Section 4.18(b) on the
related Transfer Date, (b) with respect to any Monthly Period during
the Controlled Accumulation Period prior to the payment in full of the
Class A Invested Amount, the Principal Funding Investment Proceeds
arising pursuant to Section 4.16(b), if any, with respect to the
related Transfer Date and (c) amounts, if any, to be withdrawn from
the Reserve Account which will be deposited into the Finance Charge
Account on the related Transfer Date pursuant to Sections 4.17(b) and
4.17(d).
"Class A Certificate Rate" means a per annum rate equal to 6.95%.
"Class A Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in Section 4.8(a).
"Class A Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100% or be less than zero) of a
fraction, the numerator of which is the Class A Invested Amount as of
the close of business on the last day of the Revolving Period and the
denominator of which is equal to the numerator used in determining the
related Fixed Allocation Percentage; provided that if Series 1996-B is
paired with a Paired Series and an Early Amortization Event occurs
with respect to such Paired Series during the Controlled Accumulation
Period, Transferor may, by written notice delivered to Trustee and
Servicer, designate a different numerator (provided that such
numerator is not less than the Class A Adjusted Invested Amount (less
the balance on deposit in the Principal Account that is not subject to
being treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such
Paired Series).
"Class A Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Adjusted
Invested Amount 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 Invested Amount as of the close of business on such last day;
provided that, with respect to the first Monthly Period, the Class A
Floating Allocation Percentage means the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Invested
Amount and the denominator of which is the Initial Invested Amount.
"Class A Holder" means the Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Initial Invested Amount" means the aggregate initial
principal amount of the Class A Certificates, which is $283,500,000.
"Class A Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class A Holders prior
to such date and minus (c) the excess, if any, of the aggregate amount
of Class A Investor Charge-Offs pursuant to Section 4.12(a) over Class
A Investor Charge-Offs reimbursed pursuant to Section 4.13(b) prior to
such date of determination, minus (d) the amount of any reduction in
the Class A Invested Amount as a result of the purchase by Transferor
and subsequent cancellation of the Class A Certificates pursuant to
Section 4(d) of this Series Supplement; provided that the Class A
Invested Amount may not be reduced below zero.
"Class A Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution
Amounts and Finance Charge Receivables at any time and Principal
Receivables during the Revolving Period, the Class A Floating
Allocation Percentage, and (b) with respect to Principal Receivables
during the Controlled Accumulation Period or Early Amortization
Period, the Class A Fixed Allocation Percentage.
"Class A Investor Charge-Off" is defined in Section 4.12(a).
"Class A Investor Default Amount" means, as 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 Percentage applicable for the related Monthly
Period.
"Class A Monthly Interest" is defined in Section 4.8(a).
"Class A Monthly Principal" is defined in Section 4.9(a).
"Class A Reduction Amount" is defined in Section 4.12(a).
"Class A Required Amount" is defined in Section 4.10(a).
"Class A Scheduled Payment Date" means the May 2003 Distribution
Date.
"Class A Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class A Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution
Amount for the related Monthly Period and (b) the Class A Investor
Allocation Percentage applicable for the related Monthly Period.
"Class B Additional Interest" is defined in Section 4.8(b).
"Class B Available Funds" means, as to any Monthly Period, an
amount equal to the Class B Floating Allocation Percentage of the sum
of (a) the Collections of Finance Charge Receivables allocated to the
Investor Certificates and deposited in the Finance Charge Account for
such Monthly Period (or required to be deposited in the Finance Charge
Account on the related Transfer Date (before giving effect to any
netting) with respect to the preceding Monthly Period pursuant to
Section 4.7(d)) and (b) interest and earnings on the Cash Collateral
Account to be treated as Collections of Finance Charge Receivables
pursuant to Section 4.18(b) on the related Transfer Date.
"Class B Certificate Rate" means a per annum rate equal to 7.20%.
"Class B Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class B Deficiency Amount" is defined in Section 4.8(b).
"Class B Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100% or be less than zero) of a
fraction, the numerator of which is the Class B Invested Amount as of
the close of business on the last day of the Revolving Period and the
denominator of which is equal to the numerator used in determining the
related Fixed Allocation Percentage; provided that if Series 1996-B is
paired with a Paired Series and an Early Amortization Event occurs
with respect to such Paired Series during the Controlled Accumulation
Period, Transferor may, by written notice delivered to Trustee and
Servicer, designate a different numerator (provided that such
numerator is not less than the Class B Invested Amount (less, if the
Class A Fixed Allocation Percentage is zero, the balance on deposit in
the Principal Account (that is not subject to being treated as
Reallocated Principal Collections or Shared Principal Collections) and
on deposit in the Principal Funding Account, in each case to the
extent not subtracted in reducing the Class A Fixed Allocation
Percentage to zero) as of the last day of the revolving period for
such Paired Series).
"Class B Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Invested
Amount 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
Invested Amount as of the close of business on such last day; provided
that, with respect to the first Monthly Period, the Class B Floating
Allocation Percentage means the percentage equivalent of a fraction,
the numerator of which is the Class B Initial Invested Amount and the
denominator of which is the Initial Invested Amount.
"Class B Holder" means the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Initial Invested Amount" means the aggregate initial
principal amount of the Class B Certificates, which is $29,750,000.
"Class B Invested Amount" means, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class B Holders prior
to such date, minus (c) the aggregate amount of Class B Investor
Charge-Offs for all prior Transfer Dates pursuant to Section 4.12(b),
minus (d) the amount of the Reallocated Class B Principal Collections
allocated pursuant to Section 4.14(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 Invested Amount has
been reduced on all prior Transfer Dates pursuant to Section 4.12(a)
and plus (f) the aggregate amount of Excess Spread allocated and
available on all prior Transfer Dates pursuant to Section 4.13(d), for
the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c), (d) and (e), minus (g) the amount of any reduction in the
Class B Invested Amount as a result of the purchase by Transferor and
subsequent cancellation of Class B Certificates pursuant to Section
4(d) of this Series Supplement; provided that the Class B Invested
Amount may not be reduced below zero.
"Class B Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution
Amounts and Finance Charge Receivables at any time and Principal
Receivables during the Revolving Period, the Class B Floating
Allocation Percentage, and (b) with respect to Principal Receivables
during the Controlled Accumulation Period or Early Amortization
Period, the Class B Fixed Allocation Percentage.
"Class B Investor Charge-Off" is defined in Section 4.12(b).
"Class B Investor Default Amount" means, as 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 B
Floating Allocation Percentage applicable for the related Monthly
Period.
"Class B Monthly Interest" is defined in Section 4.8(b).
"Class B Monthly Principal" is defined in Section 4.9(b).
"Class B Reduction Amount" is defined in Section 4.12(b).
"Class B Required Amount" is defined in Section 4.10(b).
"Class B Scheduled Payment Date" means the June 2003 Distribution
Date.
"Class B Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class B Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution
Amount for the related Monthly Period and (b) the Class B Investor
Allocation Percentage applicable for the related Monthly Period.
"Closing Date" means May 9, 1996.
"Collateral Available Funds" means, as to any Monthly Period, an
amount equal to the Collateral Floating Allocation Percentage of the
sum of (a) the Collections of Finance Charge Receivables allocated to
the Investor Certificates and deposited in the Finance Charge Account
for such Monthly Period (or required to be deposited in the Finance
Charge Account on the related Transfer Date (before giving effect to
any permitted netting) with respect to the preceding Monthly Period
pursuant to Section 4.7(d)) and (b) interest and earnings on the Cash
Collateral Account to be treated as Collections of Finance Charge
Receivables pursuant to Section 4.18(b) on the related Transfer Date.
"Collateral Charge-Off" is defined in Section 4.12(c).
"Collateral Default Amount" means, as 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 Percentage applicable for the related Monthly Period.
"Collateral Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100% or be less than zero) 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 numerator used in determining the
related Fixed Allocation Percentage; provided that if Series 1996-B is
paired with a Paired Series and an Early Amortization Event occurs
with respect to such Paired Series during the Controlled Accumulation
Period, Transferor may, by written notice delivered to Trustee and
Servicer, designate a different numerator (provided that such
numerator is not less than the Collateral Interest (less, if the Class
A Fixed Allocation Percentage and the Class B Fixed Allocation
Percentage are zero, the balance on deposit in the Principal Account
that is not subject to being treated as Reallocated Principal
Collections or Shared Principal Collections, to the extent not
subtracted in reducing the Class A Fixed Allocation Percentage and/or
the Class B Fixed Allocation Percentage to zero) as of the last day of
the revolving period for such Paired Series).
"Collateral Floating Allocation Percentage" means, for 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 Invested Amount as of the close of business on such last day;
provided that, with respect to the first Monthly Period, the
Collateral Floating Allocation Percentage means the percentage
equivalent of a fraction, the numerator of which is the Collateral
Initial Interest and the denominator of which is the Initial Invested
Amount.
"Collateral Initial Interest" means $36,750,000.
"Collateral Interest" means, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the
right to receive, to the extent necessary to make the required
payments to the Collateral Interest Holder under this Series
Supplement, the portion of Collections allocable thereto under the
Agreement and this Series Supplement, funds on deposit in the
Collection Account allocable thereto pursuant to the Agreement and
this Series Supplement and other amounts to be paid in respect thereof
as provided in the Agreement and this Series Supplement. On any date,
for purposes of all calculations in the Agreement and this Series
Supplement, the amount of the Collateral Interest shall be an amount
equal to (a) the 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 Section 4.12(c),
minus (d) the amount of Reallocated Principal Collections allocated
pursuant to Sections 4.14(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
Sections 4.12(a) and (b), and plus (f) the aggregate amount of Excess
Spread allocated and available on all prior Transfer Dates pursuant to
Section 4.13(h), for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" means the entity so designated in
the Loan Agreement.
"Collateral Interest Servicing Fee" is defined in Section 3(a) of
this Series Supplement.
"Collateral Investor Allocation Percentage" means, for any
Monthly Period, (a) with respect to Default Amounts, Uncovered
Dilution Amounts and Finance Charge Receivables at any time and
Principal Receivables during the Revolving Period, the Collateral
Floating Allocation Percentage, and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Early
Amortization Period, the Collateral Fixed Allocation Percentage.
"Collateral Monthly Interest" is defined in Section 4.8(c).
"Collateral Monthly Principal" is defined in Section 4.9(c).
"Collateral Rate" means, for any Distribution Period, the rate
specified in the Loan Agreement; provided that the Collateral Rate
shall not exceed a per annum rate of 1.1% in excess of LIBOR for such
Distribution Period for purposes of this Supplement and the Agreement.
"Collateral Reduction Amount" is defined in Section 4.12(c).
"Collateral Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution
Amount for the related Monthly Period and (b) the Collateral Investor
Allocation Percentage applicable for the related Monthly Period.
"Controlled Accumulation Amount" means (a) for any Transfer Date
with respect to the Controlled Accumulation Period prior to the
payment in full of the Class A Invested Amount, $23,625,000; provided
that if the Controlled Accumulation Period Length is modified pursuant
to Section 4.11(i), (i) the Controlled Accumulation Amount for each
Transfer Date with respect to the Controlled Accumulation Period shall
mean the amount determined in accordance with Section 4.11(i) on the
date on which the Controlled Accumulation Period has most recently
been modified and (ii) the sum of the Controlled Accumulation Amounts
for all Transfer Dates with respect to the modified Controlled
Accumulation Period shall not be less than the Class A Invested
Amount.
"Controlled Accumulation Date" means May 1, 2002.
"Controlled Accumulation Period" means, unless an Early
Amortization Event shall have occurred prior thereto, the period
commencing at the beginning of business on the Controlled Accumulation
Date or such later date as is determined in accordance with Section
4.11(i) and ending on the first to occur of (a) the Early Amortization
Commencement Date and (b) the Series 1996-B Termination Date.
"Controlled Accumulation Period Length" is defined in Section
4.11(i).
"Controlled Deposit Amount" means, 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" means an amount determined as of each Transfer
Date with respect to any Distribution Period as the product of (a) (i)
one-twelfth, times (ii) the Class A Certificate Rate, and (b) the
Principal Funding Account Balance as of the Record Date preceding such
Transfer Date.
"Cumulative Principal Shortfall" means the sum of the Principal
Shortfalls (as such term is defined in each of the related
Supplements) for each Series in Group One.
"Default Amount" means, as to any Defaulted Account, the amount
of Principal Receivables (other than Ineligible Receivables, unless
there is an Insolvency Event with respect to Transferor) in such
Defaulted Account on the day it became a Defaulted Account.
"Defaulted Account" means an Account in which there are Defaulted
Receivables.
"Deficiency Amount" means, at any time of determination, the sum
of the Class A Deficiency Amount and the Class B Deficiency Amount.
"Dilution" means any downward adjustment made by Servicer in the
amount of any Receivable (a) because of a rebate, refund, unauthorized
charge, fraudulent or counterfeit charge or billing error to an
accountholder, (b) because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder or (c)
for any other reason other than receiving Collections therefor or
charging off such amount as uncollectible.
"Distribution Account" is defined in Section 4.16(a).
"Distribution Date" means June 17, 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.
"Distribution Period" means, with respect to any Distribution
Date, the period from and including the previous Distribution Date
through the day preceding such Distribution Date, except the initial
Distribution Period will be the period from and including the Closing
Date through the day preceding the initial Distribution Date.
"Early Amortization Commencement Date" means the date on which an
Early Amortization Event is deemed to occur pursuant to Section 9.1 of
the Agreement or a Series 1996-B Early Amortization Event is deemed to
occur pursuant to Section 9 of this Series Supplement.
"Early Amortization Period" means the period commencing on the
Early Amortization Commencement Date and ending on the Series 1996-B
Termination Date.
"Enhancement" means, with respect to the Class A Certificates,
the subordination of the Class B Certificates and the Collateral
Interest and the Cash Collateral Account, and with respect to the
Class B Certificates, the subordination of the Collateral Interest and
the Cash Collateral Account.
"Enhancement Agreement" means the Loan Agreement.
"Enhancement Provider" means the Collateral Interest Holder.
"Enhancement Surplus" means, with respect to any Transfer Date,
the excess, if any, of (a) the amount on deposit in the Cash
Collateral Account, plus the Collateral Interest (in each case after
giving effect to any withdrawals, increases or reductions made with
respect to such date other than as the result of the existence of an
Enhancement Surplus) over (b) the Required Enhancement Amount.
"Excess Principal Funding Investment Proceeds" means, 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" means, with respect to any Transfer Date and
subject to Section 4.7(d), the sum of (a) the sum of the amounts, if
any, with respect to such Transfer Date specified pursuant to Sections
4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii), plus (b) the Excess Finance
Charge Collections, if any, allocated to Series 1996-B pursuant to
Section 4.5 for that Transfer Date.
"Finance Charge Account" is defined in Section 4.16(a).
"Finance Charge Shortfall" means, with respect to any Transfer
Date, an amount equal to the excess, if any, of (a) the sum of the
amounts specified in clauses (a) through (k) of Section 4.13 for that
Transfer Date over (b) the sum of the amounts, if any, with respect to
such Transfer Date specified pursuant to Sections 4.11(a)(iv),
4.11(b)(iii) and 4.11(c)(ii).
"Fitch" means Fitch Investors Service, L.P. or its successors.
"Fixed Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of
which is the Invested Amount as of the close of business on the last
day of the Revolving Period and the denominator of which is the
greater of (a) the aggregate amount of Principal Receivables in the
Trust determined as of the close of business on the 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 that if
Series 1996-B is paired with a Paired Series and an Early Amortization
Event occurs with respect to such Paired Series during the Controlled
Accumulation Period, Transferor may, by written notice delivered to
Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Adjusted Invested Amount (less the
balance on deposit in the Principal Account that is not subject to
being treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such
Paired Series); provided further that if one or more Reset Dates occur
in a Monthly Period, the Fixed Allocation Percentage for the portion
of the Monthly Period falling on and after each such Reset Date (the
"subject Reset Date") and prior to any subsequent Reset Date will be
determined using a denominator equal to the greater of the amounts
specified in clauses (a) and (b) above determined as of the close of
business on the subject Reset Date.
"Floating Allocation Percentage" means, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator
of which is the Adjusted Invested Amount as of the close of business
on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the Initial Invested Amount) and the
denominator of which is the greater of (a) the aggregate amount of
Principal Receivables as of the close of business on the last day of
the preceding Monthly Period (or with respect to the first Monthly
Period, the aggregate amount of Principal Receivables in the Trust as
of the close of business on the day immediately preceding the Closing
Date), 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 Finance Charge Receivables, Default
Amounts, Uncovered Dilution Amounts or Principal Receivables, as
applicable, for all outstanding Series on such date of determination;
provided that if one or more Reset Dates occur in a Monthly Period,
the Floating Allocation Percentage for the portion of the Monthly
Period falling on and after each such Reset Date (the "subject Reset
Date") and prior to any subsequent Reset Date will be determined using
a denominator equal to the greater of the amounts specified in clauses
(a) and (b) above determined as of the close of business on the
subject Reset Date.
"Group One" means Series 1996-B and each other Series specified
in the related Supplement to be included in Group One.
"Initial Invested Amount" means $350,000,000.
"Invested Amount" means, on any date of determination, an amount
equal to the sum of (a) the Class A Invested Amount, (b) the Class B
Invested Amount and (c) the Collateral Interest, each as of such date.
"Investor Certificates" means the Class A Certificates, the Class
B Certificates and the Collateral Interest.
"Investor Default Amount" means, with respect to any Receivable
in a Defaulted Account, an amount equal to the product of (a) the
Default Amount and (b) the Floating Allocation Percentage on the day
such Account became a Defaulted Account.
"Investor Holder" means, for all purposes of the Agreement and
this Series Supplement, (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 Percentage" means, 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
Allocation Percentage and (b) with respect to Principal Receivables
during the Controlled Accumulation Period or the Early Amortization
Period, the Fixed Allocation Percentage.
"Investor Principal Collections" means, with respect to any
Monthly Period, the sum of (a) the aggregate amount deposited (or
required to be deposited on the related Transfer Date (before giving
effect to any permitted netting) pursuant to Section 4.7(d)) into the
Principal Account for such Monthly Period pursuant to Sections
4.7(a)(ii) and (iii), 4.7(b)(ii), (iii) and (iv), or 4.7(c)(ii), (iii)
and (iv), in each case, as applicable to such Monthly Period, (b) the
aggregate amount to be treated as Investor Principal Collections
pursuant to Sections 4.11(a)(iii), and 4.13(a), (b), (c), (d), (g) and
(h) for such Monthly Period (other than such amount paid from
Reallocated Principal Collections), and (c) the aggregate amount
transferred or required to be transferred on the related Transfer Date
(before giving effect to any permitted netting pursuant to Section
4.7(d)) from the Excess Funding Account into the Principal Account
pursuant to Section 4.15(d).
"LIBOR" means, for each Distribution Period, the London interbank
offered rate for one-month United States dollar deposits (reserve
adjusted as provided for therein), as determined by Trustee in
accordance with the Loan Agreement.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of May 9, 1996,
as amended, supplemented or modified from time to time.
"Paired Series" means a Series that has been paired with Series
1996-B (which Series may be prefunded or partially prefunded or may be
a Variable Interest) such that a reduction of the Adjusted Invested
Amount results in (or permits) an increase of the invested amount of
the paired Series.
"Portfolio Adjusted Yield" means, 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 0.50% from the
result for each Monthly Period.
"Portfolio Yield" means, 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 (or required to be deposited on
the related Transfer Date (before giving effect to any permitted
netting), into the Finance Charge Account and allocable to the
Investor Certificates for such Monthly Period and (b) the Principal
Funding Investment Proceeds deposited or required to be deposited into
the Finance Charge Account on the Transfer Date (before giving effect
to any permitted netting) related to such Monthly Period, (c) the
amount of the Reserve Draw Amount (up to the Available Reserve Account
Amount) plus any amounts of interest and earnings described in Section
4.17, and (d) interest and earnings on the Cash Collateral Account to
be treated as Collections of Finance Charge Receivables allocable to
the Investor Certificates on the Transfer Date related to such Monthly
Period, as described in Section 4.18(b), each deposited or required to
be deposited into the Finance Charge Account on the Transfer Date
(before giving effect to any permitted netting) relating to such
Monthly Period, 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 Invested Amount as of the
close of business on the last day of such Monthly Period.
"Principal Account" is defined in Section 4.16(a).
"Principal Funding Account" is defined in Section 4.16(a).
"Principal Funding Account Balance" means, 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" means, 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" means, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for
such Transfer Date are less than the Covered Amount determined as of
such Transfer Date.
"Principal Shortfall" means, 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, (B) on any Transfer
Date after the Transfer Date on which the Class A Adjusted Invested
Amount is reduced to zero, the Class B Invested Amount and (C) the
lesser of the Enhancement Surplus (if any) and the Collateral Interest
for such Transfer Date, (ii) with respect to any Transfer Date during
the Early Amortization Period, the Adjusted Invested Amount and (iii)
with respect to any Transfer Date relating to the Revolving Period,
the amount specified in clause (a)(i)(C) above over (b) the Investor
Principal Collections minus the Reallocated Principal Collections
(other than any portions thereof that are applied pursuant to (x)
Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such
portions pursuant to Section 4.13(c) are available to pay the Class B
Investor Default Amount or the Class B Uncovered Dilution Amount)) for
such Transfer Date.
"Rating Agency" means Moody's, S&P and Fitch.
"Rating Agency Condition" means the notification in writing by
each Rating Agency to Transferor, Servicer and Trustee that an action
will not result in any Rating Agency reducing or withdrawing its then
existing rating of the Class A Certificates or the Class B
Certificates.
"Reallocated Class B Principal Collections" is defined in Section
4.14.
"Reallocated Collateral Principal Collections" is defined in
Section 4.14.
"Reallocated Principal Collections" is defined in Section 4.14.
"Record Date" means, with respect to any Distribution Date, the
last Business Day of the calendar month preceding such Distribution
Date.
"Required Cash Collateral Amount" means, with respect to any date
of determination, the Required Enhancement Amount less the Collateral
Interest.
"Required Draw Amount" is defined in Section 4.18(c).
"Required Enhancement Amount" means, with respect to each
Transfer Date, the greater of (a) an amount equal to 13% of the
Adjusted Invested Amount on such Transfer Date, after taking into
account deposits into the Principal Funding Account on such Transfer
Date and payments (including payments on the Collateral Interest) to
be made on the related Distribution Date and (b) $10,500,000; provided
that (x) if, on or prior to such Transfer Date, there has been any
Required Draw Amount pursuant to Section 4.18(c) or any reductions in
the Collateral Interest pursuant to clauses (c), (d) or (e) of the
definition of such term, or an Early Amortization Event has occurred
with respect to Series 1996-B, then the Required Enhancement Amount
for such Transfer Date shall, subject to clauses (y) and (z), equal
the Required Enhancement Amount on the Transfer Date immediately
preceding such reduction, Required Draw Amount or Early Amortization
Event, (y) in no event shall the Required Enhancement Amount 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 Enhancement Amount may be reduced or increased at
Transferor's option at any time if Transferor, Servicer, the
Collateral Interest Holder and Trustee have been provided evidence
that the Rating Agency Condition has been satisfied.
"Required Reserve Account Amount" means, with respect to any
Transfer Date on or after the Reserve Account Funding Date, an amount
equal to (a) 1% of the outstanding principal balance of the Class A
Certificates or (b) any other amount designated by Transferor;
provided that if such designation is of a lesser amount, Transferor
shall (i) provide Servicer, the Collateral Interest Holder and Trustee
with evidence that the Rating Agency Condition has been satisfied and
(ii) deliver to Trustee a certificate of an authorized officer to the
effect that, based on the facts known to such officer at such time, in
the reasonable belief of Transferor, such designation will not cause
an Early Amortization Event or an event that, after the giving of
notice or the lapse of time, would cause an Early Amortization Event
to occur with respect to Series 1996-B.
"Required Retained Transferor Percentage" means, for purposes of
Series 1996-B, 7%.
"Reserve Account" is defined in Section 4.17(a).
"Reserve Account Funding Date" means the Transfer Date which
occurs not later than the earliest of: (a) the Transfer Date with
respect to the Monthly Period which commences no later than 3 months
prior to May 1, 2002; (b) the first Transfer Date for which the
Portfolio Adjusted Yield is less than 2.00%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier
than the Transfer Date with respect to the Monthly Period which
commences 12 months prior to the anticipated commencement of the
Controlled Accumulation Period; (c) the first Transfer Date for which
the Portfolio Adjusted Yield is less than 3.00%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier
than the Transfer Date with respect to the Monthly Period which
commences 6 months prior to the anticipated commencement of the
Controlled Accumulation Period; and (d) the first Transfer Date for
which the Portfolio Adjusted Yield is less than 4.00%, but in such
event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period
which commences 4 months prior to the anticipated commencement of the
Controlled Accumulation Period.
"Reserve Account Surplus" means, 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" is defined in Section 4.17(c).
"Reset Date" means each of (a) an Addition Date on which
Receivables from Supplemental Accounts are added to the Trust, (b) a
Removal Date on which, if any Series has been paid in full, Principal
Receivables in an aggregate amount approximately equal to the initial
investor interest of such Series are removed from the Trust, (c) a
date on which there is an increase in the Invested Amount of any
Variable Interest issued by the Trust and (d) any date on which a new
Series is issued.
"Revolving Period" means the period from and including the
Closing Date to, but not including, the earlier of (a) the Controlled
Accumulation Date and (b) the Early Amortization Commencement Date.
"Series Account" means, as to Series 1996-B, the Distribution
Account, the Finance Charge Account, the Principal Account, the
Principal Funding Account, the Cash Collateral Account and the Reserve
Account.
"Series Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of
which is the numerator used in determining the Floating Allocation
Percentage for that Monthly Period and the denominator of which is the
sum of the numerators used to calculate the Investor Percentages (as
such term is defined in the Agreement) for allocations with respect to
Finance Charge Receivables for all outstanding Series on such date of
determination; provided that if one or more Reset Dates occur in a
Monthly Period, the Series Allocation Percentage for the portion of
the Monthly Period falling on and after each such Reset Date (the
"subject Reset Date") and prior to any subsequent Reset Date will be
determined using a denominator which is equal to the sum of the
numerators used to calculate the Investor Percentages for allocations
with respect to Finance Charge Receivables for all outstanding Series
as of the close of business on the subject Reset Date.
"Series 1996-B" means the Series of the World Financial Network
Credit Card Master Trust represented by the Investor Certificates.
"Series 1996-B Certificates" means the Class A Certificates and
the Class B Certificates.
"Series 1996-B Holder" means the holder of record of a Series
1996-B Certificate.
"Series 1996-B Termination Date" means the earliest to occur of
(a) the Distribution Date on which the Invested Amount is paid in
full, (b) the termination of the Trust pursuant to the Agreement and
(c) the April 2006 Distribution Date.
"Series Servicing Fee Percentage" means 2.0%.
"Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Shared Principal Collections" means, as the context requires,
either (a) the amount allocated to the Investor Certificates which are
treated as Shared Principal Collections pursuant to Sections 4.7(a),
4.7(b)(iv)(B), 4.7(c)(iv)(B), 4.11(d)(ii) and 4.11(e)(iv) and which
may be applied to the principal shortfall with respect to other
outstanding Series in Group One or (b) the amounts allocated to the
investor certificates of other Series in Group One which the
applicable Supplements for such Series specify are to be treated as
"Shared Principal Collections" and which may be applied to cover the
Principal Shortfall with respect to the Investor Certificates.
"Specified Transferor Amount" means, at any time, the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount,
if any) at that time.
"Target Amount" is defined in Section 4.7(d).
"Uncovered Dilution Amount" means an amount equal to the product
of (x) the Series Allocation Percentage for the related Monthly Period
(determined on a weighted average basis, if a Reset Date occurs during
that Monthly Period), times (y) the aggregate Dilutions occurring
during that Monthly Period as to which any deposit is required to made
to the Excess Funding Account pursuant to Section 3.9(a) but has not
been made; provided that, if the Transferor Amount is greater than
zero at the time the deposit referred to in clause (y) is required to
be made, the Uncovered Dilution Amount for such amount to be deposited
shall be deemed to be zero.
SECTION 3. Servicing Fee. The share of the Servicing Fee
allocable to Series 1996-B with respect to any Transfer Date (the
"Servicing Fee") shall be equal to one-twelfth of the product of (i)
the Series Servicing Fee Percentage and (ii) the Adjusted Invested
Amount as of the last day of the Monthly Period preceding such
Transfer Date; provided that with respect to the first Transfer Date,
the Servicing Fee shall equal $427,777.78. The share of the Servicing
Fee allocable to the Class A Invested Amount (the "Class A Servicing
Fee"), the Class B Invested Amount (the "Class B Servicing Fee") and
the Collateral Interest (the "Collateral Interest Servicing Fee") with
respect to any Transfer Date shall equal the Class A Floating
Allocation Percentage, Class B Floating Allocation Percentage and
Collateral Floating Allocation Percentage, respectively, of such
Servicing Fee. Except as specifically provided above, the Servicing
Fee shall be paid by the cash flows from the Trust allocated to
Transferor or the certificateholders of other Series (as provided in
the related Supplements) and in no event shall the Trust, Trustee or
the Investor Holders be liable therefor. The Class A Servicing Fee
shall be payable to Servicer solely to the extent amounts are
available for distribution in respect thereof pursuant to Sections
4.11(a)(ii) and 4.13(a). The Class B Servicing Fee shall be payable
solely to the extent amounts are available for distribution in respect
thereof pursuant to Sections 4.11(b)(ii) and 4.13(c). The Collateral
Interest Servicing Fee shall be payable solely to the extent amounts
are available for distribution in respect thereof pursuant to Section
4.13(f) or if applicable Section 4.11(c)(i).
SECTION 4. Optional Repurchase; Reassignment and Termination
Provisions. (a) The Investor Certificates shall be subject to
retransfer to Transferor at its option on any Distribution Date, on or
after the Distribution Date on which the Invested Amount is reduced to
an amount less than or equal to 5% of the Initial Invested Amount by
deposit into the Collection Account for application in accordance with
Section 12.2 of an amount equal to the sum of (i) the Adjusted
Invested Amount (less any amounts then on deposit in the Principal
Account), plus (ii) accrued and unpaid interest on the Investor
Certificates through the day preceding the Distribution Date on which
the repurchase occurs. Upon the tender of the outstanding Series
1996-B Certificates by the Holders (and without tender in the case of
the Collateral Interest), Trustee shall distribute such amount,
together with all funds on deposit in the Principal Account and
Principal Funding Account to the Investor Holders on the next
Distribution Date in repayment of the principal amount and accrued and
unpaid interest owing to the Investor Holders. Following any
redemption, the Investor Holders shall have no further rights with
respect to the Receivables. If Transferor fails for any reason to
deposit in the Collection Account the aggregate purchase price for the
Investor Certificates, payments shall continue to be made to the
Investor Holders in accordance with the terms of the Agreement and
this Series Supplement.
(b) The amount required to be deposited by Transferor with
respect to the Investor Certificates in connection with any
reassignment of Receivables pursuant to Section 2.6 shall equal the
sum of (i) the Adjusted Invested Amount (less any amounts then on
deposit in the Principal Account), plus (ii) accrued and unpaid
interest on the Investor Certificates through the day preceding the
Distribution Date on which the repurchase occurs. The amount so
deposited together with the amount then on deposit in the Principal
Account and the Principal Funding Account shall be distributed to the
Holders of the Investor Certificates in final payment of the Invested
Amount and all such other amounts on the Distribution Date on which it
is deposited.
(c) Proceeds available from the sale of Receivables in accordance
with Section 12.2(c) on the Series 1996-B Termination Date shall be
treated, to the extent of the Invested Amount, as Collections of
Principal Receivables that have been allocated to the Investor
Certificates and any excess shall be treated as Collections of Finance
Charge Receivables that have been allocated to the Investor
Certificates, in each case with respect to the prior Monthly Period.
(d) Transferor may from time to time, purchase Class A and Class
B Certificates on the secondary market and request Trustee to cancel
such Class A and Class B Certificates held by Transferor and reduce
the Class A or Class B Invested Amount, as applicable, by a
corresponding amount; provided that Transferor may make such purchases
and requests for cancellation of Class B Certificates resulting in a
reduction of the Class B Invested Amount only to the extent that it
has made (or will make contemporaneously with any such purchase and
request for cancellation of Class B Certificates) purchases and
requests for cancellations of Class A Certificates that result in at
least a pro rata reduction of the Class A Invested Amount.
SECTION 5. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1996-B Certificates to
Trustee (in definitive, fully registered form) for authentication in
accordance with Section 6.1. Trustee shall deliver such Certificates
when authenticated in accordance with Section 6.2. The Collateral
Interest shall be issued as provided in this Series Supplement and the
Loan Agreement.
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-B 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 through 4.5
shall read in their entirety as provided in the Agreement. Article IV
(except for Sections 4.1 through 4.5 thereof) shall be read in its
entirety as follows and shall be applicable only to the Investor
Certificates:
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.6 Rights of Holders 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 applicable Investor Percentage of Collections
received with respect to the Receivables and (b) funds on deposit in
the Collection Account, the Finance Charge Account, the Principal
Account, the Principal Funding Account, the Cash Collateral Account,
the Reserve Account and the Distribution Account. The Collateral
Interest shall be subordinate to the Class A Certificates and the
Class B Certificates to the extent described herein. The Class B
Certificates shall be subordinate to the Class A Certificates to the
extent described herein. Transferor shall not have any interest in the
Collection Account, the Finance Charge Account, the Principal Account,
the Principal Funding Account, the Cash Collateral Account, the
Reserve Account and the Distribution Account, except as specifically
provided in this Article IV.
SECTION 4.7 Allocations. (a) Allocations During the Revolving
Period. During the Revolving Period, Servicer shall allocate
Collections to the Investor Holders as follows:
(i) allocate to the Investor Holders 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;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Investor Allocation Percentage
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; and
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage 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.
In addition, an amount equal to the product of (1) the Class A
Investor Allocation Percentage 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 each Date of Processing shall
be treated as Shared Principal Collections.
(b) Allocations During the Controlled Accumulation Period.
During the Controlled Accumulation Period, Servicer shall allocate
Collections to the Investor Holders as follows:
(i) allocate to the Investor Holders 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;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Investor Allocation Percentage
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;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage 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; and
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation Percentage
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 that
the amount allocated pursuant to this Section 4.7(b)(iv)(A)
during any Monthly Period shall not exceed the Controlled Deposit
Amount for the related Transfer Date (after taking into account
any payments to be made on the immediately preceding Distribution
Date) and (B) treat as Shared Principal Collections any amount
not allocated as a result of the proviso to clause (A).
(c) Allocations During the Early Amortization Period. During the
Early Amortization Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders 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;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Investor Allocation Percentage
on the Date of Processing of such Collections and (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;
(iii) allocate to the Investor Holders an amount equal
to the product of (A) the Class B Investor Allocation Percentage
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; and
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation Percentage
on the Date of Processing of such Collections and (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
that the aggregate amount allocated pursuant to this Section
4.7(c)(iv)(A) during any Monthly Period shall not exceed the
Invested Amount 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
Invested Amount to be made on the Transfer Date relating to such
Monthly Period) and (B) treat as Shared Principal Collections any
amount not allocated as a result of the proviso to clause (A).
(d) During any period when Servicer is permitted by Section 4.3
to make a single monthly deposit to the Collection Account, amounts
allocated to the Investor Holders pursuant to Sections 4.7(a), (b) and
(c) with respect to any Monthly Period need not be deposited into the
Collection Account or any Series Account prior to the related Transfer
Date, and, when so deposited, (x) may be deposited net of any amounts
required to be distributed to Transferor and, if WFN is Servicer,
Servicer and (y) shall be deposited into the Finance Charge Account
(in the case of Collections of Finance Charge Receivables) and the
Principal Account (in the case of Collections of Principal Receivables
(not including any Shared Principal Collections allocated to Series
1996-B pursuant to Section 4.15)), subject in either case to the
proviso to the next sentence. At any other time, amounts so allocated
on each Date of Processing shall be deposited on that Date of
Processing into the Finance Charge Account (in the case of Collections
of Finance Charge Receivables) and the Principal Account (in the case
of Collections of Principal Receivables (not including any Shared
Principal Collections allocated to Series 1996-B pursuant to Section
4.15)), provided that:
(i) with respect to each Monthly Period falling in the
Revolving Period (and with respect to that portion of each
Monthly Period in the Controlled Accumulation Period falling on
or after the day on which Collections of Principal Receivables
equal to the related Controlled Deposit Amount have been
allocated pursuant to Section 4.7(b)(iv) and deposited pursuant
to Section 4.7(d)), Collections of Finance Charge Receivables
shall be deposited into the Finance Charge Account only until
such time as the aggregate amount so deposited equals the sum
(the "Target Amount") of (A) the amounts of Class A Monthly
Interest, Class B Monthly Interest, Class A Deficiency Amount and
Class A Additional Interest (if any), Class B Deficiency Amount
and Class B Additional Interest (if any), (B) if WFN is not
Servicer, the Servicing Fee, each due on the related Distribution
Date, (C) any Collateral Monthly Interest due on the related
Transfer Date and any other amounts that the Transferor or
Servicer knows will be owed under the Loan Agreement on the
related Transfer Date to the extent such amounts are payable
under the Loan Agreement from Available Non-Principal Funds (as
defined in the Loan Agreement), (D) any amount required to be
deposited in the Reserve Account on the related Transfer Date
and (E) any Finance Charge Shortfalls for any other Series in
Group One (as defined in the related Supplement); and
(ii) with respect to each Monthly Period falling in the
Revolving Period, Collections of Principal Receivables allocated
to the Investor Holders pursuant to Section 4.7(a)(ii) and (iii)
shall (after an amount equal to any Collateral Monthly Principal
for that Monthly Period has been deposited into the Principal
Account) be paid to Transferor (or, if the Transferor Amount is
less than the Specified Transferor Amount, deposited into the
Excess Funding Account), but Transferor shall make an amount
equal to the Reallocated Principal Collections for the related
Transfer Date available on that Transfer Date for application in
accordance with Section 4.14.
With respect to any Monthly Period when deposits of Collections of
Finance Charge Receivables into the Finance Charge Account are limited
in accordance with clause (i) of the preceding proviso,
notwithstanding such limitation: (1) "Excess Spread" for the related
Transfer Date shall be calculated as if the full amount of Finance
Charge Collections allocated to the Investor Certificates during that
Monthly Period had been deposited in the Finance Charge Account and
applied on such Transfer Date in accordance with Sections 4.11(a),
4.11(b) and 4.11(c); and (2) Collections of Finance Charge Receivables
released to Transferor pursuant to such clause (i) shall be deemed,
for purposes of all calculations under this Supplement and the Loan
Agreement, to have been applied to the items specified in Sections
4.11(a), 4.11(b), 4.11(c) and 4.13 to which such amounts would have
been applied (and in the priority in which they would have been
applied) had such amounts been available in the Finance Charge Account
on such Transfer Date. To avoid doubt, the calculations referred to in
the preceding clause (2) include the calculations required by clause
(c) of the definition of Class A Invested Amount, clause (f) of the
definition of Class B Invested Amount, clause (f) of the definition of
Collateral Interest and Section 4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the
Target Amount for that Monthly Period as previously calculated by
Servicer, then (x) Servicer shall (on the same Business Day) inform
Transferor of such determination, and (y) within two Business Days of
receiving such notice Transferor shall deposit into the Finance Charge
Account funds in an amount equal to the amount of Collections of
Finance Charge Receivables allocated to the Investor Certificates for
that Monthly Period but not deposited into the Finance Charge Account
due to the operation of clause (i) (but not in excess of the amount
required so that the aggregate amount deposited for the subject
Monthly Period equals the Target Amount). In addition, if on any
Transfer Date the Transferor Amount will be less than the Specified
Transferor Amount after giving effect to all transfers and deposits on
that Transfer Date, Transferor shall, on that Transfer Date, deposit
into the Principal Account funds in an amount equal to the amounts of
Class A Available Funds and Excess Spread that are required to be
treated as Investor Principal Collections pursuant to Sections
4.11(a)(iii) and 4.13 but are not available from funds in the Finance
Charge Account as a result of the operation of clause (i).
(e) On any date, Servicer may withdraw from the Collection
Account or any Series Account any amounts inadvertently deposited in
such account that should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount
of monthly interest distributable to the Class A Certificates shall
equal the product of (i) one-twelfth, times (ii) the Class A
Certificate Rate, times (iii) the outstanding principal balance of the
Class A Certificates determined as of the Record Date preceding the
related Transfer Date (the "Class A Monthly Interest"); provided that
(x) Class A Monthly Interest for the first Distribution Period will be
$1,970,325 and (y) in addition to Class A Monthly Interest an amount
equal to the amount of any unpaid Class A Deficiency Amounts, plus an
amount equal to the product of (A) (1) one-twelfth, times (2) the sum
of the Class A Certificate Rate, plus 2% per annum, and (B) any Class
A Deficiency Amount from the prior Transfer Date (or the portion
thereof which has not theretofore been paid to Class A Holders) (the
"Class A Additional Interest"), shall also be distributable to the
Class A Certificates, and on such Transfer Date Trustee shall deposit
such funds, to the extent available, into the Distribution Account.
The "Class A Deficiency Amount" for any Transfer Date shall equal the
excess, if any, of the aggregate amount accrued pursuant to this
Section 4.8(a) as of the prior Distribution Period over the amount
actually transferred from the Distribution Account for payment of such
amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) one-twelfth, times (ii)
the Class B Certificate Rate, times (iii) the outstanding principal
balance of the Class B Certificates determined as of the Record Date
preceding the related Transfer Date (the "Class B Monthly Interest");
provided that (x) Class B Monthly Interest for the first Distribution
Period will be $214,200 and (y) in addition to the Class B Monthly
Interest an amount equal to the amount of any unpaid Class B
Deficiency Amounts, plus an amount equal to the product of (A) (1)
one-twelfth, times (2) the sum of the Class B Certificate Rate, plus
2% per annum, and (B) any Class B Deficiency Amount from the prior
Transfer Date (or the portion thereof which has not theretofore been
paid to Class B Holders) (the "Class B Additional Interest"), shall
also be distributable to the Class B Certificates, and on such
Transfer Date Trustee shall deposit such funds, to the extent
available, into the Distribution Account. The "Class B Deficiency
Amount" for any Transfer Date shall equal the excess, if any, of the
aggregate amount accrued pursuant to this Section 4.8(b) as of the
prior Distribution Period over the amount actually transferred from
the Distribution Account for payment of such amount.
(c) The amount of monthly interest distributable to the
Collateral Interest (the "Collateral Monthly Interest") shall equal
the product of (i) (A) a fraction, the numerator of which is the
actual number of days in the related Distribution Period and the
denominator of which is 360, times (B) the Collateral Rate in effect
with respect to the related Distribution Period, times (ii) the
Collateral Interest determined as of the Record Date preceding such
Transfer Date.
SECTION 4.9 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 Early 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 Invested
Amount 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 after the one on
which the Class A Adjusted Invested Amount is reduced to zero, and for
the Early Amortization Period beginning with the Transfer Date on
which the Class A Invested Amount is reduced to zero (in either case
after giving effect to payments to be made on the related Distribution
Date), shall be an amount equal to the lesser of (i) the excess, if
any, of (A) the Available Investor Principal Collections on such
Transfer Date over (B) any Class A Monthly Principal on such Transfer
Date and (ii) the Class B Invested Amount (after taking into account
any adjustments to be made on such Transfer Date pursuant to Sections
4.12 and 4.14) 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 (i) during the
Revolving Period following any reduction of the Required Enhancement
Amount, an amount equal to the lesser of (A) the Enhancement Surplus
on such Transfer Date and (B) the Available Investor Principal
Collections on such Transfer Date or (ii) during the Controlled
Accumulation Period or Early Amortization Period an amount equal to
the lesser of (A) the Enhancement Surplus on such Transfer Date, (B)
the excess, if any, of (1) the Available Investor Principal
Collections on such Transfer Date over (2) the sum of the Class A
Monthly Principal and the Class B Monthly Principal for such Transfer
Date and (C) the Collateral Interest on such Transfer Date (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14).
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, 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 such
Transfer Date, plus (vii) the Class A Uncovered Dilution Amount for
the related Monthly Period, exceeds the Class A Available Funds for
the related Monthly Period.
(b) On or before each Transfer Date, 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 sum of (A) the Class B Investor Default Amount, if any,
for such Transfer Date and (B) the Class B Uncovered Dilution Amount
for the related Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B
Required Amount for such Transfer Date is greater than zero, Servicer
shall give written notice to Trustee of such positive Class A Required
Amount or Class B Required Amount on or before such Transfer Date. In
addition:
(i) If the Class A Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) 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 (or, in
the case of Excess Spread, deemed, in accordance with Section
4.7(d), to be distributed) from the Finance Charge Account (and
the Cash Collateral Account) on such Transfer Date pursuant to
Section 4.13(a). If the Class A Required Amount for such Transfer
Date exceeds the amount of Excess Spread (and any Required Draw
Amount) with respect to such Transfer Date, the Collections of
Principal Receivables allocable to the Collateral Interest and
the Class B Certificates with respect to the prior Monthly Period
shall be applied as specified in Section 4.14.
(ii) If the Class B Required Amount for such Transfer Date
is greater than zero, all or a portion of the Excess Spread (and
any Required Draw Amount) with respect to such Transfer Date in
an amount equal to the Class B Required Amount, to the extent
available, for such Transfer Date shall be distributed (or, in
the case of Excess Spread, deemed, in accordance with Section
4.7(d), to be distributed) from the Finance Charge Account (and
the Cash Collateral Account) on such Transfer Date pursuant to
Section 4.13(c). If the Class B Required Amount for such Transfer
Date exceeds the amount of Excess Spread (and any Required Draw
Amount) available to fund the Class B Required Amount pursuant to
Section 4.13(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
4.14;
provided that the sum of any payments pursuant to this paragraph shall
not exceed the sum of the Class A Required Amount and the Class B
Required Amount.
SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to withdraw, and Trustee,
acting in accordance with such instructions, shall withdraw on such
Transfer Date or the related Distribution Date, as applicable, to the
extent of available funds, the amounts required to be withdrawn from
the Finance Charge Account, the Principal Account, the Principal
Funding Account and the Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the
related Monthly Period will be distributed on each Transfer Date, to
the extent available, in the following priority:
(i) an amount equal to Class A Monthly Interest, plus any
Class A Deficiency Amount, plus any Class A Additional Interest
(in each case for such Transfer Date) shall be deposited by
Servicer or Trustee into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date plus any Class A Servicing Fee due but not paid to
Servicer on any prior Transfer Date (less, if WFN is Servicer,
amounts previously retained toward payment of such fees) shall be
distributed to Servicer;
(iii) an amount equal to the sum of the Class A Investor
Default Amount and the Class A Uncovered Dilution Amount, if any,
for the preceding Monthly Period shall be treated (or deemed, in
accordance with Section 4.7(d), to be treated) as a portion of
Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, 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
4.13.
(b) An amount equal to the Class B Available Funds for the
related Monthly Period will be distributed on each Transfer Date, to
the extent available, in the following priority:
(i) an amount equal to the Class B Monthly Interest, plus
any Class B Deficiency Amount, plus any Class B Additional
Interest (in each case for such Transfer Date) shall be deposited
by Servicer or Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus any Class B Servicing Fee due but not paid to
Servicer on any prior Transfer Date for such Transfer Date (less,
if WFN is Servicer, amounts previously retained toward payment of
such fees) shall be distributed to Servicer; and
(iii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(c) An amount equal to the Collateral Available Funds for the
related Monthly Period will be distributed on each Transfer Date, to
the extent available, in the following priority:
(i) if neither Transferor nor any of its Affiliates is
Servicer, an amount equal to the Collateral Interest Servicing
Fee for such Transfer Date, plus any Collateral Interest
Servicing Fee due but not paid to Servicer on any prior Transfer
Date shall be distributed to Servicer; and
(ii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(d) During the Revolving Period, an amount equal to the
Available Investor Principal Collections for the related Monthly
Period will be distributed on each Transfer Date, to the extent
available, 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; and
(ii) an amount equal to the Available Investor Principal
Collections remaining after the application specified in Section
4.11(d)(i) shall be treated as Shared Principal Collections.
(e) On each Transfer Date commencing with the Transfer Date
falling in the calendar month following the one in which the
Controlled Accumulation Period or the Early Amortization Period
(whichever is earlier) commences, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on such Transfer Date, to the extent available, in the
following priority:
(i) an amount equal to the Class A Monthly Principal for
such Transfer Date, shall be (A) with respect to the Controlled
Accumulation Period, deposited into the Principal Funding
Account, and (B) during the Early Amortization Period, deposited
into the Distribution Account;
(ii) after giving effect to the distribution referred to in
clause (i), 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-B Termination Date, in
which case on the Series 1996-B 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; and
(iv) an amount equal to the Available Investor Principal
Collections remaining after the applications specified in clauses
(i), (ii) and (iii) above shall be treated as Shared Principal
Collections.
(f) On the earlier to occur of (i) the first Transfer Date with
respect to the Early Amortization Period and (ii) the Transfer Date
immediately preceding the Class A Scheduled Payment Date, Trustee,
acting in accordance with instructions from Servicer, shall withdraw
from the Principal Funding Account and deposit in the Distribution
Account the amount on deposit in the Principal Funding Account.
(g) On each Distribution Date, Trustee shall pay in accordance
with Section 5.1(a) to the Class A Holders from the Distribution
Account, the amount deposited into the Distribution Account pursuant
to Section 4.11(a)(i) on the preceding Transfer Date and to the Class
B Holders from the Distribution Account, the amount deposited into the
Distribution Account pursuant to Section 4.11(b)(i) on the preceding
Transfer Date.
(h) On the earlier to occur of (i) the first Distribution Date
with respect to the Early Amortization Period and (ii) the Class A
Scheduled Payment Date and on each Distribution Date thereafter,
Trustee, acting in accordance with instructions from Servicer, shall
pay in accordance with Section 5.1 from the Distribution Account the
amount so deposited into the Distribution Account pursuant to Sections
4.11(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 Invested Amount shall
be paid to the Class A Holders; and
(ii) for each Distribution Date with respect to the Early
Amortization Period and on or after 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 Invested
Amount shall be paid to the Class B Holders.
(i) The Controlled Accumulation Period is scheduled to commence
at the beginning of business on the Controlled Accumulation Date;
provided that if the Controlled Accumulation Period Length (determined
as described below) on any Determination Date on or after the April
2002 Determination Date is less than 12 months, upon written notice to
Trustee, Transferor and, each Rating Agency, Servicer, at its option,
may elect to modify the date on which the Controlled Accumulation
Period actually commences to the first day of the month that is a
number of months prior to the month in which the Class A Scheduled
Payment Date occurs at least equal to the Controlled Accumulation
Period Length (so that, as a result of such election, the number of
Monthly Periods in the Controlled Accumulation Period will at least
equal the Controlled Accumulation Period Length); provided that (i)
the length of the Controlled Accumulation Period will not be less than
one month, (ii) such determination of the Controlled Accumulation
Period Length shall be made on each Determination Date on and after
the April 2002 Determination Date but prior to the commencement of the
Controlled Accumulation Period, and any election to shorten the
Controlled Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the Controlled
Accumulation Period Length determined on any subsequent Determination
Date, but the Controlled Accumulation Period shall in no event
commence prior to the Controlled Accumulation Date, and (iii)
notwithstanding any other provision of this Series Supplement to the
contrary, no election to postpone the commencement of the Controlled
Accumulation Period shall be made after an Early Amortization Event
shall have occurred and be continuing with respect to any other
Series. The "Controlled Accumulation Period Length" will mean a number
of whole months such that the amount available for distribution of
principal on the Class A Certificates on the Class A Scheduled Payment
Date is expected to equal or exceed the Class A Invested Amount,
assuming for this purpose that (1) the payment rate with respect to
Collections of Principal Receivables remains constant at the lowest
level of such payment rate during the twelve preceding Monthly Periods
(or such lower payment rate as Servicer may select), (2) the total
amount of Principal Receivables in the Trust (and the principal amount
on deposit in the Excess Funding Account, if any) remains constant at
the level on such date of determination, (3) no Early Amortization
Event with respect to any Series will subsequently occur and (4) no
additional Series (other than any Series being issued on such date of
determination) will be subsequently issued. Any notice by Servicer
electing to modify the commencement of the Controlled Accumulation
Period pursuant to this Section 4.11(i) shall specify (i) the
Controlled Accumulation Period Length, (ii) the commencement date of
the Controlled Accumulation Period and (iii) the Controlled
Accumulation Amount with respect to each Monthly Period during the
Controlled Accumulation Period.
SECTION 4.12 Investor Charge-Offs. (a) On or before each
Transfer Date, Servicer shall calculate the sum of the Class A
Investor Default Amount and the Class A Uncovered Dilution Amount
(such sum being the "Class A Reduction Amount"). If on any Transfer
Date, the Class A Reduction Amount for the prior Monthly Period
exceeds the sum of the amount allocated with respect thereto pursuant
to Section 4.11(a)(iii), Section 4.13(a) (including amounts withdrawn
from the Cash Collateral Account for such allocation) and Section 4.14
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 Reduction 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. If such reduction would cause the Collateral Interest
to be a negative number, the Collateral Interest will be reduced to
zero, and the Class B Invested Amount (after giving effect to
reductions for any Class B Investor Charge-Offs and any Reallocated
Class B Principal Collections on such Transfer Date) will be reduced
by the amount by which the Collateral Interest would have been reduced
below zero. If such reduction would cause the Class B Invested Amount
to be a negative number, the Class B Invested Amount will be reduced
to zero, and the Class A Invested Amount will be reduced by the amount
by which the Class B Invested Amount would have been reduced below
zero, but not by more than the Class A Reduction Amount for such
Transfer Date (a "Class A Investor Charge-Off"). If the Class A
Invested Amount 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 allocated and available for such purpose
pursuant to Section 4.13(b).
(b) On or before each Transfer Date, Servicer shall calculate
the sum of the Class B Investor Default Amount and the Class B
Uncovered Dilution Amount (such sum being the "Class B Reduction
Amount"). If on any Transfer Date, the Class B Reduction Amount for
the prior Monthly Period exceeds the amount of Excess Spread and
Reallocated Collateral Principal Collections which are allocated and
available to fund such amount pursuant to Section 4.13(c) (including
amounts withdrawn from the Cash Collateral Account for such
allocation) and Section 4.14, 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 Section 4.12(a)) will
be reduced by the amount of such excess but not by more than the
lesser of the Class B Reduction 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 Section 4.12(a)) for
such Transfer Date. If such reduction would cause the Collateral
Interest to be a negative number, the Collateral Interest shall be
reduced to zero and the Class B Invested Amount 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 Reduction Amount for such
Transfer Date (a "Class B Investor Charge-Off"). The Class B Invested
Amount will also be reduced by the amount of Reallocated Class B
Principal Collections in excess of the Collateral Interest pursuant to
Section 4.14 and the amount of any portion of the Class B Invested
Amount allocated to the Class A Certificates to avoid a reduction in
the Class A Invested Amount pursuant to Section 4.12(a). The Class B
Invested Amount 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 allocated and
available for that purpose as described under Section 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate
the sum of the Collateral Default Amount and the Collateral Uncovered
Dilution Amount (such sum being the "Collateral Reduction Amount"). If
on any Transfer Date, the Collateral Reduction Amount for the prior
Monthly Period exceeds the amount of Excess Spread which is allocated
and available to fund such amount pursuant to Section 4.13(g), the
Collateral Interest will be reduced by the amount of such excess but
not by more than the lesser of the Collateral Reduction 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 4.14
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 Invested Amount, pursuant to Section 4.12(a),
or the Class B Invested Amount, pursuant to Section 4.12(b),
respectively. The Collateral Interest will thereafter be reimbursed on
any Transfer Date by the amount of the Excess Spread allocated and
available for that purpose as described under Section 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to apply, and Trustee, acting
in accordance with such instructions shall apply (or be deemed, in
accordance with Section 4.7(d), 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 will be used to fund the Class A
Required Amount and be applied in accordance with, and in the priority
set forth in, Section 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed will be treated
as a portion of Investor Principal Collections and, during the
Controlled Accumulation Period or the Early Amortization Period,
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 will be used to fund the Class B
Required Amount and be applied first in accordance with, and in the
priority set forth in, Section 4.11(b) and then any remaining amount
available to pay the Class B Reduction Amount shall be treated as a
portion of Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, deposited into
the Principal Account on such Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced below the initial Class B Invested
Amount for reasons other than the payment of principal to the Class B
Holders (but not in excess of the aggregate amount of such reductions
which have not been previously reimbursed) will be treated as a
portion of Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, 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 will be paid to the Collateral Interest Holder in accordance with
the Loan Agreement;
(f) if Transferor or any of its Affiliates is Servicer, an
amount equal to the aggregate amount of accrued but unpaid Collateral
Interest Servicing Fees (less, if WFN is Servicer, amounts previously
retained towards payment of such fee) will be paid to Servicer;
(g) an amount equal to the Collateral Reduction Amount, if any,
for the related Monthly Period will be treated as a portion of
Investor Principal Collections and, during the Controlled Accumulation
Period or the Early Amortization Period, 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 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) will be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period
or the Early Amortization Period, deposited into the Principal Account
on such Transfer Date;
(i) an amount up to the excess, if any, of the Required Cash
Collateral Amount (determined after all deposits, withdrawals,
reductions, payments and adjustments to be made with respect to such
date) over the Available Cash Collateral Amount (without giving effect
to any deposit made on such date hereunder) shall be deposited in the
Cash Collateral Account;
(j) 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 4.17(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;
(k) an amount equal to all other amounts due under the Loan
Agreement shall be distributed in accordance with the Loan Agreement;
and
(l) the balance, if any, after giving effect to the payments
made pursuant to clauses (a) through (k) shall constitute "Excess
Finance Charge Collections" to be applied with respect to other Series
in accordance with Section 4.5 of the Agreement.
SECTION 4.14 Reallocated Principal Collections. On or before
each Transfer Date, Servicer shall instruct Trustee in writing (which
writing shall be substantially in the form of Exhibit B) to, and
Trustee in accordance with such instructions shall, withdraw from the
Principal Account and apply Collections of Principal Receivables 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 sum of (x) the amount of Excess Spread with respect
to the related Monthly Period and (y) the Available Cash
Collateral Amount with respect to such Transfer Date, shall be
applied pursuant to Sections 4.11(a)(i), (ii) and (iii); 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 sum of (x) the amount of Excess Spread allocated
and available to the Class B Certificates pursuant to Section
4.13(c) on such Transfer Date and (y) the amount withdrawn from
the Cash Collateral Account pursuant to Section 4.18(c) which is
remaining after application pursuant to Section 4.13(c) with
respect to such Transfer Date shall be applied first pursuant to
Sections 4.11(b)(i) and (ii) and then pursuant to Section
4.13(c);
provided, that:
(1) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clauses (a) and (b) (the
"Reallocated Principal Collections") shall not exceed the lesser
of (A) the product of (x) the sum of the Collateral Investor
Allocation Percentage and the Class B Investor Allocation
Percentage for the Monthly Period relating to such Transfer Date
and (y) the Investor Percentage for the Monthly Period relating
to such Transfer Date and (z) the amount of Collections of
Principal Receivables for the Monthly Period relating to such
Transfer Date and (B) the sum of the Collateral Interest and the
Class B Invested Amount after giving effect to any Collateral
Charge-Offs and Class B Investor Charge-Offs for such Transfer
Date; and
(2) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clause (b) shall not exceed
the lesser of (A) the product of (x) the Collateral Investor
Allocation Percentage for the Monthly Period relating to such
Transfer Date and (y) the Investor Percentage for the Monthly
Period relating to such Transfer Date and (z) the amount of
Collections of Principal Receivables for the Monthly Period
relating to such Transfer Date and (B) the Collateral Interest
after giving effect to any Collateral Charge-Offs for such
Transfer Date.
With respect to any Transfer Date, any Reallocated Principal
Collections up to and including the amount specified in clause (2)(A)
above shall constitute "Reallocated Collateral Principal Collections,"
and any Reallocated Principal Collections in excess of such amount
shall constitute "Reallocated Class B Principal Collections."
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. If 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 Invested Amount shall be reduced by
the amount by which the Collateral Interest would have been reduced
below zero. If the reallocation of Reallocated Principal Collections
would cause the Class B Invested Amount (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 Invested Amount (after
giving effect to any Class B Investor Charge-Offs for such Transfer
Date) to be reduced to zero.
SECTION 4.15 Shared Principal Collections; Amounts Transferred
from the Excess Funding Account to the Principal Account. (a) The
Shared Principal Collections allocable to Series 1996-B on any
Transfer Date pursuant to Section 4.15(b) shall be applied as
Available Investor Principal Collections pursuant to Section 4.11 and
pursuant to such Section 4.11 shall be deposited in the Distribution
Account or distributed in accordance with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1996-B with
respect to any Transfer Date means an amount equal to the Principal
Shortfall, if any, with respect to Series 1996-B for such Transfer
Date; provided that if the aggregate amount of Shared Principal
Collections for all Series in Group One for such Transfer Date is less
than the Cumulative Principal Shortfall for such Transfer Date, then
Shared Principal Collections allocable to Series 1996-B on such
Transfer Date shall equal the product of (i) Shared Principal
Collections for all Series in Group One for such Transfer Date and
(ii) a fraction, the numerator of which is the Principal Shortfall
with respect to Series 1996-B for such Transfer Date and the
denominator of which is the aggregate amount of Cumulative Principal
Shortfall for all Series in Group One for such Transfer Date. On each
Transfer Date, Trustee (in accordance with instructions from Servicer)
shall withdraw Shared Principal Collections allocable to Series 1996-B
from the Collection Account and deposit the same into the Principal
Account.
(c) Solely for the purpose of determining the amount of
Available Investor Principal Collections to be treated as Shared
Principal Collections on any Transfer Date allocable to other Series
in Group One, on each Determination Date, Servicer shall determine the
Class A Required Amount, Class B Required Amount, Excess Spread and
Reallocated Principal Collections as of such Determination Date for
the following Transfer Date.
(d) The aggregate amount allocable to Series 1996-B and required
to be transferred from the Excess Funding Account into the Principal
Account with respect to any Transfer Date means an amount equal to the
Principal Shortfall, if any, with respect to Series 1996-B for such
Transfer Date minus the amount of Shared Principal Collections
allocated to Series 1996-B from other Series in Group One on that
Transfer Date; provided that if the aggregate amount required to be
withdrawn from the Excess Funding Account pursuant to Section 4.2 for
all Series (whether or not included in Group One) for such Transfer
Date is less than the cumulative Principal Shortfall minus available
Shared Principal Collections for all Series (whether or not included
in Group One) for such Transfer Date, then the aggregate amount
allocable to Series 1996-B and required to be transferred on such
Transfer Date shall equal the product of (i) the aggregate amount
required to be withdrawn from the Excess Funding Account pursuant to
Section 4.2 for all Series for such Transfer Date and (ii) a fraction,
(A) the numerator of which is the Principal Shortfall with respect to
Series 1996-B for such Transfer Date minus the amount of Shared
Principal Collections allocated to Series 1996-B from other Series in
Group One on that Transfer Date and (B) the denominator of which is
the cumulative Principal Shortfall for all Series (whether or not
included in Group One) minus available Shared Principal Collections
for all Series (whether or not included in Group One) for such
Transfer Date.
SECTION 4.16 Finance Charge Account, Principal Account,
Principal Funding Account and Distribution Account. (a) Trustee shall
establish and maintain with an Eligible Institution, which may be
Trustee, in the name of the Trust, on behalf of the Trust, for the
benefit of the Investor Holders, four segregated trust accounts (the
"Finance Charge Account", the "Principal Account", the "Principal
Funding Account" and the "Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Investor Holders. Trustee shall possess
all right, title and interest in all funds on deposit from time to
time in the Finance Charge Account, the Principal Account, the
Principal Funding Account and the Distribution Account and in all
proceeds thereof. The Finance Charge Account, the Principal Account,
the Principal Funding Account and the Distribution Account shall be
under the sole dominion and control of Trustee for the benefit of the
Investor Holders. If at any time the institution holding the Finance
Charge Account, the Principal Account, the Principal Funding Account
and the Distribution Account ceases to be an Eligible Institution,
Transferor shall notify Trustee, and Trustee upon being notified (or
Servicer on its behalf) shall, within 10 Business Days, establish a
new Finance Charge Account, a new Principal Account, a new Principal
Funding Account and a new Distribution Account meeting the conditions
specified above, and shall transfer any cash or any investments to
such new Finance Charge Account, Principal Account, Principal Funding
Account and Distribution Account. Trustee, at the direction of
Servicer, shall (i) make withdrawals from the Finance Charge Account,
the Principal Account, the Principal Funding Account and the
Distribution Account from time to time, in the amounts and for the
purposes set forth in this Series Supplement and the Agreement, 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, Section
4.11(e). Trustee at all times shall maintain accurate records
reflecting each transaction in the Finance Charge Account, the
Principal Account, the Principal Funding Account and the Distribution
Account and that the funds held therein shall at all times be held in
trust for the benefit of the Investor Holders.
(b) Funds on deposit in the Finance Charge Account, the
Principal Account and the Principal Funding Account from time to time
shall be invested and reinvested at the direction of Servicer by
Trustee in Eligible Investments that will mature so that such funds
will be available for withdrawal on the following Transfer Date.
Trustee shall maintain for the benefit of the Investor Holders
possession of the negotiable instruments or securities, if any,
evidencing such Eligible Investments. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and
either (i) such disposal will not result in a loss of all or part of
the principal portion of such Eligible Investment or (ii) prior to the
maturity of such Eligible Investment, a default occurs in the payment
of principal, interest or any other amount with respect to such
Eligible Investment. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds
(x) on deposit in the Finance Charge Account and the Principal Account
shall be treated as Collections of Finance Charge Receivables
allocated to the Invested Amount for purposes of this Series
Supplement and (y) on deposit in the Principal Funding Account shall
be treated as Collections of Finance Charge Receivables allocated to
the Invested Amount for purposes of this Series Supplement and shall
be applied in accordance with Section 4.16(c).
(c) On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each
Transfer Date thereafter with respect to the Controlled Accumulation
Period, Trustee, acting at 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 Section 4.11(a)(i).
(d) Any Excess Principal Funding Investment Proceeds shall be
paid to Transferor on each Transfer Date. An amount equal to any
Principal Funding Investment Shortfall will be deposited in the
Finance Charge Account on each Transfer Date from the Reserve Account
to the extent funds are available pursuant to Section 4.17(d).
Principal Funding Investment Proceeds (including reinvested interest)
shall not be considered part of the amounts on deposit in the
Principal Funding Account for purposes of this Series Supplement.
SECTION 4.17 Reserve Account. (a) Trustee shall establish and
maintain with an Eligible Institution, which may be Trustee, in the
name of the Trust, on behalf of the Trust, for the benefit of the
Investor Holders, a segregated trust account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Investor Holders. 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
Trustee for the benefit of the Investor Holders. If at any time an
Eligible Institution holding the Reserve Account ceases to be a
Eligible Institution, Transferor shall notify Trustee, and Trustee
upon being notified (or Servicer on its behalf) shall, within 10
Business Days, establish a new Reserve Account meeting the conditions
specified above, and shall transfer any cash or any investments to
such new Reserve Account. Trustee, at the direction of 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,
Section 4.13(j).
(b) Funds on deposit in the Reserve Account shall be invested by
Trustee in Eligible Investments pursuant to the written direction of
Servicer. 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. Trustee shall maintain for the benefit
of the Investor Holders possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity unless Servicer
so directs and either (i) such disposal will not result in a loss of
all or part of the principal portion of such Eligible Investment or
(ii) prior to the maturity of such Eligible Investment, a default
occurs in the payment of principal, interest or any other amount with
respect to such Eligible Investment. 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, 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 Invested Amount and on or before the first Transfer Date with
respect to the Early Amortization Period, 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 Early Amortization Period less, in each case, the
amount of funds deposited into the Finance Charge Account on such
Transfer Date pursuant to Section 4.17(b).
(d) If the Reserve Draw Amount for any Transfer Date 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 Trustee (acting in accordance with the instructions
of Servicer), deposited into the Finance Charge Account and included
in Class A Available Funds for such Transfer Date.
(e) If 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,
Trustee, acting in accordance with the instructions of 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, (ii) the first Transfer Date relating
to the Early Amortization Period and (iii) the Transfer Date
immediately preceding the Class A Scheduled Payment Date, Trustee,
acting in accordance with the instructions of Servicer, after the
prior payment of all amounts owing to the Series 1996-B Holders 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 4.18 Cash Collateral Account. (a) Servicer shall
establish and maintain with an Eligible Institution, which may be
Trustee, in the name of Trustee, on behalf of the Trust, a segregated
trust account (the "Cash Collateral Account") bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Holders. Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Cash Collateral Account and in all proceeds thereof. The Cash
Collateral Account shall be under the sole dominion and control of
Trustee for the benefit of the Investor Holders. If at any time an
Eligible Institution holding the Cash Collateral Account ceases to be
an Eligible Institution, Transferor shall notify Trustee, and Trustee
upon being notified (or Servicer on its behalf) shall within 10
Business Days establish a new Cash Collateral Account meeting the
conditions specified above, and shall transfer any cash or any
investments to such new Cash Collateral Account. Trustee, at the
direction of Servicer, shall make deposits to and withdrawals from the
Cash Collateral Account in the amounts and at the times set forth in
this Series Supplement and the Loan Agreement. All withdrawals from
the Cash Collateral Account shall be made in the priority set forth
below.
(b) On the Closing Date, Transferor shall deposit $8,750,000 in
immediately available funds into the Cash Collateral Account. Funds
on deposit in the Cash Collateral Account from time to time shall be
invested and/or reinvested at the direction of Servicer by Trustee in
Eligible Investments that will mature so that such funds will be
available for withdrawal on the following Transfer Date. No Eligible
Investment shall be disposed of prior to its maturity unless Servicer
so directs and either (i) such disposal will not result in a loss of
all or part of the principal portion of such Eligible Investment or
(ii) prior to the maturity of such Eligible Investment, a default
occurs in the payment of principal, interest or any other amount with
respect to such Eligible Investment. Trustee shall maintain for the
benefit of the Investor Holders possession of the negotiable
instruments or securities, if any, evidencing such Eligible
Investments. 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 Cash Collateral Account shall be
treated as Collections of Finance Charge Receivables allocated to the
Invested Amount and shall be part of Class A Available Funds, Class B
Available Funds and Collateral Available Funds for such Transfer Date.
For purposes of determining the availability of funds or the balances
in the Cash Collateral Account for any reason under this Series
Supplement, all investment earnings on such funds shall be deemed not
to be available or on deposit.
(c) On each Determination Date, Servicer shall calculate the
amount (the "Required Draw Amount") by which the sum of the amounts
specified in clauses (a) through (d) of Section 4.13 with respect to
the related Transfer Date exceeds the amount of Excess Spread
allocated with respect to the related Monthly Period. In the event
that for any Transfer Date the Required Draw Amount is greater than
zero, Servicer shall give written notice to Trustee and the Collateral
Interest Holder of such positive Required Draw Amount on the related
Determination Date. On the related Transfer Date, the Required Draw
Amount, if any, up to the Available Cash Collateral Amount, shall be
withdrawn from the Cash Collateral Account and distributed to fund any
deficiency pursuant to Section 4.13(a) through (d) (in the order of
priority set forth in Section 4.13).
(d) If, after giving effect to all deposits to and withdrawals
from the Cash Collateral Account and adjustments to the Collateral
Interest with respect to any Transfer Date, the Collateral Interest
has been reduced to zero and there is an Enhancement Surplus (after
giving effect to such reduction), Trustee, acting in accordance with
the instructions of Servicer, shall withdraw an amount equal to such
Enhancement Surplus from the Cash Collateral Account, and apply in
accordance with the Loan Agreement.
SECTION 4.19 Determination of LIBOR. As needed for the
determination of Collateral Rate, Trustee will determine LIBOR
pursuant to the terms of the Loan Agreement.
SECTION 4.20 Transferor's or Servicer's Failure to Make a
Deposit or Payment. If Servicer or Transferor fails to make, or give
instructions to make, any payment or deposit (other than as required
by Sections 2.5, 2.6 or 12.2) required to be made or given by Servicer
or Transferor, respectively, at the time specified in the Agreement
(including applicable grace periods), Trustee shall make such payment
or deposit from the Finance Charge Account, the Principal Account, the
Principal Funding Account, the Cash Collateral Account, the
Distribution Account and/or the Reserve Account, as applicable,
without instruction from Servicer or Transferor. Trustee shall be
required to make any such payment, deposit or withdrawal hereunder
only to the extent that Trustee has sufficient information to allow it
to determine the amount thereof; provided that Trustee shall in all
cases be deemed to have sufficient information to determine the amount
of interest payable to the Investor Holders on each Distribution Date.
Servicer shall, upon request of Trustee, promptly provide Trustee with
all information necessary to allow Trustee to make such payment,
deposit or withdrawal. Such funds or the proceeds of such withdrawal
shall be applied by Trustee in the manner in which such payment or
deposit should have been made by Transferor or 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 Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date,
Trustee shall distribute (in accordance with the certificate delivered
on or before the related Transfer Date by Servicer to Trustee pursuant
to Section 3.4(b)) to each Class A Holder of record on the immediately
preceding Record Date (other than as provided in Section 2.6 or
Section 12.2 respecting a final distribution) such Holder's pro rata
share (based on the share of the aggregate outstanding principal
balance of all Class A Certificates represented by the Class A
Certificates held by such Holder) of amounts on deposit in the
Distribution Account as are payable to the Class A Holders pursuant to
Section 4.11 by check mailed to each Class A Holder (at such Holder'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 by wire transfer
in immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in
accordance with the certificate delivered on or before the related
Transfer Date by Servicer to Trustee pursuant to Section 3.4(b)) to
each Class B Holder of record on the immediately preceding Record Date
(other than as provided in Section 2.6 or Section 12.2 respecting a
final distribution) such Holder's pro rata share (based on the share
of the aggregate outstanding principal balance of all Class B
Certificates represented by the Class B Certificates held by such
Holder) of amounts on deposit in the Distribution Account as are
payable to the Class B Holders pursuant to Section 4.11 by check
mailed to each Class B Holder (at such Holder'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 by wire transfer in
immediately available funds.
SECTION 5.2 Reports. (a) Monthly Series 1996-B Servicer's
Certificate. On or before each Distribution Date, Trustee shall
forward to each Investor Holder and each Rating Agency a statement
substantially in the form of Exhibit C prepared by Servicer and
delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of
each calendar year, beginning with calendar year 1997, Trustee shall
distribute to each Person who at any time during the preceding
calendar year was an Investor Holder, a statement prepared by Servicer
containing the following information:
(i) the amount of the current distribution allocable to
Class A Monthly Principal, Class B Monthly Principal and
Collateral Monthly Principal, respectively; and
(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.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was an Investor
Holder, together with such other customary information (consistent
with the treatment of the Certificates as debt) as Trustee or Servicer
deems necessary or desirable to enable the Investor Holders to prepare
their tax returns. Such obligations of Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information
shall be provided by Trustee pursuant to any requirements of the
Internal Revenue Code.
SECTION 9. Series 1996-B Early Amortization Events. If any one
of the following events shall occur with respect to the Investor
Certificates:
(a) failure on the part of 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 Transferor set forth in the Agreement or this Series Supplement
(including the covenant of Transferor contained in Section 11 of this
Series Supplement), which failure has a material adverse effect on the
Series 1996-B Holders (which determination shall be made without
reference to whether any funds are available under the Collateral
Interest or the Cash Collateral Account) 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 Transferor by Trustee, or to Transferor and Trustee by
Investor Holders representing more than 50% of the Invested Amount of
this Series 1996-B, and continues to affect materially and adversely
the interests of the Series 1996-B Holders (which determination shall
be made without reference to whether any funds are available under the
Collateral Interest or the Cash Collateral Account) for such period;
(b) any representation or warranty made by Transferor in the
Agreement or this Series Supplement, or any information contained in
an Account Schedule required to be delivered by Transferor pursuant to
Section 2.1 or 2.8, (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 Transferor by Trustee, or to
Transferor and Trustee by Investor Holders representing more than 50%
of the Invested Amount of this Series 1996-B, and (ii) as a result of
which the interests of the Series 1996-B Holders are materially and
adversely affected (which determination shall be made without
reference to whether any funds are available under the Collateral
Interest or the Cash Collateral Account) and continue to be materially
and adversely affected for such period; provided that a Series 1996-B
Early Amortization Event pursuant to this Section 9(b) shall not be
deemed to have occurred hereunder if 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) Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
Section 2.8(b); provided that such failure shall not give rise to an
Early Amortization Event if, prior to the date on which such
conveyance was required to be completed, Transferor causes a reduction
in the invested amount of any Variable Interest to occur, so that,
after giving effect to that reduction (i) the Transferor Amount is not
less than the Minimum Transferor Amount (including the Additional
Minimum Transferor Amount, if any) and (ii) the sum of the aggregate
amount of Principal Receivables plus amounts on deposit in the Excess
Funding Account is not less than the Required Principal Balance;
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1996-B Holders (which determination shall
be made without refrence to whether any funds are available under the
Collateral Interest or the Cash Collateral Account);
(f) the Class A Invested Amount shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Invested Amount shall
not be paid in full on the Class B Scheduled Payment Date; or
(g) The Limited shall fail generally to, or admit in writing its
inability to, pay its debts as they become due; or a proceeding shall
have been instituted in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of The Limited in an
involuntary case under any Debtor Relief Law, or for the appointment
of a receiver, liquidator, assignee, trustee, custodian, sequestrator,
conservator or other similar official of The Limited or for any
substantial part of its property, or for the winding-up or liquidation
of its affairs, and any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any of
the actions sought in such proceeding shall occur; or the commencement
by The Limited of a voluntary case under any Debtor Relief Law, or The
Limited's consent to the entry of an order for relief in an
involuntary case under any Debtor Relief Law, or consent to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other
similar official of The Limited or for any substantial part of its
property, or any general assignment for the benefit of creditors; or
The Limited shall have taken any corporate action in furtherance of
any of the foregoing actions;
then, in the case of any event described in Section 9(a), (b) or (e)
hereof, after the applicable grace period set forth in such Sections,
either Trustee or Investor Holders representing more than 50% of the
Invested Amount of this Series 1996-B by notice then given in writing
to Transferor and Servicer (and to Trustee if given by the Holders)
may declare that an early amortization event (a "Series 1996-B Early
Amortization Event") has occurred as of the date of such notice, and
in the case of any event described in Section 9(c), (d), (f) or (g)
hereof, a Series 1996-B Early Amortization Event shall occur without
any notice or other action on the part of Trustee or the Investor
Holders immediately upon the occurrence of such event.
SECTION 10. Series 1996-B Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1996-B Termination Date.
SECTION 11. Periodic Finance Charges and Other Fees. Transferor
hereby agrees that, except as otherwise required by any Requirement of
Law, or as is deemed by Transferor to be necessary in order for
Transferor to maintain its credit card business, based upon a good
faith assessment by Transferor, in its sole discretion, of the nature
of the competition in the credit card business, it shall not at any
time reduce the Periodic Finance Charges assessed on any Receivable or
other fees on any Account if, as a result of such reduction,
Transferor's reasonable expectation of the Portfolio Yield as of such
date would be less than the then Base Rate.
SECTION 12. Limitations on Addition of Approved Portfolios.
Transferor may designate additional Approved Portfolios if (a) the
Rating Agency Condition is satisfied with respect to that designation
and (b) Transferor delivers to Trustee an Opinion of Counsel that all
UCC financing statements or amendments required to perfect the
interest of the Trust in Receivables arising in accounts included in
each such Additional Portfolio have been made.
SECTION 13. 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 14. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 15. Additional Provisions. (a) Notwithstanding the
provisions of Section 2.10(a), the Discount Percentage may exceed 3%,
so long as the Rating Agency Condition is satisfied.
(b) Notwithstanding the provisions of Section 2.8, no new
accounts that would otherwise be Automatic Additional Accounts shall
be treated as such on any Addition Date if both of the following
statements are true:
(i) an Automatic Addition Limitation Event has occurred,
and the Rating Agency Condition has not been satisfied as to the
resumption of treating new accounts as Automatic Additional
Accounts; and
(ii) the number of such Automatic Additional Accounts would
exceed an amount equal to the excess (if any) of (A) 20% of the
aggregate number of Accounts determined as of the first day of
the fiscal year of Transferor in which the Addition Date occurs
over (B) the aggregate amount of Automatic Additional Accounts
and Supplemental Accounts the Addition Date for which has
occurred since the first day of such fiscal year.
An "Automatic Addition Limitation Event" will be deemed to occur
on any Determination Date if:
(1) the average of the default ratio for that Determination
Date and the preceding two Determination Dates is greater than
1.5%, where the "default ratio" for any Determination Date equals
the percentage equivalent of a fraction (A) the numerator of
which is the aggregate of the Default Amounts for all Accounts
that became Defaulted Accounts during the related Monthly Period
and (B) the denominator of which is the total Receivables as of
the end of the sixth preceding Monthly Period; or
(2) the average of the payment rate for that Determination
Date and the preceding two Determination Dates is less than 10%,
where the "payment rate" for any Determination Date equals the
percentage equivalent of a fraction (A) the numerator of which is
the aggregate Collections received during the related Monthly
Period and (B) the denominator of which is equal to the total
Receivables held by the Trust at the close of business for the
Monthly Period immediately prior to such related Monthly Period.
(c) The Additional Minimum Transferor Amount is hereby specified
as an additional amount to be considered part of the Minimum
Transferor Amount pursuant to clause (b) of the definition of Minimum
Transferor Amount.
(d) Notwithstanding the provisions of Section 3.9(a), so long as
any of the Investor Certificates remain outstanding, Transferor shall
make deposits of the type referred to in that Section as if the
antepenultimate and penultimate sentences of the first grammatical
paragraph of that Section read as follows:
"Any adjustment required pursuant to either of the two preceding
sentences shall be made on the first Business Day after the Date
of Processing for the event giving rise to such adjustment. If,
following the exclusion of such Principal Receivables from the
calculation of the Transferor Amount, the Transferor Amount would
be less than the Specified Transferor Amount, not later than the
close of business on such first Business Day, Transferor shall
make a deposit into the Excess Funding Account in immediately
available funds in an amount equal to the amount by which the
Transferor Amount would be less than the Specified Transferor
Amount (up to the amount of such Principal Receivables).".
Amounts deposited in the Excess Funding Account pursuant to this
Section 15(d) shall be deemed for all purposes of the Agreement to
have been deposited pursuant to such penultimate sentence.
(e) Notwithstanding the definition of "Identified Portfolio"
appearing in Section 1.1, for purposes of Series 1996-B, the
definition of "Identified Portfolio" shall be as follows:
""Identified Portfolio" means any Accounts owned from time
to time by WFN and included in the private label credit card
programs of Lane Bryant, Inc., Lerner New York, Inc., Express,
Inc., Structure, Inc., Victoria's Secret Stores, Inc., Victoria's
Secret Catalogue, Inc., The Limited Stores, Inc., Abercrombie &
Fitch, Inc., Henri Bendel, Inc. and Brylane, L.P. (but limited,
in the case of Brylane, L.P., to accounts related to the Lane
Bryant, Lerner New York and Roamans catalogues). To avoid doubt,
the foregoing programs include all cards issued under the
insignia of "Limited Fashion Group."".
(f) Notwithstanding Section 3.6, Servicer shall, in lieu of
delivering any annual report by a firm of nationally recognized
independent accountants required to be delivered pursuant to such
Section on or before the 90th day following 1996 and each subsequent
calendar year, deliver any such annual report on or before the 90th
day following the end of its 1996 fiscal year and each of its
subsequent fiscal years.
(g) Notwithstanding Section 4.4: (i) during the Controlled
Accumulation Period and the Early Amortization Period Transferor may
not apply Shared Principal Collections as principal with respect to
any Variable Interest, unless such application of principal is made on
any Transfer Date or related Distribution Date after the application
of Shared Principal Collections pursuant to Section 4.15 and (ii)
Shared Principal Collections allocable to Series 1996-B pursuant to
Section 4.4 shall be withdrawn on each Transfer Date, rather than each
Distribution Date. Notwithstanding Section 4.5, Excess Finance Charge
Collections allocable to Series 1996-B pursuant to Section 4.5 shall
be withdrawn on each Transfer Date, rather than each Distribution
Date.
SECTION 16. No Petition. Transferor, Servicer and Trustee, by
entering into this Series Supplement and each Holder, by accepting a
Series 1996-B 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 Holders, the Agreement or
this Series Supplement.
SECTION 17. Amendments. This Series Supplement may be amended
pursuant to Section 13.1 of the Agreement. This Series Supplement may
also be amended by Transferor without the consent of Servicer, Trustee
or any Investor Holder if Transferor provides Trustee with: (i) an
Opinion of Counsel to the effect that such amendment or modification
would (A) reduce the risk that the Trust would be treated as taxable
as a publicly traded partnership pursuant to Internal Revenue Code
section 7704 or (B) permit the Trust or a relevant portion thereof to
be treated as a "financial asset securitization investment trust" and
(C) in either case, (1) would not cause the Trust to be classified,
for Federal income tax purposes, as an association (or publicly traded
partnership) taxable as a corporation and (2) would not cause or
constitute an event in which gain or loss would be recognized by any
Investor Holder; and (ii) a certificate that such amendment or
modification would not materially and adversely affect any Investor
Holder; provided that no such amendment shall be deemed effective
without Trustee's consent, if Trustee's rights, duties and obligations
hereunder are thereby modified. Prior to the execution of any such
amendment (other than an amendment pursuant to Section 13.1(a) of the
Agreement), Trustee shall furnish notification of the substance of
such amendment to each Rating Agency.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Series 1996-B Supplement to be duly executed by their respective
officers as of the day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
Transferor and Servicer
By:____________________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By:____________________________________
Name:
Title:
EXHIBIT A-1
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to World Financial Network National Bank or its agent for
registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
No. ___ $_____________
CUSIP No._____________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.95% CLASS A
ASSET-BACKED CERTIFICATE, SERIES 1996-B
Evidencing an Undivided Interest in a trust, the corpus of which
consists of a portfolio of credit card receivables generated or
acquired by World Financial Network National Bank and other assets and
interests constituting the Trust under the Pooling and Servicing
Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the
"Accounts"), (ii) all Receivables generated under the Accounts from
time to time thereafter, (iii) funds collected or to be collected from
accountholders in respect of the Receivables, (iv) all funds which are
from time to time on deposit in the Collection Account, Excess Funding
Account and in the Series Accounts, (v) the benefits of any
Enhancements, if any, with respect to one or more Series of Investor
Certificates, (vi) the benefits of the Collateral Interest and (vii)
the other assets and interests constituting the Trust pursuant to a
Pooling and Servicing Agreement dated as of January 17, 1996 as
supplemented by the Series 1996-B Supplement dated as of May 9, 1996
(collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"),
and The Bank of New York, as Trustee ("Trustee").
The Series 1996-B Certificates are issued in two classes, the
Class A Certificates (of which this certificate is one) and the Class
B Certificates, which are subordinated to the Class A Certificates in
certain rights of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-B
Certificates with the intention that the Series 1996-B Certificates
will qualify under applicable tax law as indebtedness, and each of
Transferor, the Holder of the Transferor Certificate, Servicer and
each Series 1996-B Holder (or Series 1996-B Certificate Owner) by
acceptance of its Series 1996-B Certificate (or in the case of a
Series 1996-B Certificate Owner, by virtue of such Series 1996-B
Certificate Owner's acquisition of a beneficial interest therein),
agrees to treat and to take no action inconsistent with the treatment
of the Series 1996-B Certificates (or any 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, value of intangible property or net worth. Each Series 1996-B
Holder agrees that it will cause any Series 1996-B Certificate Owner
acquiring an interest in a Series 1996-B Certificate through it to
comply with the Agreement as to treatment of the Series 1996-B
Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned to them in the Agreement. This
Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as
amended from time to time, the Class A Holder by virtue of the
acceptance hereof assents and by which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate
does not represent an obligation of, or an interest in, Transferor or
Servicer, and the Series 1996-B Certificates, the Collateral Interest
and the Accounts or Receivables are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental
agency. This Series 1996-B Certificate is limited in right of payment
to certain collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Agreement.
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual or facsimile signature, this
Class A Certificate shall not be entitled to any benefit under the
Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank
has caused this Class A Certificate to be duly executed under its
official seal.
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:____________________
This is one of the 6.95% Class A Asset-Backed Certificates,
Series 1996-B referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:_______________________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
-------------------
CLASS B
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to World Financial Network National Bank or its agent for
registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
No. ___ $____________
CUSIP No.____________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.20% CLASS B
ASSET-BACKED CERTIFICATE, SERIES 1996-B
Evidencing an Undivided Interest in a trust, the corpus of which
consists of a portfolio of credit card receivables generated or
acquired by World Financial Network National Bank and other assets and
interests constituting the Trust under the Pooling and Servicing
Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the
"Accounts"), (ii) all Receivables generated under the Accounts from
time to time thereafter, (iii) funds collected or to be collected from
accountholders in respect of the Receivables, (iv) all funds which are
from time to time on deposit in the Collection Account, Excess Funding
Account and in the Series Accounts, (v) the benefits of any
Enhancements, if any, with respect to one or more Series of Investor
Certificates, (vi) the benefits of the Collateral Interest and (vii)
the other assets and interests constituting the Trust pursuant to a
Pooling and Servicing Agreement dated as of January 17, 1996 as
supplemented by the Series 1996-B Supplement dated as of May 9, 1996
(collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"),
and The Bank of New York, as Trustee ("Trustee").
The Series 1996-B Certificates are issued in two classes, the
Class A Certificates and the Class B Certificates (of which this
certificate is one), which are subordinated to the Class A
Certificates in certain rights of payment as described in the
Agreement.
Transferor has structured the Agreement and the Series 1996-B
Certificates with the intention that the Series 1996-B Certificates
will qualify under applicable tax law as indebtedness, and each of
Transferor, the Holder of the Transferor Certificate, Servicer and
each Series 1996-B Holder (or Series 1996-B Certificate Owner) by
acceptance of its Series 1996-B Certificate (or in the case of a
Series 1996-B Certificate Owner, by virtue of such Series 1996-B
Certificate Owner's acquisition of a beneficial interest therein),
agrees to treat and to take no action inconsistent with the treatment
of the Series 1996-B Certificates (or any 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, value of intangible property or net worth. Each Series 1996-B
Holder agrees that it will cause any Series 1996-B Certificate Owner
acquiring an interest in a Series 1996-B Certificate through it to
comply with the Agreement as to treatment of the Series 1996-B
Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned to them in the Agreement. This
Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as
amended from time to time, the Class B Holder by virtue of the
acceptance hereof assents and by which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate
does not represent an obligation of, or an interest in, Transferor or
Servicer, and the Series 1996-B Certificates, the Collateral Interest
and the Accounts or Receivables are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental
agency. This Series 1996-B Certificate is limited in right of payment
to certain collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Agreement.
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual or facsimile signature, this
Class B Certificate shall not be entitled to any benefit under the
Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank
has caused this Class B Certificate to be duly executed under its
official seal.
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:______________________
This is one of the 7.20% Class B Asset-Backed Certificates,
Series 1996-B referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:___________________________________
Authorized Signatory
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO TRUSTEE
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
SERIES 1996-B
MONTHLY PERIOD ENDING ______________, ____
EXHIBIT C
FORM OF MONTHLY Series 1996-B
-----------------------------
HOLDERS' STATEMENT
------------------
SERIES 1996-B
WORLD FINANCIAL NETWORK NATIONAL BANK
________________________________________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
________________________________________
May 9, 1996
To the Persons Listed on
Schedule A
Gentlemen and Ladies:
This opinion is furnished to you pursuant to (a) subsection 6(d)(2)
of the Class A Underwriting Agreement, Series 1996-A dated April 25, 1996
(the "Class A Underwriting Agreement, Series 1996-A") between CS First
Boston Corporation, as Representative of the several underwriters named
therein and World Financial Network National Bank, a national banking
association ("Transferor"); (b) subsection 6(d)(2) of the Class B
Underwriting Agreement, Series 1996-A dated April 25, 1996 (the "Class B
Underwriting Agreement, Series 1996-A") between CS First Boston Corporation
and Transferor; (c) subsection 6(d)(2) of the Class A Underwriting
Agreement, Series 1996-B dated April 25, 1996 (the "Class A Underwriting
Agreement, Series 1996-B") between CS First Boston Corporation, as
Representative of the several underwriters named therein and Transferor;
and (d) and subsection 6(d)(2) of the Class B Underwriting Agreement,
Series 1996-B dated April 25, 1996 (the "Class B Underwriting Agreement,
Series 1996-B"; together with the Class A Underwriting Agreement, Series
1996-A, the Class B Underwriting Agreement, Series 1996-A, and the Class A
Underwriting Agreement, Series 1996-B, the "Underwriting Agreements")
between CS First Boston Corporation and Transferor. Capitalized terms used
but not defined herein have the same meaning ascribed thereto in each of
the Underwriting Agreements. As used herein, "Certificates" means the
Certificates issued pursuant to (and as defined in) each of the
Supplements, and the "Pooling and Servicing Agreement" means the P&S as
supplemented by each of the Supplements.
We have examined copies of the Underwriting Agreements, the P&S, the
Supplements for Series 1996-A and Series 1996-B (the "Supplements"), the
Loan Agreements for Series 1996-A and Series 1996-B (the "Loan
Agreements"), the forms of Certificates attached to the Supplements, a
signed copy of the legal opinion of Carolyn Melvin, General Counsel to
Transferor and a signed copy of the legal opinion of Schwartz, Warren &
Ramirez, Ohio counsel to Transferor. In addition, we have examined such
other documents, corporate records and certificates of officers of
Transferor as to matters of fact and of public officials as to matters
within their jurisdiction and such other instruments and sources as we have
deemed necessary and advisable for the purpose of rendering this opinion.
In conducting our examination, we have assumed, without
investigation, the authenticity of any documents submitted to us as an
original, the conformity with the original of any document submitted to us
as a copy, the authenticity of the original of any such copy and the
genuineness of all signatures. We have relied, as to factual matters, on
the documents we have examined and upon certificates of Transferor, its
officers, public officials or other persons. We have also assumed the due
authorization, execution, and delivery of all documents by parties thereto
and, except as set forth in paragraph (i) below, the enforceability of any
agreements included in such documents against parties thereto.
Our opinions herein are limited to the Federal law of the United
States of America.
Based on the foregoing, we are of the opinion that:
(i) The statements in the Prospectus under the headings
"Certain Legal Aspects of the Receivables-Transfer of Receivables",
"U.S. Federal Income Tax Consequences" and "ERISA Considerations"
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein have been prepared or
reviewed by us and are correct in all material respects.
Furthermore, insofar as the statements contained in the Registration
Statement and the Prospectus purport to summarize certain provisions
of the Certificates and the Pooling and Servicing Agreement and the
Loan Agreements, such statements present summaries of such provisions
that are accurate in all material respects.
(ii) Based upon the applicable provisions of the Internal
Revenue Code of 1986, as amended, Treasury regulations promulgated
and proposed thereunder, current positions of the Internal Revenue
Service (the "IRS") contained in published Revenue Rulings and
Revenue Procedures, current administrative positions of the IRS and
existing judicial decisions, and assuming that the Certificates are
executed, delivered and authenticated in substantially the forms we
have examined, we are of the opinion that: (a) the Certificates will
be characterized as indebtedness that is secured by the Receivables;
(b) the Trust will not be characterized for Federal income tax
purposes as an association (or publicly traded partnership) taxable
as a corporation; (c) the issuance of the Certificates will not
adversely affect the tax characterization as debt of the Series
1996-VFC Certificates issued by the Trust; and (d) the issuance of
the Certificates will not cause or constitute an event in which gain
or loss would be recognized by the holders of the Series 1996-VFC
Certificates.
The opinion set forth in this letter is based upon the applicable
provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated and proposed thereunder, current positions of the
IRS contained in published Revenue Rulings and Revenue Procedures, current
administrative positions of the IRS and existing judicial decisions. This
opinion is subject to the explanations and qualifications set forth under
the caption "U.S. Federal Income Tax Consequences" in the Prospectus which
constitutes a part of the Registration Statement. No tax rulings have been
or will be sought from the IRS with respect to any of the matters discussed
herein.
This opinion is for your use and may not be relied upon by any other
person without our prior written consent.
Very truly yours,
RFH
Schedule A
----------
CS First Boston Corporation, as Representative The Collateral Investors
of the Several Underwriters under the Loan Agreement
55 East 52nd Street relating to Series 1996-B
Park Avenue Plaza c/o Credit Suisse,
New York, New York 10055 New York Branch
Tower 49
World Financial Network National Bank 12 East 49th Street
4590 East Broad Street New York, New York 10017
Columbus, Ohio 43213
World Financial Network Credit Card Master Trust
c/o The Bank of New York
101 Barclay Street, Floor 12 East
New York, New York 10286
The Bank of New York
101 Barclay Street, Floor 12 East
New York, New York 10286
Standard & Poor's Ratings Services,
a division of The McGraw-Hill
Companies
25 Broadway
New York, New York 10004
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10004
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
The Industrial Bank of Japan, Limited,
Chicago Branch
227 West Monroe Street, Suite 2600
Chicago, Illinois 60606
Credit Suisse, New York Branch, as Agent
Tower 49
12 East 49th Street
New York, New York 10017
