<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 5, 1996
REGISTRATION NO. 333-4152
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BANK OF AMERICA NATIONAL ASSOCIATION
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME AS SPECIFIED IN REGISTRANT'S CHARTER)
BA MASTER CREDIT CARD TRUST
(ISSUER OF THE CERTIFICATES)
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UNITED STATES 6025 86-0645265
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
1825 EAST BUCKEYE ROAD
PHOENIX, ARIZONA 85034
(602) 597-3738
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CHERYL A. SOROKIN
BANKAMERICA CORPORATION
BANK OF AMERICA CENTER
555 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 622-3530
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
Copies to:
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MARK R. LEVIE, ESQ. ANDREA B. SUDMANN, ESQ. JASON H.P. KRAVITT, ESQ.
ORRICK, HERRINGTON BANK OF AMERICA NATIONAL MAYER, BROWN & PLATT
& SUTCLIFFE TRUST AND SAVINGS ASSOCIATION 190 SOUTH LASALLE STREET
OLD FEDERAL RESERVE BANK BUILDING 555 SOUTH FLOWER STREET SUITE 3900
400 SANSOME STREET LOS ANGELES, CALIFORNIA 90071 CHICAGO, ILLINOIS 60603
SAN FRANCISCO, CALIFORNIA 94111-3143 (213) 228-5678 (312) 782-0600
(415) 392-1122
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective as
determined by market conditions.
If the only securities registered on this form are to be offered pursuant to
dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE(1)
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE AMOUNT OF
REGISTERED REGISTERED CERTIFICATE(2) OFFERING PRICE REGISTRATION FEE(3)
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Asset Backed
Certificates............ $1,000,000,000 100% $1,000,000,000 $344,827.59
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</TABLE>
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(1) This Registration Statement also registers an indeterminate amount of
securities to be sold by BA Securities, Inc. in market making transactions,
where required.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) The registration fee has been previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 3, 1996
PROSPECTUS
BA MASTER CREDIT CARD TRUST
ASSET BACKED CERTIFICATES
BANK OF AMERICA NATIONAL ASSOCIATION
TRANSFEROR AND SERVICER
------------------------
The Asset Backed Certificates (collectively, the "Certificates") described
herein may be sold from time to time in one or more series (each, a "Series"),
in amounts, at prices and on terms to be determined at the time of sale and
which are set forth in a supplement to this Prospectus (a "Prospectus
Supplement"). The Certificates of each Series will represent an undivided
interest in the assets of the BA Master Credit Card Trust (the "Trust"). The
Trust is to be formed pursuant to a pooling and servicing agreement between Bank
of America National Association ("Bank of America"), as transferor and servicer,
and First Bank National Association, as trustee. The property of the Trust will
include receivables (the "Receivables") generated from time to time in a
portfolio of consumer revolving credit card accounts (the "Accounts"), all
monies due and to become due in payment of the Receivables, all proceeds of the
Receivables and proceeds of credit insurance policies relating to the
Receivables, any Enhancements and all monies on deposit in certain bank accounts
of the Trust (including any Permitted Investments in which any such monies are
invested), as more fully described herein and, with respect to any Series, in
the related Prospectus Supplement. Certain capitalized terms used herein are
defined elsewhere in this Prospectus. A listing of the pages on which such terms
are defined are found in the "Index of Terms for Prospectus" beginning on page
69. Bank of America initially will own the remaining undivided interest in the
Trust not represented by the Certificates issued by the Trust and the other
interests issued by the Trust from time to time and will service the related
Receivables.
Each Series will consist of one or more classes of Certificates (each, a
"Class"), one or more of which may be fixed-rate Certificates, floating-rate
Certificates or other type of Certificates, as specified in the related
Prospectus Supplement. Each Certificate will represent an undivided interest in
the Trust and the interest of the Certificateholders of each Class or Series
will include the right to receive a varying percentage of each month's
collections with respect to the Receivables of the Trust at the times, in the
manner and to the extent described herein and, with respect to any Series
offered hereby, in the related Prospectus Supplement. Interest and principal
payments with respect to each Series offered hereby will be made as specified in
the related Prospectus Supplement. One or more Classes of a Series offered
hereby may be entitled to the benefits of Credit Enhancement, such as a
collateral interest, cash collateral account or guaranty, a letter of credit, a
surety bond, an insurance policy or other form of enhancement as specified in
the Prospectus Supplement relating to such Series. In addition, any Series
offered hereby may include one or more Classes which are subordinated in right
and priority to payment of principal of, and/or interest on, one or more other
Classes of such Series or another Series, in each case to the extent described
in the related Prospectus Supplement. Each Series of Certificates or Class
thereof offered hereby will be rated in one of the four highest rating
categories by at least one nationally recognized rating organization.
While the specific terms of any Series in respect of which this Prospectus
is being delivered are described in the related Prospectus Supplement, the terms
of such Series are not subject to prior review by, or consent of, the
Certificateholders of any previously issued Series.
Any Series of Certificates may be sold to or through underwriters, including
BA Securities, Inc., an affiliate of the Transferor and Servicer, acting as
principals for their own account or as agents. See "Plan of Distribution." This
Prospectus and any related Prospectus Supplement may be used by BA Securities,
Inc. in connection with offers and sales related to secondary market
transactions in any Series of the Certificates. BA Securities, Inc. may act as
principal or agent in such transactions. Such sales will be made at prices
related to prevailing market prices at the time of the sale.
POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION
SET FORTH IN "RISK FACTORS" ON PAGE 19.
PROCEEDS FROM THE ASSETS IN THE TRUST WILL BE THE ONLY SOURCE OF PAYMENTS ON
THE CERTIFICATES. THE CERTIFICATES DO NOT REPRESENT AN OBLIGATION OF OR INTEREST
IN THE TRANSFEROR, BANKAMERICA CORPORATION, BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, OR ANY OF THEIR AFFILIATES. NEITHER THE CERTIFICATES NOR
THE UNDERLYING RECEIVABLES OR OTHER ASSETS OF THE TRUST ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY THE TRANSFEROR,
BANKAMERICA CORPORATION, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
OR ANY OF THEIR AFFILIATES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
Certificates may be sold by Bank of America or the Trust directly to
purchasers, through agents designated from time to time, through underwriting
syndicates led by one or more managing underwriters or through one or more
underwriters acting alone. If underwriters or agents are involved in the
offering of the Certificates of any Series offered hereby, the name of the
managing underwriter or underwriters or agents is set forth in the related
Prospectus Supplement. If an underwriter, agent or dealer is involved in the
offering of the Certificates of any Series offered hereby, the underwriter's
discount, agent's commission or dealer's purchase price is set forth in, or may
be calculated from, the related Prospectus Supplement, and the net proceeds to
Bank of America from such offering will be the public offering price of such
Certificates less such discount in the case of an underwriter, the purchase
price of such Certificates less such commission in the case of an agent or the
purchase price of such Certificates in the case of a dealer, and less, in each
case, the other expenses of Bank of America associated with the issuance and
distribution of such Certificates. See "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF ANY SERIES OF
CERTIFICATES UNLESS ACCOMPANIED BY THE RELATED PROSPECTUS SUPPLEMENT.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE> 3
PROSPECTUS SUPPLEMENT
The Prospectus Supplement relating to a Series to be offered thereby and
hereby, among other things, sets forth with respect to such Series: (a) the
initial aggregate principal amount of each Class of such Series; (b) the
certificate interest rate (or method for determining it) of each Class of such
Series; (c) certain information concerning the Receivables allocated to such
Series; (d) the expected date or dates on which the principal amount of the
Certificates will be paid to holders of each Class of Certificates (the
"Certificateholders"); (e) the extent to which any Class within a Series is
subordinated to any other Class of such Series or any other Series; (f) the
identity of each Class of floating-rate Certificates and fixed-rate Certificates
included in such Series, if any, or such other type of Class of Certificates;
(g) the Distribution Dates for the respective Classes; (h) relevant financial
information with respect to the Receivables; (i) the Series Termination Date
with respect to such Series; (j) additional information with respect to any
Enhancement relating to such Series; and (k) the plan of distribution of such
Series.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and annual
reports, containing information concerning the Trust and prepared by the
Servicer, will be sent on behalf of the Trust to Cede & Co. ("Cede"), as nominee
of The Depository Trust Company ("DTC") and registered holder of the related
Certificates, pursuant to the Agreement. See "Description of the
Certificates -- Book-Entry Registration," "-- Reports to Certificateholders" and
"-- Evidence as to Compliance." Such reports will not constitute financial
statements prepared in accordance with generally accepted accounting principles.
The Transferor does not intend to send any of its financial reports to
Certificateholders or to the owners of beneficial interests in the Certificates
("Certificate Owners"). The Servicer will file with the Securities and Exchange
Commission (the "Commission") such periodic reports with respect to the Trust as
are required under the Securities Exchange Act of 1934, as amended (the "
Exchange Act"), and the rules and regulations of the Commission thereunder (the
"Rules"). The Prospectus Supplement relating to a Series to be offered thereby
and hereby will set forth whether or not the Servicer intends to file with the
Commission periodic reports with respect to any Series following completion of
the reporting period required by Rule 15d-1.
AVAILABLE INFORMATION
This Prospectus, which forms a part of the Registration Statement, omits
certain information contained in such Registration Statement pursuant to the
rules and regulations of the Commission. For further information, reference is
made to the Registration Statement (including any amendments thereof and
exhibits thereto) and any reports and other documents incorporated herein by
reference as described below under "Incorporation of Certain Documents by
Reference," which are available for inspection without charge at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, New York, New York 10048; and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
2
<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed by the Servicer, on behalf of the
Trust, pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Certificates shall be deemed to be incorporated by reference
into this Prospectus and to be part hereof. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Servicer will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all of the documents incorporated herein by reference, except
the exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to 1825 East Buckeye Road, Phoenix, Arizona 85034, Attention:
Chief Financial Officer. Telephone requests for such copies should be directed
to Bank of America National Association at (602) 597-3273.
3
<PAGE> 5
TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUPPLEMENT................. 2
REPORTS TO CERTIFICATEHOLDERS......... 2
AVAILABLE INFORMATION................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... 3
PROSPECTUS SUMMARY.................... 5
RISK FACTORS.......................... 19
THE TRUST............................. 25
BANK OF AMERICA'S CREDIT CARD
ACTIVITIES.......................... 26
General............................. 26
Originations and Underwriting....... 26
Customer Service.................... 27
Interchange......................... 27
THE RECEIVABLES....................... 28
MATURITY ASSUMPTIONS.................. 28
USE OF PROCEEDS....................... 29
BANKAMERICA CORPORATION AND BANK OF
AMERICA NATIONAL ASSOCIATION........ 29
DESCRIPTION OF THE CERTIFICATES....... 29
General............................. 30
Book-Entry Registration............. 31
Definitive Certificates............. 33
The Transferor Certificate;
Additional Transferors........... 34
Interest Payments................... 35
Principal Payments.................. 35
Transfer and Assignment of
Receivables...................... 35
New Issuance........................ 36
Representations and Warranties...... 37
Addition of Trust Assets............ 39
Removal of Accounts................. 41
Collection and Other Servicing
Procedures....................... 41
Discount Option..................... 42
Trust Accounts...................... 42
Funding Period...................... 43
Investor Percentage and Transferor
Percentage....................... 43
Application of Collections.......... 44
Groups of Series.................... 45
Shared Excess Finance Charge
Collections...................... 46
Shared Excess Principal
Collections...................... 46
Paired Series....................... 47
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PAGE
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Defaulted Receivables; Rebates and
Fraudulent Charges; Investor
Charge-Offs...................... 47
Defeasance.......................... 48
Final Payment of Principal;
Termination...................... 48
Pay Out Events...................... 49
Servicing Compensation and Payment
of Expenses...................... 50
Certain Matters Regarding the
Transferor and the Servicer...... 50
Servicer Default.................... 51
Reports to Certificateholders....... 52
Evidence as to Compliance........... 53
Amendments.......................... 53
List of Certificateholders.......... 54
The Trustee......................... 55
CREDIT ENHANCEMENT AND ENHANCEMENT.... 55
General............................. 55
Subordination....................... 56
Letter of Credit.................... 56
Cash Collateral Guaranty or
Account.......................... 56
Collateral Interest................. 56
Surety Bond or Insurance Policy..... 57
Spread Account...................... 57
Reserve Account..................... 57
Interest Rate Swaps and Related
Caps, Floors and Collars......... 57
CERTAIN LEGAL ASPECTS OF THE
RECEIVABLES......................... 58
Transfer of Receivables............. 58
Certain Matters Relating to
Receivership..................... 58
Consumer Protection Laws............ 59
FEDERAL INCOME TAX CONSEQUENCES..... 60
General.......................... 60
Treatment of the Certificates as
Debt........................... 61
Treatment of the Trust........... 61
Taxation of Interest Income of
U.S. Certificate Owners........ 63
Sale or Exchange of
Certificates................... 64
Non-U.S. Certificate Owners...... 64
Information Reporting and Backup
Withholding.................... 65
State and Local Taxation......... 66
ERISA CONSIDERATIONS.................. 66
PLAN OF DISTRIBUTION.................. 67
LEGAL MATTERS......................... 68
INDEX OF TERMS FOR PROSPECTUS......... 69
</TABLE>
4
<PAGE> 6
PROSPECTUS SUMMARY
The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus and in the accompanying
Prospectus Supplement. Certain capitalized terms used in this summary are
defined elsewhere in this Prospectus and in the accompanying Prospectus
Supplement. A listing of the pages on which some of such terms are defined is
found in the "Index of Terms for Prospectus." Unless the context requires
otherwise, capitalized terms used in this Prospectus and in the accompanying
Prospectus Supplement refer only to the particular Series being offered by such
Prospectus Supplement.
TYPE OF SECURITIES......Asset Backed Certificates (the "Certificates")
evidencing an undivided interest in the assets of the
BA Master Credit Card Trust (the "Trust") may be
issued from time to time in one or more series (each,
a "Series") which will consist of one or more classes
of Certificates (each, a "Class").
TRUST...................The Trust is to be formed pursuant to a pooling and
servicing agreement (as amended from time to time,
the "Agreement") between Bank of America National
Association ("Bank of America"), as transferor (in
such capacity, the "Transferor") and servicer, and
First Bank National Association, as trustee (the
"Trustee"). The Trust will be created as a master
trust under which one or more Series may be issued
pursuant to a series supplement to the Agreement
(each such series supplement, a "Series Supplement;"
the term "Agreement," as it relates to any Series,
refers to the Agreement as supplemented by the Series
Supplement entered into with respect to such Series).
Any Series issued by the Trust may be offered
pursuant to this Prospectus, or may be offered in a
transaction exempt from the registration requirements
of the Securities Act of 1933, as amended (the
"Securities Act"). Each Prospectus Supplement
identifies the Trust and all Series previously issued
by the Trust.
TRUST ASSETS............The assets of the Trust will include receivables (the
"Receivables") arising under certain MasterCard(R)
and VISA(R)* revolving credit card accounts (the
"Accounts") selected from an identified pool of
MasterCard and VISA accounts owned by Bank of America
(the "Identified Pool") and all monies due or to
become due in payment of the Receivables, all
proceeds of the Receivables and proceeds of credit
insurance policies relating to the Receivables, and
all monies on deposit in certain bank accounts of the
Trust (including any Permitted Investments in which
any such monies are invested, but excluding
investment earnings on such amounts unless otherwise
specified in the related Prospectus Supplement), and
any Enhancement with respect to any particular Series
or Class, as described in the related Prospectus
Supplement. In addition, with respect to any Series,
the assets of the Trust may include the right to
receive Interchange, if any, allocable to such
Series, as described in the related Prospectus
Supplement. See "The Receivables" and "Description of
the Certificates -- Addition of Trust Assets."
"Interchange" consists of certain fees received by
Bank of America from VISA and MasterCard as partial
compensation for taking credit risk, absorbing fraud
losses and funding receivables for a limited period
prior to initial billing. The term "Enhancement"
means, with respect to any Series or Class thereof,
any Credit Enhancement, guaranteed rate agreement,
maturity liquidity facility, interest rate cap
agreement, interest
- ---------------
*MasterCard(R) and VISA(R) are federally registered servicemarks of MasterCard
International Incorporated and VISA U.S.A. Inc., respectively.
5
<PAGE> 7
rate swap agreement or other similar arrangement for
the benefit of the Certificateholders of such Series
or Class. The term "Credit Enhancement" means, with
respect to any Series or Class thereof, any letter of
credit, cash collateral guaranty or account,
collateral interest, surety bond, insurance policy,
spread account, reserve account or other similar
arrangement for the benefit of the Certificateholders
of such Series or Class. Credit Enhancement may also
take the form of subordination of one or more Classes
of a Series to any other Class or Classes of a Series
or a cross-support feature which requires collections
on Receivables of one Series to be paid as principal
and/or interest with respect to another Series.
At the time of formation of the Trust and at certain
other times subsequent thereto, the Transferor will
convey to the Trustee all Receivables existing under
certain Accounts selected from the Identified Pool
based on criteria provided in the Agreement and all
Receivables arising under such Accounts from time to
time thereafter until termination of the Trust. In
addition, the Agreement will provide, that Bank of
America may from time to time (subject to certain
limitations and conditions), and in some
circumstances will be obligated to, designate
additional eligible revolving credit card accounts to
be included as Accounts (the "Additional Accounts"),
the Receivables of which will be included in the
Trust. The Agreement will provide that in lieu of
Additional Accounts or in addition thereto, Bank of
America may include in the Trust, participations
representing undivided interests in a pool of assets
primarily consisting of receivables arising under
consumer revolving credit card accounts owned by the
Transferor and collections thereon
("Participations"). The addition of Participations to
the Trust may be subject to certain restrictions
relating to the Securities Act. See "The Receivables"
and "Description of the Certificates -- Addition of
Trust Assets."
NON-RECOURSE
OBLIGATIONS.............Proceeds from the assets in the Trust will be the only
source of payments on the Certificates of each
Series. The Certificates do not represent an
obligation of or interest in the Transferor,
BankAmerica Corporation, Bank of America NT&SA or any
of their affiliates. None of the Certificates, the
underlying Receivables or the other assets of the
Trust are insured or guaranteed by any governmental
agency or instrumentality or by the Transferor,
BankAmerica Corporation, Bank of America NT&SA or any
of their affiliates.
CERTIFICATE INTEREST AND
PRINCIPAL...............Each Series of Certificates will represent an undivided
interest in the assets of the Trust. Each Certificate
of a Series will represent the right to receive
payments of (i) interest at the specified rate or
rates per annum (each, a "Certificate Rate"), which
may be a fixed, a floating or other type of rate and
(ii) principal during the Controlled Amortization
Period, the Principal Amortization Period, or, under
certain limited circumstances, the Rapid Amortization
Period (each, an "Amortization Period"), or on
Scheduled Payment Dates, in which case such Series
will have a Controlled Accumulation Period and, under
certain limited circumstances if so specified in the
related Prospectus Supplement, a Rapid Accumulation
Period (each, an "Accumulation Period"), as well as,
under certain limited circumstances, a Rapid
Amortization Period, all as specified in the related
Prospectus Supplement.
6
<PAGE> 8
Each Series of Certificates will consist of one or more
Classes, one or more of which may be Senior
Certificates ("Senior Certificates") and one or more
of which may be Subordinated Certificates
("Subordinated Certificates"). Each Class of a Series
may evidence the right to receive a specified portion
of each distribution of principal or interest or
both. The Certificates of a Class may also differ
from Certificates of other Classes of the same Series
in, among other things, the amounts allocated to
principal payments, priority of payments, payment
dates, maturity, interest rates, interest rate
computation, and availability and form of
Enhancement.
The assets of the Trust will be allocated among the
Certificateholders of each Series of the Trust and
the holder of the Transferor Certificate of the Trust
and, if any Credit Enhancement constitutes an
undivided interest in the Trust as specified in the
related Prospectus Supplement, the related Credit
Enhancement Provider. See "Credit Enhancement"
herein, and "Description of the
Certificates -- Allocation Percentages" in the
Prospectus Supplement. The aggregate principal amount
of the interest of the Certificateholders of a Series
in the Trust is referred to herein as the "Investor
Interest" and is based on the aggregate amount of the
Principal Receivables in the Trust allocated to such
Series. If specified in the related Prospectus
Supplement, the term "Investor Interest" with respect
to the related Series includes the Collateral
Interest with respect to such Series. The aggregate
principal amount of the interest of the holder of the
Transferor Certificate in the Trust is referred to
herein as the "Transferor Interest," and is based on
the aggregate amount of Principal Receivables in the
Trust not allocated to the Certificateholders or any
Credit Enhancement Provider with respect to the
Trust. See "Description of the Certificates --
General."
The Certificateholders of each Series will have the
right to receive (but only to the extent needed to
make required payments under the Agreement and the
related Series Supplement and subject to any
reallocation of such amounts if the related Series
Supplement so provides) varying percentages of the
collections of Finance Charge Receivables and
Principal Receivables for each month and will be
allocated a varying percentage of the amount of
Receivables in Accounts which were written off as
uncollectible by the Servicer ("Defaulted Accounts")
for such month (each such percentage, an "Investor
Percentage"). The related Prospectus Supplement
specifies the Investor Percentages with respect to
the allocation of collections of Principal
Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts during the
Revolving Period, any Amortization Period and any
Accumulation Period, as applicable. If the
Certificates of a Series offered hereby include more
than one Class of Certificates, the assets of the
Trust allocable to the Certificates of such Series
may be further allocated among each Class in such
Series as described in the related Prospectus
Supplement. See "Description of the
Certificates -- Investor Percentage and Transferor
Percentage."
RECEIVABLES.............The Receivables held in the Trust will arise in Accounts
that have been selected from the Identified Pool
based on criteria provided in the Agreement and
described in the related Prospectus Supplement as
applied initially on the date (the "Cut-Off Date")
specified in the related Prospectus Supplement and,
with respect to certain Additional Accounts, if any,
on the subsequent dates specified in the related
Prospectus Supplement.
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<PAGE> 9
The Receivables will consist of amounts charged by
cardholders for goods and services and cash advances
(the "Principal Receivables"), plus the related
periodic finance charges and amounts charged to the
Accounts in respect of membership or annual fees,
late fees, overlimit fees, returned check charges,
cash advance fees and certain other credit card fees,
amounts with respect to recoveries on the Accounts
and certain other amounts as described herein (the
"Finance Charge Receivables"); provided, however,
that if the Transferor exercises the Discount Option
with respect to the Trust, an amount equal to the
product of the Discount Percentage and the amount of
Receivables arising in the related Accounts on and
after the date such option is exercised that
otherwise would be Principal Receivables will be
treated as Finance Charge Receivables. See
"Description of the Certificates -- Discount Option."
In addition, if so specified in the related
Prospectus Supplement, certain amounts of Interchange
attributed to cardholder charges for goods and
services in the Accounts may be allocated to the
Certificates of a Series or any Class thereof and
treated as collections of Finance Charge Receivables
for purposes of such Series or Class thereof or may
be applied in some other manner as described in the
related Prospectus Supplement. See "Bank of America's
Credit Card Activities -- Interchange."
During the term of the Trust, all new Receivables
arising in the Accounts relating to the Trust will be
transferred automatically to the Trust by the
Transferor. The total amount of Receivables in the
Trust will fluctuate from day to day, because the
amount of new Receivables arising in the Accounts and
the amount of payments collected on existing
Receivables usually differ each day. It is not
required or anticipated that the Trustee will make
any initial or periodic general examination of the
Receivables or any records relating to the
Receivables for the presence or absence of defects,
compliance with the Transferor's representations and
warranties or for any other purpose.
Pursuant to the Agreement, the Transferor will have the
right (subject to certain limitations and
conditions), and in some circumstances, such as the
maintenance of the Transferor Interest at a specified
minimum level (the "Minimum Transferor Interest"),
will be obligated, to designate additional eligible
revolving credit card accounts to be included as
Additional Accounts and to convey to the Trust all of
the Receivables in the Additional Accounts, whether
such Receivables are then existing or thereafter
created or to designate Participations to be included
in the Trust in lieu thereof or in addition thereto.
See "Description of the Certificates -- Addition of
Trust Assets."
Pursuant to the Agreement, the Transferor will have the
right (subject to certain limitations and conditions)
to designate certain Accounts and to accept the
reconveyance of all the Receivables in such Accounts
(the "Removed Accounts"), whether such Receivables
are then existing or thereafter created. See
"Description of the Certificates -- Removal of
Accounts."
NEW ISSUANCES...........The Agreement will authorize the Trustee to issue three
types of certificates: (i) one or more Series of
Certificates that will be transferable and have the
characteristics described below, (ii) a certificate
that, along with any Supplemental Certificates
outstanding, evidences the Transferor Interest (the
"Transferor Certificate"), which is not offered
hereby and which
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<PAGE> 10
initially will be held by the Transferor and which
will be transferable only as provided in the
Agreement and (iii) one or more Supplemental
Certificates (relating to the Transferor Certificate)
which are not offered hereby and will be transferable
only as provided in the Agreement. Any such Series of
Certificates identified in clause (i) above, or one
or more Classes of such Series of Certificates
identified in clause (i) above may be offered to the
public or other investors under a prospectus or other
disclosure document (a "Disclosure Document") in
offerings pursuant to this Prospectus or in
transactions either registered under the Securities
Act, or exempt from registration thereunder, directly
or through one or more other underwriters or
placement agents, in fixed-price offerings or in
negotiated transactions or otherwise. See
"Description of the Certificates -- New Issuance."
A new issuance of a Series of Certificates identified in
clause (i) of the previous paragraph (a "New
Issuance") may occur only upon delivery to the
Trustee of the following: (i) a Series Supplement
specifying the principal terms of such Series (the
"Principal Terms"), (ii) an opinion of counsel to the
effect that, for federal income tax purposes, (1)
such issuance will not adversely affect the tax
characterization as debt of Certificates of any
outstanding Series or Class that were characterized
as debt at the time of their issuance, (2) following
such issuance the Trust will not be deemed to be an
association (or publicly traded partnership) taxable
as a corporation and (3) such issuance will not cause
or constitute an event in which gain or loss would be
recognized by any Certificateholder (an opinion of
counsel with respect to any matter to the effect
referred to in clause (ii) with respect to any action
is referred to herein as a "Tax Opinion"), (iii) if
required by the related Series Supplement, the form
of Credit Enhancement, (iv) if Credit Enhancement is
required by the Series Supplement, an appropriate
Credit Enhancement agreement with respect thereto,
(v) written confirmation from each Rating Agency that
the New Issuance will not result in such Rating
Agency reducing or withdrawing its rating on any then
outstanding Series rated by it and (vi) an officer's
certificate of the Transferor to the effect that
after giving effect to the New Issuance the
Transferor would not be required to add the
Receivables of any Additional Accounts pursuant to
the Agreement and the Transferor Interest would be at
least equal to the Minimum Transferor Interest. See
"Description of the Certificates -- New Issuance."
DENOMINATIONS...........Beneficial interests in the Certificates will be offered
for purchase in denominations of $1,000 and integral
multiples thereof or such other denominations
specified in the Prospectus Supplement.
REGISTRATION OF
CERTIFICATES............Except as specified in the related Prospectus
Supplement, the Certificates of each Series initially
will be represented by Certificates registered in the
name of Cede, as the nominee of DTC. No Certificate
Owner will be entitled to receive a definitive
certificate representing such person's interest,
except in the event that Certificates in fully
registered, certificated form ("Definitive
Certificates") are issued under the limited
circumstances described herein. See "Description of
the Certificates -- Definitive Certificates."
CLEARANCE AND
SETTLEMENT..............Except as specified in the related Prospectus
Supplement, Certificate Owners of each Series offered
hereby may elect to hold their Certificates through
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<PAGE> 11
any of DTC (in the United States) or Cedel or
Euroclear (in Europe). Transfers within DTC, Cedel or
Euroclear, as the case may be, will be made in
accordance with the usual rules and operating
procedures of the relevant system. Cross-market
transfers between persons holding directly or
indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly through
Cedel or Euroclear, on the other, will be effected in
DTC through the relevant Depositaries of Cedel or
Euroclear. See "Description of the
Certificates -- Book-Entry Registration."
SERVICER................Bank of America National Association is the Servicer.
The principal executive offices of Bank of America
are located at 1825 East Buckeye Road, Phoenix,
Arizona 85034, telephone number (602) 597-3738. The
Servicer will receive a fee as servicing compensation
from the Trust in respect of each Series in the
amounts and at the times specified in the related
Prospectus Supplement (the "Servicing Fee"). The
Servicing Fee may be payable from Finance Charge
Receivables, or other amounts as specified in the
related Prospectus Supplement. In certain limited
circumstances, Bank of America may resign or be
removed, in which event the Trustee or a third-party
servicer may be appointed as successor servicer (Bank
of America, or any such successor servicer, is
referred to herein as the "Servicer"). Bank of
America is a wholly-owned subsidiary of BankAmerica
Corporation (the "Corporation"). See "BankAmerica
Corporation and Bank of America."
TRANSFEROR..............Bank of America is the Transferor. Subject to certain
conditions described herein under "Description of the
Certificates -- The Transferor Certificate;
Additional Transferors," Bank of America may
designate one or more affiliates to transfer all
right, title and interest in Receivables or
Participations to the Trust from time to time. Any
such additional transferors will generally have the
same rights and obligations as those of the
Transferor described herein.
COLLECTIONS.............Except in circumstances specified in the related
Prospectus Supplement, the Servicer will deposit all
collections of Receivables in an account required to
be established for such purpose by the Agreement (the
"Collection Account"). All amounts deposited in the
Collection Account with respect to the Trust will be
allocated by the Servicer between amounts collected
on Principal Receivables and amounts collected on
Finance Charge Receivables. If so specified in the
related Prospectus Supplement, Principal Receivables
and/or Finance Charge Receivables may be otherwise
characterized. See "Description of the
Certificates -- Discount Option." All such amounts
will then be allocated in accordance with the
respective interests of the Certificateholders of
each Series of Certificates or Class thereof and the
holder of the Transferor Certificate and, in certain
circumstances, certain Credit Enhancement Providers.
See "Description of the Certificates -- Investor
Percentage and Transferor Percentage."
INTEREST PAYMENTS.......Interest on each Series of Certificates or Class thereof
for each accrual period (each, an "Interest Period")
specified in the related Prospectus Supplement will
be distributed in the amounts and on the dates (which
may be monthly, quarterly, semiannually or otherwise
as specified in the related Prospectus Supplement)
(each, a "Distribution Date") specified in the
related Prospectus Supplement. Interest payments will
be funded from collections of Finance Charge
Receivables allocated to the Investor Interest during
the preceding calendar month or other period
immediately preceding the related Distribution Date
(each, a "Monthly Period") as described in the
related
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<PAGE> 12
Prospectus Supplement, and may be funded from certain
investment earnings on funds in certain accounts of
the Trust and from any applicable Enhancement, if
necessary, or certain other amounts as specified in
the related Prospectus Supplement. If the
Distribution Dates for payment of interest for a
Series or Class occur less frequently than monthly,
such collections or other amounts allocable to such
Series or Class may be deposited in one or more trust
accounts pending distribution to the
Certificateholders of such Series or Class, all as
described in the related Prospectus Supplement. See
"Risk Factors -- Limited Credit Enhancement,"
"Description of the Certificates -- Application of
Collections," "-- Shared Excess Finance Charge
Collections" and "Credit Enhancement."
REVOLVING PERIOD........Unless otherwise specified in the related Prospectus
Supplement, with respect to each Series and any Class
thereof, no principal will be payable to
Certificateholders until the Principal Commencement
Date or the Scheduled Payment Date with respect to
such Series or Class, as described below. For the
period beginning on the date of issuance of the
related Series (the "Closing Date") and ending with
the commencement of an Amortization Period or an
Accumulation Period (the "Revolving Period"),
collections of Principal Receivables otherwise
allocable to the Investor Interest will, subject to
certain limitations, be paid from the Trust to the
holder of the Transferor Certificate or, under
certain circumstances and if so specified in the
related Prospectus Supplement, will be treated as
Shared Excess Principal Collections and paid to the
holders of other Series of Certificates issued by the
Trust, as described herein and in the related
Prospectus Supplement. See "Description of the
Certificates -- Pay Out Events" for a discussion of
the events which might lead to early termination of
the Revolving Period.
PRINCIPAL PAYMENTS......The principal of the Certificates of each Series offered
hereby will be scheduled to be paid either in
installments commencing on a date specified in the
related Prospectus Supplement (the "Principal
Commencement Date"), in which case such Series will
have either a Controlled Amortization Period or a
Principal Amortization Period, as described below, or
on an expected date specified in, or determined in
the manner specified in, the related Prospectus
Supplement (the "Scheduled Payment Date"), in which
case such Series will have an Accumulation Period, as
described below. If a Series has more than one Class
of Certificates, a different method of paying
principal, Principal Commencement Date or Scheduled
Payment Date may be assigned to each Class. The
payment of principal with respect to the Certificates
of a Series or Class may commence earlier than the
applicable Principal Commencement Date or Scheduled
Payment Date, and the final principal payment with
respect to the Certificates of a Series or Class may
be made earlier or later than the applicable expected
payment date, Scheduled Payment Date or other
expected date, if a Pay Out Event occurs and the
Rapid Amortization Period commences with respect to
such Series or Class or under certain other
circumstances described herein. See "Description of
the Certificates -- Principal Payments."
CONTROLLED AMORTIZATION
PERIOD..................If the Prospectus Supplement relating to a Series so
specifies, unless a Rapid Amortization Period with
respect to such Series commences, the Certificates of
such Series or any Class thereof will have an
amortization period (the "Controlled Amortization
Period") during which collections of Princi-
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<PAGE> 13
pal Receivables allocable to the Investor Interest of
such Series (and certain other amounts if so
specified in the related Prospectus Supplement) will
be used on each Distribution Date to make principal
distributions in scheduled amounts to the
Certificateholders of such Series or any Class of
such Series then scheduled to receive such
distributions. The Controlled Amortization Period is
intended to permit the applicable Certificateholders
to receive payment of the principal balance of their
Certificates in fixed installments over a specified
period. The amount to be distributed on any
Distribution Date during the Controlled Amortization
Period will be limited to an amount (the "Controlled
Distribution Amount") equal to an amount specified in
the related Prospectus Supplement (the "Controlled
Amortization Amount") plus any existing deficit
controlled amortization amount arising from prior
Distribution Dates. If a Series has more than one
Class of Certificates, each Class may have a separate
Controlled Amortization Amount. In addition, the
related Prospectus Supplement may describe certain
priorities among such Classes with respect to such
distributions. The Controlled Amortization Period
will commence at the close of business on a date
specified in the related Prospectus Supplement and
continue until the earliest of (a) the commencement
of the Rapid Amortization Period, (b) payment in full
of the Investor Interest of the Certificates of such
Series or Class and, if so specified in the related
Prospectus Supplement, of the Collateral Interest or
Enhancement Invested Amount, if any, with respect to
such Series, and (c) the Series Termination Date with
respect to such Series.
PRINCIPAL AMORTIZATION
PERIOD..................If the Prospectus Supplement relating to a Series so
specifies, unless a Rapid Amortization Period with
respect to such Series commences, the Certificates of
such Series or any Class thereof will have an
amortization period (the "Principal Amortization
Period") during which collections of Principal
Receivables allocable to the Investor Interest of
such Series (and certain other amounts if so
specified in the related Prospectus Supplement) will
be used on each Distribution Date to make principal
distributions to the Certificateholders of such
Series or any Class of such Series then scheduled to
receive such distributions. Such payments will not be
limited by any Controlled Amortization Amount as they
are during a Controlled Amortization Period. If a
Series has more than one Class of Certificates, the
related Prospectus Supplement may describe certain
priorities among such Classes with respect to such
distributions. The Principal Amortization Period will
commence at the close of business on a date specified
in the related Prospectus Supplement and continue
until the earlier of (a) the commencement of the
Rapid Amortization Period, (b) payment in full of the
Investor Interest of the Certificates of such Series
or Class and, if so specified in the related
Prospectus Supplement, of the Collateral Interest or
Enhancement Invested Amount, if any, with respect to
such Series, and (c) the Series Termination Date with
respect to such Series. The Principal Amortization
Period is intended to result in the fastest possible
distribution of principal to Certificateholders in a
Series or Class.
CONTROLLED ACCUMULATION
PERIOD..................If the Prospectus Supplement relating to a Series so
specifies, unless a Rapid Amortization Period or, if
so specified in the related Prospectus Supplement, a
Rapid Accumulation Period with respect to such Series
commences, the Certificates of such Series or any
Class thereof will have an
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<PAGE> 14
accumulation period (the "Controlled Accumulation
Period") during which collections of Principal
Receivables allocable to the Investor Interest of
such Series (and certain other amounts if so
specified in the related Prospectus Supplement) will
be deposited on the business day immediately prior to
each Distribution Date or other business day
specified in the related Prospectus Supplement (each
a "Transfer Date") in a trust account established for
the benefit of the Certificateholders of such Series
or Class (a "Principal Funding Account") and used to
make distributions of principal to the
Certificateholders of such Series or Class on the
Scheduled Payment Date relating to such Series or
Class. This is to allow Certificateholders to receive
a single payment with respect to their principal
balance rather than to receive installment payments
as with a Controlled Amortization Period, a Principal
Amortization Period or a Rapid Amortization Period.
The amount to be deposited in the Principal Funding
Account on any Transfer Date will be limited to an
amount (the "Controlled Deposit Amount") equal to an
amount specified in the related Prospectus Supplement
(the "Controlled Accumulation Amount") plus any
deficit Controlled Accumulation Amount arising from
prior Distribution Dates. If a Series has more than
one Class of Certificates, each Class may have a
separate Principal Funding Account and Controlled
Accumulation Amount. In addition, the related
Prospectus Supplement may describe certain priorities
among such Classes with respect to deposits of
principal into such Principal Funding Accounts. The
Controlled Accumulation Period will commence at the
close of business on a date specified in or
determined in the manner specified in the related
Prospectus Supplement and continue until the earliest
of (a) the commencement of the Rapid Amortization
Period or, if so specified in the related Prospectus
Supplement, the Rapid Accumulation Period, (b)
payment in full of the Investor Interest of the
Certificates of such Series or Class and, if so
specified in the related Prospectus Supplement, of
the Collateral Interest or Enhancement Invested
Amount, if any, with respect to such Series and (c)
the Series Termination Date with respect to such
Series.
Funds on deposit in any Principal Funding Account may be
invested in Permitted Investments or subject to a
guaranteed rate or investment contract or other
arrangement intended to assure a minimum return on
the investment of such funds. Investment earnings on
such funds may be applied to pay interest on the
related Series of Certificates. In order to enhance
the likelihood of payment in full of principal at the
end of an Accumulation Period with respect to a
Series of Certificates, such Series may be subject to
a principal guaranty or other similar arrangement.
RAPID ACCUMULATION
PERIOD..................If so specified and under the conditions set forth in
the Prospectus Supplement relating to a Series having
a Controlled Accumulation Period, during the period
from the day on which a Pay Out Event has occurred
until the earliest of (a) the commencement of the
Rapid Amortization Period, (b) the payment in full of
the Investor Interest of the Certificates of such
Series and, if so specified in the related Prospectus
Supplement, of the Collateral Interest or Enhancement
Invested Amount, if any, with respect to such Series
and (c) the related Series Termination Date (the
"Rapid Accumulation Period"), collections of
Principal Receivables allocable to the Investor
Interest of such Series (and certain other amounts if
so specified in the related Prospectus Supplement)
will be deposited on each Transfer Date
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<PAGE> 15
in the Principal Funding Account and used to make
distributions of principal to the Certificateholders
of such Series or Class on the Scheduled Payment
Date. The amount to be deposited in the Principal
Funding Account during the Rapid Accumulation Period
will not be limited to the Controlled Deposit Amount
as such amount is limited during a Controlled
Accumulation Period. The Rapid Accumulation Period is
intended to result in the fastest possible
accumulation of funds available to make principal
distributions to Certificateholders of a Series or
Class on the Scheduled Payment Date following a Pay
Out Event with respect to such Series in order to
better assure the repayment of principal to such
Certificateholders.
The term "Pay Out Event" with respect to a Series of
Certificates issued by the Trust means any of the
events identified as such in the related Prospectus
Supplement and any of the following: (a) certain
events of insolvency or bankruptcy relating to the
Transferor, an Additional Transferor or any other
holder of the Transferor Certificate, (b) the
Transferor or an Additional Transferor is unable for
any reason to transfer Receivables to the Trust in
accordance with the provisions of the Agreement or
(c) the Trust becomes an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended. See "Description of the Certificates -- Pay
Out Events" for a discussion of the events which
might lead to commencement of a Rapid Accumulation
Period.
During the Rapid Accumulation Period, funds on deposit
in any Principal Funding Account may be invested in
Permitted Investments or subject to a guaranteed rate
or investment contract or other arrangement intended
to assure a minimum return on the investment of such
funds. Investment earnings on such funds may be
applied to pay interest on the related Series of
Certificates or make other payments as specified in
the related Prospectus Supplement. In order to
enhance the likelihood of payment in full of
principal at the end of the Rapid Accumulation Period
with respect to a Series of Certificates, such Series
may be subject to a principal guaranty or other
similar arrangement.
RAPID AMORTIZATION
PERIOD..................During the period from the day on which a Pay Out Event
has occurred with respect to a Series or, if so
specified in the Prospectus Supplement relating to a
Series with a Controlled Accumulation Period, from
such time specified in the related Prospectus
Supplement after a Pay Out Event has occurred and the
Rapid Accumulation Period has commenced, to the
earlier of (a) the date on which the Investor
Interest of the Certificates of such Series and the
Enhancement Invested Amount or the Collateral
Interest, if any, with respect to such Series have
been paid in full and (b) the related Series
Termination Date (the "Rapid Amortization Period"),
collections of Principal Receivables allocable to the
Investor Interest of such Series (and certain other
amounts if so specified in the related Prospectus
Supplement) will be distributed as principal payments
to the Certificateholders of such Series and, in
certain circumstances, to the Credit Enhancement
Provider, monthly on each Distribution Date with
respect to such Series in the manner and order of
priority set forth in the related Prospectus
Supplement. During the Rapid Amortization Period with
respect to a Series, distributions of principal will
not be subject to any Controlled Deposit Amount or
Controlled Distribution Amount. In addition, upon the
commencement of the Rapid Amortization Period with
respect to a Series, any funds on deposit in a
14
<PAGE> 16
Principal Funding Account with respect to such Series
or any Class thereof will be paid to the
Certificateholders of such Series or Class on the
first Distribution Date in the Rapid Amortization
Period. The Rapid Amortization Period is intended to
result in the fastest possible distribution of
principal to Certificateholders of a Series following
a Pay Out Event with respect to such Series in order
to better assure the repayment of principal to such
Certificateholders. See "Description of the
Certificates -- Pay Out Events" for a discussion of
the events which might lead to commencement of a
Rapid Amortization Period.
SHARED EXCESS FINANCE
CHARGE COLLECTIONS......Any Series offered hereby may be, but will not be
required to be, designated by the Transferor to be
included in a group of Series (a "Shared Excess
Finance Charge Collections Group"). If so specified
in the related Prospectus Supplement, the
Certificateholders of a Series within a Shared Excess
Finance Charge Collections Group or any Class thereof
may be entitled to receive all or a portion of Excess
Finance Charge Collections with respect to another
Series within such Shared Excess Finance Charge
Collections Group or Class thereof to cover any
shortfalls with respect to amounts payable from
collections of Finance Charge Receivables allocable
to such Series or Class. By so sharing such excess
collections with respect to Finance Charge
Receivables allocated to investors, the Transferor
may avoid the occurrence of a Pay Out Event with
respect to a Series within a Shared Excess Finance
Charge Collections Group resulting from a shortfall
which is limited to that Series and is merely
temporary. See "Description of the
Certificates -- Application of Collections,"
"-- Shared Excess Finance Charge Collections," and
"-- Defaulted Receivables; Rebates and Fraudulent
Charges; Investor Charge-Offs."
SHARED EXCESS PRINCIPAL
COLLECTIONS.............Any Series offered hereby may be, but will not be
required to be, designated by the Transferor to be
included in a group of Series (the "Shared Excess
Principal Collections Group"). If so specified in the
related Prospectus Supplement, to the extent that
collections of Principal Receivables that are
allocated to the Investor Interest of any Series are
not needed to make payments or deposits with respect
to such Series, such collections ("Shared Excess
Principal Collections") will be applied to cover
principal payments due to or for the benefit of
Certificateholders of another Series. By so applying
Shared Excess Principal Collections, the Transferor
may make more efficient use of collections with
respect to Principal Receivables allocated to
investors to repay investors' principal when due or
for its own purposes when no return of investors'
principal is due. Any such reallocation will not
result in a reduction in the Investor Interest of the
Series to which such collections were initially
allocated.
FUNDING PERIOD..........The Prospectus Supplement relating to a Series of
Certificates may specify that for a period beginning
on the Closing Date and ending on a specified date
before the commencement of an Amortization Period or
Accumulation Period with respect to such Series (the
"Funding Period"), which period is expected to be
less than one year, the aggregate amount of Principal
Receivables in the Trust allocable to such Series may
be less than the aggregate principal amount of the
Certificates of such Series and that the amount of
such deficiency (the "Pre-Funding Amount") will be
held in a trust account established with the Trustee
for the benefit of Certificate-
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<PAGE> 17
holders of such Series (the "Pre-Funding Account")
pending the transfer of additional Principal
Receivables to the Trust or pending the reduction of
the Investor Interests or Adjusted Investor Interest
of other Series issued by the Trust. The Pre-Funding
Amount may be up to 100% of the principal amount of
the Certificates of a Series. The related Prospectus
Supplement will specify the initial Investor Interest
on the Closing Date with respect to such Series, the
aggregate principal amount of the Certificates of
such Series (the "Full Investor Interest") and the
date by which the Investor Interest is expected to
equal the Full Investor Interest. The Investor
Interest will increase as Principal Receivables are
delivered to the Trust or as the Investor Interests
or Adjusted Investor Interests of other Series of the
Trust are reduced. The Investor Interest may also
decrease due to Investor Charge-Offs or the
occurrence of a Pay Out Event and the commencement of
the Rapid Amortization Period, as specified in the
related Prospectus Supplement.
During the Funding Period, funds on deposit in the
Pre-Funding Account for a Series of Certificates will
be withdrawn and paid to the holder of the Transferor
Certificate to the extent of any increases in the
Investor Interest. In the event that the Investor
Interest does not for any reason equal the Full
Investor Interest by the end of the Funding Period,
any amount remaining in the Pre-Funding Account will
be payable to the Certificateholders of such Series
in a manner and at such time as set forth in the
related Prospectus Supplement. Such payment will
reduce the aggregate principal amount of such
Certificates. In addition, a prepayment premium or
penalty or similar amount may be payable to the
Certificateholders of such Series, if specified in
the related Prospectus Supplement.
If so specified in the related Prospectus Supplement,
monies in the Pre-Funding Account with respect to any
Series will be invested by the Trustee in Permitted
Investments or will be subject to a guaranteed rate
or investment agreement or other similar arrangement,
and investment earnings and any applicable payment
under any such investment arrangement will be applied
to pay interest on the Certificates of such Series.
PAIRED SERIES...........If so specified in the related Prospectus Supplement, a
Series of Certificates may be paired with another
Series previously or subsequently issued by the Trust
(a "Paired Series"). As the Adjusted Investor
Interest of the Series having a Paired Series is
reduced, the Investor Interest of the Paired Series
will increase by an equal amount. The effect of a
Paired Series is to provide for the continuous
investment in the Receivables by Certificateholders,
thereby reducing the potential increase in the
Transferor Interest as a Series' interest in the
Trust is reduced through the amortization or
accumulation of principal. If a Pay Out Event occurs
with respect to the Series having a Paired Series or
with respect to the Paired Series when such Series is
in the Controlled Amortization Period or Controlled
Accumulation Period, the percentage used for
allocating collections of Principal Receivables for
the Series and for the Paired Series may be reset as
specified in the related Prospectus Supplement.
CREDIT ENHANCEMENT......Credit Enhancement with respect to a Series or any Class
thereof may be provided in the form or forms of
subordination, a letter of credit, a cash collateral
guaranty or account, a collateral interest, a surety
bond, an insurance policy, a spread account, a
reserve account or other form of support as specified
in the related Prospectus Supplement. Credit Enhance-
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ment may also be provided to a Class or Classes of
different Series by a cross-support feature which
requires that distributions of principal and/or
interest be made with respect to Certificates of one
or more Classes of a particular Series before
distributions are made to one or more Classes of
another Series.
The type, characteristics and amount of the Credit
Enhancement will be determined based on several
factors, including the characteristics of the
Receivables and Accounts included in the Trust
Portfolio as of the Closing Date with respect to any
Series, and will be established on the basis of
requirements of each Rating Agency rating the
Certificates of such Series. If so specified in the
related Prospectus Supplement, any such Credit
Enhancement will apply only in the event of certain
types of losses and the protection against losses
provided by such Credit Enhancement will be limited.
The terms of the Credit Enhancement with respect to a
Series, and the conditions under which the Credit
Enhancement may be increased, reduced or replaced,
are described in the related Prospectus Supplement.
See "Risk Factors -- Scope of Certificate Rating" and
"Credit Enhancement."
OPTIONAL REPURCHASE.....With respect to each Series of Certificates, the
Investor Interest will be subject to optional
repurchase by the Transferor on any Distribution Date
after the Investor Interest and the Enhancement
Invested Amount, if any, with respect to such Series,
is reduced to an amount less than or equal to 5% of
the initial Investor Interest, if any, or such other
amount specified in the related Prospectus
Supplement, if certain conditions set forth in the
Agreement are met. The repurchase price will be equal
to the Investor Interest (less the amount, if any, on
deposit in any Principal Funding Account with respect
to such Series), plus accrued and unpaid interest on
the Certificates and interest or other amounts
payable on the Enhancement Invested Amount or the
Collateral Interest, if any, through the day
preceding the Distribution Date on which the
repurchase occurs or such other amount specified in
the Prospectus Supplement. See "Description of the
Certificates -- Final Payment of Principal;
Termination."
TAX STATUS..............Except to the extent otherwise specified in the related
Prospectus Supplement, Special Counsel to the
Transferor will deliver its opinion that under
existing law the Certificates of each Series will be
characterized as debt for federal income tax
purposes. Except to the extent otherwise specified in
the related Prospectus Supplement, the Certificate
Owners will agree to treat the Certificates as debt
for federal income tax purposes. See "Federal Income
Tax Consequences" for additional information
concerning the application of federal income tax
laws.
ERISA CONSIDERATIONS....Under regulations issued by the Department of Labor, the
Trust's assets would not be deemed "plan assets" of
any employee benefit plan holding interests in the
Certificates of a Series if certain conditions are
met. If the Trust's assets were deemed to be "plan
assets" of an employee benefit plan, there is
uncertainty as to whether existing exemptions from
the "prohibited transaction" rules of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), would apply to all transactions involving
the Trust's assets. No assurance can be made with
respect to any offering of the Certificates of any
Series that the conditions which would allow the
Trust assets not to be deemed "plan assets" will be
met, although the intention of the underwriters (but
not their assurance) as to whether the Certificates
of a
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particular Series will be "publicly-offered
securities," and therefore eligible for an ERISA
exemption, is set forth in the related Prospectus
Supplement. Accordingly, employee benefit plans
contemplating purchasing interests in Certificates
should consult their counsel before making a
purchase. See "ERISA Considerations."
CERTIFICATE RATING......It will be a condition to the issuance of the
certificates of each Series or Class thereof offered
pursuant to this Prospectus and the related
Prospectus Supplement that they be rated in one of
the four highest rating categories by at least one
nationally recognized rating organization (the rating
agency or agencies selected by the Transferor to rate
any Series, the "Rating Agency"). The rating or
ratings applicable to the Certificates of each Series
or Class thereof offered hereby will be set forth in
the related Prospectus Supplement.
A rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or
withdrawal at any time by the assigning Rating
Agency. Each rating should be evaluated independently
of any other rating. See "Risk Factors -- Scope of
Certificate Rating."
LISTING.................If so specified in the Prospectus Supplement relating to
a Series, application will be made to list the
Certificates of such Series, or all or a portion of
any Class thereof, on the Luxembourg Stock Exchange
or any other specified exchange.
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RISK FACTORS
Potential investors should consider, among other things, the following risk
factors in connection with the purchase of the Certificates.
Limited Liquidity. It is anticipated that, to the extent permitted, the
underwriters of any Series of Certificates offered hereby will make a market in
such Certificates, but in no event will any such underwriter be under an
obligation to do so. There is no assurance that a secondary market will develop
with respect to the Certificates of any Series offered hereby, or if it does
develop, that it will provide Certificateholders with liquidity of investment or
that it will continue for the life of such Certificates.
Limited Obligations. The Certificates will not represent an interest in or
obligation of the Transferor, BankAmerica Corporation (the "Corporation"), Bank
of America NT&SA, or any of their affiliates. The only obligations of the
foregoing entities with respect to the Certificates or the Receivables will be
(i) the obligations (if any) of the Transferor, if applicable, pursuant to
certain limited representations and warranties made with respect to the
Receivables and (ii) the Servicer's servicing obligations under the Agreement.
Neither the Certificates nor the underlying Receivables will be guaranteed or
insured by any governmental agency or instrumentality, or by the Transferor, the
Corporation, Bank of America NT&SA, or any of their affiliates. PROCEEDS OF THE
ASSETS INCLUDED IN THE TRUST (INCLUDING THE RECEIVABLES AND ANY FORM OF
ENHANCEMENT) WILL BE THE SOLE SOURCE OF PAYMENTS ON THE CERTIFICATES, AND THERE
WILL BE NO RECOURSE TO THE TRANSFEROR, THE CORPORATION, BANK OF AMERICA NT&SA OR
ANY OTHER ENTITY IN THE EVENT THAT SUCH PROCEEDS ARE INSUFFICIENT OR OTHERWISE
UNAVAILABLE TO MAKE PAYMENTS PROVIDED FOR UNDER THE CERTIFICATES.
Potential Priority of Certain Liens. While the Transferor will transfer
interests in Receivables to the Trust, a court could treat any such transaction
as an assignment of collateral as security for the benefit of holders of
Certificates issued by the Trust. The Transferor will represent and warrant in
the Agreement that the transfer of the Receivables to the Trust is either a
valid transfer and assignment of the related Receivables to the Trust or a grant
to the Trust of a security interest in such Receivables. With respect to the
Trust, the Transferor will take certain actions as are required to perfect the
Trust's security interest in the related Receivables and, with respect to the
Trust, will warrant that if the transfer to the Trust is deemed to be a grant to
the Trust of a security interest in the related Receivables, the Trustee will
have a first priority perfected security interest therein (except for certain
tax and other governmental liens), and, with certain exceptions and for certain
limited periods of time provided for in the Uniform Commercial Code, in the
proceeds thereof (subject, in each case, to certain potential tax or other
governmental liens referred to under "Description of the
Certificates -- Representations and Warranties"). Nevertheless, if the transfer
of Receivables to the Trust is deemed to create a security interest therein, a
tax or government lien or other nonconsensual lien on property of any Transferor
arising before Receivables come into existence may have priority over the
Trust's interest in such Receivables, and if the FDIC were appointed receiver of
the Transferor, the receiver's administrative expenses may also have priority
over the Trust's interest in such Receivables. The existence of such liens or
rights of the receiver of the Transferor could reduce the amount payable on the
Receivables and result in possible reductions in the amount of payments on the
Certificates. See "Certain Legal Aspects of the Receivables -- Transfer of
Receivables."
Insolvency or Bankruptcy of Transferor or Other Holder of Transferor
Certificate. Positions taken by the FDIC staff prior to the passage of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended
("FIRREA") do not suggest that the FDIC, as receiver for the Transferor, would
interfere with the timely transfer to the Trust of payments collected on the
related Receivables. To the extent that the Transferor will grant a security
interest in Receivables to the Trust and that security interest is validly
perfected before the Transferor's insolvency and will not be taken in
contemplation of insolvency of the Transferor, or with the intent to hinder,
delay or defraud the Transferor or the creditors of the Transferor, based upon
opinions issued by the general counsel of the FDIC and policy statements of the
FDIC, such security interest should not be subject to avoidance, and payments to
the Trust with respect to the Receivables should not be subject to recovery, by
the FDIC. However, such opinions and policy statements are not binding on the
FDIC and if the FDIC were to assert a contrary position, certain provisions of
the Federal Deposit Insurance Act ("FDIA"), as amended by FIRREA, which, at the
request of the FDIC, have been applied in
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<PAGE> 21
recent lawsuits to avoid security interests in collateral granted by depository
institutions, would permit the FDIC to avoid such security interest, thereby
resulting in possible delays and reductions in payments to the
Certificateholders of all outstanding Series. In addition, the FDIA could be
interpreted to require compliance with certain claims procedures if a receiver
or conservator were appointed for the Transferor before the Trustee could
collect, sell, dispose of or otherwise liquidate the Receivables, which could
delay or possibly reduce payments on the Certificates of all Series outstanding.
If a conservator or receiver were appointed for the Transferor or other
holder of the Transferor Certificate or a bankruptcy or insolvency event were to
occur with respect to the Transferor or other holder of the Transferor
Certificate, then a Pay Out Event will occur with respect to all Series then
outstanding and, pursuant to the Agreement, new Principal Receivables would not
be transferred to the Trust unless otherwise required by the FDIC as receiver or
conservator. In addition, the Trustee would sell the Receivables (unless
otherwise instructed by holders of not less than 50% of the Investor Interest of
each Series of Certificates, or with respect to any Series with more than one
Class, of each Class, and the Transferor and each holder of an interest in the
Transferor Certificate not subject to the appointment of a conservator or
receiver or the occurrence of an insolvency event, and any other person
designated by the Transferor in an officer's certificate delivered to the
Trustee prior to the Insolvency Event or specified in the related Series
Supplement, which may include any provider of Enhancement), thereby causing
early termination of the Trust and a loss to Certificateholders of a Series if
the net proceeds of such sale allocable to such Series were insufficient to pay
the Certificateholders of such Series in full. If a Pay Out Event occurs
involving either the bankruptcy or insolvency of the Transferor or other holder
of the Transferor Certificate or the appointment of a conservator or receiver
for the Transferor, the conservator, receiver or bankruptcy trustee (including
another holder of the Transferor Certificate as debtor-in-possession) for the
Transferor or other holder of the Transferor Certificate may have the power to
prevent the early sale, liquidation or disposition of the Receivables and the
commencement of the Rapid Amortization Period or, if applicable with respect to
a Series as specified in the related Prospectus Supplement, the Rapid
Accumulation Period. Such action could cause delays or shortfalls in the amounts
ultimately repaid to Certificateholders. A conservator, receiver or bankruptcy
trustee (including another holder of the Transferor Certificate as
debtor-in-possession) for the Transferor or other holder of the Transferor
Certificate may also have the power to cause the early sale of the Receivables
and the early retirement of the Certificates of each Series or to prohibit the
continued transfer of Principal Receivables to the Trust. In addition, in the
event of a Servicer Default relating to the conservatorship, receivership, or
insolvency of the Servicer, if no Servicer Default other than such
conservatorship, receivership, or insolvency exists, the conservator or receiver
for the Servicer may have the power to prevent either the Trustee or the
Certificateholders from appointing a successor Servicer under the Agreement. See
"Certain Legal Aspects of the Receivables -- Certain Matters Relating to
Receivership."
Transferor's Ability to Change Terms of the Receivables. Pursuant to the
Agreement, the Transferor does not transfer to the Trust the Accounts, but only
the Receivables arising in the Accounts. As owner of the Accounts, the
Transferor retains the right to determine the monthly periodic finance charges
and other fees which will be applicable from time to time to the Accounts, to
alter the minimum monthly payment required on the Accounts and to change various
other terms with respect to the Accounts, including changing the annual
percentage rate from a fixed-rate to a variable-rate. A decrease in the monthly
periodic finance charge and a reduction in credit card or other fees would
decrease the effective yield on the Accounts with respect to the Trust and could
result in the occurrence of a Pay Out Event with respect to each Series relating
to the Trust and the commencement of the Rapid Amortization Period or, if so
specified in the related Prospectus Supplement, the Rapid Accumulation Period
with respect to each such Series. Under the Agreement, the Transferor will agree
that, except as otherwise required by law or as is deemed by the Transferor to
be necessary in order to maintain its credit card business, based upon a good
faith assessment by it, in its sole discretion, of the nature of the competition
in that business, the Transferor will not reduce the annual percentage rate of
the monthly periodic finance charges assessed on the related Receivables or
other fees on the related Accounts if, as a result of such reduction, the
Portfolio Yield for any Series as of such date would be less than the Base Rate
for such Series. The terms "Portfolio Yield" and "Base Rate" for each Series
will have the meanings set forth in the Prospectus Supplement relating to each
such Series. In addition, the Agreement will provide that the Transferor may
change the terms of the contracts relating to the related
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<PAGE> 22
Accounts or its policies and procedures with respect to the servicing thereof
(including without limitation the reduction of the required minimum monthly
payment and the calculation of the amount or the timing of finance charges,
credit card fees, and charge offs), if such change (i) would not, in the
reasonable belief of the Transferor, cause a Pay Out Event for any related
Series to occur, and (ii) is made applicable to the comparable segment of
revolving credit card accounts owned and serviced by the Transferor which have
characteristics the same as or substantially similar to the related Accounts
which are subject to such change. In servicing the Accounts, the Servicer will
be required to exercise the same care and apply the same policies that it
exercises in handling similar matters for its own comparable accounts. Except as
specified above or in any Prospectus Supplement, there will be no restrictions
on the Transferor's ability to change the terms of the Accounts. There can be no
assurance that changes in applicable law, changes in the marketplace or prudent
business practice might not result in a determination by the Transferor to take
actions which would change some or all of the above-mentioned Account terms or
other Account terms. Currently, the Transferor has no basis to determine what
effect various changes in the terms of the Receivables may have had in the past
and has no basis to determine what change in the terms of the Receivables may be
made in the future or what effect those changes may have.
Effects of Consumer Protection Laws. Federal and state consumer protection
laws impose requirements on the making and enforcement of consumer loans.
Congress and the states may enact new laws and amendments to existing laws to
regulate further the credit card and consumer credit industry or to reduce
finance charges or other fees or charges applicable to credit card accounts.
Such laws, as well as any new laws or rulings which may be adopted, may
adversely affect the Servicer's ability to collect on the Receivables or
maintain previous levels of monthly periodic finance charges and other credit
card fees. One effect of any legislation which regulates the amount of interest
and other charges that may be assessed on credit card account balances would be
to reduce the Portfolio Yield on the Accounts. If such legislation were to
result in a significant reduction in the Portfolio Yield, a Pay Out Event could
occur, in which case the Rapid Amortization Period or, if so specified in the
related Prospectus Supplement, the Rapid Accumulation Period would commence.
Certificateholders of an affected Series might then receive principal payments
earlier than expected. If the resulting reduction in the Portfolio Yield were
significant enough, there could be reductions in payments to Certificateholders
of the affected Series. See "Description of the Certificates -- Pay Out Events."
Pursuant to the Agreement, the Transferor will covenant to accept
reassignment, subject to certain conditions described under "Description of the
Certificates -- Representations and Warranties," of each Receivable that does
not comply in all material respects with all requirements of applicable law. The
Transferor will make certain other representations and warranties relating to
the validity and enforceability of the Receivables. However, it is not
anticipated that the Trustee will make any examination of the related
Receivables or the records relating thereto for the purpose of establishing the
presence or absence of defects, compliance with such representations and
warranties, or for any other purpose. The sole remedy if any such representation
or warranty is breached and such breach continues beyond the applicable cure
period is that the Transferor will be obligated to accept reassignment, subject
to certain conditions described under "Description of the
Certificates -- Representations and Warranties," of the Receivables affected
thereby. Such Receivables will be reassigned to the Transferor without any cost,
direct or indirect, incurred by Certificateholders. See "Description of the
Certificates -- Representations and Warranties" and "Certain Legal Aspects of
the Receivables -- Consumer Protection Laws."
Application of federal and state bankruptcy and debtor relief laws would
affect the interests of the Certificateholders in the Receivables if such laws
result in any Receivables being written off as uncollectible when there are no
funds available from any Credit Enhancement or other sources to cover any
resulting shortfalls in amounts payable to Certificateholders. See "Description
of the Certificates -- Defaulted Receivables; Rebates and Fraudulent Charges;
Investor Charge-Offs."
Effects of Competition in the Credit Card Industry. The credit card
industry is highly competitive. As new credit card issuers enter the market and
all issuers seek to expand their share of the market, there is increased use of
advertising, target marketing and pricing competition. The Trust will be
dependent upon the Transferor's continued ability to generate new Receivables.
If the rate at which new Receivables are generated declines significantly and
the Transferor or an Additional Transferor is unable to designate Additional
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Accounts with respect to the Trust, a Pay Out Event could occur with respect to
each Series relating to the Trust, in which case the Rapid Amortization Period
or, if so specified in the related Prospectus Supplement, the Rapid Accumulation
Period with respect to each such Series would commence. Certificateholders might
then receive principal payments earlier than expected.
Timing of Principal Payments Other Than at Expected Maturity. The
Receivables may be paid at any time and there is no assurance that there will be
additional Receivables created in the Accounts or that any particular pattern of
cardholder repayments will occur. The commencement and continuation of a
Controlled Amortization Period, a Principal Amortization Period or a Controlled
Accumulation Period for a Series or Class thereof with respect to the Trust will
be dependent upon the continued generation of new Receivables to be conveyed to
the Trust. A significant decline in the amount of Receivables generated could
result in the occurrence of a Pay Out Event for one or more Series and the
commencement of the Rapid Amortization Period or, if so specified in the related
Prospectus Supplement, the Rapid Accumulation Period for each such Series.
Certificateholders might then receive principal payments earlier than expected.
Certificateholders should be aware that the Transferor's ability to continue to
compete in the current industry environment will affect the Transferor's ability
to generate new Receivables to be conveyed to the Trust and may also affect
payment patterns. In addition, changes in periodic finance charges can alter the
monthly payment rates of cardholders. A significant decrease in such monthly
payment rate could slow the payment or accumulation of principal for the benefit
of Certificateholders during an Amortization Period or Accumulation Period. No
assurance can be given that payments of principal will be made as expected
during the Controlled Amortization Period or the Principal Amortization Period,
or with respect to an Accumulation Period, on the Scheduled Payment Date, as
applicable. See "Maturity Assumptions."
Prepayment Risks Connected with a Pre-Funding Account. With respect to any
Series having a Pre-Funding Account, in the event that there is an insufficient
amount of Principal Receivables in the Trust at the end of the applicable
Funding Period, the Certificateholders of such Series will be repaid principal
from amounts on deposit in the Pre-Funding Account (to the extent of such
insufficiency) following the end of such Funding Period, as described more fully
in the Prospectus Supplement. Such repayment of principal would be prior to the
scheduled date of such repayment. As a result of such repayment,
Certificateholders would receive a principal payment earlier than they expected.
In addition, Certificateholders would not receive the benefit of the applicable
Certificate Rate for the period of time originally expected on the amount of
such early repayment. There can be no assurance that a Certificateholder would
be able to reinvest such early repayment amount at a similar rate of return. If
a Certificateholder is not able to reinvest such early repayment amount at the
same rate of return or better, the Certificateholder's anticipated yield would
be adversely affected. However, a Series with a Pre-Funding Account feature may
also require the payment of a prepayment premium in such a circumstance, which
would mitigate the adverse effect to the Certificateholder's anticipated yield.
See "Description of the Certificates -- Funding Period."
Effect of Subordination on Class B Certificateholders. With respect to
Certificates of a Series having a Class or Classes of Subordinated Certificates,
except in circumstances specified in the related Prospectus Supplement, payments
of principal in respect of the Subordinated Certificates of a Series will not
commence until after the final principal payment with respect to the Senior
Certificates of such Series. In addition, if so specified in the related
Prospectus Supplement, if collections of Finance Charge Receivables allocable to
the Certificates of a Series are insufficient to cover required amounts due with
respect to the Senior Certificates of such Series, the Investor Interest with
respect to the Subordinated Certificates will be reduced, resulting in a
reduction of the portion of collections of Finance Charge Receivables allocable
to the Subordinated Certificates in future periods and a possible delay or
reduction in principal and interest payments on the Subordinated Certificates.
Moreover, if so specified in the related Prospectus Supplement, in the event of
a sale of Receivables in the Trust due to the bankruptcy or insolvency with
respect to the Transferor or any other holder of the Transferor Certificate or
the appointment of a conservator or receiver for the Transferor or any other
holder of the Transferor Certificate, or due to the inability of the Trustee to
act as or find a successor Servicer after a Servicer Default, the portion of the
net proceeds of such sale allocable to pay principal to the Certificates of a
Series will be used first to pay amounts due to the Senior Certificateholders
and any remainder will be used to pay amounts due to the Subordinated
Certificateholders.
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<PAGE> 24
Effect of Geographic Concentration. Unless otherwise specified in the
related Prospectus Supplement, the cardholders whose accounts are included in
the Identified Pool have addresses in all 50 states, the District of Columbia
and certain U.S. territories and possessions. However, if a single state or
region in the United States contains a high concentration of Receivables within
the Trust, events in that state or region may have a magnified effect on the
Trust due to such concentration. The Prospectus Supplement relating to a Series
to be offered thereby and hereby will set forth a then-current detailed
geographic breakdown of the number of Accounts and the amount of Receivables in
each state. See "The Receivables -- Geographic Distribution of Account Trust
Portfolio." The Transferor, however, is unable to determine and has no basis to
predict, with respect to any state or region, whether any such events have
occurred or may occur, or to what extent such events may effect the Receivables
or the payment of the Certificates.
Scope of Certificate Rating. Any rating assigned to the Certificates of a
Series or a Class by a Rating Agency will reflect such Rating Agency's
assessment of the likelihood that Certificateholders of such Series or Class
will receive the payments of interest and principal required to be made under
the Agreement (including amounts payable from any Pre-Funding Account) and will
be based primarily on the value of the Receivables in the Trust and the
availability of any Enhancement with respect to such Series or Class. However,
any such rating will not, unless otherwise specified in the related Prospectus
Supplement with respect to any Class or Series offered hereby, address the
likelihood that the principal of, or interest on, any Certificates of such Class
or Series will be paid on a scheduled date. In addition, any such rating will
not address the possibility of the occurrence of a Pay Out Event with respect to
such Class or Series or the possibility of the imposition of United States
withholding tax with respect to non-U.S. Certificateholders. The rating will not
be a recommendation to purchase, hold or sell Certificates of such Series or
Class, and such rating will not comment as to the marketability of such
Certificates, any market price or suitability for a particular investor. There
is no assurance that any rating will remain for any given period of time or that
any rating will not be reduced or withdrawn entirely by a Rating Agency if in
such Rating Agency's judgment circumstances so warrant. Such a reduction or
withdrawal may affect the price or marketability of the Certificates. However,
the Transferor has no basis to determine what specific effects such a reduction
or withdrawal might have on any particular Certificateholder or Certificate
Owner.
The Transferor will request a rating of the Certificates offered hereby of
each Series by at least one Rating Agency. There can be no assurance as to
whether any rating agency not requested to rate the Certificates will
nonetheless issue a rating with respect to any Series of Certificates or Class
thereof, and, if so, what such rating would be. A rating assigned to any Series
of Certificates or Class thereof by a rating agency that has not been requested
by the Transferor to do so may be lower than the rating assigned by a Rating
Agency pursuant to the Transferor's request.
Limited Credit Enhancement. Although Credit Enhancement may be provided
with respect to a Series of Certificates or any Class thereof, the amount
available will be limited and will be subject to certain reductions. If the
amount available under any Credit Enhancement is reduced to zero or the Credit
Enhancement is otherwise not available to cover a loss, Certificateholders of
the Series or Class thereof covered by such Credit Enhancement will bear
directly the credit and other risks associated with their undivided interest in
the Trust and will be more likely to suffer a loss. See "Credit Enhancement."
Basis Risk. If so specified in the related Prospectus Supplement, a portion
of the Accounts in the Trust will have finance charges set at a variable-rate
above a designated reference rate or other designated index. A Series of
Certificates issued by the Trust may bear interest at a fixed-rate or at a
floating-rate based on an index other than such reference rate or other
designated index. If there is a decline in such reference rate or other
designated index, the amount of collections of Finance Charge Receivables on
such Accounts may be reduced, whereas the amounts payable as Monthly Interest on
such Series of Certificates and other amounts required to be funded out of
collections of Finance Charge Receivables with respect to such Series may not be
similarly reduced. Such an event could result in the occurrence of a Pay Out
Event, in which case the Rapid Amortization Period or, if so specified in the
related Prospectus Supplement, the Rapid Accumulation Period would commence.
Certificateholders of an affected Series might then receive principal payments
earlier than expected. Conversely, to the extent that Accounts in the Trust bear
interest at a fixed-rate and there is an increase in such reference rate or
other designated index, amounts payable as Monthly Interest on such
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<PAGE> 25
Series of Certificates and other amounts required to be funded out of
collections of Finance Charge Receivables with respect to such Series may be
increased, whereas the amount of collections of Finance Charge Receivables on
such Accounts may not be similarly increased.
Risks of Swaps. The Trustee on behalf of the Trust may enter into interest
rate swaps and related caps, floors and collars or other forms of derivatives to
minimize the risk to Certificateholders from adverse changes in interest rates.
However, such transactions will not eliminate fluctuations in the value of the
Receivables or prevent such losses if the value of the Receivables decline.
The Trust's ability to hedge all or a portion of its portfolio of
Receivables through transactions in Swaps depends on the degree to which
interest rate movements in the market generally correlate with interest rate
movements in the Receivables.
The Trust's ability to engage in transactions involving Swaps will depend
on the degree to which the Trust can identify acceptable counterparties. There
can be no assurance that acceptable counterparties will be available for a
specific Swap at any specific time.
The costs to the Trust of hedging transactions vary among the hedging
techniques and also depend on such factors as market conditions and the length
of the contract. Furthermore, the Trust's ability to engage in hedging
transactions may be limited by tax considerations.
Swaps are not traded on markets regulated by the Commission or the
Commodity Futures Trading Commission, but are arranged through financial
institutions acting as principals or agents. In an over-the-counter environment,
many of the protections afforded to exchange participants are not available. For
example, there are no daily fluctuation limits, and adverse market movements
could therefore continue to an unlimited extent over a period of time. Because
the performance of over-the-counter Swaps is not guaranteed by any settlement
agency, there is a risk of counterparty default.
The Trust may consider taking advantage of investment opportunities in
Swaps that are not presently contemplated for use by the Trust or that are not
currently available but that may be developed, to the extent such opportunities
are both consistent with the Trust's objectives and legally permissible
investments for the Trust. Such opportunities, if they arise, may involve risks
that differ from or exceed those involved in the activities described above and
will be more fully described in the applicable Prospectus Supplement.
Master Trust Considerations. The Trust, as a master trust, is expected to
issue Series from time to time. While the Principal Terms of any Series will be
specified in a Series Supplement, the provisions of a Series Supplement and,
therefore, the terms of any additional Series, will not be subject to the prior
review by or consent of, holders of the Certificates of any previously issued
Series. Such Principal Terms may include methods for determining applicable
investor percentages and allocating collections, provisions creating different
or additional security or other Credit Enhancement, provisions subordinating
such Series to another Series or other Series (if the Series Supplement relating
to such Series so permits) to such Series, and any other amendment or supplement
to the Agreement which is made applicable only to such Series. It is a condition
precedent to the issuance of any additional Series by the Trust that each Rating
Agency that has rated any outstanding Series issued by the Trust deliver written
confirmation to the Trustee that a New Issuance will not result in such Rating
Agency reducing or withdrawing its rating on any outstanding Series. There can
be no assurance, however, that the Principal Terms of any other Series,
including any Series issued from time to time hereafter, might not have an
impact on the timing and amount of payments received by a Certificateholder of
any other Series. See "Description of the Certificates -- New Issuance."
Effect of Addition of Trust Assets on Credit Quality. The Transferor
expects, and in some cases will be obligated, to designate Additional Accounts,
the Receivables in which will be conveyed to the Trust. Such Additional Accounts
may include accounts having characteristics (including the possibility of
certain rebate features) which are different from, or accounts originated using
criteria different from those which were applied to, the Accounts designated on
the Cut-Off Date related to the Trust or to previously-designated Additional
Accounts, because such accounts were originated at a different date or were
acquired from another institution. Consequently, there can be no assurance that
Additional Accounts designated in the future will be of the same credit quality
as previously-designated Accounts. In addition, the Agreement will provide that
the
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Transferor may add Participations to the Trust. The designation of Additional
Accounts and Participations will be subject to the satisfaction of certain
conditions described herein under "Description of the Certificates -- Addition
of Trust Assets;" however, there is no mechanism to assure consistent credit
quality from time to time. The credit quality of the Certificates are related to
the credit quality of the underlying Accounts. In addition, if a decline in the
credit quality of the Trust Portfolio were significant enough, it could result
in reductions in payment to Certificateholders in an affected Series.
Certificateholders Have Limited Control of Action Under Agreement. The
Certificateholders generally have limited control over the administration of the
Trust or the applicable Series. Subject to certain exceptions, the
Certificateholders of each Series may take certain actions, or direct certain
actions to be taken, under the Agreement or the related Series Supplement.
However, the Agreement or related Series Supplement may provide that under
certain circumstances the consent or approval of a specified percentage of the
aggregate Investor Interest of other Series or of the Investor Interest of a
specified Class of such other Series will be required to direct certain actions,
including requiring the appointment of a successor Servicer following a Servicer
Default, amending the Agreement in certain circumstances and directing a
repurchase of all outstanding Series upon the breach of certain representations
and warranties by the Transferor. See "Description of the Certificates -- Pay
Out Events, Servicer Defaults" and "-- Amendments." Certificateholders of such
other Series may have interests which do not coincide in any way with the
interests of Certificateholders of the subject Series. In such instances, it may
be difficult for the Certificateholders of such Series to achieve the results
from the vote that they desire.
Risks Presented by Social, Technological, Legal and Economic
Factors. Changes in use of credit and payment patterns by customers may result
from a variety of social, technological, legal and economic factors. Social
factors include the public's perceptions of the use of credit cards.
Technological factors include new methods of payment such as debit cards. Legal
factors include any changes in the current legal structure affecting the
relative positions of credit card issuers and obligors under credit card
accounts. Economic factors include the rate of inflation, unemployment levels
and relative interest rates. Cardholders whose accounts are included in the
Identified Pool have addresses in all 50 states, the District of Columbia and
certain U.S. territories and possessions. See "-- Effect of Geographic
Concentration." The Transferor, however, is unable to determine and has no basis
to predict whether, or to what extent, social, technological, legal or economic
factors in any state will affect future use of credit or repayment patterns.
Effects of Book-Entry Registration. Unless otherwise specified in the
related Prospectus Supplement, the Certificates of each Series initially will be
represented by one or more Certificates registered in the name of Cede, the
nominee for DTC, and will not be registered in the names of the Certificate
Owners or their nominees. Unless and until Definitive Certificates are issued
for a Series, Certificate Owners relating to such Series will not be recognized
by the Trustee as Certificateholders, as that term will be used in the
Agreement. Hence, until such time, Certificate Owners will only be able to
exercise the rights of Certificateholders indirectly through DTC, Cedel or
Euroclear and their participating organizations. See "Description of the
Certificates -- Book-Entry Registration" and "-- Definitive Certificates."
THE TRUST
The Trust will be formed in accordance with the laws of the State of New
York pursuant to the Agreement. The Trust will not engage in any business
activity other than acquiring and holding Receivables, issuing Series of
Certificates, Supplemental Certificates and the Transferor Certificate, making
payments thereon and engaging in related activities (including, with respect to
any Series, obtaining any Enhancement and entering into an Enhancement agreement
relating thereto). As a consequence, the Trust is not expected to have any need
for additional capital resources other than the assets of the Trust and there is
no reasonable potential for such need to develop. Furthermore, no such
additional capital resources will be available.
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BANK OF AMERICA'S CREDIT CARD ACTIVITIES
GENERAL
On December 1, 1994, Bank of America NT&SA transferred its credit card
accounts and certain related assets to Bank of America National Association
("Bank of America"). A selected portion of these transferred accounts will
initially constitute the Accounts within the Trust. The Receivables which Bank
of America will convey to the Trust pursuant to the Agreement have been
generated from transactions made by cardholders of VISA Classic and VISA Gold
credit card accounts and Standard MasterCard and Gold MasterCard credit card
accounts. The Accounts designated as of the Cut-Off Date were generated under
the VISA or MasterCard programs and were originated by Bank of America NT&SA.
Bank of America is a member of VISA U.S.A. Inc. and of MasterCard International
Incorporated.
The VISA and MasterCard credit card accounts may be used, and Principal
Receivables may be created, in four types of transactions: credit card
purchases, cash advances, overdraft protection, and in certain cases,
consolidation of outstanding balances of other credit card accounts.
Each cardholder is subject to an agreement with Bank of America governing
the terms and conditions of the related VISA or MasterCard credit card account.
Pursuant to each such agreement, Bank of America reserves the right, subject to
such notice to the cardholder as may be required by law, to add to or change the
terms of its VISA or MasterCard credit card accounts at any time, including,
without limitation, increasing or decreasing the periodic finance charges, or
other charges, or the minimum monthly payment requirements.
The credit evaluation, collection, and charge-off policies and servicing
practices of Bank of America, as well as the terms and conditions governing
cardholder agreements in effect as of the date hereof, are under continuous
review by Bank of America and may change at any time in accordance with Bank of
America's business judgment, applicable law and guidelines established by
regulatory authorities.
Transactions creating the Receivables through the use of the credit cards
are processed through the VISA and MasterCard systems. If either system
materially curtails its activities, or if Bank of America ceases to be a member
of VISA or MasterCard, for any reason, a Pay Out Event could occur, and delays
in payments on the Receivables and possible reductions in the amounts thereof
could occur.
The Accounts within the Trust are currently serviced by Bank of America.
However, Bank of America management plans to delegate the data processing
services relating to substantially all of the Accounts to Total System Services,
Inc ("TSYS") in Columbus, Georgia. TSYS is a credit, debit and private-label
card processing company. Under this delegation, it is expected that TSYS will
provide a variety of data processing services to Bank of America, including
processing credit slips (drafts), cash advances and accountholder purchases for
merchants. Additionally, it is expected that TSYS will store customer's data
files, update master files daily, and provide master file tapes monthly, make
billing statement calculations, create statement files, handle the daily posting
of transactions to the accounts and handle the daily settlements with MasterCard
and VISA.
ORIGINATIONS AND UNDERWRITING
The Accounts designated as of the Cut-Off Date were principally generated
by Bank of America NT&SA through: (1) applications made available to prospective
cardholders through a network of branches operated by Bank of America NT&SA and
its affiliated banks; (2) direct-mail solicitations on a non-prescreened basis;
(3) applications mailed to customers of Bank of America NT&SA and its
affiliates; (4) pre-approved direct-mail solicitations of individuals who were
prescreened at credit bureaus on the basis of criteria furnished by Bank of
America NT&SA; and (5) consumer-initiated requests.
When the Accounts designated as of the Cut-Off Date were originated, Bank
of America NT&SA was subject to the Corporation's credit policy guidelines which
have governed lending activities at all Corporation subsidiaries. The
Corporation's credit policy has addressed guiding principles, basic rules,
policies, and special requirements to which all Corporation subsidiaries have
been held accountable. Before purchasing the Bank of America NT&SA portfolio,
Bank of America reviewed the historical performance and seasoning of the
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portfolio and the policies and practices of Bank of America NT&SA. Bank of
America's ongoing compliance with the Corporation's credit policy and governing
laws and regulations is frequently reviewed by internal compliance specialists,
the Corporation's auditors and external auditors, and regulatory agency
personnel. There can be no assurance, however, that Accounts so acquired have
been originated in a manner consistent with Bank of America's policies or that
the underwriting and qualification of such Accounts conformed with prudent
underwriting and qualification standards.
Bank of America NT&SA's national direct-mail solicitation process employed
in the origination of certain of the Accounts designated as of the Cut-Off Date
began with a prescreening review to identify creditworthy consumers for a credit
card account. As part of the prescreening process, Bank of America NT&SA
provided a set of credit history criteria to credit reporting agencies, which in
turn generated a list of prospective cardholders with desired attributes. Bank
of America NT&SA further refined the list by applying its internal underwriting
criteria. These additional criteria were applied using risk analysis models
designed to predict the potential credit risk of prospective cardholders. The
credit line was based on, among other things, each consumer's credit profile,
level of existing and potential indebtedness relative to assumed income and
estimated income, and demographic data.
In the case of an application which was not pre-approved, the credit risk
of the applicant was evaluated with a credit scoring system, intended to provide
a general indication, based on the information available, of the applicant's
willingness and ability to repay his or her obligations. Each application was
scored and evaluated based jointly on information reported on the application
and by independent credit reporting agencies.
Cardholder requests for credit line increases are evaluated by Bank of
America based on current credit bureau reports, updated application data, and
prior account performance. In addition, Bank of America periodically increases
credit lines for cardholders meeting specific criteria.
Each Account is subject to an agreement governing the terms and conditions
of the Accounts. In that agreement, Bank of America reserves the right to change
or terminate any terms, conditions, services or features of an Account
(including, without limitation, increasing or decreasing monthly periodic
finance charges, other fees or minimum payments).
CUSTOMER SERVICE
Customer Service representatives are available seven days a week.
Technologies, such as voice-response units for incoming calls, together with
multiple tracking and reporting systems, are employed as part of Bank of
America's effort to ensure that service standards are achieved and maintained.
INTERCHANGE
Creditors participating in the VISA and MasterCard associations receive
Interchange as partial compensation for taking credit risk, absorbing fraud
losses and funding receivables for a limited period prior to initial billing.
Under the VISA and MasterCard systems, a portion of this Interchange in
connection with cardholder charges for goods and services is passed from banks
which clear the transactions for merchants to credit card issuing banks.
Interchange fees are set annually by MasterCard and VISA and are based on the
number of credit card transactions and the amount charged per transaction. The
Transferor may be required, as described in the related Prospectus Supplement,
to transfer to the Trust a percentage of the Interchange attributable to
cardholder charges for goods and services in the related Accounts. If so
required to be transferred, Interchange arising under the Accounts will be
allocated to the related Certificates of any Series in the manner provided in
the related Prospectus Supplement, and, unless otherwise provided in the related
Prospectus Supplement, will be treated as collections of Finance Charge
Receivables and will be used to pay required monthly payments including interest
on the related Series of Certificates, and, in some cases, to pay all or a
portion of the Servicing Fee to the Servicer.
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<PAGE> 29
THE RECEIVABLES
The Receivables conveyed to the Trust will arise in Accounts selected from
the Identified Pool on the basis of criteria set forth in the Agreement as
applied on the relevant Cut-Off Date and, with respect to Additional Accounts,
as of the related date of their designation (the "Trust Portfolio"). The
Transferor will have the right (subject to certain limitations and conditions
set forth therein), and in some circumstances will be obligated, to designate
from time to time Additional Accounts and to transfer to the Trust all
Receivables of such Additional Accounts, whether such Receivables are then
existing or thereafter created, or to transfer to the Trust, Participations in
lieu of such Receivables or in addition thereto. Any Additional Accounts
designated pursuant to the Agreement must be Eligible Accounts as of the date
the Transferor designates such accounts as Additional Accounts. Furthermore,
pursuant to the Agreement, the Transferor has the right (subject to certain
limitations and conditions) to designate certain Accounts as Removed Accounts
and to require the Trustee to reconvey all Receivables in such Removed Accounts
to the Transferor, whether such Receivables are then existing or thereafter
created. Throughout the term of the Trust, the related Accounts from which the
Receivables arise will be the Accounts designated by the Transferor on the
relevant Cut-Off Date plus any Additional Accounts minus any Removed Accounts.
With respect to each Series of Certificates, the Transferor will represent and
warrant to the Trust that, as of the Closing Date and the date Receivables are
conveyed to the Trust, such Receivables meet certain eligibility requirements.
See "Description of the Certificates -- Representations and Warranties."
The Prospectus Supplement relating to each Series of Certificates will
provide certain information about the Trust Portfolio as of the date specified.
Such information will include, but not be limited to, the amount of Principal
Receivables, the amount of Finance Charge Receivables, the range of principal
balances of the Accounts and the average thereof, the range of credit limits of
the Accounts and the average thereof, the range of ages of the Accounts and the
average thereof, the geographic distribution of the Accounts, the types of
Accounts and delinquency statistics relating to the Accounts.
MATURITY ASSUMPTIONS
For each Series, following the Revolving Period, collections of Principal
Receivables are expected to be distributed to the Certificateholders of such
Series or any specified Class thereof on each specified Distribution Date during
the Controlled Amortization Period or the Principal Amortization Period, or are
expected to be accumulated for payment to Certificateholders of such Series or
any specified Class thereof during an Accumulation Period and distributed on a
Scheduled Payment Date; provided, however, that, if the Rapid Amortization
Period commences, collections of Principal Receivables will be paid to
Certificateholders in the manner described herein and in the related Prospectus
Supplement. The related Prospectus Supplement specifies when the Controlled
Amortization Period, the Principal Amortization Period or an Accumulation
Period, as applicable, will commence, the principal payments expected or
available to be received or accumulated during such Controlled Amortization
Period, Principal Amortization Period or Accumulation Period, or on the
Scheduled Payment Date, as applicable, the manner and priority of principal
accumulations and payments among the Classes of a Series of Certificates, the
payment rate assumptions on which such expected principal accumulations and
payments are based and the Pay Out Events which, if any were to occur, would
lead to the commencement of a Rapid Amortization Period or, if so specified in
the related Prospectus Supplement, a Rapid Accumulation Period.
No assurance can be given, however, that the Principal Receivables
allocated to be paid to Certificateholders or the holders of any specified Class
thereof will be available for distribution or accumulation for payment to
Certificateholders on each Distribution Date during the Controlled Amortization
Period, the Principal Amortization Period or an Accumulation Period, or on the
Scheduled Payment Date, as applicable.
In addition, the Transferor can give no assurance that the payment rate
assumptions for any Series will prove to be correct. The related Prospectus
Supplement will provide certain historical data relating to payments by
cardholders, total charge-offs and other related information relating to the
Identified Pool. There can be no assurance that future events will be consistent
with such historical data.
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The amount of collections of Receivables may vary from month to month due
to seasonal variations, general economic conditions and payment habits of
individual cardholders. There can be no assurance that collections of Principal
Receivables with respect to the Trust Portfolio, and thus the rate at which the
related Certificateholders could expect to receive or accumulate payments of
principal on their Certificates during an Amortization Period or Accumulation
Period, or on any Scheduled Payment Date, as applicable, will be similar to any
historical experience set forth in a related Prospectus Supplement. If a Pay Out
Event occurs and the Rapid Amortization Period commences, the average life and
maturity of such Series of Certificates could be significantly reduced.
Because, for any Series of Certificates, there may be a slowdown in the
payment rate below the payment rate used to determine the amount of collections
of Principal Receivables scheduled or available to be distributed or accumulated
for later payment to Certificateholders or any specified Class thereof during an
Amortization Period or an Accumulation Period or on any Scheduled Payment Date,
as applicable, or a Pay Out Event may occur which could initiate the Rapid
Amortization Period, there can be no assurance that the actual number of months
elapsed from the date of issuance of such Series of Certificates to the final
Distribution Date with respect to the Certificates will equal the expected
number of months.
USE OF PROCEEDS
The net proceeds from the sale of each Series of Certificates offered
hereby will be paid to the Transferor. The Transferor will use such proceeds for
its general corporate purposes or for such other purpose specified in the
Prospectus Supplement.
BANKAMERICA CORPORATION AND BANK OF AMERICA NATIONAL ASSOCIATION
BankAmerica Corporation (the "Corporation") is a multi-bank holding company
which was incorporated in Delaware in 1968. Bank of America National Association
("Bank of America"), a wholly-owned subsidiary of the Corporation, was formed in
1989 and is headquartered in Phoenix, Arizona. Bank of America is a national
bank organized under the laws of the United States and regulated primarily by
the Office of the Comptroller of the Currency. Bank of America National Trust
and Savings Association ("Bank of America NT&SA"), a wholly-owned subsidiary of
the Corporation, was formed in 1904. In addition to Bank of America and Bank of
America NT&SA, the Corporation holds investments in other subsidiaries which
provide a variety of financial services, including commercial and consumer
lending, investment banking, securities trading, and investment advisory
services.
On December 1, 1994, Bank of America NT&SA transferred its credit card
accounts and certain related assets to Bank of America. A selected portion of
these transferred accounts will initially constitute the Accounts within the
Trust. Bank of America's activities are primarily related to credit card
lending.
The Prospectus Supplement for each Series of Certificates contains
additional information, including financial information, relating to the
Corporation and Bank of America.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued in Series. Each Series will represent an
interest in the specified Trust other than the interests represented by any
other Series of Certificates issued by the Trust (which may include Series
offered pursuant to this Prospectus) and the Transferor Certificate. Each Series
will be issued pursuant to the Agreement entered into by Bank of America and the
Trustee and a Series Supplement to the Agreement, a copy of the form of which is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The following summaries describe certain provisions common to each Series
of Certificates. The summaries do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all of the provisions of
the Agreement and Series Supplement.
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<PAGE> 31
GENERAL
The Certificates of each Series will represent undivided interests in
certain assets of the Trust, including the right to the applicable Investor
Percentage of all cardholder payments on the Receivables in the Trust. For each
Series of Certificates, the Investor Interest on any date generally will be
equal to the initial Investor Interest as of the related Closing Date for such
Series (increased by the principal balance of any Certificates of such Series
issued after the Closing Date for such Series) minus the amount of principal
paid to the related Certificateholders prior to such date and minus the amount
of unreimbursed Investor Charge-Offs with respect to such Certificates prior to
such date, except that the Investor Interest of any pre-funded Series may
increase upon the transfer of additional Principal Receivables to the applicable
Trust or the reduction of the Investor Interest or the Adjusted Investor
Interest of another Series. If so specified in the Prospectus Supplement
relating to any Series of Certificates, under certain circumstances the Investor
Interest may be further adjusted by the amount of principal allocated to
Certificateholders, the funds on deposit in any specified account, and any other
amount specified in the related Prospectus Supplement.
Each Series of Certificates may consist of one or more Classes, one or more
of which may be Senior Certificates and one or more of which may be Subordinated
Certificates. Each Class of a Series will evidence the right to receive a
specified portion of each distribution of principal or interest or both. The
Investor Interest with respect to a Series with more than one Class will be
allocated among the Classes as described in the related Prospectus Supplement.
The Certificates of a Class may differ from Certificates of other Classes of the
same Series in, among other things, the amounts allocated to principal payments,
maturity date, Certificate Rate and the availability of Enhancement.
For each Series of Certificates, payments of interest and principal will be
made on Distribution Dates specified in the related Prospectus Supplement to
Certificateholders in whose names the Certificates were registered on the record
dates (each, a "Record Date") specified in the related Prospectus Supplement.
Interest will be distributed to Certificateholders in the amounts, for the
periods and on the dates specified in the related Prospectus Supplement.
For each Series of Certificates, the Transferor initially will own the
Transferor Certificate. The Transferor Certificate will represent the undivided
interest in the Trust not represented by the Certificates issued and outstanding
under the Trust or the rights, if any, of any Credit Enhancement Providers to
receive payments from the Trust. The holder of the Transferor Certificate will
have the right to a percentage (the "Transferor Percentage") of all cardholder
payments from the Receivables in the Trust. If provided in the Agreement and
Prospectus Supplement, the Transferor Certificate may be transferred in whole or
in part subject to certain limitations and conditions set forth therein. See
"-- Certain Matters Regarding the Transferor and the Servicer."
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, during the Revolving Period, the amount
of the Investor Interest in the Trust will remain constant except under certain
limited circumstances. See "-- Defaulted Receivables; Rebates and Fraudulent
Charges; Investor Charge-Offs." The amount of Principal Receivables in the
Trust, however, will vary each day as new Principal Receivables are created and
others are paid. The amount of the Transferor Interest will fluctuate each day,
therefore, to reflect the changes in the amount of the Principal Receivables in
the Trust. When a Series is amortizing, the Investor Interest of such Series
will decline as customer payments of Principal Receivables are collected and
distributed to or accumulated for distribution to the Certificateholders. As a
result, the Transferor Interest will generally increase to reflect reductions in
the Investor Interest for such Series and will also change to reflect the
variations in the amount of Principal Receivables in the Trust. The Transferor
Interest in the Trust may also be reduced as the result of a New Issuance. See
"-- New Issuance."
Unless otherwise specified in the related Prospectus Supplement,
Certificates of each Series initially will be represented by certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Transferor, the "Depository") except as set forth
below. Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, beneficial interests in the Certificates
will be available for purchase in minimum denominations of $1,000 and integral
multiples thereof in book-entry form only. The Transferor has been informed by
DTC that DTC's nominee will be Cede.
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<PAGE> 32
Accordingly, Cede is expected to be the holder of record of each Series of
Certificates. No Certificate Owner acquiring an interest in the Certificates
will be entitled to receive a certificate representing such person's interest in
the Certificates. Unless and until Definitive Certificates are issued for any
Series under the limited circumstances described herein, all references herein
to actions by Certificateholders shall refer to actions taken by DTC upon
instructions from its Participants (as defined below), and all references herein
to distributions, notices, reports and statements to Certificateholders shall
refer to distributions, notices, reports and statements to DTC or Cede, as the
registered holder of the Certificates, as the case may be, for distribution to
Certificate Owners in accordance with DTC procedures. See "-- Book-Entry
Registration" and "-- Definitive Certificates."
If so specified in the Prospectus Supplement relating to a Series,
application will be made to list the Certificates of such Series, or all or a
portion of any Class thereof, on the Luxembourg Stock Exchange or any other
specified exchange.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, Certificateholders may hold their
Certificates through DTC (in the United States) or Cedel or Euroclear (in
Europe) if they are participants of such systems, or indirectly through
organizations that are participants in such systems.
Cede, as nominee for DTC, will hold the global Certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities accounts
in Cedel's and Euroclear's names on the books of their respective depositaries
(collectively, the "Depositaries") which in turn will hold such positions in
customers' securities accounts in the Depositaries' names on the books of DTC.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participating
organizations ("Participants") and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(who may include the underwriters of any Series), banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system also is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (the "Indirect
Participants").
Transfers between Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions will
require delivery of instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its rules and
procedures and within its established deadlines (European time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its Depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedel Participants and Euroclear
Participants may not deliver instructions directly to the Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a Participant will be made during
the subsequent securities settlement processing, dated the business day
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following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant Cedel
Participant or Euroclear Participant on such business day. Cash received in
Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following settlement
in DTC.
Certificate Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other interest
in, Certificates may do so only through Participants and Indirect Participants.
In addition, Certificate Owners will receive all distributions of principal of
and interest on the Certificates from the Trustee through the Participants who
in turn will receive them from DTC. Under a book-entry format, Certificate
Owners may experience some delay in their receipt of payments, since such
payments will be forwarded by the Trustee to Cede, as nominee for DTC. DTC will
forward such payments to Participants which thereafter will forward them to
Indirect Participants or Certificate Owners. It is anticipated that the only
"Certificateholder" will be Cede, as nominee of DTC. Certificate Owners will not
be recognized by the Trustee as Certificateholders, as such term is used in the
Agreement, and Certificate Owners will only be permitted to exercise the rights
of Certificateholders indirectly through the Participants who in turn will
exercise the rights of Certificateholders through DTC.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among Participants
on whose behalf it acts with respect to the Certificates and is required to
receive and transmit distributions of principal and interest on the
Certificates. Participants and Indirect Participants with which Certificate
Owners have accounts with respect to the Certificates similarly are required to
make book-entry transfers and receive and transmit such payments on behalf of
their respective Certificate Owners. Accordingly, although Certificate Owners
will not possess Certificates, Certificate Owners will receive payments and will
be able to transfer their interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Certificate
Owner to pledge Certificates to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such Certificates, may
be limited due to the lack of a physical certificate for such Certificates.
DTC has advised the Transferor that it will take any action permitted to be
taken by a Certificateholder under the Agreement only at the direction of one or
more Participants to whose account with DTC the Certificates are credited.
Additionally, DTC has advised the Transferor that it will take such actions with
respect to specified percentages of the Investor Interest only at the direction
of and on behalf of Participants whose holdings include undivided interests that
satisfy such specified percentages. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of Participants whose holdings include such undivided interests.
Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the clearance
and settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedel in any of 34 currencies, including United States dollars. Cedel
provides to its Cedel Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedel interfaces with domestic
markets in several countries. As a professional depository, Cedel is subject to
regulation by the Luxembourg Monetary Institute. Cedel Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the underwriters of any Series
of Certificates. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to clear and
settle transactions between Euroclear Participants through
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simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions may now be settled
in any of 34 currencies, including United States dollars. The Euroclear System
includes various other services, including securities lending and borrowing and
interfaces with domestic markets in more than 25 countries generally similar to
the arrangements for cross-market transfers with DTC described above. The
Euroclear System is operated by Morgan Guaranty Trust Company of New York,
Brussels, Belgium office (the "Euroclear Operator" or "Euroclear"), under
contract with Euroclear Clearance System, Societe Cooperative, a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative Board establishes policy for the Euroclear System.
Euroclear Participants include banks (including central banks), securities
brokers and dealers and other professional financial intermediaries and may
include the underwriters of any Series of Certificates. Indirect access to the
Euroclear System is also available to other firms that maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System (collectively, the "Terms
and Conditions"). The Terms and Conditions govern transfers of securities and
cash within the Euroclear System, withdrawal of securities and cash from the
Euroclear System, and receipts of payments with respect to securities in the
Euroclear System. All securities in the Euroclear System are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Terms and Conditions
only on behalf of Euroclear Participants and has no record of or relationship
with persons holding through Euroclear Participants.
Distributions with respect to Certificates held through Cedel or Euroclear
will be credited to the cash accounts of Cedel Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures, to
the extent received by its Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
See "Federal Income Tax Consequences." Cedel or the Euroclear Operator, as the
case may be, will take any other action permitted to be taken by a
Certificateholder under the Agreement on behalf of a Cedel Participant or
Euroclear Participant only in accordance with its relevant rules and procedures
and subject to its Depositary's ability to effect such actions on its behalf
through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Certificates among participants of DTC,
Cedel and Euroclear, they are under no obligation to perform or continue to
perform such procedures and such procedures may be discontinued at any time.
In the event that any of DTC, Cedel or Euroclear should discontinue its
services, the Transferor would seek an alternative depository (if available) or
cause the issuance of Definitive Certificates to Certificate Owners or their
nominees in the manner described under "-- Definitive Certificates."
DEFINITIVE CERTIFICATES
Unless otherwise specified in the related Prospectus Supplement, the
Certificates of each Series will be issued as Definitive Certificates in fully
registered, certificated form to Certificate Owners or their nominees rather
than to DTC or its nominee, only if (i) the Transferor advises the Trustee for
such Series in writing that DTC is no longer willing or able to discharge
properly its responsibilities as Depository with respect to such Series of
Certificates, and the Trustee or the Transferor is unable to locate a qualified
successor, (ii) the Transferor, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system through DTC or (iii) after the
occurrence of a Servicer Default, Certificate Owners representing not less than
50% (or such other percentage specified in the related Prospectus Supplement) of
the Investor Interest advise
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the Trustee and DTC through Participants in writing that the continuation of a
book-entry system through DTC (or a successor thereto) is no longer in the best
interest of the Certificate Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates. Upon surrender by DTC of
the definitive certificate representing the Certificates and instructions for
re-registration, the Trustee will issue the Certificates as Definitive
Certificates, and thereafter the Trustee will recognize the holders of such
Definitive Certificates as holders under the Agreement ("Holders").
Distribution of principal and interest on the Certificates will be made by
the Trustee directly to Holders of Definitive Certificates in accordance with
the procedures set forth herein and in the Agreement. Interest payments and any
principal payments on each Distribution Date will be made to Holders in whose
names the Definitive Certificates were registered at the close of business on
the related Record Date. Distributions will be made by check mailed to the
address of such Holder as it appears on the register maintained by the Trustee,
except that distributions made with respect to Certificates registered in the
name of the nominee of a clearing agency will be made in immediately available
funds. The final payment on any Certificate (whether Definitive Certificates or
the Certificates registered in the name of Cede representing the Certificates),
however, will be made only upon presentation and surrender of such Certificate
at the office or agency specified in the notice of final distribution to
Certificateholders. The Trustee will provide such notice to registered
Certificateholders not later than the fifth day of the month of such final
distributions.
Definitive Certificates will be transferable and exchangeable at the
offices of the Transfer Agent and Registrar, which shall initially be the
Trustee. No service charge will be imposed for any registration of transfer or
exchange, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith. The Transfer Agent and Registrar shall not be required to register
the transfer or exchange of Definitive Certificates for a period of fifteen days
preceding the due date for any payment with respect to such Definitive
Certificates.
THE TRANSFEROR CERTIFICATE; ADDITIONAL TRANSFERORS
The Agreement will provide that the Transferor may instruct the Trustee to
issue one or more additional certificates (each, a "Supplemental Certificate")
which, together with the Transferor Certificate, will represent the Transferor
Interest. Each Supplemental Certificate will be issued to a person designated by
the Transferor upon the execution and delivery of a supplement to the Agreement
(which supplement will be subject to the amendment section of the Agreement to
the extent that it amends any of the terms of the Agreement; see
"-- Amendments"); provided, however, that (a) the Trustee shall have received
confirmation in writing from each Rating Agency that such transfer will not
result in a lowering or withdrawal of its then-current rating of any Series of
Investor Certificates and (b) if any Series of Certificates are outstanding that
were characterized as debt at the time of their issuance, the Transferor shall
have delivered to the Trustee and each Rating Agency an opinion of counsel,
dated the date of such transfer, to the effect that such transfer does not
adversely affect the conclusions reached in any of the Tax Opinions delivered in
connection with the issuance of any applicable Series of Certificates. Any
transfer of a Supplemental Certificate is subject to the condition set forth in
clause (b) above.
Bank of America may designate affiliates of Bank of America to be included
as a Transferor (each, an "Additional Transferor") under the Agreement (by means
of an amendment to the Agreement that will not require the consent of any
Certificateholder; see "-- Amendments") and, in connection with such
designation, the Transferor shall surrender the Transferor Certificate to the
Trustee in exchange for a newly issued Transferor Certificate modified to
reflect such Additional Transferor's interest in the Transferor Interest;
provided, however, that (i) the conditions set forth in the preceding paragraph
with respect to the issuance of a Supplemental Certificate shall have been
satisfied with respect to such designation and exchange and (ii) any applicable
condition described in "-- Addition of Trust Assets" shall have been satisfied
with respect to the transfer of Receivables or Participations by any Additional
Transferor to the Trust. Following the inclusion of an Additional Transferor,
the Additional Transferor will be treated in the same manner as a Transferor and
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each Additional Transferor generally will have the same obligations and rights
as a Transferor described herein.
INTEREST PAYMENTS
For each Series of Certificates and Class thereof, interest will accrue
from the relevant Closing Date on the applicable Investor Interest at the
applicable Certificate Rate, which may be a fixed, floating or other type of
rate as specified in the related Prospectus Supplement. Interest will be
distributed to Certificateholders on the Distribution Dates specified in the
related Prospectus Supplement. Interest payments on any Distribution Date will
be funded from collections of Finance Charge Receivables allocated to the
Investor Interest during the preceding Monthly Period or Periods and may be
funded from certain investment earnings on funds held in accounts of the Trust
and from any applicable Credit Enhancement, if necessary, or certain other
amounts as specified in the related Prospectus Supplement. If the Distribution
Dates for payment of interest for a Series or Class occur less frequently than
monthly, such collections or other amounts (or the portion thereof allocable to
such Class) may be deposited in one or more trust accounts (each, an "Interest
Funding Account") pending distribution to the Certificateholders of such Series
or Class, as described in the related Prospectus Supplement. If a Series has
more than one Class of Certificates, each such Class may have a separate
Interest Funding Account. The Prospectus Supplement relating to each Series of
Certificates and each Class thereof describes the amounts and sources of
interest payments to be made, the Certificate Rate, and, for a Series or Class
thereof bearing interest at a floating Certificate Rate, the dates and the
manner for determining subsequent Certificate Rates, and the formula, index or
other method by which such Certificate Rates are determined.
PRINCIPAL PAYMENTS
Except in the circumstances specified in the related Prospectus Supplement,
during the Revolving Period for each Series of Certificates (which begins on the
Closing Date relating to such Series and ends on the day before an Amortization
Period or Accumulation Period begins), no principal payments will be made to the
Certificateholders of such Series. During the Controlled Amortization Period or
Principal Amortization Period, as applicable, which will be scheduled to begin
on the date specified in, or determined in the manner specified in, the related
Prospectus Supplement, and during the Rapid Amortization Period, which will
begin upon the occurrence of a Pay Out Event or, if so specified in the related
Prospectus Supplement, the Rapid Accumulation Period, principal will be paid to
the Certificateholders in the amounts and on Distribution Dates specified in the
related Prospectus Supplement. During an Accumulation Period, principal will be
accumulated in a Principal Funding Account for later distribution to
Certificateholders on the Scheduled Payment Date in the amounts specified in the
related Prospectus Supplement. Principal payments for any Series or Class
thereof will be funded from collections of Principal Receivables received during
the related Monthly Period or Periods as specified in the related Prospectus
Supplement and allocated to such Series or Class and from certain other sources
specified in the related Prospectus Supplement. In the case of a Series with
more than one Class of Certificates, the Certificateholders of one or more
Classes may receive payments of principal at different times. The related
Prospectus Supplement describes the manner, timing and priority of payments of
principal to Certificateholders of each Class.
Funds on deposit in any Principal Funding Account applicable to a Series
may be subject to a guaranteed rate agreement or guaranteed investment contract
or other arrangement specified in the related Prospectus Supplement intended to
assure a minimum rate of return on the investment of such funds. In order to
enhance the likelihood of the payment in full of the principal amount of a
Series of Certificates or Class thereof at the end of an Accumulation Period,
such Series of Certificates or Class thereof may be subject to a principal
guaranty or other similar arrangement specified in the related Prospectus
Supplement.
TRANSFER AND ASSIGNMENT OF RECEIVABLES
With respect to the Trust, the Transferor will transfer and assign, at the
time of formation of the Trust, all of its right, title and interest in and to
the Receivables in the related Accounts and all Receivables thereafter created
in such Accounts.
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In connection with each transfer of Receivables to the Trust, the
Transferor will indicate in its computer files that the related Receivables have
been conveyed to the Trust. In addition, the Transferor will provide to the
Trustee, with respect to the Trust, computer files or microfiche lists,
containing a true and complete list showing each related Account, identified by
account number and by total outstanding balance on the date of transfer. The
Transferor will not deliver to the Trustee any other records or agreements
relating to the Accounts or the Receivables, except in connection with additions
or removals of Accounts. Except as stated above, the records and agreements
relating to the Accounts and the Receivables maintained by the Transferor or the
Servicer are not and will not be segregated by the Transferor or the Servicer
from other documents and agreements relating to other credit card accounts and
receivables and are not and will not be stamped or marked to reflect the
transfer of the Receivables to the Trust, but the computer records of the
Transferor are and will be required to be marked to evidence such transfer. The
Transferor will file, with respect to the Trust, Uniform Commercial Code
financing statements with respect to the Receivables meeting the requirements of
applicable state law. See "Risk Factors -- Potential Priority of Certain Liens"
and "Certain Legal Aspects of the Receivables."
NEW ISSUANCE
The Agreement will provide for the Trustee to issue three types of
certificates: (i) one or more Series of Certificates which are transferable and
have the characteristics described below, (ii) the Transferor Certificate, a
certificate which, together with any Supplemental Certificates outstanding, if
any, evidences the Transferor Interest, which initially will be held by the
Transferor and will be transferable only as provided in the Agreement and (iii)
one or more Supplemental Certificates, which if issued, would relate to the
Transferor Certificate in that they would be entitled to a portion of amounts
allocable to the Transferor Certificate and would be transferable as provided in
the Agreement. Pursuant to the Agreement, the holder of the Transferor
Certificate may define, with respect to any newly issued Series of Certificates,
all Principal Terms of such new Series. Upon the issuance of an additional
Series of Certificates, none of the Transferor, the Servicer, the Trustee or the
Trust will be required or will intend to obtain the consent of any
Certificateholder of any other Series previously issued by the Trust. However,
as a condition of a New Issuance, the holder of the Transferor Certificate will
deliver to the Trustee written confirmation that the New Issuance will not
result in the reduction or withdrawal by any Rating Agency of its rating of any
outstanding Series. The Transferor may offer any Series under a Disclosure
Document in offerings pursuant to this Prospectus or in transactions either
registered under the Securities Act or exempt from registration thereunder
directly, through one or more other underwriters or placement agents, in
fixed-price offerings or in negotiated transactions or otherwise.
The holder of the Transferor Certificate may permit a New Issuance and
define Principal Terms such that each Series issued under the Trust has a period
during which amortization or accumulation of the principal amount thereof is
intended to occur which may have a different length and begin on a different
date than such period for any other Series. Further, one or more Series may be
in their amortization or accumulation periods while other Series are not.
Moreover, each Series may have the benefit of a Credit Enhancement which is
available only to such Series. Under the Agreement, the Trustee shall hold any
such form of Credit Enhancement only on behalf of the Series with respect to
which it relates. Likewise, with respect to each such form of Credit
Enhancement, the holder of the Transferor Certificate may deliver a different
form of Credit Enhancement agreement. The holder of the Transferor Certificate
may specify different certificate rates and monthly servicing fees with respect
to each Series (or a particular Class within such Series). The holder of the
Transferor Certificate will also have the option under the Agreement to vary
between Series the terms upon which a Series (or a particular Class within such
Series) may be repurchased by the Transferor or remarketed to other investors.
Additionally, certain Series may be subordinated to other Series, or Classes
within a Series may have different priorities. There will be no limit to the
number of New Issuances that may be performed under the Agreement.
A New Issuance may only occur upon the satisfaction of certain conditions
provided in the Agreement. Under the Agreement, the holder of the Transferor
Certificate may permit a New Issuance by notifying the Trustee at least 3 days
in advance of the date upon which the New Issuance is to occur. Under the
Agreement,
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the notice will state the designation of any Series to be issued on the date of
the New Issuance and, with respect to each such Series: (i) its initial
principal amount (or method for calculating such amount) which amount may not be
greater than the current principal amount of the Transferor Certificate, (ii)
its certificate rate (or method of calculating such rate) and (iii) the provider
of Credit Enhancement, if any, which is expected to provide support with respect
to it. The Agreement will provide that on the date of the New Issuance the
Trustee will authenticate any such Series only upon delivery to it of the
following, among others, (i) a Series Supplement specifying the Principal Terms
of such Series, (ii) a Tax Opinion, (iii) if required by the related Series
Supplement, the form of Credit Enhancement, (iv) if Credit Enhancement is
required by the Series Supplement, an appropriate Credit Enhancement agreement
with respect thereto executed by the Transferor and the issuer of the Credit
Enhancement, (v) written confirmation from each Rating Agency that the New
Issuance will not result in such Rating Agency's reducing or withdrawing its
rating on any then outstanding Series rated by it and (vi) an officer's
certificate of the Transferor to the effect that after giving effect to the New
Issuance the Transferor would not be required to add Additional Accounts
pursuant to the Agreement and the Transferor Interest would be at least equal to
the Minimum Transferor Interest. Upon satisfaction of such conditions, the
Trustee will authenticate the new Series.
REPRESENTATIONS AND WARRANTIES
The Transferor will make in the Agreement, certain representations and
warranties to the Trust to the effect that, among other things, (a) as of the
Closing Date, the Transferor was duly organized and in good standing and that it
has the authority to consummate the transactions contemplated by the Agreement
and (b) as of the relevant Cut-Off Date (or as of the date of the designation of
Additional Accounts), each Account was an Eligible Account. If so provided in
the related Prospectus Supplement, if (i) any of these representations and
warranties proves to have been incorrect in any material respect when made, and
continues to be incorrect for 60 days after notice to the Transferor by the
Trustee or to the Transferor and the Trustee by the Certificateholders holding
not less than 50% of the Investor Interest of the related Series, and (ii) as a
result the interests of the Certificateholders are materially and adversely
affected, and continue to be materially and adversely affected during such
period, then the Trustee or Certificateholders holding not less than 50% of the
Investor Interest may give notice to the Transferor (and to the Trustee in the
latter instance) declaring that a Pay Out Event has occurred, thereby commencing
the Rapid Amortization Period or, if so specified in the related Prospectus
Supplement, the Rapid Accumulation Period.
The Transferor will make in the Agreement, representations and warranties
to the Trust relating to the Receivables in the Trust to the effect, among other
things, that (a) as of the Closing Date of the initial Series of Certificates
issued by the Trust, each of the Receivables then existing is an Eligible
Receivable and (b) as of the date of creation of any new Receivable, such
Receivable is an Eligible Receivable, and the representation and warranty set
forth in clause (b) in the immediately following paragraph is true and correct
with respect to such Receivable. In the event (i) of a breach of any
representation and warranty set forth in this paragraph within 60 days, or such
longer period as may be agreed to by the Trustee, of the earlier to occur of the
discovery of such breach by the Transferor or Servicer or receipt by the
Transferor of written notice of such breach given by the Trustee, or, with
respect to certain breaches relating to prior liens, immediately upon the
earlier to occur of such discovery or notice and (ii) that as a result of such
breach, the Receivables in the related Accounts are charged off as
uncollectible, the Trust's rights in, to or under the Receivables or its
proceeds are impaired or the proceeds of such Receivables are not available for
any reason to the Trust free and clear of any lien, the Transferor shall accept
reassignment of each Principal Receivable as to which such breach relates (an
"Ineligible Receivable") on the terms and conditions set forth below; provided,
however,that no such reassignment shall be required to be made with respect to
such Ineligible Receivable if, on any day within the applicable period (or such
longer period as may be agreed to by the Trustee), the representations and
warranties with respect to such Ineligible Receivable shall then be true and
correct in all material respects. The Transferor shall accept reassignment of
each such Ineligible Receivable by directing the Servicer to deduct the amount
of each such Ineligible Receivable from the aggregate amount of Principal
Receivables used to calculate the Transferor Interest. In the event that the
exclusion of an Ineligible Receivable from the calculation of the Transferor
Interest would cause the Transferor Interest to be a negative number, on the
date of reassignment of such Ineligible Receivable the Transferor shall make a
deposit in the
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Principal Account in immediately available funds in an amount equal to the
amount by which the Transferor Interest would be reduced below zero. Any such
deduction or deposit shall be considered a repayment in full of the Ineligible
Receivable. The obligation of the Transferor to accept reassignment of any
Ineligible Receivable is the sole remedy respecting any breach of the
representations and warranties set forth in this paragraph with respect to such
Receivable available to the Certificateholders or the Trustee on behalf of
Certificateholders. Certificateholders will not incur any costs, direct or
indirect, relating to any such reassignment to the Transferor.
The Transferor will make in the Agreement, representations and warranties
to the Trust to the effect, among other things, that as of the Closing Date of
the initial Series of Certificates issued by the Trust (a) the Agreement will
constitute a legal, valid and binding obligation of the Transferor and (b) the
transfer of Receivables by it to the Trust under the Agreement will constitute
either a valid transfer and assignment to the Trust of all right, title and
interest of the Transferor in and to the Receivables (other than Receivables in
Additional Accounts), whether then existing or thereafter created and the
proceeds thereof (including amounts in any of the accounts established for the
benefit of Certificateholders) or the grant of a first priority perfected
security interest in such Receivables (except for certain tax and other
governmental liens) and the proceeds thereof (including amounts in any of the
accounts established for the benefit of Certificateholders), which is effective
as to each such Receivable upon the creation thereof. In the event of a breach
of any of the representations and warranties described in this paragraph, either
the Trustee or the Holders of Certificates evidencing undivided interests in the
Trust aggregating not less than 50% of the aggregate Investor Interest of all
Series outstanding under the Trust may direct the Transferor to accept
reassignment of the Trust Portfolio within 60 days of such notice, or within
such longer period specified in such notice. The Transferor will be obligated to
accept reassignment of such Receivables on a Distribution Date occurring within
such applicable period. Such reassignment will not be required to be made,
however, if at any time during such applicable period, or such longer period,
the representations and warranties shall then be true and correct in all
material respects. The deposit amount for such reassignment will be equal to the
Investor Interest and Enhancement Invested Amount, if any, for each Series
outstanding under the Trust on the last day of the Monthly Period preceding the
Distribution Date on which the reassignment is scheduled to be made less the
amount, if any, previously allocated for payment of principal to such
Certificateholders or such holders of the Enhancement Invested Amount or the
Collateral Interest, if any, on such Distribution Date, plus an amount equal to
all accrued and unpaid interest less the amount, if any, previously allocated
for payment of such interest on such Distribution Date. The payment of the
reassignment deposit amount and the transfer of all other amounts deposited for
the preceding month in the Distribution Account will be considered a payment in
full of the Investor Interest and the Enhancement Invested Amount, if any, for
each such Series required to be repurchased and will be distributed upon
presentation and surrender of the Certificates for each such Series. If the
Trustee or Certificateholders give a notice as provided above, the obligation of
the Transferor to make any such deposit will constitute the sole remedy
respecting a breach of the representations and warranties available to the
Trustee or such Certificateholders. Certificateholders will not incur any costs,
direct or indirect, related to the reassignment of the Trust Portfolio to the
Transferor.
An "Eligible Account" will be defined to mean, as of the relevant Cut-Off
Date (or, with respect to Additional Accounts, as of their date of designation
for inclusion in the Trust), each Account owned by the applicable Transferor (a)
which was in existence and maintained with such Transferor, (b) which is payable
in United States dollars, (c) the customer of which has provided, as his most
recent billing address, an address located in the United States or its
territories or possessions, (d) which has not been classified by such Transferor
as cancelled, counterfeit, bankrupt, fraudulent, stolen or lost and (e) which
has not been charged off by such Transferor in its customary and usual manner
for charging off such Account as of the Cut-Off Date and, with respect to
Additional Accounts, as of their date of designation for inclusion in the Trust.
Under the Agreement, the definition of Eligible Account may be changed by
amendment to the Agreement without the consent of the related Certificateholders
if (i) each of the related Transferors delivers to the Trustee a certificate of
an authorized officer to the effect that, in the reasonable belief of such
Transferors, such amendment will not as of the date of such amendment adversely
affect in any material respect the interest of such Certificateholders, and (ii)
such amendment will not result in a withdrawal or reduction of the rating of any
outstanding Series under the Trust.
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An "Eligible Receivable" will be defined to mean each Receivable (a) which
has arisen under an Eligible Account, (b) which was created in compliance, in
all material respects, with all requirements of law applicable to the Transferor
that transferred such Receivable to the Trust, and pursuant to a credit card
agreement which complies in all material respects with all requirements of law
applicable to such Transferor, (c) with respect to which all consents, licenses
or authorizations of, or registrations with, any governmental authority required
to be obtained or given by such Transferor in connection with the creation of
such Receivable or the execution, delivery, creation and performance by such
Transferor of the related credit card agreement have been duly obtained or given
and are in full force and effect as of the date of the creation of such
Receivable, (d) as to which, at the time of its creation, such Transferor or the
Trust had good and marketable title free and clear of all liens and security
interests arising under or through such Transferor (other than certain tax liens
for taxes not then due or which such Transferor is contesting), (e) which is the
legal, valid and binding payment obligation of the obligor thereon, legally
enforceable against such obligor in accordance with its terms (with certain
bankruptcy-related exceptions) and (f) which constitutes an "account" or a
"general intangible" under Article 9 of the applicable Uniform Commercial Code.
Unless otherwise specified in the Prospectus Supplement relating to a
Series of Certificates, it will not be required or anticipated that the Trustee
will make any initial or periodic general examination of the Receivables or any
records relating to the Receivables for the purpose of establishing the presence
or absence of defects, compliance with the Transferor's representations and
warranties or for any other purpose. However, the Servicer will, with respect to
the Trust, deliver to the Trustee on or before March 31 of each year (or such
other date specified in the related Prospectus Supplement) an opinion of counsel
with respect to the validity of the security interest of the Trust in and to the
Receivables and certain other components of the Trust.
ADDITION OF TRUST ASSETS
As described above under "The Receivables," the Transferor will have the
right to designate for the Trust, from time to time, additional Accounts to be
included as Accounts with respect to the Trust ("Designated Additional
Accounts"). In addition, the Transferor will be required to include Designated
Additional Accounts under the circumstances and in the amounts specified in the
related Prospectus Supplement. The Transferor will convey to the Trust its
interest in all Receivables of such Designated Additional Accounts, whether such
Receivables are then existing or thereafter created. This feature permits the
Transferor to increase the amount of Principal Receivables in the Trust over the
amount that would otherwise be included, thereby permitting the issuance of
additional Series or avoiding the occurrence of certain Pay Out Events with
respect to existing Series. Certificateholders will not incur any costs, direct
or indirect, as a result of the exercise of this feature.
The Transferor may from time to time, at its sole discretion, designate
that all Eligible Accounts arising in the Identified Pool (or a specified
portion thereof) during a specified period be included as Accounts ("Automatic
Additional Accounts"), subject to the limitations specified in this paragraph.
Unless each Rating Agency otherwise consents, no Automatic Additional Accounts
may be designated for addition to the Trust if the number of Automatic
Additional Accounts plus the number of Designated Additional Accounts added
voluntarily as specified above, without prior Rating Agency approval, shall not
either (i) with respect to any three consecutive Monthly Periods, exceed 15% of
the number of Accounts at the end of the ninth Monthly Period preceding the
commencement of such three Monthly Periods (or, the Cut-Off Date, whichever is
later) and (ii) with respect to any twelve Monthly Periods, exceed 20% of the
number of Accounts as of the first day of such twelve Monthly Periods (or, the
related Cut-Off Date, whichever is later) (the "Aggregate Addition Limit"). If
the Transferor or any Additional Transferor includes Automatic Additional
Accounts in the Trust, in each quarter on or before March 31, June 30, September
30 and December 31 of each calendar year beginning after the initial inclusion
of Automatic Additional Accounts, or more frequently if required by any Rating
Agency, the Transferor shall deliver to the Trustee and each Rating Agency an
opinion of outside counsel with respect to the Automatic Additional Accounts
included as Accounts during the preceding three-month period confirming the
validity and perfection of each transfer of such Automatic Additional Accounts.
If such opinion of counsel with respect to any Automatic Additional Accounts is
not so received, the ability of the Transferor and any Additional Transferor to
designate Automatic Additional Accounts will be suspended
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until such time as each Rating Agency otherwise consents in writing or such
Accounts are removed from the Trust. The Transferors may only include as
Automatic Additional Accounts revolving credit card accounts either (i)
originated by the Transferor, any Additional Transferor or any affiliate of the
Transferor or any Additional Transferor and (ii) of a type previously included
as Accounts. Additions of Participations must also comply with such conditions.
Automatic Additional Accounts and Designated Additional Accounts relating to any
Addition are collectively referred to herein as "Additional Accounts."
The applicable Transferor will represent that each Additional Account is an
Eligible Account at the time of its designation. However, Additional Accounts
may not be of the same credit quality as the initial Accounts. Additional
Accounts may have been originated by the Transferor using credit criteria
different from those which were applied by the Transferor to the initial
Accounts or may have been acquired by the Transferor from an institution which
may have had different credit criteria.
If so specified in the Prospectus Supplement relating to a Series, in
addition to or in lieu of Additional Accounts, the Transferor under the
Agreement will be permitted to add to the Trust, participations representing
undivided interests in a pool of assets primarily consisting of receivables
arising under consumer revolving credit card accounts owned by the Transferor
and collections thereon ("Participations"). Participations may be evidenced by
one or more certificates of ownership issued under a separate pooling and
servicing agreement or similar agreement (a "Participation Agreement") entered
into by the Transferor which entitles the certificateholder to receive
percentages of collections generated by the pool of assets subject to such
Participation Agreement from time to time and to certain other rights and
remedies specified therein. Participations may have their own credit
enhancement, pay out events, servicing obligations and servicer defaults, all of
which are likely to be enforceable by a separate trustee under the Participation
Agreement and may be different from those specified herein. The rights and
remedies of the Trust as the holder of a Participation (and therefore the
Certificateholders) will be subject to all the terms and provisions of the
related Participation Agreement. To the extent that such Participations
encompass previously issued credit-card or other asset-backed securities, such
securities (i) either will have been previously registered under the Securities
Act or will have been held for the "holding period" prescribed by Rule 144(k)
under the Securities Act and (ii) will have been acquired in a bona fide
secondary market transaction, rather than from the issuer thereof or one of such
issuer's affiliates or such securities will have otherwise been acquired in
compliance with the Securities Act. The Agreement may be amended to permit the
addition of a Participation in the Trust without the consent of the related
Certificateholders if (i) the Transferor delivers to the Trustee a certificate
of an authorized officer to the effect that, in the reasonable belief of the
Transferor, such amendment will not as of the date of such amendment adversely
affect in any material respect the interest of such Certificateholders, and (ii)
such amendment will not result in a withdrawal or reduction of the rating of any
outstanding Series under the Trust.
A conveyance by the Transferor to the Trust of Receivables in Additional
Accounts or Participations is subject to the following conditions, among others
(provided, that the following conditions (other than the delivery of a written
assignment as described in clause (ii) and the making of representations and
warranties in clause (iii)) shall not apply to the transfer to the Trust of
Receivables in Automatic Additional Accounts): (i) the Transferor shall give the
Trustee, each Rating Agency and the Servicer written notice that such Additional
Accounts or Participations will be included, which notice shall specify the
approximate aggregate amount of the Receivables or interests therein to be
transferred; (ii) the Transferor shall have delivered to the Trustee a written
assignment (including an acceptance by the Trustee on behalf of the Trust for
the benefit of the Certificateholders) as provided in the Agreement relating to
such Additional Accounts or Participations (the " Assignment") and, the
Transferor shall have delivered to the Trustee a computer file or microfiche
list, dated the date of such Assignment, containing a true and complete list of
such Additional Accounts (other than Automatic Additional Accounts) or
Participations; (iii) the Transferor shall represent and warrant that (x) each
Additional Account is, as of the Addition Date, an Eligible Account, and each
Receivable in such Additional Account is, as of the Addition Date, an Eligible
Receivable, (y) no selection procedures believed by the Transferor to be
materially adverse to the interests of the related Certificateholders were
utilized in selecting the Additional Accounts from the available Eligible
Accounts from the Identified Pool, and (z) as of the Addition Date, the
Transferor or the applicable Additional Transferor, as the case may be, is not
insolvent;
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(iv) the Transferor shall deliver certain opinions of counsel with respect to
the transfer of the Receivables in the Additional Accounts or the Participations
to the Trust and (v) under certain circumstances with respect to Additional
Accounts, and in all cases with respect to Participations, the Transferor shall
have received notice from each Rating Agency then rating any Series of
Certificates outstanding under the Trust that the addition of such Additional
Accounts or Participations will not result in the reduction or withdrawal of its
then existing rating of any Series of Certificates outstanding under the Trust.
In addition to the periodic reports otherwise required to be filed by the
Servicer with the Commission pursuant to the Exchange Act, the Servicer intends
to file, on behalf of the Trust, a Report on Form 8-K with respect to any
addition to the Trust of Receivables in Additional Accounts or Participations
that would have a material effect on the composition of the assets of the Trust.
REMOVAL OF ACCOUNTS
Subject to the conditions set forth in the next succeeding sentence, the
Transferor may, but shall not be obligated to, designate from time to time
(which may be restricted to certain periods if so specified in the related
Prospectus Supplement) certain Accounts to be Removed Accounts, all Receivables
in which shall be subject to deletion and removal from the Trust. This feature
is intended to permit the Transferor to obtain unencumbered ownership of
Receivables not needed to support any Series of Certificates. Certificateholders
will not incur any cost, direct or indirect, as a result of the exercise of this
feature. The Transferor will be permitted to designate and require reassignment
to it of the Receivables from Removed Accounts only upon satisfaction of the
following conditions: (i) the removal of any Receivables of any Removed Accounts
shall not, in the reasonable belief of the Transferor, cause a Pay Out Event to
occur; (ii) the Transferor shall have delivered to the Trustee for execution a
written assignment and a computer file or microfiche list containing a true and
complete list of all Removed Accounts identified by account number and the
aggregate amount of the Receivables in such Removed Accounts; (iii) none of (a)
the Receivables are more than 15% delinquent by estimated principal amount and
the weighted average delinquency of such Receivables does not exceed 60 days,
(b) the Receivables are more than 7% delinquent by estimated principal balance
and the weighted average delinquency of such Receivables does not exceed 90 days
or (c) the Receivables are more than the specified percentage delinquent by
estimated principal amount and the weighted average delinquency of such
Receivables does not exceed the number of days specified in the related
Prospectus Supplement; (iv) the Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially adverse to the
interests of the holders of any Series of Certificates outstanding under the
Trust were utilized in selecting the Removed Accounts to be removed from the
Trust; (v) each Rating Agency then rating each Series of Certificates
outstanding under the Trust shall have received notice of such proposed removal
of Accounts and the Transferor shall have received notice from each such Rating
Agency that such proposed removal will not result in a downgrade of its
then-current rating for any such Series; (vi) the aggregate amount of Principal
Receivables of the Accounts then existing less the aggregate amount of Principal
Receivables of the Removed Accounts shall not be less than the amount, if any,
specified for any period specified; (vii) the Principal Receivables of the
Removed Accounts shall not equal or exceed 5% (or such other percentage
specified in the related Prospectus Supplement) of the aggregate amount of the
Principal Receivables in the Trust at such time; provided, however, that if any
Series has been paid in full, the Principal Receivables in such Removed Accounts
may equal or approximately equal the Investor Interest as of the last day of the
Revolving Period or Full Investor Interest, as applicable, of such Series;
(viii) such other conditions as are specified in the related Prospectus
Supplement; and (ix) the Transferor shall have delivered to the Trustee an
officer's certificate confirming the items set forth in clauses (i) through
(viii) above. Notwithstanding the above, the Transferor will be permitted to
designate as a Removed Account without the consent of the Trustee,
Certificateholders or Rating Agencies any Account that has a zero balance and
which the Transferor will remove from its computer file.
COLLECTION AND OTHER SERVICING PROCEDURES
For each Series of Certificates, the Servicer will be responsible for
servicing and administering the Receivables in accordance with the Servicer's
policies and procedures for servicing credit card receivables
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comparable to the Receivables. The Servicer will be required to maintain, or
cause to be maintained, fidelity bond coverage insuring against losses through
wrongdoing of its officers and employees who are involved in the servicing of
credit card receivables covering such actions and in such amounts as the
Servicer believes to be commercially reasonable from time to time.
DISCOUNT OPTION
The Transferor may at any time designate a specified fixed or variable
percentage (the "Discount Percentage") of the amount of Receivables arising in
the Accounts with respect to the Trust on and after the date such option is
exercised that otherwise would have been treated as Principal Receivables to be
treated as Finance Charge Receivables. Such designation will become effective
upon satisfaction of the requirements set forth in the Agreement, including
written confirmation by each Rating Agency of its then current rating on each
outstanding Series of the Trust. On the date of processing of any collections,
the product of the Discount Percentage and collections of Receivables that arise
in the Accounts on such day on or after the date such option is exercised that
otherwise would be Principal Receivables will be deemed collections of Finance
Charge Receivables and will be applied accordingly, unless otherwise provided in
the related Prospectus Supplement. Such feature is intended to permit the
Transferor to increase the Portfolio Yield and thereby decrease the risk of the
occurrence of a Pay Out Event.
TRUST ACCOUNTS
The Trustee will establish and maintain in the name of the Trust two
separate accounts in a segregated trust account (which need not be a deposit
account), a "Finance Charge Account" and a "Principal Account," for the benefit
of the Certificateholders of all related Series, including any Series offered
pursuant to this Prospectus. The Agreement will provide that the Trustee shall
have the power to establish series accounts in Series Supplements, including an
Interest Funding Account, a Principal Funding Account, a Pre-Funding Account or
such other account specified in the related Series Supplement, each of which
series accounts shall be held for the benefit of the Certificateholders of the
related Series and for the purposes set forth in the related Prospectus
Supplement. The Trustee will also establish a "Distribution Account" (a non-
interest bearing segregated demand deposit account established with a Qualified
Institution other than the Transferor). The Servicer will establish and
maintain, in the name of the Trustee, on behalf of the Trust, for the benefit of
Certificateholders of all Series issued thereby including any Series offered
pursuant to this Prospectus, a Collection Account, which will be a non-interest
bearing segregated account established and maintained with the Servicer or with
a "Qualified Institution," defined as a depository institution or trust company,
which may include the Trustee, organized under the laws of the United States or
any one of the states thereof, which at all times has a short-term unsecured
debt rating of P-1 by Moody's Investors Service, Inc. ("Moody's") and A-1+ by
Standard & Poor's Ratings Services ("Standard & Poor's") or, if such depository
institution shall have corporate trust powers and shall maintain the Trust
account as a fully segregated trust account with the trust department long-term
unsecured debt obligation rating of Baa3 by Moody's or a depository institution,
which may include the Trustee, which is acceptable to the Rating Agencies. Funds
in the Principal Account and the Finance Charge Account for the Trust will be
invested, at the direction of the Servicer, in (i) obligations of or fully
guaranteed by the United States of America, (ii) demand deposits, time deposits
or certificates of deposit of depository institutions or trust companies, the
certificates of deposit or short-term deposits of which have the highest rating
from Moody's and Standard & Poor's, (iii) commercial paper, bank notes or any
other debt obligation having, at the time of the Trust's investment, a rating in
the highest rating category from Moody's and Standard & Poor's, (iv) bankers'
acceptances issued by any depository institution or trust company described in
clause (ii) above and certain repurchase agreements transacted with either (a)
an entity subject to the United States federal bankruptcy code or (b) a
financial institution insured by the FDIC or any broker-dealer with "retail
customers" that is under the jurisdiction of the Securities Investors Protection
Corporation and (v) any other investment if the Rating Agency confirms in
writing that such investment will not adversely affect its then current rating
or ratings, if any, of the Certificates then outstanding, provided, that such
investment will not cause the Trust to be treated as an investment company
within the meaning of the Investment Company Act of 1940, as amended (such
investments, "Permitted Investments"). Any earnings (net of losses and
investment
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expenses) on funds in the Finance Charge Account or the Principal Account will
be paid to the Transferor or used for another purpose if specified in the
related Prospectus Supplement. Funds in any other series account established by
a Series Supplement may be invested in Permitted Investments or otherwise as
provided in the related Prospectus Supplement. The Servicer will have the
revocable power to withdraw funds from the Collection Account and to instruct
the Trustee to make withdrawals and payments from the Finance Charge Account and
the Principal Account for the purpose of carrying out the Servicer's duties
under the Agreement. The Trustee will initially be the paying agent and will
have the revocable power to withdraw funds from the Distribution Account for the
purpose of making distributions to the Certificateholders.
FUNDING PERIOD
For any Series of Certificates, the related Prospectus Supplement may
specify that during a Funding Period, the Pre-Funding Amount will be held in a
Pre-Funding Account pending the transfer of additional Receivables to the Trust
or pending the reduction of the Investor Interests or the Adjusted Investor
Interests of other Series issued by the Trust. The related Prospectus Supplement
will specify the initial Investor Interest with respect to such Series, the Full
Investor Interest and the date by which the Investor Interest is expected to
equal the Full Investor Interest. The Investor Interest will increase as
Receivables are delivered to the Trust or as the Investor Interests or the
Adjusted Investor Interests of other Series of the Trust are reduced. The
Investor Interest may also decrease due to Investor Charge-Offs or the
occurrence of a Pay Out Event with respect to such Series as provided in the
related Prospectus Supplement. See "-- Addition of Trust Assets." This feature
is intended to permit the Transferor to issue a new Series of Certificates at an
opportune time, if the Investor Interests or Adjusted Investor Interests of
existing Series are expected to be reduced or additional Receivables are
expected to be included in the Trust at a subsequent time. Certificateholders
will not incur any costs, direct or indirect, as a result of the exercise of
this feature. If the Investor Interest does not equal the Full Investor Interest
by the end of the Funding Period, Certificateholders of the affected Series will
receive principal repayments prior to the expected date of receipt. See "Risk
Factors -- Prepayment Risks Connected with a Pre-Funding Account." Any
designation of Additional Accounts (or Participations) during the Funding Period
will be subject to the same conditions and protections applicable at any other
time.
During the Funding Period, funds on deposit in the Pre-Funding Account for
a Series of Certificates will be withdrawn and paid to the Transferor to the
extent of any increases in the Investor Interest. In the event that the Investor
Interest does not for any reason equal the Full Investor Interest by the end of
the Funding Period, any amount remaining in the Pre-Funding Account and any
additional amounts specified in the related Prospectus Supplement will be
payable to the Certificateholders of such Series in the manner and at such time
as set forth in the related Prospectus Supplement. Such payment will reduce the
aggregate principal amount of such Certificates. In addition, if so specified in
the related Prospectus Supplement, a prepayment premium or penalty or similar
amount may be payable to the Certificateholders of such Series.
Monies in the Pre-Funding Account will be invested by the Trustee in
Permitted Investments and, if so specified in the related Prospectus Supplement,
will be subject to a guaranteed rate or investment agreement or other similar
arrangement, and, in connection with each Distribution Date during the Funding
Period, investment earnings on funds in the Pre-Funding Account during the
related Monthly Period will be withdrawn from the Pre-Funding Account and
deposited, together with any applicable payment under a guaranteed rate or
investment agreement or other similar arrangement, into the Finance Charge
Account for distribution in respect of interest on the Certificates of the
related Series in the manner specified in the related Prospectus Supplement.
INVESTOR PERCENTAGE AND TRANSFEROR PERCENTAGE
For the Trust, the Servicer will allocate between the Investor Interest of
each Series issued and outstanding by the Trust (and among each outstanding
Class of each Series) and the Transferor Interest, and, in certain
circumstances, the interest of certain Credit Enhancement Providers, all amounts
collected on Finance Charge Receivables, all amounts collected on Principal
Receivables and all Receivables in Defaulted Accounts. The Servicer will make
each allocation by reference to the applicable Investor Percentage of each
Series and the Transferor Percentage, and, in certain circumstances, the
percentage interest of certain Credit
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Enhancement Providers (the "Credit Enhancement Percentage") with respect to such
Series. The Prospectus Supplement relating to a Series specifies the Investor
Percentage and, if applicable, the Credit Enhancement Percentage (or the method
of calculating such percentages) with respect to the allocations of collections
of Principal Receivables, Finance Charge Receivables and Receivables in
Defaulted Accounts during the Revolving Period, any Amortization Period and any
Accumulation Period, as applicable. In addition, for each Series of Certificates
having more than one Class, the related Prospectus Supplement specifies the
method of allocation between each Class.
The Transferor Percentage will, in all cases, be equal to 100% minus the
aggregate Investor Percentages and, if applicable, the Credit Enhancement
Percentages, for all Series then outstanding.
APPLICATION OF COLLECTIONS
Except as otherwise provided below, the Servicer will deposit into the
Collection Account for the Trust no later than the second business day (or such
other day specified in the related Prospectus Supplement) following the date of
processing, any payment collected by the Servicer on the Receivables. On the
same day as any such deposit is made, the Servicer will make the deposits and
payments to the accounts and parties as indicated below; provided, however, that
for as long as Bank of America remains the Servicer under the Agreement, and
(a)(i) the Servicer provides to the Trustee a letter of credit (or other credit
support) covering risk collection of the Servicer and (ii) the Transferor shall
not have received a notice from the Rating Agency that such letter of credit
would result in the lowering of such Rating Agency's then-existing rating of the
related Series (and if the Trust has issued more than one series, any Series of
certificates previously-issued and then-outstanding thereunder), or (b) the
Servicer has and maintains a certificate of deposit or short-term deposit rating
of P-1 by Moody's and of A-1 by Standard & Poor's and deposit insurance provided
by the FDIC, then the Servicer may make such deposits and payments on a monthly
or other periodic basis on the Transfer Date in an amount equal to the net
amount of such deposits and payments which would have been made had the
conditions of this proviso not applied.
Notwithstanding anything in the Agreement to the contrary, whether the
Servicer is required to make monthly or daily deposits from the Collection
Account into the Finance Charge Account, the Principal Account or any applicable
series account, with respect to any Monthly Period, (i) the Servicer will only
be required to deposit collections from the Collection Account into the Finance
Charge Account, the Principal Account or any series account established by a
related Series Supplement up to the required amount to be deposited into any
such deposit account or, without duplication, distributed on or prior to the
related Distribution Date to Certificateholders or to the provider of
Enhancement and (ii) if at any time prior to such Distribution Date the amount
of collections deposited in the Collection Account exceeds the amount required
to be deposited pursuant to clause (i) above, the Servicer will be permitted to
withdraw the excess from the Collection Account.
The Servicer will withdraw the following amounts, in the priority
indicated, from the Collection Account for application as indicated unless the
related Prospectus Supplement specifies otherwise:
(a) an amount equal to the Transferor Percentage of the aggregate
amount of such deposits in respect of Principal Receivables and Finance
Charge Receivables, respectively, will be paid or held for payment to the
holder of the Transferor Certificate;
(b) an amount equal to the applicable Investor Percentage of the
aggregate amount of such deposits in respect of Finance Charge Receivables
will be deposited into the Finance Charge Account for allocation and
distribution as described in the related Prospectus Supplement;
(c) during the Revolving Period, an amount equal to the applicable
Investor Percentage of the aggregate amount of such deposits in respect of
Principal Receivables will be paid or held for payment to the holder of the
Transferor Certificate, provided that if after giving effect to the
inclusion in the Trust of all Receivables on or prior to such date of
processing and the application of payments referred to in paragraph (a)
above the Transferor Interest is reduced to zero, the excess will be
deposited in the
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Principal Account or other specified account and will be used as described
in the related Prospectus Supplement, including for payment to other Series
of Certificates issued by the Trust;
(d) during the Controlled Amortization Period, Controlled Accumulation
Period or Rapid Accumulation Period, as applicable, an amount equal to the
applicable Investor Percentage of such deposits in respect of Principal
Receivables up to the amount, if any, as specified in the related
Prospectus Supplement will be deposited in the Principal Account or
Principal Funding Account, as applicable, for allocation and distribution
to Certificateholders as described in the related Prospectus Supplement,
provided that if collections of Principal Receivables exceed the principal
payments which may be allocated or distributed to Certificateholders, the
amount of such excess will be paid to the holder of the Transferor
Certificate until the Transferor Interest is reduced to zero, and
thereafter will be deposited in the Principal Account or other specified
account and will be used as described in the related Prospectus Supplement,
including for payment to other Series of Certificates issued by the Trust;
and
(e) during the Principal Amortization Period, if applicable, and the
Rapid Amortization Period, an amount equal to the applicable Investor
Percentage of such deposits in respect of Principal Receivables will be
deposited into the Principal Account for application and distribution as
provided in the related Prospectus Supplement.
In the case of a Series of Certificates having more than one Class, the
amounts in the Collection Account will be allocated and applied to each Class in
the manner and order of priority described in the related Prospectus Supplement.
Any amounts collected in respect of Principal Receivables and not paid to
the Transferor because the Transferor Interest is zero as described above (with
respect to each Series, "Unallocated Principal Collections"), together with any
adjustment payments as described above under "-- Representations and Warranties"
and below under "-- Defaulted Receivables; Rebate and Fraudulent Charges;
Investor Charge-Offs," will be paid to and held in the Principal Account and
paid to the Transferor if and to the extent that the Transferor Interest is
equal to or greater than zero. If an Amortization Period or Accumulation Period
has commenced, Unallocated Principal Collections will be held for distribution
to the Certificateholders on the related Distribution Date or accumulated for
distribution on the Scheduled Payment Date, as applicable, and distributed to
the Certificateholders of each Class or held for and distributed to the
Certificateholders of other Series of Certificates issued by the Trust in the
manner and order of priority specified in the related Prospectus Supplement.
GROUPS OF SERIES
The Agreement provides that the Transferor may create certain groups of
Series (each a "Group"). These Groups will consist of (a) a single Shared Excess
Principal Collections Group and (b) any number of Shared Excess Finance Charge
Collections Groups. The Certificates of a Series may be designated by the
Transferor to be included in the Shared Excess Principal Collections Group
and/or one of the Shared Excess Finance Charge Collections Groups. That
designation, if any, will be made by the Transferor, at its sole discretion,
prior to the issuance of each Series and if any Series is designated by the
Transferor to be included in any Group or Groups, such designation will be
provided for in the Prospectus Supplement relating to any Series of Certificates
so designated.
To the extent that a Series of Certificates is included in the Shared
Excess Principal Collections Group, Shared Excess Principal Collections with
respect to such Group will be available to such Series, as described below under
"-- Shared Excess Principal Collections" and under "Description of the
Certificates -- Shared Excess Principal Collections" in the Prospectus
Supplement relating to such Series of Certificates. To the extent that a Series
of Certificates is included in a Shared Excess Finance Charge Collections Group,
Shared Excess Finance Charge Collections with respect to such Group will be
available to such Series, as described below under "-- Shared Excess Finance
Charge Collections" and under "Description of the Certificates -- Shared Excess
Finance Charge Collections" in the Prospectus Supplement relating to such Series
of Certificates.
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SHARED EXCESS FINANCE CHARGE COLLECTIONS
Any Series offered hereby may be included in a Shared Excess Finance Charge
Collections Group. The Prospectus Supplement relating to a Series specifies
whether such Series is included in a Shared Excess Finance Charge Collections
Group and identifies any previously issued Series included in such Shared Excess
Finance Charge Collections Group. If so specified in the related Prospectus
Supplement, the Certificateholders of a Series within a Shared Excess Finance
Charge Collections Group or any Class thereof may be entitled to receive all or
a portion of the Shared Excess Finance Charge Collections (as defined in the
Prospectus Supplement relating to each applicable Series) with respect to all
other Series within such Shared Excess Finance Charge Collections Group to cover
any shortfalls with respect to amounts payable from collections of Finance
Charge Receivables allocable to such Series or Class; provided, however, that
the application of Shared Excess Finance Charge Collections among any Series
within any Shared Excess Finance Charge Collections Group will cease if the
Transferor shall deliver to the Trustee a certificate of an authorized
representative to the effect that, in the reasonable belief of the Transferor,
the continued application of Shared Excess Finance Charge Collections with
respect to any applicable Shared Excess Finance Charge Collections Group would
have adverse regulatory implications with respect to the Transferor. Following
the delivery by the Transferor of any such certificate to the Trustee with
respect to any Shared Excess Finance Charge Collections Group, there will not be
any further sharing of Excess Finance Charge Collections among the Series
included in such Shared Excess Finance Charge Collections Group. In all cases,
any Shared Excess Finance Charge Collections with respect to any Shared Excess
Finance Charge Collections Group remaining after covering any shortfalls with
respect to all outstanding Series within such Shared Excess Finance Charge
Collections Group will be paid to the holder of the Transferor Certificate. The
application of Shared Excess Finance Charge Collections among the Series
included in a Shared Excess Finance Charge Collections Group permits amounts
with respect to such Series that would otherwise be payable to the holder of the
Transferor Certificate to be used for the benefit of the Series within the
related Shared Excess Finance Charge Collections Group that would otherwise
experience shortfalls, if any, in amounts payable from collections of Finance
Charge Receivables allocable to, or from Enhancement relating to, such Series.
See "-- Application of Collections" and "-- Defaulted Receivables; Rebates and
Fraudulent Charges; Investor Charge-Offs."
While any Series offered hereby may be designated by the Transferor to be
included within a Shared Excess Finance Charge Collections Group, there can be
no assurance that (a) any other Series will be designated by the Transferor to
be included within the same Shared Excess Finance Charge Collections Group, (b)
there will be any Shared Excess Finance Charge Collections with respect to any
other Series within such Shared Excess Finance Charge Collections Group, (c) any
agreement relating to any Enhancement will not be amended in such a manner as to
increase payments to the providers of such Enhancement and thereby decrease the
amount of Shared Excess Finance Charge Collections available from such Series or
(d) the Transferor will not, at any time, deliver a certificate as to adverse
regulatory implications as described above. While the Transferor believes that,
based upon applicable rules and regulations as currently in effect, the
application of Shared Excess Finance Charge Collections among the Series
included within the applicable Shared Excess Finance Charge Collections Group
will not have adverse regulatory implications for it, there can be no assurance
that this will continue to be true in the future.
SHARED EXCESS PRINCIPAL COLLECTIONS
If so specified in the related Prospectus Supplement, to the extent that
collections of Principal Receivables and certain other amounts that are
allocated to the Investor Interest of any Series are not needed to make payments
or deposits with respect to such Series, such collections will constitute Shared
Excess Principal Collections and will be applied to cover principal payments due
to or for the benefit of Certificateholders of other Series. If so specified in
the related Prospectus Supplement, the allocation of Shared Excess Principal
Collections may be among Series within the Shared Excess Principal Collections
Group. Any such reallocation will not result in a reduction in the Investor
Interest of the Series to which such collections were initially allocated. This
feature permits amounts that would otherwise be payable to the holder of the
Transferor Certificate to be used for the benefit of Series of Certificates that
would otherwise experience a shortfall or delay in the payment of principal
thereon.
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While any Series offered hereby may be designated by the Transferor to be
included within the Shared Excess Principal Collections Group, there can be no
assurance that (a) any other Series will be designated by the Transferor to be
included within the Shared Excess Principal Collections Group or (b) there will
be any Shared Excess Principal Collections with respect to any other Series
within the Shared Excess Principal Collections Group.
PAIRED SERIES
If so provided in the Prospectus Supplement relating to a Series, each such
Series is subject to being paired with a Paired Series issued by the Trust. As
the Investor Interest of the Series having a Paired Series is reduced, the
Investor Interest or Adjusted Investor Interest (as defined in the related
Prospectus Supplement), as the case may be, in the Trust of the Paired Series
will increase by an equal amount. If a Pay Out Event occurs with respect to the
Series having a Paired Series or with respect to the Paired Series when the
Series is in a Controlled Amortization Period or a Controlled Accumulation
Period, the percentage used for allocating collections of Principal Receivables
for such Series and for the Paired Series will be reset as provided in the
related Prospectus Supplement. The effects of this feature will be discussed in
the Prospectus Supplement relating to a Paired Series.
DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES; INVESTOR CHARGE-OFFS
For each Series of Certificates, on or before the second business day
preceding each Transfer Date (the "Determination Date"), the Servicer will
calculate the aggregate Investor Default Amount for the preceding Monthly
Period, which will be equal to the aggregate amount of the Investor Percentage
of Principal Receivables in Defaulted Accounts; that is, Accounts which in such
Monthly Period were written off as uncollectible in accordance with the
Servicer's policies and procedures for servicing credit card receivables
comparable to the Receivables. In the case of a Series of Certificates having
more than one Class, the Investor Default Amount will be allocated among the
Classes in the manner described in the related Prospectus Supplement. If so
provided in the related Prospectus Supplement, an amount equal to the Investor
Default Amount for any Monthly Period may be paid from other amounts, including
collections in the Finance Charge Account or from Credit Enhancement, and
applied to pay principal to Certificateholders or the holder of the Transferor
Certificate, as appropriate. In the case of a Series of Certificates having one
or more Classes of Subordinated Certificates, the related Prospectus Supplement
may provide that all or a portion of amounts otherwise allocable to such
Subordinated Certificates may be paid to the holders of Senior Certificates to
make up any Investor Default Amount allocable to such holders of Senior
Certificates.
With respect to each Series of Certificates, the Investor Interest with
respect to such Series will be reduced by the amount of Investor Charge-Offs for
any Monthly Period. Investor Charge-Offs will be reimbursed on any Distribution
Date to the extent amounts on deposit in the Finance Charge Account and
otherwise available therefor exceed such interest, fees and any aggregate
Investor Default Amount payable on such date. Such reimbursement of Investor
Charge-Offs will result in an increase in the Investor Interest with respect to
such Series. In the case of a Series of Certificates having more than one Class,
the related Prospectus Supplement describes the manner and priority of
allocating Investor Charge-Offs and reimbursements thereof among the Investor
Interests of the several Classes.
If the Servicer adjusts the amount of any Principal Receivable (a) because
of transactions occurring in respect of a rebate or refund to a cardholder
(including any rebates arising under a rebate program), (b) because such
Principal Receivable was created in respect of merchandise which was refused or
returned by a cardholder or services successfully disputed by a cardholder or
(c) because such Principal Receivable was transferred to a credit card account
outside of the Trust, then the amount of the Transferor Interest in the Trust
will be reduced, on a net basis, by the amount of the adjustment. In addition,
the Transferor Interest in the Trust will be reduced, on a net basis, as a
result of transactions in respect of any Principal Receivable which was
discovered as having been created through a fraudulent or counterfeit charge. In
the event any such reduction would cause the Transferor Interest to be a
negative number, the Transferor shall make a deposit into the Principal Account
in immediately available funds in an amount equal to the deficiency.
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DEFEASANCE
If so specified in the Prospectus Supplement relating to a Series, the
Transferor may terminate its substantive obligations in respect of such Series
or the Trust by depositing with the Trustee, from amounts representing, or
acquired with, collections of Receivables, money or Permitted Investments
sufficient to make all remaining scheduled interest and principal payments on
such Series or all outstanding Series of Certificates of the Trust, as the case
may be, on the dates scheduled for such payments and to pay all amounts owing to
any Credit Enhancement Provider with respect to such Series or all outstanding
Series, as the case may be, if such action would not result in a Pay Out Event
for any Series. Prior to its first exercise of its right to substitute money or
Permitted Investments for Receivables, the Transferor will deliver to the
Trustee (i) an opinion of counsel to the effect that such deposit and
termination of obligations will not result in the Trust being required to
register as an "investment company" within the meaning of the Investment Company
Act of 1940, as amended and (ii) an Opinion of Counsel with respect to such
deposit and termination to the effect that it will not cause the Trust or any
portion thereof to be treated as an association or publicly traded partnership
taxable as a corporation. Upon any such deposit, holders of Certificates of the
affected Series could recognize taxable gain for federal income tax purposes to
the extent that the value of the related Certificate exceeds its tax basis
therein, but would in no event be allowed to deduct a taxable loss for such
purposes. See "Federal Income Tax Consequences -- Sale or Exchange of
Certificates."
FINAL PAYMENT OF PRINCIPAL; TERMINATION
With respect to each Series, the Certificates will be subject to optional
repurchase by the Transferor on any Distribution Date after the total Investor
Interest of such Series and the Enhancement Invested Amount, if any, with
respect to such Series, is reduced to an amount less than or equal to 5% of the
initial Investor Interest, if any (or such other amount specified in the related
Prospectus Supplement), if certain conditions set forth in the Agreement are
met. The repurchase price will be equal to the total Investor Interest of such
Series (less the amount, if any, on deposit in any Principal Funding Account
with respect to such Series), plus the Enhancement Invested Amount, if any, with
respect to such Series, plus accrued and unpaid interest on the Certificates and
interest or other amounts payable on the Enhancement Invested Amount or the
Collateral Interest, if any, through the day preceding the Distribution Date on
which the repurchase occurs.
The Certificates of each Series will be retired on the day following the
Distribution Date on which the final payment of principal is scheduled to be
made to the Certificateholders, whether as a result of optional reassignment to
the Transferor or otherwise. Each Prospectus Supplement specifies the final date
on which principal and interest with respect to the related Series of
Certificates will be scheduled to be distributed (the "Series Termination
Date"); provided, however, that the Certificates may be subject to prior
termination as provided above. If the Investor Interest is greater than zero on
the Series Termination Date, the Trustee or Servicer may be required to sell or
cause to be sold certain Receivables in the manner provided in the Agreement and
Series Supplement and to pay the net proceeds of such sale and any collections
on the Receivables, in an amount at least equal to the sum of the Investor
Interest and the Enhancement Invested Amount, if any, with respect to such
Series plus accrued interest due thereon.
Unless the Servicer and the holder of the Transferor Certificate instruct
the Trustee otherwise, the Trust will terminate on the earlier of (a) the day
after the Distribution Date on which the aggregate Investor Interest and
Enhancement Invested Amount or Collateral Interest, if any, with respect to each
Series outstanding is zero, (b) June 30, 2036 or (c) if the Receivables are
sold, disposed of or liquidated following the occurrence of an Insolvency Event,
immediately following such sale, disposition or liquidation (such date, the
"Trust Termination Date"). Upon the termination of the Trust and the surrender
of the Transferor Certificate, the Trustee shall convey to the holder of the
Transferor Certificate all right, title and interest of the Trust in and to the
Receivables and other funds of the Trust.
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PAY OUT EVENTS
As described above, the Revolving Period will continue through the date
specified in the related Prospectus Supplement unless a Pay Out Event occurs
prior to such date. A Pay Out Event occurs with respect to all Series issued by
the Trust upon the occurrence of any of the following events:
(a) certain events of insolvency, receivership or bankruptcy relating
to the Transferor, an Additional Transferor or another holder of the
Transferor Certificate (each, an "Insolvency Event" with respect to the
related Transferor);
(b) the Transferor or any Additional Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with the
provisions of the Agreement; or
(c) the Trust becomes an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
In addition, a Pay Out Event may occur with respect to any Series upon the
occurrence of any other event specified in the related Prospectus Supplement. On
the date on which a Pay Out Event is deemed to have occurred, the Rapid
Amortization Period or, if so specified in the related Prospectus Supplement,
the Rapid Accumulation Period will commence. If, because of the occurrence of a
Pay Out Event, the Rapid Amortization Period begins earlier than the scheduled
commencement of an Amortization Period or prior to a Scheduled Payment Date,
Certificateholders will begin receiving distributions of principal earlier than
they otherwise would have, which may shorten the average life of the
Certificates.
In addition to the consequences of a Pay Out Event discussed above, if a
conservator or receiver were appointed for, the Transferor, an Additional
Transferor or another holder of the Transferor Certificate or a bankruptcy or
Insolvency Event were to occur with respect to the Transferor, an Additional
Transferor or another holder of the Transferor Certificate, on the day any such
event occurs the Transferor and any Additional Transferor will immediately cease
to transfer Principal Receivables and Discount Option Receivables to the Trust
and promptly give notice to the Trustee of such event and the Agreement and the
Trust shall terminate, subject to the liquidation, winding-up and dissolution
procedures described in the Agreement. Within 15 days, the Trustee will publish
a notice of the termination of the Trust and the liquidation or the appointment
stating that the Trustee intends to sell, dispose of, or otherwise liquidate the
Receivables in a commercially reasonable manner. Unless otherwise instructed
within a specified period by Certificateholders representing undivided interests
aggregating not less than 50% of the Investor Interest of each Series (or, with
respect to any Series with more than one Class, of each Class) and the
Transferor, each Additional Transferor (other than the Transferor that is the
subject of such Insolvency Event) and each holder of an interest in the
Transferor Interest (including any holder of a Supplemental Certificate) not
subject to the appointment or Insolvency Event, and any other person designated
by the Transferor or an Additional Transferor in an officer's certificate
delivered to the Trustee prior to the Insolvency Event or specified in the
related Series Supplement, which may include any provider of Enhancement, to the
effect that such Persons disapprove of the liquidation of the Receivables and
wish to reconstitute the Trust pursuant to the terms of the Agreement (as
amended in connection with such reconstitution), the Trustee will promptly sell,
dispose of, or otherwise liquidate the Receivables in a commercially reasonable
manner and on commercially reasonable terms. If the Trustee is instructed not to
liquidate the Receivables as described in the preceding sentence, the Trustee
will retain the Receivables and apply collections thereon in accordance with the
Agreement. The proceeds from the sale, disposition or liquidation of the
Receivables and any Participation will be immediately deposited in the related
Collection Account and allocated as specified above in "-- Application of
Collections" and in the related Prospectus Supplement. The foregoing provisions
have been included in the Agreement for reasons related to the possible
treatment of the Trust as a partnership for federal income tax purposes. The IRS
has issued proposed regulations that, if adopted as final regulations, would
make the foregoing provisions unnecessary. The amendment provisions of the
Agreement, therefore, allow the Trustee and the Servicer to amend the Agreement,
without the consent of any of the Certificateholders, to eliminate such
provisions upon (i) the adoption of final regulations whose applicable
provisions are substantially the same as the corresponding provisions of the
proposed regulations and (ii) the receipt of an opinion that the deletion of
such provisions will not adversely affect the ability of the Trust to be
characterized as a partnership for federal income tax
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purposes. The rights of Certificateholders to vote on whether to continue or
dissolve the Trust (or any Series thereof) upon the insolvency of the Transferor
could therefore be eliminated without Certificateholders having any right to
prevent such elimination.
If the only Pay Out Event to occur is either the insolvency of the
Transferor or an Additional Transferor or the appointment of a conservator or
receiver for the Transferor or an Additional Transferor, the conservator or
receiver may have the power to prevent the early sale, liquidation or
disposition of the Receivables and the commencement of a Rapid Amortization
Period or, if applicable with respect to a Series as specified in the related
Prospectus Supplement, a Rapid Accumulation Period. In addition, a conservator
or receiver may have the power to cause the early sale of the Receivables and
the early retirement of the Certificates. See "Risk Factors -- Insolvency or
Bankruptcy of Transferor or Other Holder of Transferor Certificate" and "Certain
Legal Aspects of the Receivables -- Certain Matters Relating to Receivership."
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
For each Series of Certificates, the Servicer's compensation for its
servicing activities and reimbursement for its expenses will take the form of
the payment to it of the Servicing Fee payable at the times and in the amounts
specified in the related Prospectus Supplement. The portion of the Servicing Fee
allocated to the Certificates of each Series will be funded from collections of
Finance Charge Receivables allocated to the related Investor Interest and will
be paid each month, or on such other specified periodic basis, from amounts so
allocated and on deposit in the Finance Charge Account (which, if so specified
in the related Prospectus Supplement, may include all or a portion of the
Interchange arising from the Accounts) or, in certain limited circumstances,
from amounts available from Enhancement and other sources, if any. The remainder
of the servicing fee for the Trust will be allocable to the Transferor Interest,
the Investor Interests of any other Series issued by the Trust and the interest
represented by the Enhancement Invested Amount or the Collateral Interest, if
any, with respect to such Series, as described in the related Prospectus
Supplement. Neither the Trust nor the related Certificateholders will have any
obligation to pay the portion of the servicing fee allocable to the Transferor
Interest.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables including, without
limitation, payment of the fees and disbursements of the Trustee and independent
certified public accountants and other fees which are not expressly stated in
the Agreement to be payable by the Trust or the related Certificateholders other
than federal, state and local income and franchise taxes, if any, of the Trust.
CERTAIN MATTERS REGARDING THE TRANSFEROR AND THE SERVICER
With respect to each Series of Certificates, the Servicer may not resign
from its obligations and duties under the Agreement, except upon determination
that performance of its duties is no longer permissible under applicable law. No
such resignation will become effective until the Trustee or a successor to the
Servicer has assumed the Servicer's responsibilities and obligations under the
Agreement.
The Agreement will provide that the Servicer will indemnify the Trust and
Trustee from and against any reasonable loss, liability, expense, damage or
injury suffered or sustained by reason of any acts or omissions or alleged acts
or omissions of the Servicer with respect to the activities of the Trust or
Trustee; provided, however, that the Servicer shall not indemnify (a) the
Trustee for liabilities imposed by reason of fraud, negligence, or willful
misconduct by the Trustee in the performance of its duties under the Agreement,
(b) the Trust, the Certificateholders or the Certificate Owners for liabilities
arising from actions taken by the Trustee at the request of Certificateholders,
(c) the Trust, the Certificateholders or the Certificate Owners for any losses,
claims, damages or liabilities incurred by any of them in their capacities as
investors, including without limitation, losses incurred as a result of
defaulted Accounts or Receivables which are written off as uncollectible, or (d)
the Trust, the Certificateholders or the Certificate Owners for any liabilities,
costs or expenses of the Trust, the Certificateholders or the Certificate Owners
arising under any tax law, including without limitation, any federal, state or
local income or franchise tax or any other tax imposed on or measured by income
(or any interest or penalties with respect thereto or arising from a failure to
comply therewith)
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required to be paid by the Trust, the Certificateholders or the Certificate
Owners in connection with the Agreement to any taxing authority.
In addition, the Agreement will provide that, subject to certain
exceptions, the Transferor will agree to be liable to an injured party for any
losses, claims, damages or liabilities (other than those incurred by a
Certificateholder as an investor in the Certificates) arising out of or based
upon each of the arrangements created by the Agreement and the actions of the
Servicer as though the Agreement created a partnership under the New York
Uniform Partnership Act in which the Transferor is a general partner.
The Agreement will provide that neither the Transferor nor the Servicer nor
any of their respective directors, officers, employees or agents will be under
any other liability to the Trust, Trustee, Certificateholders or any other
person for any action taken, or for refraining from taking any action, in good
faith pursuant to the Agreement. Neither the Transferor, the Servicer, nor any
of their respective directors, officers, employees or agents will be protected
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence of the Transferor, the Servicer or
any such person in the performance of its duties or by reason of reckless
disregard of obligations and duties thereunder. In addition, the Agreement will
provide that the Servicer is not under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its servicing
responsibilities under the Agreement and which in its opinion may expose it to
any expense or liability.
The Agreement will provide that the Transferor may transfer its interest in
all or a portion of the Transferor Certificate, provided that prior to any such
transfer (a) the Trustee receives written notification from each Rating Agency
that such transfer will not result in a lowering of its then-existing rating of
the Certificates of each outstanding Series rated by it and (b) the Trustee
receives a written opinion of counsel confirming that such transfer would not
adversely affect the treatment of the Certificates of each outstanding Series as
debt for federal income tax purposes.
Any person into which, in accordance with the Agreement, the Transferor or
the Servicer may be merged or consolidated or any person resulting from any
merger or consolidation to which the Transferor or the Servicer is a party, or
any person succeeding to the business of the Transferor or the Servicer, upon
execution of a supplement to the Agreement and delivery of an opinion of counsel
with respect to the compliance of the transaction with the applicable provisions
of the Agreement, will be the successor to the Transferor or the Servicer, as
the case may be, under the Agreement.
SERVICER DEFAULT
In the event of any Servicer Default, either the Trustee or
Certificateholders representing undivided interests aggregating not less than
50% of the Investor Interests for all Series of Certificates of the Trust, by
written notice to the Servicer (and to the Trustee if given by the
Certificateholders), may terminate all of the rights and obligations of the
Servicer as servicer under the Agreement and in and to the Receivables and the
proceeds thereof and the Trustee may appoint a new Servicer (a "Service
Transfer"). The rights and interest of the Transferor under the Agreement and in
the Transferor Interest will not be affected by such termination. The Trustee
shall as promptly as possible appoint a successor Servicer. If no such successor
Servicer has been appointed and has accepted such appointment by the time the
Servicer ceases to act as Servicer, all authority, power and obligations of the
Servicer under the Agreement shall pass to and be vested in the Trustee. If the
Trustee is unable to obtain any bids from eligible servicers and the Servicer
delivers an officer's certificate to the effect that it cannot in good faith
cure the Servicer Default which gave rise to a transfer of servicing, and if the
Trustee is legally unable to act as successor Servicer, then the Trustee shall
give the Transferor the right of first refusal to acquire the Receivables on
terms equivalent to the best offer as determined by the Trustee.
"Servicer Default" under any Agreement refers to any of the following
events:
(a) failure by the Servicer to make any payment, transfer or deposit,
or to give instructions to the Trustee to make certain payments, transfers
or deposits, on the date the Servicer is required to do so under the
Agreement or any Series Supplement (or within the applicable grace period,
which shall not exceed 10 business days);
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(b) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer which has a
material adverse effect on the Certificateholders of any Series issued and
outstanding under the Trust and which continues unremedied for a period of
60 days after written notice and continues to have a material adverse
effect on such Certificateholders; or the delegation by the Servicer of its
duties under the Agreement, except as specifically permitted thereunder;
(c) any representation, warranty or certification made by the Servicer
in the Agreement, or in any certificate delivered pursuant to the
Agreement, proves to have been incorrect when made which has a material
adverse effect on the Certificateholders of any Series issued and
outstanding under the Trust, and which continues to be incorrect in any
material respect for a period of 60 days after written notice and continues
to have a material adverse effect on such Certificateholders;
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer; or
(e) such other event specified in the related Prospectus Supplement.
Unless otherwise stated in the related Prospectus Supplement,
notwithstanding the foregoing, a delay in or failure of performance referred to
in clause (a) above for a period of 10 business days, or referred to under
clause (b) or (c) for a period of 60 business days, shall not constitute a
Servicer Default if such delay or failure could not be prevented by the exercise
of reasonable diligence by the Servicer and such delay or failure was caused by
an act of God or other similar occurrence. Upon the occurrence of any such
event, the Servicer shall not be relieved from using its best efforts to perform
its obligations in a timely manner in accordance with the terms of the
Agreement, and the Servicer shall provide the Trustee, any provider of
Enhancement and/or any issuer of any third-party Credit Enhancement (a "Credit
Enhancement Provider"), the Transferor and the holders of Certificates of each
Series issued and outstanding under the Trust prompt notice of such failure or
delay by it, together with a description of the cause of such failure or delay
and its efforts to perform its obligations.
In the event of a Servicer Default, if a conservator or receiver is
appointed for the Servicer and no Servicer Default other than such
conservatorship or receivership or the insolvency of the Servicer exists, the
conservator or receiver may have the power to prevent either the Trustee or the
majority of the Certificateholders from effecting a Service Transfer.
REPORTS TO CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, for each
Series of Certificates, on each Distribution Date, or as soon thereafter as is
practicable, as specified in the related Prospectus Supplement, the agent making
payments to the Certificateholders (the "Paying Agent") will forward to each
Certificateholder of record a statement prepared by the Servicer setting forth,
among other things: (a) the amount of the distribution on such Distribution Date
allocable to principal on the Certificates, (b) the amount of such distribution
allocable to interest on the Certificates, (c) the amount of collections of
Principal Receivables processed during the preceding month or months since the
last Distribution Date and allocated in respect of the Certificates, (d) the
aggregate amount of Principal Receivables in the Trust as of the end of the last
day of the preceding Monthly Period or Periods since the last Distribution Date,
(e) the aggregate outstanding balance of Accounts which are 30 or more days
delinquent by class of delinquency as of the end of the last day of the
preceding Monthly Period or Periods since the last Distribution Date, (f) the
aggregate Investor Default Amount for the preceding Monthly Period or Periods
since the last Distribution Date, (g) the amount of Investor Charge-Offs for the
preceding Monthly Period or Periods since the last Distribution Date and the
amount of reimbursements of previous Investor Charge-Offs for the preceding
Monthly Period or Periods since the last Distribution Date, (h) the amount of
the Servicing Fee allocated to the Certificates for the preceding Monthly Period
or Periods since the last Distribution Date, (i) the amount available under any
Enhancement (including any Credit Enhancement) as of the close of business on
such Distribution Date, (j) the aggregate amount of collections on Finance
Charge Receivables processed during the preceding Monthly Period or Periods
since the last Distribution Date, (k) the Portfolio Yield for the preceding
Monthly Period or Periods since the last Distribution Date, and (l) certain
information relating to the floating or variable Certificate Rates, if
applicable, for the Interest Period relating to such Distribution Date. In the
case
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of a Series of Certificates having more than one Class, the statements forwarded
to Certificateholders will provide information as to each Class of Certificates,
as appropriate.
On or before January 31 of each calendar year or such other date as
specified in the related Prospectus Supplement, the Paying Agent will furnish to
each person who at any time during the preceding calendar year was a
Certificateholder of record, a statement prepared by the Servicer containing the
information required to be contained in the regular monthly report to
Certificateholders, as set forth in clauses (a), (b) and (c) above aggregated
for such calendar year or the applicable portion thereof during which such
person was a Certificateholder, together with such other customary information
(consistent with the treatment of the Certificates as debt) as the Trustee or
the Servicer deems necessary or desirable to enable the Certificateholders to
prepare their United States tax returns.
EVIDENCE AS TO COMPLIANCE
The Agreement will provide that on or before March 31 of each calendar year
or such other date as specified in the related Prospectus Supplement, the
Servicer will cause a firm of independent certified public accountants to
furnish a report to the effect that such accounting firm has made a study and
evaluation of the Servicer's internal accounting controls relative to the
servicing of the Accounts and that, on the basis of such examination, such firm
is of the opinion that, assuming the accuracy of reports by the Servicer's third
party agents, the system of internal accounting controls in effect on the date
of such statement relating to servicing procedures performed by the Servicer,
taken as a whole, was sufficient for the prevention and detection of errors and
irregularities in amounts that would be material to the financial statements of
the Servicer and that such servicing was conducted in compliance with the
sections of the Agreement during the period covered by such report (which shall
be the period from January 1 (or for the initial period, the relevant Closing
Date) of the preceding calendar year to and including December 31 of such
calendar year), except for such exceptions or errors as such firm shall believe
to be immaterial and such other exceptions as shall be set forth in such
statement.
The Agreement will provide for delivery to the Trustee on or before March
31 of each calendar year or such other date as specified in the related
Prospectus Supplement, of an annual statement signed by an officer of the
Servicer to the effect that the Servicer has fully performed its obligations
under the Agreement throughout the preceding year, or, if there has been a
default in the performance of any such obligation, specifying the nature and
status of the default.
AMENDMENTS
The Agreement and any Series Supplement (unless, with respect to a Series
Supplement, otherwise specified in the related Prospectus Supplement) may be
amended by the Transferor, the Servicer and the Trustee, without the consent of
Certificateholders of any Series then outstanding, for any purpose, provided,
however, that (i) the Transferor delivers an officer's certificate to the
Trustee to the effect that such amendment will not adversely affect in any
material respect the interest of such Certificateholders, and (ii) such
amendment will not result in a withdrawal or reduction of the rating of any
outstanding Series under the Trust. The Agreement and any related Series
Supplement may be amended by the Transferor (and, if applicable, any Additional
Transferor being designated), the Servicer and the Trustee, without the consent
of the Certificateholders of any Series then outstanding, to provide for
additional Enhancement or substitute Enhancement with respect to a Series, to
change the definition of Eligible Account, to provide for the designation of an
Additional Transferor or, to provide for the addition to the Trust of a
Participation, provided, that (i) the Transferor (and, if applicable, any
Additional Transferor being designated) delivers to the Trustee a certificate of
an authorized officer to the effect that, in the reasonable belief of the
Transferor (and such Additional Transferor as applicable), such amendment will
not as of the date of such amendment adversely affect in any material respect
the interest of such Certificateholders, and (ii) such amendment will not result
in a withdrawal or reduction of the rating of any outstanding Series under the
Trust.
The Agreement and the related Series Supplement may be amended by the
Transferor, the Servicer and the Trustee with the consent of the holders of
Certificates evidencing undivided interests aggregating not less
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than 66 2/3% (or such other percentage specified in the related Prospectus
Supplement) of the Investor Interests for all Series of the Trust, for the
purpose of adding any provisions to, changing in any manner or eliminating any
of the provisions of the Agreement or the related Series Supplement or of
modifying in any manner the rights of Certificateholders of any outstanding
Series of the Trust. No such amendment, however, may (a) reduce in any manner
the amount of, or delay the timing of, distributions required to be made on the
related Series or any Series, (b) change the definition of or the manner of
calculating the interest of any Certificateholder of such Series or any
Certificateholder of any other Series issued by the Trust or (c) reduce the
aforesaid percentage of undivided interests the holders of which are required to
consent to any such amendment, in each case without the consent of all
Certificateholders of the related Series and Certificateholders of all Series
adversely affected. Promptly following the execution of any amendment to the
Agreement, the Trustee will furnish written notice of the substance of such
amendment to each Certificateholder. Any Series Supplement and any amendments
regarding the addition or removal of Receivables or Participations from the
Trust will not be considered an amendment requiring Certificateholder consent
under the provisions of the Agreement and any Series Supplement.
Additionally, the Agreement and any Series Supplement may be amended by the
Servicer and the Trustee at the direction of the Transferor without the consent
of any of the Certificateholders (i) to add, modify or eliminate such provisions
as may be necessary or advisable in order to enable all or a portion of the
Trust to qualify as, and to permit an election to be made to cause all or a
portion of the Trust to be treated as, a "financial asset securitization
investment trust" as described in the provisions of the "Seven Year Balanced
Budget Act of 1995," H.R. 2491, 104th Cong., 1st Sess. (1995), or to enable all
or a portion of the Trust to qualify and an election to be made for similar
treatment under such comparable subsequent federal income tax provisions as may
ultimately be enacted into law, and (ii) in connection with any such election,
to modify or eliminate existing provisions of the Agreement and any Series
Supplement relating to the intended federal income tax treatment of the
Certificates and the Trust in the absence of the election. See "Federal Income
Tax Consequences -- Treatment of the Trust -- Pending Legislation." It is a
condition to any such amendment that each Rating Agency will have notified the
Transferor, the Servicer and the Trustee in writing that the amendment will not
result in a reduction or withdrawal of the rating of any outstanding Series or
Class to which it is a Rating Agency. The amendments which the Transferor may
make in connection with any election described above without the consent of
Certificateholders may include, without limitation, the elimination of any sale
of Receivables and termination of the Trust upon the occurrence of an event of
receivership or insolvency with respect to the Transferor, an Additional
Transferor or other holder of the Transferor Certificate. See "Certain Legal
Aspects of the Receivables -- Certain Matters Relating to Receivership."
Additionally, the Agreement and any Series Supplement may be amended by the
Servicer and the Trustee at the direction of the Transferor without the consent
of any of the Certificateholders (i) to add, modify or eliminate such provisions
as may be necessary or advisable in order to enable (a) the transfer to the
Trust of all or any portion of the Receivables to be derecognized under
generally accepted accounting principals ("GAAP") by the Transferor or (b) the
Trust to avoid becoming a member of any Transferor's consolidated group under
GAAP, and (ii) in connection with any such addition, modification or
elimination, without limiting the generality of the foregoing clause (i), to
cause the Receivables to be transferred by a Transferor first to a bankruptcy
remote Affiliate and from such Affiliate to the Trust; provided, however, that
it is a condition to any such amendment that (i) the Transferor delivers an
officer's certificate to the Trustee to the effect that such amendment meets the
requirements set forth in this paragraph and (ii) such amendment will not result
in a withdrawal or reduction of the rating of any outstanding Series under the
Trust. In addition, the Agreement may be amended as described above under
"-- Pay Out Events."
LIST OF CERTIFICATEHOLDERS
With respect to each Series of Certificates, upon written request of
Certificateholders of record representing undivided interests in the Trust
aggregating not less than 10% (or such other percentage specified in the related
Prospectus Supplement) of the Investor Interest, the Trustee after having been
adequately indemnified by such Certificateholders for its costs and expenses,
and having given the Servicer notice that
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such request has been made, will afford such Certificateholders access during
business hours to the current list of Certificateholders of the Trust for
purposes of communicating with other Certificateholders with respect to their
rights under the Agreement. See "-- Book-Entry Registration" and "-- Definitive
Certificates" above.
THE TRUSTEE
The Prospectus Supplement for each Series will specify the Trustee under
the Agreement. The Transferor, the Servicer and their respective affiliates may
from time to time enter into normal banking and trustee relationships with the
Trustee and its affiliates. The Trustee, the Transferor, the Servicer and any of
their respective affiliates may hold Certificates in their own names. In
addition, for purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee shall have the power to appoint a co-trustee or
separate trustees of all or any part of the Trust. In the event of such
appointment, all rights, powers, duties and obligations conferred or imposed
upon the Trustee by the Agreement shall be conferred or imposed upon the Trustee
and such separate trustee or co-trustee jointly, or, in any jurisdiction in
which the Trustee shall be incompetent or unqualified to perform certain acts,
singly upon such separate trustee or co-trustee who shall exercise and perform
such rights, powers, duties and obligations solely at the direction of the
Trustee.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Transferor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Agreement or if the Trustee becomes insolvent. In such circumstances, the
Transferor will be obligated to appoint a successor Trustee. Any resignation or
removal of the Trustee and appointment of a successor Trustee does not become
effective until acceptance of the appointment by the successor Trustee.
CREDIT ENHANCEMENT AND ENHANCEMENT
GENERAL
For any Series, Credit Enhancement may be provided with respect to one or
more Classes thereof. Credit Enhancement may be in the form of the subordination
of one or more Classes of the Certificates of such Series, a letter of credit,
the establishment of a cash collateral guaranty or account, a collateral
interest, a surety bond, an insurance policy, a spread account, a reserve
account, the use of cross support features or another method of Credit
Enhancement described in the related Prospectus Supplement, or any combination
of the foregoing. If so specified in the related Prospectus Supplement, any form
of Credit Enhancement may be structured so as to be drawn upon by more than one
Class to the extent described therein. The initial form of Credit Enhancement,
with respect to any Series of Certificates, will be determined by the Transferor
prior to the issuance of such Certificates, based principally on the alternative
costs of the various forms of Credit Enhancement prevailing at that time.
Unless otherwise specified in the related Prospectus Supplement for a
Series, the Credit Enhancement will not provide protection against all risks of
loss and will not guarantee repayment of the entire principal balance of the
Certificates and interest thereon. If losses occur which exceed the amount
covered by the Credit Enhancement or which are not covered by the Credit
Enhancement, Certificateholders will bear their allocable share of deficiencies.
If Credit Enhancement is provided with respect to a Series, the related
Prospectus Supplement includes a description of (a) the amount payable under
such Credit Enhancement, (b) any conditions to payment thereunder not otherwise
described herein, (c) the conditions (if any) under which the amount payable
under such Credit Enhancement may be reduced and under which such Credit
Enhancement may be terminated or replaced, (d) any material provision of any
agreement relating to such Credit Enhancement and (e) the allocation (if any) of
Trust assets to the related Credit Enhancement Provider. Additionally, the
related Prospectus Supplement may set forth certain information with respect to
any Credit Enhancement Provider, including (i) a brief description of its
principal business activities, (ii) its principal place of business, place of
incorporation and the jurisdiction under which it is chartered or licensed to do
business, (iii) if applicable, the identity of regulatory agencies which
exercise primary jurisdiction over the conduct of its business and (iv) its
total assets, its stockholders' or policy holders' surplus, if applicable, and
other appropriate financial
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information as of the date specified in the Prospectus Supplement. If so
specified in the related Prospectus Supplement, Credit Enhancement with respect
to a Series may be available to pay principal of the Certificates of such Series
following the occurrence of certain Pay Out Events with respect to such Series.
In such event, the Credit Enhancement Provider will have an interest in certain
cash flows in respect of the Receivables to the extent described in such
Prospectus Supplement (the "Enhancement Invested Amount").
SUBORDINATION
If so specified in the related Prospectus Supplement, one or more Classes
of any Series will be subordinated as described in the related Prospectus
Supplement to the extent necessary to fund payments with respect to the Senior
Certificates. The rights of the holders of any such Subordinated Certificates to
receive distributions of principal and/or interest on any Distribution Date for
such Series will be subordinate in right and priority to the rights of the
holders of Senior Certificates, but only to the extent set forth in the related
Prospectus Supplement. If so specified in the related Prospectus Supplement,
subordination may apply only in the event of certain types of losses not covered
by another Credit Enhancement. The related Prospectus Supplement sets forth any
applicable information concerning the amount of subordination of a Class or
Classes of Subordinated Certificates in a Series, the circumstances in which
such subordination will be applicable, the manner, if any, in which the amount
of subordination will decrease over time, and the conditions under which amounts
available from payments that would otherwise be made to holders of such
Subordinated Certificates will be distributed to holders of Senior Certificates.
If collections of Receivables otherwise distributable to holders of a
Subordinated Class of a Series will be used as support for a Class of another
Series, the related Prospectus Supplement specifies the manner and conditions
for applying such a cross-support feature.
LETTER OF CREDIT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided by one or more letters of
credit. A letter of credit may provide limited protection against certain losses
in addition to or in lieu of other Credit Enhancement. The issuer of the letter
of credit (the "L/C Bank") will be obligated to honor demands with respect to
such letter of credit, to the extent of the amount available thereunder, to
provide funds under the circumstances and subject to such conditions as are
specified in the related Prospectus Supplement.
The maximum liability of an L/C Bank under its letter of credit will
generally be an amount equal to a percentage specified in the related Prospectus
Supplement of the Initial Investor Interest of a Series or a Class of such
Series. The maximum amount available at any time to be paid under a letter of
credit will be determined in the manner specified therein and in the related
Prospectus Supplement.
CASH COLLATERAL GUARANTY OR ACCOUNT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided by a guaranty (the "Cash
Collateral Guaranty") secured by the deposit of cash or certain permitted
investments in an account (the "Cash Collateral Account") reserved for the
beneficiaries of the Cash Collateral Guaranty or by a Cash Collateral Account
alone. The amount available pursuant to the Cash Collateral Guaranty or the Cash
Collateral Account will be the lesser of amounts on deposit in the Cash
Collateral Account and an amount specified in the related Prospectus Supplement.
The related Prospectus Supplement sets forth the circumstances under which
payments are made to beneficiaries of the Cash Collateral Account or the Cash
Collateral Guaranty, as applicable.
COLLATERAL INTEREST
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided initially by an undivided
interest in the Trust (the "Collateral Interest") in an amount initially equal
to a percentage of the Certificates of such Series as specified in the
Prospectus Supplement. Such Series may also have the benefit of a Cash
Collateral Guaranty or Cash Collateral Account with an
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initial amount on deposit therein, if any, as specified in the Prospectus
Supplement which will be increased (i) to the extent the Transferor elects,
subject to certain conditions specified in the related Prospectus Supplement, by
the application of collections of Principal Receivables allocable to the
Collateral Interest to decrease the Collateral Interest, (ii) to the extent
collections of Principal Receivables allocable to the Collateral Interest are
required to be deposited into the Cash Collateral Account as specified in the
related Prospectus Supplement and (iii) to the extent excess collections of
Finance Charge Receivables are required to be deposited into the Cash Collateral
Account as specified in the related Prospectus Supplement. The total amount of
the Credit Enhancement available pursuant to the Collateral Interest and, if
applicable, the Cash Collateral Guaranty or Cash Collateral Account will be the
lesser of the sum of the Collateral Interest and the amount on deposit in the
Cash Collateral Account and an amount specified in the related Prospectus
Supplement. The related Prospectus Supplement sets forth the circumstances under
which payments which otherwise would be made to holders of the Collateral
Interest will be distributed to holders of Certificates and, if applicable, the
circumstances under which payment will be made under the Cash Collateral
Guaranty or from the Cash Collateral Account.
SURETY BOND OR INSURANCE POLICY
If so specified in the related Prospectus Supplement, insurance with
respect to a Series or one or more Classes thereof will be provided by one or
more insurance companies. Such insurance will guarantee, with respect to one or
more Classes of the related Series, distributions of interest or principal in
the manner and amount specified in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, a surety bond will be
purchased for the benefit of the holders of any Series or Class of such Series
to assure distributions of interest or principal with respect to such Series or
Class of Certificates in the manner and amount specified in the related
Prospectus Supplement.
SPREAD ACCOUNT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided by the periodic deposit of
certain available excess cash flow from Trust assets into an account (the
"Spread Account") intended to assist with subsequent distribution of interest
and principal on the Certificates of such Class or Series in the manner
specified in the related Prospectus Supplement.
RESERVE ACCOUNT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof or any Enhancement related thereto will be
provided by the establishment of a reserve account (the "Reserve Account"). The
Reserve Account may be funded, to the extent provided in the related Prospectus
Supplement, by an initial cash deposit, the retention of certain periodic
distributions of principal or interest or both otherwise payable to one or more
Classes of Certificates, including the Subordinated Certificates, or the
provision of a letter of credit, guarantee, insurance policy or other form of
credit or any combination thereof. The Reserve Account will be established to
assist with the subsequent distribution of principal or interest on the
Certificates of such Series or Class thereof or such other amount owing on any
Enhancement thereto in the manner provided in the related Prospectus Supplement.
INTEREST RATE SWAPS AND RELATED CAPS, FLOORS AND COLLARS
The Trustee on behalf of the Trust may enter into interest rate swaps and
related caps, floors and collars or other forms of derivatives to minimize the
risk to Certificateholders from adverse changes in interest rates (collectively,
"Swaps").
An interest rate Swap is an agreement between two parties
("counterparties") to exchange a stream of interest payments on an agreed
hypothetical or "notional" principal amount. No principal amount is exchanged
between the counterparties to an interest rate swap. In the typical Swap, one
party agrees to pay a fixed-rate on a notional principal amount, while the
counterparty pays a floating-rate based on one or more reference interest rates
such as the London Interbank Offered Rate ("LIBOR"), a specified bank's prime
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rate, or U.S. Treasury Bill rates. Interest rate Swaps also permit
counterparties to exchange a floating-rate obligation based upon one reference
interest rate (such as LIBOR) for a floating-rate obligation based upon another
referenced interest rate (such as U.S. Treasury Bill rates).
The Swap market has grown substantially in recent years with a significant
number of banks and financial service firms acting both as principals and as
agents utilizing standardized Swap documentation. Caps, floors and collars are
more recent innovations, and they may be less liquid than other Swaps. There can
be no assurance that the Trust will be able to enter into or offset Swaps at any
specific time or at prices or on other terms that are advantageous. In addition,
although the terms of Swap may provide for termination under certain
circumstances, there can be no assurance that the Trust will be able to
terminate or offset a Swap on favorable terms.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
The Transferor will represent and warrant in the Agreement that the
transfer of Receivables by it to the Trust is either a valid transfer and
assignment to the Trust of all right, title and interest of the Transferor in
and to the related Receivables, except for the interest of the Transferor as
holder of the Transferor Certificate, or the grant to the Trust of a security
interest in such Receivables. The Transferor also will represent and warrant in
the Agreement that in the event the transfer of Receivables by the Transferor to
the Trust is deemed to create a security interest under the Uniform Commercial
Code (the "UCC"), there will exist a valid, subsisting and enforceable first
priority perfected security interest in such Receivables created thereafter in
favor of the Trust on and after their creation, except for certain tax and other
governmental liens. For a discussion of the Trust's rights arising from a breach
of these warranties, see "Description of the Certificates -- Representations and
Warranties."
The Transferor will represent as to Receivables to be conveyed, that the
Receivables are "accounts" or "general intangibles" for purposes of the UCC.
Both the sale of accounts and the transfer of accounts as security for an
obligation are treated under Article 9 of the UCC as creating a security
interest therein and are subject to its provisions, and the filing of
appropriate financing statements is required to perfect the security interest of
the Trust. Financing statements covering the Receivables have been and will be
filed with the appropriate governmental authority to protect the interests of
the Trust in the Receivables. If a transfer of general intangibles is deemed to
be a sale, then the UCC is not applicable and no further action under the UCC is
required to protect the Trust's interest from third parties.
There are certain limited circumstances under the UCC in which a prior or
subsequent transferee of Receivables coming into existence after a Closing Date
could have an interest in such Receivables with priority over the Trust's
interest. Under the Agreement, however, the Transferor will represent and
warrant that it transferred the Receivables to the Trust free and clear of the
lien of any third party. In addition, the Transferor will covenant that it will
not sell, pledge, assign, transfer or grant any lien on any Receivable (or any
interest therein) other than to the Trust. A tax or government lien or other
nonconsensual lien on property of the Transferor arising prior to the time a
Receivable comes into existence may also have priority over the interest of the
Trust in such Receivable. In addition, if the FDIC were appointed as receiver of
the Transferor, certain administrative expenses of the receiver may also have
priority over the interest of the Trust in such Receivable.
CERTAIN MATTERS RELATING TO RECEIVERSHIP
The Transferor is chartered as a national banking association and is
subject to regulation and supervision by the Office of the Comptroller of the
Currency, which is authorized to appoint the FDIC as conservator or receiver of
the Transferor upon the occurrence of certain events relating to the
Transferor's financial condition.
The FDIA, as amended by FIRREA, sets forth certain powers that the FDIC in
its capacity as conservator or receiver for the Transferor could exercise.
Positions taken by the FDIC prior to the passage of
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FIRREA do not suggest that the FDIC, if appointed as conservator or receiver for
the Transferor, would interfere with the timely transfer to the Trust of
payments collected on the Receivables or interfere with the timely liquidation
of related Receivables, as described below. To the extent that the Transferor
has granted a security interest in related Receivables to the Trust, and that
interest was validly perfected before the Transferor's insolvency and was not
taken in contemplation of the insolvency of the Transferor, or with the intent
to hinder, delay or defraud the Transferor or the creditors of the Transferor,
based upon opinions issued by the general counsel of the FDIC and policy
statements of the FDIC, such security interest should not be subject to
avoidance, and payments to the Trust with respect to the Receivables should not
be subject to recovery, by the FDIC. However, such opinions and policy
statements are not binding on the FDIC and if the FDIC were to assert a contrary
position, certain provisions of the FDIA which, at the request of the FDIC, have
been applied in recent lawsuits to avoid security interests in collateral
granted by depository institutions, would permit the FDIC to avoid such security
interest, thereby resulting in possible delays and reductions in payments to the
Certificateholders of all outstanding Series. In addition, the FDIA could be
interpreted to require compliance with certain claims procedures if a receiver
or conservator were appointed for the Transferor before the Trustee could
collect, sell, dispose of or otherwise liquidate the Receivables, which could
delay or possibly reduce payments on the Certificates of all outstanding Series.
If a conservator or receiver were appointed for the Transferor or other
holder of the Transferor Certificate or a bankruptcy or insolvency event were to
occur with respect to the Transferor or other holder of the Transferor
Certificate, then the Transferor will promptly give notice thereof to the
Trustee and a Pay Out Event will occur with respect to all Series then
outstanding under the Trust. Pursuant to the Agreement, newly created Principal
Receivables will not be transferred to the Trust on and after any such
appointment or insolvency event, unless otherwise required by the FDIC as
receiver or conservator. In addition, the Trustee will proceed to sell, dispose
of or otherwise liquidate the Receivables in a commercially reasonable manner
and on commercially reasonable terms, unless otherwise instructed within a
specified period by holders of Certificates representing undivided interests
aggregating not less than 50% of the Investor Interest of each Series (or if any
Series has more than one Class, of each Class) and the Transferor and each
holder of an interest in the Transferor Interest not subject to the appointment
or insolvency event, and any other person designated by the Transferor in an
officer's certificate delivered to the Trustee prior to the appointment or
insolvency event or specified in the related Series Supplement, which may
include any provider of Enhancement, or unless otherwise required by the FDIC as
receiver or conservator. Under the Agreement, the proceeds from the sale of the
Receivables would be treated as collections of the Receivables and the Investor
Percentage of such proceeds would be distributed to the Certificateholders or,
if so specified in the related Prospectus Supplement, collected and held for the
benefit of Certificateholders. This procedure could be delayed, as described
above. If the only Pay Out Event to occur is either the appointment of a
conservator or receiver for, or the insolvency of, the Transferor or other
holder of the Transferor Certificate, or a bankruptcy or insolvency event with
respect to the Transferor or other holder of the Transferor Certificate, the
conservator, receiver or bankruptcy trustee (including another holder of the
Transferor Certificate as debtor-in-possession) for the Transferor or other
holder of the Transferor Certificate may have the power to prevent the early
sale, liquidation or disposition of the Receivables and the commencement of a
Rapid Amortization Period or, if applicable with respect to a Series as
specified in the related Prospectus Supplement, a Rapid Accumulation Period. In
addition, a conservator, receiver or bankruptcy trustee (including another
holder of the Transferor Certificate as debtor-in-possession) for the Transferor
or other holder of the Transferor Certificate may have the power to cause the
early sale of the Receivables and the early retirement of the Certificates or to
prohibit the continued transfer of Principal Receivables to the Trust. See
"Description of the Certificates -- Pay Out Events." In addition, in the event
of a Servicer Default relating to the conservatorship, receivership, or
insolvency of the Servicer, if no Servicer Default other than such
conservatorship, receivership, or insolvency exists, the conservator or receiver
for the Servicer may have the power to prevent either the Trustee or the
Certificateholders from appointing a successor Servicer under the Agreement.
CONSUMER PROTECTION LAWS
The relationships of the cardholder and credit card issuer and the lender
are extensively regulated by federal and state consumer protection laws. With
respect to credit cards issued by the Transferor, the most
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significant laws include the federal Truth-in-Lending, Equal Credit Opportunity,
Fair Credit Reporting, Fair Debt Collection Practice and Electronic Funds
Transfer Acts. These statutes impose disclosure requirements when a credit card
account is advertised, when it is opened, at the end of monthly billing cycles,
and at year end. In addition, these statutes limit customer liability for
unauthorized use, prohibit certain discriminatory practices in extending credit,
and impose certain limitations on the type of account-related charges that may
be assessed. Cardholders are entitled under these laws to have payments and
credits applied to the credit card accounts promptly, to receive prescribed
notices and to require billing errors to be resolved promptly. The Trust may be
liable for certain violations of consumer protection laws that apply to the
related Receivables, either as assignee from the Transferor with respect to
obligations arising before transfer of the Receivables to the Trust or as a
party directly responsible for obligations arising after the transfer. In
addition, a cardholder may be entitled to assert such violations by way of
set-off against his obligation to pay the amount of Receivables owing. The
Transferor will warrant in the Agreement that all related Receivables have been
and will be created in compliance with the requirements of such laws. The
Servicer will also agree in the Agreement to indemnify the Trust, among other
things, for any liability arising from such violations caused by the Servicer.
For a discussion of the Trust's rights arising from the breach of these
warranties, see "Description of the Certificates -- Representations and
Warranties."
Certain jurisdictions may attempt to require out-of-state credit card
issuers to comply with such jurisdiction's consumer protection laws (including
laws limiting the charges imposed by such credit card issuers) in connection
with their operations in such jurisdictions. A successful challenge by such a
jurisdiction could have an adverse impact on the Transferor's credit card
operations or the yield on the Receivables in the Trust.
Application of federal and state bankruptcy and debtor relief laws would
affect the interests of the Certificateholders if such laws result in any
related Receivables being written off as uncollectible when the amount available
under any Credit Enhancement is equal to zero. See "Description of the
Certificates -- Defaulted Receivables; Rebates and Fraudulent Charges; Investor
Charge-Offs."
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a general discussion of material federal income tax
consequences relating to the purchase, ownership and disposition of a
Certificate, which is based on the opinion of Orrick, Herrington & Sutcliffe,
counsel to the Transferor ("Special Counsel"). This discussion represents the
opinion of Orrick, Herrington & Sutcliffe, counsel to the Transferor, subject to
the qualifications set forth herein. Orrick, Herrington & Sutcliffe has prepared
and reviewed the statements in this Prospectus under the heading "Federal Income
Tax Consequences," and is of the opinion that such statements are correct in all
material respects. Additional federal income tax considerations relevant to a
particular Series may be set forth in the related Prospectus Supplement. This
discussion is based on current law, which is subject to changes that could
prospectively or retroactively modify or adversely affect the tax consequences
summarized below. The discussion does not address all of the tax consequences
relevant to a particular Certificate Owner in light of that Certificate Owner's
circumstances, and some Certificate Owners may be subject to special tax rules
and limitations not discussed below. Each prospective Certificate Owner is urged
to consult its own tax adviser in determining the federal, state, local and
foreign income and any other tax consequences of the purchase, ownership and
disposition of a Certificate.
For purposes of this discussion, "U.S. Person" means a citizen or resident
of the United States, a corporation or partnership organized in or under the
laws of the United States, any state thereof, or any political subdivision of
either (including the District of Columbia), or an estate or trust the income of
which is includible in gross income for U.S. federal income tax purposes
regardless of its source. The term "U.S. Certificate Owner" means any U.S.
Person and any other person to the extent that income attributable to its
interest in a Certificate is effectively connected with that person's conduct of
a U.S. trade or business. The term "non-U.S. Certificate Owner" means any person
other than a U.S. Certificate Owner.
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The discussion assumes that a Certificate is issued in registered form, has
all payments denominated in U.S. dollars and has a term that exceeds one year.
Moreover, the discussion assumes that the interest formula for the Certificate
meets the requirements for "qualified stated interest" under Treasury
regulations (the "OID regulations") relating to original issue discount ("OID"),
and that any OID on the Certificate (i.e., any excess of the principal amount of
the Certificate over its issue price) does not exceed a de minimis amount (i.e.,
0.25 percent of its principal amount multiplied by the number of full years
until its maturity date), all within the meaning of the OID regulations.
Moreover, the discussion assumes that the Certificates are of a type, as set
forth below, which counsel is of the opinion will be debt for federal income tax
purposes. The applicable Prospectus Supplement will set forth a discussion of
any additional material tax consequences with respect to Certificates not
conforming to the foregoing assumptions.
TREATMENT OF THE CERTIFICATES AS DEBT
The Transferor will express in the Agreement the intent that for federal,
state and local income and franchise tax purposes, the Certificates will be debt
secured by the Receivables. The Transferor, by entering into the Agreement, and
each investor, by the acceptance of a beneficial interest in a Certificate, will
agree to treat the Certificates as debt for federal, state and local income and
franchise tax purposes. However, the Agreement is generally ambiguous in
characterizing the transfer of Receivables, and because different criteria are
used in determining the non-tax accounting treatment of the transaction, the
Transferor will treat the Agreement for certain non-tax accounting purposes as
causing a transfer of an ownership interest in the Receivables and not as
creating a debt obligation.
A basic premise of federal income tax law is that the economic substance of
a transaction generally determines its tax consequences. The form and non-tax
characterization of a transaction, while relevant factors, are not conclusive
evidence of its economic substance. In appropriate circumstances, the courts
have allowed taxpayers as well as the Internal Revenue Service (the "IRS") to
treat a transaction in accordance with its economic substance as determined
under federal income tax law, even though the participants in the transaction
have characterized it differently for non-tax purposes.
The determination of whether the economic substance of a transfer of an
interest in property is instead a loan secured by the transferred property has
been made by the IRS and the courts on the basis of numerous factors designed to
determine whether the transferor has relinquished (and the transferee has
obtained) substantial incidents of ownership in the property. Among those
factors, the primary ones examined are whether the transferee has the
opportunity to gain if the property increases in value, and has the risk of loss
if the property decreases in value. Based on its analysis of such factors,
Special Counsel is of the opinion that, under current law, although no
transaction closely comparable to that contemplated herein has been the subject
of any Treasury regulation, revenue ruling or judicial decision, for federal
income tax purposes the Certificates will not constitute an ownership interest
in the Receivables but will properly be characterized as debt.
TREATMENT OF THE TRUST
General. The Agreement will permit the issuance of Certificates and certain
other interests (including any Collateral Interest) in the Trust, each of which
may be treated for federal income tax purposes either as debt or as equity
interests in the Trust. If all of the Certificates and other interests (other
than the Transferor Certificate) in the Trust were characterized as debt, the
Trust might be characterized as a security arrangement for debt collateralized
by the Receivables and issued directly by the Transferor (or other holder of the
Transferor Certificate). Under such a view, the Trust would be disregarded for
federal income tax purposes. Alternatively, if some of the Transferor
Certificate, the Certificates and other interests in the Trust were
characterized as equity therein, the Trust might be characterized as a separate
entity owning the Receivables, issuing its own debt, and jointly owned by the
Transferor (or other holder of the Transferor Certificate) and any other holders
of equity interests in the Trust. However, Special Counsel is of the opinion
that, under current law, any such entity constituted by the Trust will not be an
association or publicly traded partnership taxable as a corporation.
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Possible Treatment of the Trust as a Partnership, a Publicly Traded
Partnership or an Association. Although, as described above, Special Counsel is
of the opinion that the Certificates will properly be treated as debt for
federal income tax purposes and that the Trust will not be treated as an
association or publicly traded partnership taxable as a corporation, such
opinion will not bind the IRS and thus no assurance can be given that such
treatment will prevail. If the IRS were to contend successfully that some or all
of the Transferor Certificate, the Certificates or any other interest in the
Trust, including any Collateral Interest, were equity in the Trust for federal
income tax purposes, all or a portion of the Trust could be classified as a
partnership or an association taxable as a corporation for such purposes.
Because Special Counsel is of the opinion that the Certificates will be
characterized as debt for federal income tax purposes and because any holder of
an interest in a Collateral Interest will agree to treat that interest as debt
for such purposes, no attempt will be made to comply with any tax reporting
requirements that would apply as a result of such alternative characterizations.
If the Trust were treated in whole or in part as a partnership in which
some or all of the holders of interests in the publicly offered Certificates
were partners, that partnership would be classified as a publicly traded
partnership, and so could be taxable as a corporation. Further, regulations
published by the Treasury Department on December 4, 1995 (the "Regulations")
could cause the Trust to constitute a publicly traded partnership even if all
holders of interests in the publicly offered Certificates are treated as holding
debt. The Regulations generally apply to taxable years beginning after December
31, 1995. If the Trust were classified as a publicly traded partnership, whether
by reason of the treatment of publicly offered Certificates as equity or by
reason of the Regulations, it would avoid taxation as a corporation if its
income was not derived in the conduct of a "financial business"; however,
whether the income of the Trust would be so classified is unclear and Special
Counsel is unable to opine as to whether the Trust would be so classified.
Under the Code and the Regulations, a partnership will be classified as a
publicly traded partnership if equity interests therein are traded on an
"established securities market," or are "readily tradable" on a "secondary
market" or its "substantial equivalent." The Transferor intends to take measures
designed to reduce the risk that the Trust could be classified as a publicly
traded partnership by reason of interests in the Trust other than the publicly
offered Certificates. Although the Transferor expects such measures will
ultimately be successful, certain of the actions that may be necessary for
avoiding the treatment of such interests as "readily tradable" on a "secondary
market" or its "substantial equivalent" are not fully within the control of the
Transferor. As a result, there can be no assurance that the measures the
Transferor intends to take will in all circumstances be sufficient to prevent
the Trust from being classified as a publicly traded partnership under the
Regulations.
If the Trust treated as a partnership nevertheless were not treated as a
publicly traded partnership, that partnership would not be subject to federal
income tax. Rather, each item of income, gain, loss and deduction of the
partnership generated through the ownership of the related Receivables would be
taken into account directly in computing taxable income of the Transferor (or
the holder of the Transferor Certificate) and any Certificate Owners treated as
partners in accordance with their respective partnership interests therein. The
amounts and timing of income reportable by any Certificate Owners treated as
partners would likely differ from that reportable by such Certificate Owners had
they been treated as owning debt. In addition, if the Trust were treated in
whole or in part as a partnership other than a publicly traded partnership,
income derived from the partnership by any Certificate Owner that is a pension
fund or other tax-exempt entity may be treated as unrelated business taxable
income. Partnership characterization also may have adverse state and local
income or franchise tax consequences for a Certificate Owner. From time to time,
legislation has been introduced in Congress that would affect the treatment of
any "large partnership," defined as any partnership in which there are at least
250 partners in a taxable year. Under such legislative proposals, among other
things, the availability of certain deductions to partners may be limited, and
certain computations (such as those relating to the level of allowable
miscellaneous itemized deductions and the netting of capital gains and losses)
would be made at the partnership rather than the partner level. No prediction
can be made regarding whether any such legislation will be enacted or, if so,
what its ultimate effective date will be.
If the arrangement created by the Agreement were treated in whole or in
part as a publicly traded partnership or an association taxable as a
corporation, that entity would be subject to federal income tax at corporate tax
rates on its taxable income generated by ownership of the related Receivables.
That tax could
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result in reduced distributions to Certificate Owners. No distributions from the
Trust would be deductible in computing the taxable income of the corporation,
except to the extent that any Certificates were treated as debt of the
corporation and distributions to the related Certificate Owners were treated as
payments of interest thereon. In addition, distributions to Certificate Owners
not treated as holding debt would be dividend income to the extent of the
current and accumulated earnings and profits of the corporation (and Certificate
Owners may not be entitled to any dividends received deduction in respect of
such income).
Pending Legislation. The United States Congress recently passed the "Seven
Year Balanced Budget Act of 1995," H.R. 2491 (the "Bill"). Although the Bill was
vetoed by President Clinton, it would have created a new type of entity for
federal income tax purposes called a "financial asset securitization investment
trust" or "FASIT," and future legislation may include provisions similar to the
FASIT provisions of the Bill. If those provisions are reintroduced and enacted
in the form contained in the Bill, they generally will enable certain
arrangements similar to the Trust to elect to be treated as a FASIT. Under the
FASIT provisions of the Bill, a FASIT generally would avoid federal income
taxation and could issue securities substantially similar to the Certificates,
and those securities would be treated as debt for federal income tax purposes.
Upon satisfying certain conditions set forth in the Agreement, the Transferor
will be permitted to amend the Agreement and any Series Supplement in order to
enable all or a portion of the Trust to qualify as a FASIT and to permit a FASIT
election to be made with respect thereto, and to make such modifications to the
Agreement and any Supplement as may be permitted by reason of the making of such
an election. See "Description of the Certificates -- Amendments." However, there
can be no assurance that FASIT provisions of the Bill will be reintroduced and
enacted, that they will be enacted in their present form, or that they will
permit an election to be made with respect to all or any portion of the Trust.
There also can be no assurance that the Transferor will or will not cause any
permissible FASIT election to be made with respect to the Trust or amend the
Agreement or any Series Supplement in connection with any election. However, if
such an election is made, it may cause a holder to recognize gain (but not loss)
with respect to its Certificate, even though Special Counsel is of the opinion
that a Certificate will be treated as debt for federal income tax purposes
without regard to the election and the Certificate would be treated as debt
following the election. Additionally, any such election and any related
amendments to the Agreement and any Series Supplement may have other tax and
non-tax consequences to Certificateholders. Accordingly, prospective
Certificateholders should consult their tax advisors with regard to the effects
of any such election and any permitted related amendments on them in their
particular circumstances.
TAXATION OF INTEREST INCOME OF U.S. CERTIFICATE OWNERS
General. Assuming, in accordance with Special Counsel's opinion, that the
Certificates are debt obligations for federal income tax purposes, stated
interest on a beneficial interest in a Certificate will be includible in gross
income in accordance with a U.S. Certificate Owner's method of accounting.
Original Issue Discount. If the Certificates are issued with original issue
discount ("OID"), the provisions of sections 1271 through 1273 and 1275 of the
Internal Revenue Code of 1986 (the "Code") will apply to the Certificates. Under
those provisions, a U.S. Certificate Owner (including a cash basis holder)
generally would be required to accrue the OID on its interest in a Certificate
in income for federal income tax purposes on a constant yield basis, resulting
in the inclusion of OID in income somewhat in advance of the receipt of cash
attributable to that income. In general, a Certificate will be treated as having
OID to the extent that its "stated redemption price" exceeds its "issue price,"
if such excess is more than 0.25 percent multiplied by the weighted average life
of the Certificate (determined by taking into account only the number of
complete years following issuance until payment is made for any partial
principal payments). Under section 1272(a)(6) of the Code, special provisions
apply to debt instruments on which payments may be accelerated due to
prepayments of other obligations securing those debt instruments. However, no
regulations have been issued interpreting those provisions, and the manner in
which those provisions would apply to the Certificates is unclear. Additionally,
because the failure to pay interest currently on a Certificate is not a default
and may not be considered to give rise to any penalty or remedy to compel
payment, the IRS could take the position based on Treasury Regulations that all
of the interest payable on a Certificate should be included in its stated
redemption price at maturity. Accordingly, Special Counsel is unable to opine as
to whether interest payable on a Certificate constitutes "qualified stated
interest" exempt from such inclusion. If
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sustained, such treatment should not significantly affect tax liabilities for
most Certificate Owners, but prospective U.S. Certificate Owners should consult
their own tax advisors concerning the impact to them in their particular
circumstances. The Transferor intends to take the position that interest on the
Certificates constitutes "qualified stated interest" and that the above
consequences do not apply.
Market Discount. A U.S. Certificate Owner who purchases an interest in a
Certificate at a discount that exceeds any unamortized OID may be subject to the
"market discount" rules of sections 1276 through 1278 of the Code. These rules
provide, in part, that gain on the sale or other disposition of a Certificate
and partial principal payments on a Certificate are treated as ordinary income
to the extent of accrued market discount. The market discount rules also provide
for deferral of interest deductions with respect to debt incurred to purchase or
carry a Certificate that has market discount.
Market Premium. A U.S. Certificate Owner who purchases an interest in a
Certificate at a premium may elect to offset the premium against interest income
over the remaining term of the Certificate in accordance with the provisions of
section 171 of the Code.
SALE OR EXCHANGE OF CERTIFICATES
Upon a disposition of an interest in a Certificate, a U.S. Certificate
Owner generally will recognize gain or loss equal to the difference between the
amount realized on the disposition and the U.S. Certificate Owner's adjusted
basis in its interest in the Certificate. A taxable exchange of a Certificate
also could occur as a result of the Transferor's substitution of money or
investments for Receivables; see "Description of the
Certificates -- Defeasance." The adjusted basis in the interest in the
Certificate will equal its cost, increased by any OID or market discount
included in income with respect to the interest in the Certificate prior to its
disposition and reduced by any principal payments previously received with
respect to the interest in the Certificate and any amortized premium. Subject to
the market discount rules, gain or loss will generally be capital gain or loss
if the interest in the Certificate was held as a capital asset. Capital losses
generally may be used by a corporate taxpayer only to offset capital gains and
by an individual taxpayer only to the extent of capital gains plus $3,000 of
other income.
NON-U.S. CERTIFICATE OWNERS
In general, a non-U.S. Certificate Owner will not be subject to U.S.
federal income tax on interest (including OID) on a beneficial interest in a
Certificate unless (i) the non-U.S. Certificate Owner actually or constructively
owns 10 percent or more of the total combined voting power of all classes of
stock of the Transferor entitled to vote (or of a profits or capital interest of
the Trust characterized as a partnership), (ii) the non-U.S. Certificate Owner
is a controlled foreign corporation that is related to the Transferor (or the
Trust treated as a partnership) through stock ownership, (iii) the non-U.S.
Certificate Owner is a bank described in Code Section 881(c)(3)(A), (iv) such
interest is contingent interest described in Code Section 871(h)(4), or (v) the
non-U.S. Certificate Owner bears certain relationships to any holder of either
the Transferor Certificate other than the Transferor or any other interest in
the Trust not properly characterized as debt. To qualify for the exemption from
taxation, the last U.S. Person in the chain of payment prior to payment to a
non-U.S. Certificate Owner (the "Withholding Agent") must have received (in the
year in which a payment of interest or principal occurs or in either of the two
preceding years) a statement that (i) is signed by the non-U.S. Certificate
Owner under penalties of perjury, (ii) certifies that the non-U.S. Certificate
Owner is not a U.S. Person and (iii) provides the name and address of the
non-U.S. Certificate Owner. The statement may be made on a Form W-8 or
substantially similar substitute form, and the non-U.S. Certificate Owner must
inform the Withholding Agent of any change in the information on the statement
within 30 days of the change. If a Certificate is held through a securities
clearing organization or certain other financial institutions, the organization
or institution may provide a signed statement to the Withholding Agent. However,
in that case, the signed statement must be accompanied by a Form W-8 or
substitute form provided by the non-U.S. Certificate Owner to the organization
or institution holding the Certificate on behalf of the non-U.S. Certificate
Owner. The U.S. Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
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Generally, any gain or income realized by a non-U.S. Certificate Owner upon
retirement or disposition of an interest in a Certificate will not be subject to
U.S. federal income tax, provided that (i) in the case of a Certificate Owner
that is an individual, such Certificate Owner is not present in the United
States for 183 days or more during the taxable year in which such retirement or
disposition occurs and (ii) in the case of gain representing accrued interest,
the conditions described in the preceding paragraph for exemption from
withholding are satisfied. Certain exceptions may be applicable, and an
individual non-U.S. Certificate Owner should consult a tax adviser.
If the Certificates were treated as an interest in a partnership, the
recharacterization could cause a non-U.S. Certificate Owner to be treated as
engaged in a trade or business in the United States. In that event, the non-U.S.
Certificate Owner would be required to file a federal income tax return and, in
general, would be subject to U.S. federal income tax (including the branch
profits tax) on its net income from the partnership. Further, certain
withholding obligations apply with respect to income allocable or distributions
made to a foreign partner. That withholding may be at a rate as high as 39.6
percent. If some or all of the Certificates were treated as stock in a
corporation, any related dividend distributions to a non-U.S. Certificate Owner
generally would be subject to withholding of tax at the rate of 30 percent,
unless that rate were reduced by an applicable tax treaty.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Backup withholding of U.S. federal income tax at a rate of 31 percent may
apply to payments made in respect of a Certificate to a registered owner who is
not an "exempt recipient" and who fails to provide certain identifying
information (such as the registered owner's taxpayer identification number) in
the manner required. Generally, individuals are not exempt recipients whereas
corporations and certain other entities are exempt recipients. Payments made in
respect of a U.S. Certificate Owner must be reported to the IRS, unless the U.S.
Certificate Owner is an exempt recipient or otherwise establishes an exemption.
Compliance with the identification procedures (described in the preceding
section) would establish an exemption from backup withholding for a non-U.S.
Certificate Owner who is not an exempt recipient.
In addition, upon the sale of a Certificate to (or through) a "broker," the
broker must withhold 31 percent of the entire purchase price, unless either (i)
the broker determines that the seller is a corporation or other exempt recipient
or (ii) the seller provides certain identifying information in the required
manner, and in the case of a non-U.S. Certificate Owner certifies that the
seller is a non-U.S. Certificate Owner (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS, unless either (i)
the broker determines that the seller is an exempt recipient or (ii) the seller
certifies its non-U.S. status (and certain other conditions are met).
Certification of the registered owner's non-U.S. status normally would be made
on Form W-8 under penalties of perjury, although in certain cases under proposed
Treasury regulations it may be possible to submit other documentary evidence. As
defined by Treasury regulations, the term "broker" includes all persons who
stand ready to effect sales made by others in the ordinary course of a trade or
business, as well as brokers and dealers registered as such under the laws of
the United States or a state. These requirements generally will apply to a U.S.
office of a broker, and the information reporting requirements generally will
apply to a foreign office of a U.S. broker as well as to a foreign office of a
foreign broker (i) that is a controlled foreign corporation within the meaning
of section 957(a) of the Code or (ii) 50 percent or more of whose gross income
from all sources for the three year period ending with the close of its taxable
year preceding the payment (or for such part of the period that the foreign
broker has been in existence) was effectively connected with the conduct of a
trade or business within the United States.
Any amounts withheld under the backup withholding rules from a payment to a
Certificate Owner would be allowed as a refund or a credit against such
Certificate Owner's U.S. federal income tax, provided that the required
information is furnished to the IRS.
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STATE AND LOCAL TAXATION
The discussion above does not address the taxation of the Trust or the tax
consequences of the purchase, ownership or disposition of an interest in the
Certificates under any state or local tax law. Each investor should consult its
own tax adviser regarding state and local tax consequences.
ERISA CONSIDERATIONS
Section 406 of ERISA and section 4975 of the Code prohibit certain pension,
profit sharing or other employee benefit plans, individual retirement accounts
or annuities and employee annuity plans and Keogh plans (collectively, "Plans")
from engaging in certain transactions involving "plan assets" with persons that
are "parties in interest" under ERISA or "disqualified persons" under the Code
with respect to the Plan. A violation of these "prohibited transaction" rules
may generate excise tax and other liabilities under ERISA and section 4975 of
the Code for such persons, unless a statutory, regulatory or administrative
exemption is available. Plans that are governmental plans (as defined in section
3(32) of ERISA) and certain church plans (as defined in section 3(33) of ERISA)
are not subject to ERISA requirements.
Subject to the considerations described below and except to the extent
otherwise specified in the related Prospectus Supplement, the Transferor
anticipates that each Class of Certificates will be eligible for purchase by
Plan investors.
A violation of the prohibited transaction rules could occur if any Series
of Certificates were to be purchased with assets of any Plan if the Transferor,
the Trustee, any underwriters of such Series or any of their affiliates were a
"party in interest" or a "disqualified person," with respect to such Plan,
unless a statutory, regulatory or administrative exemption is available or an
exception applies under a regulation (the "Plan Asset Regulation") issued by the
Department of Labor (the "DoL"). The Transferor, the Trustee, any underwriters
of a Series and their affiliates are likely to be "parties in interest" and
"disqualified persons" with respect to many Plans. Before purchasing
Certificates, a Plan fiduciary or other Plan investor should consider whether a
prohibited transaction might arise by reason of the relationship between the
Plan and the Transferor, the Trustee, any underwriters of such Series or any of
their affiliates and consult their counsel regarding the purchase in light of
the considerations described below. The DoL has issued four class exemptions
that may apply to otherwise prohibited transactions arising from the purchase or
holding of the Certificates: DoL Prohibited Transaction Exemptions 91-38 (Class
Exemption for Certain Transactions Involving Bank Collective Investment Funds),
90-1 (Class Exemption for Certain Transactions Involving Insurance Company
Pooled Separate Accounts), 95-60 (Class Exemption for Certain Transactions
involving Insurance General Accounts) and 84-14 (Class Exemption for Plan Asset
Transactions Determined by Independent Qualified Professional Asset Managers).
Under certain circumstances, the Plan Asset Regulation treats the assets of
an entity in which a Plan holds an equity interest as "plan assets" of such
Plan. Because the Certificates will represent beneficial interests in the Trust,
and despite the agreement of the Transferor and the Certificate Owners to treat
each Series of Certificates as debt instruments, the Certificates are likely to
be considered equity interests in the Trust for purposes of the Plan Asset
Regulation, with the result that the assets of the Trust are likely to be
treated as "plan assets" of the investing Plans for purposes of ERISA and
section 4975 of the Code, unless either of the following exceptions applies.
The first exception applies to a "publicly-offered security." A
publicly-offered security is a security that is (a) freely transferable, (b)
part of a class of securities that is owned, immediately subsequent to the
initial offering, by 100 or more investors who were independent of the issuer
and of one another ("Independent Investors") and (c) either is (i) part of a
class of securities registered under section 12(b) or 12(g) of the Exchange Act,
or (ii) sold to the plan as part of an offering of securities to the public
pursuant to an effective registration statement under the Securities Act and the
class of securities of which such security is a part is registered under the
Exchange Act within 120 days (or such later time as may be allowed by the
Commission) after the end of the fiscal year of the issuer during which the
offering of such securities to the public occurred. For purposes of the 100
Independent Investor criterion, except to the extent otherwise disclosed in the
related
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Prospectus Supplement, each Class of Certificates should be deemed to be a
"class" of securities that would be tested separately from any other securities
that may be issued by the Trust. The related Prospectus Supplement will indicate
whether it is anticipated that each Class of Certificates will meet the
foregoing criteria for treatment as "public-offered securities." No restrictions
will be imposed on the transfer of the Certificates. Except to the extent
otherwise disclosed in the related Prospectus Supplement, the Transferor expects
that each Class of Certificates will be held by at least 100 Independent
Investors at the conclusion of the initial public offering although no assurance
can be given, and no monitoring or other measures will be taken to ensure, that
such condition is met. Each Class of Certificates will be sold as part of an
offering pursuant to an effective registration statement under the Act and then
will be timely registered under the Exchange Act.
The second exception applies if equity participation in the entity by
"benefit plan investors" (i.e., Plans and other employee benefit plans not
subject to ERISA, such as governmental or foreign plans, as well as entities
holding assets deemed to be "plan assets") is not "significant." Benefit plan
investors' equity participation in the Trust is not significant on any date on
which any Series of Certificates is issued and outstanding if, immediately after
the most recent acquisition of any equity interest in the Trust, less than 25%
of the value of each class of equity interests in the Trust (excluding interests
held by the Transferor, the Trustee or their affiliates) is held by benefit plan
investors. No assurance can be given by the Transferor as to whether the value
of each class of equity interests in the Trust held by benefit plan investors
will be "significant" upon completion of the offering of any Series of
Certificates or thereafter, and no monitoring or other measures will be taken
with respect to the satisfaction of the conditions to this exception.
If neither of the foregoing exceptions under the Plan Asset Regulation were
satisfied with respect to the Trust and the Trust were considered to hold "plan
assets," transactions involving the Trust and "parties in interest" or
"disqualified persons" with respect to a Plan that is a Certificate Owner might
be prohibited under section 406 of ERISA and/or section 4975 of the Code and
result in excise tax and other liabilities under ERISA and section 4975 of the
Code unless an exemption were available. The three DoL class exemptions
mentioned above may not provide relief for all transactions involving the assets
of the Trust even if they would otherwise apply to the purchase of a Certificate
by a Plan.
The Certificates of any Series may not be purchased with the assets of a
Plan if the Transferor, the Servicer, the Trustee or any of their affiliates (a)
has investment or administrative discretion with respect to such Plan assets;
(b) has authority or responsibility to give, or regularly gives, investment
advice with respect to such Plan assets, for a fee and pursuant to an agreement
or understanding that such advice (i) will serve as a primary basis for
investment decisions with respect to such Plan assets, and (ii) will be based on
the particular investment needs of such Plan; or (c) is an employer maintaining
or contributing to such Plan.
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the Certificates on behalf or with "plan assets" of any Plan should
consult their own counsel regarding whether the Trust assets represented by the
Certificates would be considered "plan assets," the consequences that would
apply if the Trust's assets were considered "plan assets," and the possibility
of exemptive relief from the prohibited transaction rules. Finally, Plan
fiduciaries and other Plan investors should consider the fiduciary standards
under ERISA or other applicable law in the context of the Plan's particular
circumstances before authorizing an investment of a portion of the Plan's assets
in the Certificates. Accordingly, among other factors, Plan fiduciaries and
other Plan investors should consider whether the investment (i) satisfies the
diversification requirement of ERISA or other applicable law, (ii) is in
accordance with the Plan's governing instruments, and (iii) is prudent in light
of the "Risk Factors" and other factors discussed herein and in the related
Prospectus Supplement.
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in an underwriting agreement
(an "Underwriting Agreement") to be entered into with respect to each Series of
Certificates, the Transferor will agree to sell or cause the Trust to sell to
each of the underwriters named therein and in the related Prospectus Supplement,
and each of such underwriters will severally agree to purchase from the
Transferor or Trust, as applicable, the
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principal amount of Certificates set forth therein and in the related Prospectus
Supplement (subject to proportional adjustment on the terms and conditions set
forth in the related Underwriting Agreement in the event of an increase or
decrease in the aggregate amount of Certificates offered hereby and by the
related Prospectus Supplement). BA Securities, Inc., an affiliate of the
Transferor, the Servicer and the Corporation, may participate as an underwriter
in the offering of the Certificates.
In each Underwriting Agreement, the several underwriters will agree,
subject to the terms and conditions set forth therein, to purchase all the
Certificates offered hereby and by the related Prospectus Supplement if any of
such Certificates are purchased. In the event of a default by any underwriter,
each Underwriting Agreement will provide that, in certain circumstances,
purchase commitments of the nondefaulting underwriters may be increased or the
Underwriting Agreement may be terminated.
Each Prospectus Supplement will set forth the price at which each Series of
Certificates or Class being offered thereby initially will be offered to the
public and any concessions that may be offered to certain dealers participating
in the offering of such Certificates. After the initial public offering, the
public offering price and such concessions may be changed.
This Prospectus and the related Prospectus Supplement may be used by BA
Securities, Inc., an affiliate of the Transferor and Servicer, in connection
with offers and sales related to market-making transactions in the Certificates.
BA Securities, Inc. may act as principal or agent in such transactions. Such
prices will be made at prices related to prevailing market prices at the time of
sale or otherwise.
Each Underwriting Agreement will provide that the Transferor will indemnify
the related underwriters against liabilities relating to the adequacy of
disclosure to investors, including liabilities under the Securities Act of 1933,
as amended.
The place and time of delivery for any Series of Certificates in respect of
which this Prospectus is delivered will be set forth in the accompanying
Prospectus Supplement.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Transferor by Andrea B. Sudmann, Senior Counsel for the
Corporation, and by Orrick, Herrington & Sutcliffe, San Francisco, California,
special counsel to the Transferor. Certain legal matters relating to the federal
tax consequences of the issuance of the Certificates will be passed upon for the
Transferor by Orrick, Herrington & Sutcliffe, San Francisco, California, special
tax counsel to the Transferor. Certain legal matters relating to the issuance of
the Certificates will be passed upon for the underwriters by such counsel as
specified in the related Prospectus Supplement.
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INDEX OF TERMS FOR PROSPECTUS
<TABLE>
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<S> <C>
Accounts........................................................................... 1, 5
Accumulation Period................................................................ 6
Additional Accounts................................................................ 6, 40
Additional Transferor.............................................................. 34
Aggregate Addition Limit........................................................... 39
Agreement.......................................................................... 5
Amortization Period................................................................ 6
Assignment......................................................................... 40
Automatic Additional Accounts...................................................... 39
Bank of America.................................................................... 1, 5, 26, 29
Bank of America NT&SA.............................................................. 29
Base Rate.......................................................................... 20
Bill............................................................................... 63
Cash Collateral Account............................................................ 56
Cash Collateral Guaranty........................................................... 56
Cede............................................................................... 2
Cedel.............................................................................. 32
Cedel Participants................................................................. 32
Certificate Owners................................................................. 2
Certificate Rate................................................................... 6
Certificateholder.................................................................. 32
Certificateholders................................................................. 2
Certificates....................................................................... 1, 5
Class.............................................................................. 1, 5
Closing Date....................................................................... 11
Code............................................................................... 64
Collateral Interest................................................................ 56
Collection Account................................................................. 10
Commission......................................................................... 2
Controlled Accumulation Amount..................................................... 13
Controlled Accumulation Period..................................................... 13
Controlled Amortization Amount..................................................... 12
Controlled Amortization Period..................................................... 11
Controlled Deposit Amount.......................................................... 13
Controlled Distribution Amount..................................................... 12
Cooperative........................................................................ 33
Corporation........................................................................ 10, 19, 29
Credit Enhancement................................................................. 6
Credit Enhancement Percentage...................................................... 44
Credit Enhancement Provider........................................................ 52
Cut-Off Date....................................................................... 7
Defaulted Accounts................................................................. 7
Definitive Certificates............................................................ 9
Depositaries....................................................................... 31
Depository......................................................................... 30
Designated Additional Accounts..................................................... 39
</TABLE>
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<TABLE>
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<S> <C>
Determination Date................................................................. 47
Disclosure Document................................................................ 9
Discount Percentage................................................................ 42
Distribution Account............................................................... 42
Distribution Date.................................................................. 10
DoL................................................................................ 66
DTC................................................................................ 2
Eligible Account................................................................... 38
Eligible Receivable................................................................ 39
Enhancement........................................................................ 5
Enhancement Invested Amount........................................................ 56
ERISA.............................................................................. 17
Euroclear.......................................................................... 33
Euroclear Operator................................................................. 33
Euroclear Participants............................................................. 32
Exchange Act....................................................................... 2
FASIT.............................................................................. 63
FDIA............................................................................... 19
Finance Charge Account............................................................. 42
Finance Charge Receivables......................................................... 8
FIRREA............................................................................. 19
Full Investor Interest............................................................. 16
Funding Period..................................................................... 15
GAAP............................................................................... 54
Group.............................................................................. 45
Holders............................................................................ 34
Identified Pool.................................................................... 5
Independent Investors.............................................................. 66
Indirect Participants.............................................................. 31
Ineligible Receivable.............................................................. 37
Insolvency Event................................................................... 49
Interchange........................................................................ 5
Interest Funding Account........................................................... 35
Interest Period.................................................................... 10
Investor Interest.................................................................. 7
Investor Percentage................................................................ 7
IRS................................................................................ 61
L/C Bank........................................................................... 56
LIBOR.............................................................................. 57
Minimum Transferor Interest........................................................ 8
Monthly Period..................................................................... 10
Moody's............................................................................ 42
New Issuance....................................................................... 9
Non-U.S. Certificate Owner......................................................... 60
OID................................................................................ 61, 64
OID regulations.................................................................... 61
Paired Series...................................................................... 16
Participants....................................................................... 31
</TABLE>
70
<PAGE> 72
<TABLE>
<CAPTION>
TERM PAGE
- ---------------------------------------------------------------------------------------------
<S> <C>
Participation Agreement............................................................ 40
Participations..................................................................... 6, 40
Pay Out Event...................................................................... 14
Paying Agent....................................................................... 52
Permitted Investments.............................................................. 42
Plan Asset Regulation.............................................................. 66
Plans.............................................................................. 66
Portfolio Yield.................................................................... 20
Pre-Funding Account................................................................ 16
Pre-Funding Amount................................................................. 15
Principal Account.................................................................. 42
Principal Amortization Period...................................................... 12
Principal Commencement Date........................................................ 11
Principal Funding Account.......................................................... 13
Principal Receivables.............................................................. 8
Principal Terms.................................................................... 9
Prospectus Supplement.............................................................. 1
Qualified Institution.............................................................. 42
Rapid Accumulation Period.......................................................... 13
Rapid Amortization Period.......................................................... 14
Rating Agency...................................................................... 18
Receivables........................................................................ 1, 5
Record Date........................................................................ 30
Regulations........................................................................ 62
Removed Accounts................................................................... 8
Reserve Account.................................................................... 57
Revolving Period................................................................... 11
Rules.............................................................................. 2
Scheduled Payment Date............................................................. 11
Securities Act..................................................................... 5
Senior Certificates................................................................ 7
Series............................................................................. 1, 5
Series Supplement.................................................................. 5
Series Termination Date............................................................ 48
Service Transfer................................................................... 51
Servicer........................................................................... 10
Servicer Default................................................................... 51
Servicing Fee...................................................................... 10
Shared Excess Finance Charge Collections Group..................................... 15
Shared Excess Principal Collections................................................ 15
Shared Excess Principal Collections Group.......................................... 15
Special Counsel.................................................................... 60
Spread Account..................................................................... 57
Standard & Poor's.................................................................. 42
Subordinated Certificates.......................................................... 7
Supplemental Certificate........................................................... 34
Swaps.............................................................................. 57
Tax Opinion........................................................................ 9
</TABLE>
71
<PAGE> 73
<TABLE>
<CAPTION>
TERM PAGE
- ---------------------------------------------------------------------------------------------
<S> <C>
Terms and Conditions............................................................... 33
Transfer Date...................................................................... 13
Transferor......................................................................... 5
Transferor Certificate............................................................. 8
Transferor Interest................................................................ 7
Transferor Percentage.............................................................. 30
Trust.............................................................................. 1, 5
Trust Portfolio.................................................................... 28
Trust Termination Date............................................................. 48
Trustee............................................................................ 5
TSYS............................................................................... 26
U.S. Certificate Owner............................................................. 60
U.S. Person........................................................................ 60
UCC................................................................................ 58
Unallocated Principal Collections.................................................. 45
Underwriting Agreement............................................................. 67
Withholding Agent.................................................................. 65
</TABLE>
72
<PAGE> 74
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered BA Master
Credit Card Trust Asset Backed Certificates (the "Global Securities") to be
issued in Series from time to time (each, a "Series") will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of The Depository Trust Company ("DTC"), Cedel or
Euroclear. The Global Securities will be tradeable as home market instruments in
both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedel and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-payment
basis through the respective Depositaries of Cedel and Euroclear (in such
capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities will
be represented through financial institutions acting on their behalf as direct
and indirect Participants in DTC. As a result, Cedel and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to U.S. corporate debt obligations. Investor
securities custody accounts will be credited with their holdings against payment
in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to U.S. corporate
debt obligations in same-day funds.
Trading between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and Cedel or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a Cedel Participant or a Euroclear
A-1
<PAGE> 75
Participant, the purchaser will send instructions to Cedel or Euroclear through
a Cedel Participant or Euroclear Participant at least one business day prior to
settlement. Cedel or Euroclear will instruct the respective Depositary, as the
case may be, to receive the Global Securities against payment. Payment will
include interest accrued on the Global Securities from and including the last
coupon payment date to and excluding the settlement date. Payment will then be
made by the respective Depositary to the DTC Participant's account against
delivery of the Global Securities. After settlement has been completed, the
Global Securities will be credited to the respective clearing system and by the
clearing system, in accordance with its usual procedures, to the Cedel
Participant's or Euroclear Participant's account. The Global Securities credit
will appear the next day (European time) and the cash debit will be back-valued
to, and the interest on the Global Securities will accrue from, the value date
(which would be the preceding day when settlement occurred in New York). If
settlement is not completed on the intended value date (i.e., the trade fails),
the Cedel or Euroclear cash debit will be valued instead as of the actual
settlement date.
Cedel Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Cedel or Euroclear. Under this approach,
they may take on credit exposure to Cedel or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to pre-position
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, Cedel Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue from the value date. Therefore,
in many cases the investment income on the Global Securities earned during that
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each Cedel Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of Cedel Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between Cedel or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The seller will send instructions
to Cedel or Euroclear through a Cedel Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, Cedel or Euroclear
will instruct the respective Depositary, as appropriate, to deliver the bonds to
the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date. The payment will then be reflected in the
account of the Cedel Participant or Euroclear Participant the following day, and
receipt of the cash proceeds in the Cedel Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be the
preceding day, when settlement occurred in New York). Should the Cedel
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
Cedel Participant's or Euroclear Participant's account would instead be valued
as of the actual settlement date. Finally, day traders that use Cedel or
Euroclear and that purchase Global Securities from DTC Participants for delivery
to Cedel Participants or Euroclear Participants
A-2
<PAGE> 76
should note that these trades would automatically fail on the sale side unless
affirmative action were taken. At least three techniques should be readily
available to eliminate this potential problem:
(a) borrowing through Cedel or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedel or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant
no later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedel or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant is at
least one day prior to the value date for the sale to the Cedel Participant
or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedel or
Euroclear (or through DTC if the holder has an address outside the U.S.) will be
subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
Certificates that are non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. Persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are Certificate Owners residing in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner or
his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (iii) an estate or trust
the income of which is includible in gross income for United States tax
purposes, regardless of its source. This summary does not deal with all aspects
of U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of the
Global Securities.
A-3
<PAGE> 77
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder other
than underwriting discounts and commissions.
<TABLE>
<S> <C>
Registration Fee................................................ $344,827.59
Printing and Engraving.......................................... 40,000.00
Trustee's Fees.................................................. 10,000.00
Legal Fees and Expenses......................................... 200,000.00
Blue Sky Fees and Expenses...................................... 17,000.00
Accountants' Fees and Expenses.................................. 80,000.00
Rating Agency Fees.............................................. 245,000.00
Miscellaneous Fees.............................................. 10,000.00
-----------
Total............................................ $946,827.59
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the By-laws of Bank of America provides for indemnification,
except for certain limitations, of officers, directors, employees and agents of
Bank of America to the fullest extent permitted pursuant to Delaware General
Corporation Law when any of these persons is a party to or involved in any
civil, criminal or administrative action, suit or proceeding by reason of the
fact that the person was or is acting as an officer, director or employee of
Bank of America or in some other representative capacity.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ---------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement*
4.1 Form of Pooling and Servicing Agreement
4.2 Form of Series Supplement (including form of Certificates)
4.3 Form of Prospectus Supplement
5.1 Opinion of Orrick, Herrington & Sutcliffe with respect to legality*
8.1 Opinion of Orrick, Herrington & Sutcliffe with respect to tax matters
23.1 Consent of Orrick, Herrington & Sutcliffe (included in its opinion filed as
Exhibit 5.1* and 8.1)
24.1 Powers of Attorney*
</TABLE>
- ---------------
*Previously filed.
(b) FINANCIAL STATEMENTS
All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement; (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in
II-1
<PAGE> 78
the aggregate, represent a fundamental change in the information set forth
in the registration statement; (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change in such information in the
registration statement; provided, however, that (a)(i) and (a)(ii) will not
apply if the information required to be included in a post-effective
amendment thereby is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering hereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) To provide to the underwriters at the closing specified in the
underwriting agreements certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to
each purchaser.
(f) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(g) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(i) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(h) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 2 to Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Phoenix, State of
Arizona, on July 3, 1996.
BANK OF AMERICA NATIONAL
ASSOCIATION
as originator of the Trust and
Registrant
By: /s/ MARGARET A. SPRUDE
Name: Margaret A. Sprude
Title: Chief Financial Officer
and
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to Registration Statement on Form S-3 has been signed on
July 3, 1996 by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
- ------------------------------------------ -------------------------------------------------
<C> <S>
/s/ STEPHEN B. GALASSO* President, Chief Executive Officer and Director
- ------------------------------------------
Stephen B.
Galasso
/s/ MARGARET A. SPRUDE Chief Financial Officer and Chief Accounting
- ------------------------------------------ Officer
Margaret A.
Sprude
/s/ RICHARD G. CAMPBELL* Director
- ------------------------------------------
Richard G.
Campbell
/s/ JODY L. CEITHAML* Director
- ------------------------------------------
Jody L.
Ceithaml
/s/ JOSEF E. Director
GRAY*
- ------------------------------------------
Josef E.
Gray
/s/ DAVID S. HANNA* Director
- ------------------------------------------
David S.
Hanna
/s/ ROBIN HANNA* Director
- ------------------------------------------
Robin
Hanna
/s/ GILBERT W. JONES* Director
- ------------------------------------------
Gilbert W.
Jones
/s/ JAMES G. JONES* Chairman and Director
- ------------------------------------------
James G.
Jones
/s/ LIAM E. McGEE* Director
- ------------------------------------------
Liam E.
McGee
</TABLE>
*By: /s/ ANDREA SUDMANN
- -------------------------------------------
Andrea Sudmann
Attorney-in-Fact
- ---------------
* Note: Powers of Attorney appointing Cheryl Sorokin, Jeffrey R. Lapic, Andrea
Sudmann and Willie C. Bogan, or any of them acting singly, to execute the
Registration Statement and any amendments thereto on behalf of the above-named
individuals, were previously filed in Exhibit 24.1 to the Registration
Statement.
II-3
<PAGE> 80
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
------- ----------------------------------------------------------------------- --------
<S> <C> <C>
1.1 Form of Underwriting Agreement*........................................
4.1 Form of Pooling and Servicing Agreement................................
4.2 Form of Series Supplement (including form of Certificates).............
4.3 Form of Prospectus Supplement..........................................
5.1 Opinion of Orrick, Herrington & Sutcliffe with respect to legality*....
8.1 Opinion of Orrick, Herrington & Sutcliffe with respect to tax
matters................................................................
23.1 Consent of Orrick, Herrington & Sutcliffe (included in its opinion
filed as Exhibit 5.1* and 8.1).........................................
24.1 Powers of Attorney*....................................................
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
================================================================================
BANK OF AMERICA NATIONAL ASSOCIATION
Transferor and Servicer
and
FIRST BANK NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders of the
BA MASTER CREDIT CARD TRUST
_________________________________
POOLING AND SERVICING AGREEMENT
Dated as of __________ __, 199_
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions............................................... 1
Section 1.02 Other Definitional Provisions............................. 22
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Receivables................................. 24
Section 2.02 Acceptance by Trustee..................................... 25
Section 2.03 Representations and Warranties of the
Transferors............................................... 26
Section 2.04 Representations and Warranties of the
Transferor Relating to this Agreement and
the Receivables........................................... 28
Section 2.05 Covenants of the Transferor............................... 34
Section 2.06 Addition of Accounts...................................... 37
Section 2.07 Removal of Accounts....................................... 42
Section 2.08 Discount Option........................................... 44
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters
Relating to the Servicer.................................. 45
Section 3.02 Servicing Compensation.................................... 47
Section 3.03 Representations and Warranties of the
Servicer.................................................. 48
Section 3.04 Reports and Records for the Trustee....................... 49
Section 3.05 Annual Servicer's Certificate............................. 50
Section 3.06 Annual Independent Accountants' Servicing
Report.................................................... 51
Section 3.07 Tax Treatment............................................. 52
Section 3.08 Notices to the Transferors................................ 52
Section 3.09 Reports to the Commission................................. 52
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 Rights of Certificateholders.............................. 54
Section 4.02 Establishment of Accounts................................. 54
Section 4.03 Collections and Allocations............................... 56
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates.......................................... 60
Section 6.02 Authentication of Certificates............................ 60
Section 6.03 Registration of Transfer and Exchange of
Certificates.............................................. 61
Section 6.04 Mutilated, Destroyed, Lost or Stolen
Certificates.............................................. 64
Section 6.05 Persons Deemed Owners..................................... 65
Section 6.06 Appointment of Paying Agent............................... 66
Section 6.07 Access to List of Certificateholders'
Names and Addresses....................................... 67
Section 6.08 Authenticating Agent...................................... 67
Section 6.09 New Issuances............................................. 69
Section 6.10 Book-Entry Certificates................................... 71
Section 6.11 Notices to Clearing Agency................................ 72
Section 6.12 Definitive Certificates................................... 72
Section 6.13 Global Certificate; Euro-Certificate
Exchange Date............................................. 73
Section 6.14 Meetings of Certificateholders............................ 73
Section 6.15 Uncertificated Classes.................................... 73
ARTICLE VII
OTHER MATTERS RELATING
TO EACH TRANSFEROR
Section 7.01 Liability of each Transferor.............................. 74
Section 7.02 Merger or Consolidation of, or Assumption
of the Obligations of, a Transferor....................... 74
Section 7.03 Limitation on Liability................................... 75
Section 7.04 Liabilities............................................... 75
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.01 Liability of the Servicer................................. 77
Section 8.02 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer....................... 77
Section 8.03 Limitation on Liability of the Servicer and
Others.................................................... 77
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 8.04 Servicer Indemnification of the Trust and
the Trustee............................................. 78
Section 8.05 The Servicer Not to Resign.............................. 79
Section 8.06 Access to Certain Documentation and
Information Regarding the Receivables................... 79
Section 8.07 Delegation of Duties.................................... 80
Section 8.08 Examination of Records.................................. 80
ARTICLE IX
PAY OUT EVENTS
Section 9.01 Pay Out Events.......................................... 81
Section 9.02 Additional Rights upon the Occurrence of
Certain Events.......................................... 81
ARTICLE X
SERVICER DEFAULTS
Section 10.01 Servicer Defaults....................................... 84
Section 10.02 Trustee to Act; Appointment of Successor................ 86
Section 10.03 Notification to Certificateholders...................... 88
Section 10.04 Waiver of Past Defaults................................. 88
ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee....................................... 90
Section 11.02 Certain Matters Affecting the Trustee................... 92
Section 11.03 Trustee Not Liable for Recitals in
Certificates............................................ 93
Section 11.04 Trustee May Own Certificates............................ 93
Section 11.05 The Servicer to Pay Trustee's Fees and
Expenses................................................ 93
Section 11.06 Eligibility Requirements for Trustee.................... 94
Section 11.07 Resignation or Removal of Trustee....................... 94
Section 11.08 Successor Trustee....................................... 95
Section 11.09 Merger or Consolidation of Trustee...................... 95
Section 11.10 Appointment of Co-Trustee or Separate
Trustee................................................. 96
Section 11.11 Tax Returns............................................. 97
Section 11.12 Trustee May Enforce Claims Without
Possession of Certificates.............................. 97
Section 11.13 Suits for Enforcement................................... 98
Section 11.14 Rights of Certificateholders to Direct
Trustee................................................. 98
Section 11.15 Representations and Warranties of Trustee............... 98
Section 11.16 Maintenance of Office or Agency......................... 99
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C>
ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust..................................... 100
Section 12.02 Optional Purchase........................................ 101
Section 12.03 Final Payment with Respect to any Series................. 101
Section 12.04 Termination Rights of Holder of Transferor
Certificate.............................................. 103
Section 12.05 Defeasance............................................... 103
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment................................................ 105
Section 13.02 Protection of Right, Title and Interest to
Trust.................................................... 107
Section 13.03 Limitation on Rights of Certificateholders............... 108
Section 13.04 Governing Law............................................ 109
Section 13.05 Notices.................................................. 109
Section 13.06 Severability of Provisions............................... 110
Section 13.07 Assignment............................................... 110
Section 13.08 Certificates Non-Assessable and Fully Paid............... 110
Section 13.09 Further Assurances....................................... 111
Section 13.10 No Waiver; Cumulative Remedies........................... 111
Section 13.11 Counterparts............................................. 111
Section 13.12 Third-Party Beneficiaries................................ 111
Section 13.13 Actions by Certificateholders............................ 111
Section 13.14 Rule 144A Information.................................... 112
Section 13.15 Merger and Integration................................... 112
Section 13.16 Headings................................................. 112
</TABLE>
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Page
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EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in
Additional Accounts
Exhibit C Form of Monthly Servicer's Certificate
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Opinion of Counsel Regarding
Additional Accounts
Exhibit F Form of Annual Opinion of Counsel
Exhibit G Form of Reassignment of Receivables
Exhibit H Form of Reconveyance of Receivables
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
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<PAGE> 7
POOLING AND SERVICING AGREEMENT, dated as of __________ __,
199_ by and between BANK OF AMERICA NATIONAL ASSOCIATION, a national banking
association, as Transferor and Servicer, and FIRST BANK NATIONAL ASSOCIATION, a
national banking association, as Trustee.
In consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties and the
Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account" shall mean each VISA(R) and MasterCard(R)* credit
card account of each Transferor, established pursuant to a Credit Card Agreement
between such Transferor and any Person identified by account number and by the
Receivable balance as of the Cut Off Date and as of each Addition Date in each
computer file or microfiche list delivered to the Trustee by such Transferor
pursuant to Section 2.01 or 2.06. The definition of Account shall include each
Transferred Account. The term "Account" shall be deemed to refer to an
Additional Account only from and after the Addition Date with respect thereto,
and the term "Account" shall be deemed to refer to any Removed Account only
prior to the Removal Date with respect thereto.
"Account Information" shall have the meaning specified in
subsection 2.02(b).
"Accumulation Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period, which
shall be the accumulation or other period in which Collections of Principal
Receivables are accumulated in an account for the benefit of the Investor
Certificateholders of such Series, or a Class within such Series, in each case
as defined with respect to such Series in the related Supplement.
"Addition Date" shall mean, as to Additional Accounts, each
date as of which Additional Accounts will be included as Accounts and, as to
Participations, each date as of which Participations will be included as
property of the Trust, in either case pursuant to Section 2.06.
- --------
* VISA(R) and MasterCard(R) are federally registered servicemarks of VISA
U.S.A. Inc. and of MasterCard International Inc., respectively.
<PAGE> 8
"Additional Accounts" shall have the meaning specified in
subsection 2.06(a).
"Additional Transferor" shall have the meaning specified in
subsection 2.06(e).
"Affiliate" of any Person shall mean any other Person
controlling, controlled by or under common control with such Person.
"Adjusted Investor Interest" shall have, with respect to any
Series of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Default Amount" shall have, with respect
to any Series of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Interest" shall mean, as of any date of
determination, the sum of the Investor Interests of all Series of Certificates
issued and outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted Accounts,
as the case may be, shall mean, as of any date of determination, the sum of such
Investor Percentages of all Series of Certificates issued and outstanding on
such date of determination; provided, however, that the Aggregate Investor
Percentage shall not exceed 100%.
"Agreement" shall mean this Pooling and Servicing Agreement
and all amendments hereof and supplements hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period during
which principal is distributed to Investor Certificateholders, which shall be
the controlled amortization period, the principal amortization period, the rapid
amortization period, or other amortization period, in each case as defined with
respect to such Series in the related Supplement.
"Annual Membership Fee" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for annual membership fees
or similar terms.
"Applicants" shall have the meaning specified in Section 6.07.
"Appointment Day" shall have the meaning specified in
subsection 9.02(a).
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<PAGE> 9
"Assignment" shall have the meaning specified in subsection
2.06(d)(ii).
"Authorized Newspaper" shall mean a newspaper of general
circulation in the Borough of Manhattan, The City of New York printed in the
English language (and, with respect to any Series or Class, if and so long as
the Investor Certificates of such Series or Class are listed on the Luxembourg
Stock Exchange and such exchange shall so require, in Luxembourg, printed in any
language satisfying the requirements of such exchange) and customarily published
on each Business Day, whether or not published on Saturdays, Sundays and
holidays.
"Automatic Additional Account" shall mean each revolving
credit card account established pursuant to a Credit Card Agreement, which
account is designated pursuant to Section 2.06(c) to be included as an
Additional Account and is identified in a computer file, microfiche list or
printed list delivered to the Trustee by the applicable Transferor pursuant to
Section 2.09(d)(ii).
"Average Principal Receivables" shall mean, for any period, an
amount equal to (a) the sum of the aggregate amount of Principal Receivables at
the end of each day during such period divided by (b) the number of days in such
period.
"Bank of America" shall mean Bank of America National
Association.
"Bearer Certificates" shall have the meaning specified in
Section 6.01.
"Bearer Rules" shall mean the provisions of the Internal
Revenue Code, in effect from time to time, governing the treatment of bearer
obligations, including sections 163(f), 871, 881, 1441, 1442 and 4701, and any
regulations thereunder including, to the extent applicable to any Series,
Proposed or Temporary Regulations.
"Book-Entry Certificates" shall mean certificates evidencing a
beneficial interest in the Investor Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 6.10; provided, that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer authorized and Definitive
Certificates are to be issued to the Certificate Owners, such certificates shall
no longer be "Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in [City locations of Trustee,
Transferor and Servicer] (or, with respect to any Series, any additional city
specified in the related Supplement) or any other city and state in which the
3
<PAGE> 10
principal executive offices of Bank of America or any Additional Transferor are
located, are authorized or obligated by law or executive order to be closed.
"Cash Advance Fees" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for cash advance fees or
similar terms.
"CEDEL" shall mean Cedel Bank, societe anonyme.
"Certificate" shall mean any one of the Investor Certificates
of any Series or the Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose
name a Certificate is registered in the Certificate Register and, if applicable,
the holder of any Bearer Certificate or Coupon, as the case may be or such other
Person deemed to be a "Certificateholder" or "Holder" in any related Supplement.
"Certificate Interest" shall mean interest payable in respect
of the Investor Certificates of any Series pursuant to Article IV of this
Agreement as such Article relates to such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency) as such Article relates to such Series.
"Certificate Principal" shall mean principal payable in
respect of the Investor Certificates of any Series pursuant to Article IV of
this Agreement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates (or, for any Series with more than one Class, for each Class of
such Series), the percentage (or formula on the basis of which such rate shall
be determined) stated in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.03, providing for the registration of the Certificates and
transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the
classes of Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
4
<PAGE> 11
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency or Foreign Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency or Foreign Clearing
Agency.
"Closing Date" shall mean, with respect to any Series, the
date of issuance of such Series of Certificates, as specified in the related
Supplement.
"Collateral Interest" shall have the meaning, with respect to
any Series, specified in the related Supplement.
"Collection Account" shall have the meaning specified in
subsection 4.02(a).
"Collections" shall mean all payments (including Insurance
Proceeds) received by the Servicer in respect of the Receivables, in the form of
cash, checks, wire transfers, ATM transfers or other form of payment in
accordance with the Credit Card Agreement in effect from time to time on any
Receivables. A Collection processed on an Account in excess of the aggregate
amount of Receivables in such Account as of the Date of Processing of such
Collection shall be deemed to be a payment in respect of Principal Receivables
to the extent of such excess. Collections with respect to any Monthly Period
shall include the amount of Interchange (if any) allocable to any Series of
Certificates pursuant to any Supplement with respect to such Monthly Period (to
the extent received by the Trust and deposited into the Finance Charge Account
or any Series Account as the case may be, on the Transfer Date following such
Monthly Period), to be applied as if such amount were Collections of Finance
Charge Receivables for all purposes.
"Corporate Trust Office" shall mean the principal office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this Agreement is
located at 180 East Fifth Street, St. Paul, Minnesota 55101.
"Corporation" shall mean BankAmerica Corporation.
"Coupon" shall have the meaning specified in Section 6.01.
"Credit Adjustment" shall have the meaning specified in
subsection 4.03(c).
"Credit Card Agreement" shall mean the agreement and Federal
Truth in Lending Statement for MasterCard and VISA credit card accounts between
any Obligor and Bank of America National Association or any Additional
Transferor, as the case may be, as such agreements may be amended, modified or
otherwise changed from time to time.
5
<PAGE> 12
"Credit Card Guidelines" shall mean the Transferor's policies
and procedures or any Additional Transferor's policies and procedures, as the
case may be, relating to the operation of its credit card business, including,
without limitation, the policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers, and relating to the maintenance of credit card accounts and
collection of credit card receivables, as such policies and procedures may, in
accordance with this Agreement, be amended from time to time.
"Credit Enhancement" shall mean, with respect to any Series,
the subordination, the cash collateral guaranty or account, collateral interest,
letter of credit, surety bond, insurance policy, spread account, reserve
account, cross-support feature or any other contract or agreement for the
benefit of the Certificateholders of such Series (or Certificateholders of a
Class within such Series) as designated in the applicable Supplement.
"Credit Enhancement Provider" shall mean, with respect to any
Series, the Person, if any, designated as such in the related Supplement.
"Cut Off Date" shall mean [________ __, 199_].
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is first recorded on the
Servicer's computer master file of VISA and MasterCard accounts (without regard
to the effective date of such recordation).
"Default Amount" shall mean, with respect to any Defaulted
Account, the amount of Principal Receivables (other than Ineligible Receivables)
in such Defaulted Account on the day such Account became a Defaulted Account.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the applicable Credit Card Guidelines or the
Servicer's customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables, the Servicer has charged-off the
Receivables in such Account as uncollectible; an Account shall become a
Defaulted Account on the day on which such Receivables are recorded as charged
off as uncollectible on the Servicer's computer master file of VISA and
MasterCard accounts. Notwithstanding any other provision hereof, any Receivables
in a Defaulted Account that are Ineligible Receivables shall be treated as
Ineligible Receivables rather than Receivables in Defaulted Accounts.
"Defeasance" shall have the meaning specified in Section
12.05(a).
6
<PAGE> 13
"Definitive Certificate" shall have the meaning specified in
Section 6.10.
"Depository" shall have the meaning specified in Section 6.10.
"Depository Agreement" shall mean, with respect to each
Series, the agreement among the Transferors, the Trustee and the Clearing
Agency, or as otherwise provided in the related Supplement.
"Determination Date" shall mean, unless otherwise specified in
the related Series Supplement, the second Business Day prior to each Transfer
Date.
"Discounted Percentage" shall have the meaning specified in
Section 2.08.
"Discount Option Receivables" shall mean, with respect to any
Series, Principal Receivables designated by the Transferors that are transferred
to the Trust at a specified discount, which discount is applied such that the
discounted portion of Collections of such Principal Receivables are treated as
Collections of Finance Charge Receivables, as specified with respect to such
Series in the related Supplement.
"Discount Option Receivable Collections" shall have the
meaning specified in Section 2.08.
"Distribution Account" shall have the meaning specified in
subsection 4.02(c).
"Distribution Date" shall mean, with respect to each Series,
the dates specified in the related Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
"Draft Fees" shall have the meaning specified in the Credit
Card Agreement applicable to each Account for any draft fees or similar terms.
"Eligible Account" shall mean, as of the Cut Off Date (or,
with respect to Additional Accounts as of the relevant Addition Date), each
Account owned by the Transferor:
(a) which is in existence and maintained with the Bank of
America with respect to Accounts designated as of the Cut Off Date, or
with Bank of America or any Additional Transferor in the case of
Additional Accounts as of the applicable Addition Date;
(b) which is payable in Dollars;
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<PAGE> 14
(c) the Obligor on which has provided, as its most recent
billing address, an address which is located in the United States or
its territories or possessions;
(d) which Bank of America or the applicable Additional
Transferor, as the case may be, has not classified on its electronic
records as counterfeit, cancelled, bankrupt, fraudulent, stolen or
lost; and
(e) which Bank of America or the applicable Additional
Transferor, as the case may be, has not charged off in its customary
and usual manner for charging off such Accounts as of the Cut Off Date
(or, with respect to Additional Accounts, as of the relevant Addition
Date).
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account (in the
case of Accounts conveyed to the Trust on the Initial Closing Date and
in the case of Additional Accounts);
(b) which was created in compliance, in all material
respects, with all Requirements of Law applicable to the Transferor
that transferred such Receivable to the Trust and pursuant to a Credit
Card Agreement which complies, in all material respects, with all
Requirements of Law applicable to such Transferor;
(c) with respect to which all consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected or given
by the Transferor that transferred such Receivable to the Trust in
connection with the creation of such Receivable or the execution,
delivery and performance by such Transferor of the Credit Card
Agreement pursuant to which such Receivable was created, have been duly
obtained, effected or given and are in full force and effect as of such
date of creation;
(d) as to which, at the time of and at all times after
the creation of such Receivable, the Transferor that transferred such
Receivable to the Trust or the Trust had good and marketable title
thereto, free and clear of all Liens arising under or through such
Transferor or any of its Affiliates (other than Liens permitted
pursuant to subsection 2.05(b));
(e) which is the legal, valid and binding payment
obligation of the Obligor thereon, enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting the
enforcement of creditors' rights in general and except as such
8
<PAGE> 15
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(f) which constitutes an "account" or a "general
intangible" under and as defined in Article 9 of the UCC as then in
effect in the applicable jurisdiction.
"Eligible Servicer" shall mean the Trustee, a wholly-owned
subsidiary of the Trustee, or an entity which, at the time of its appointment as
Servicer, (a) is servicing a portfolio of consumer revolving credit card
accounts or other consumer revolving credit accounts, (b) is legally qualified
and has the capacity to service the Accounts, (c) is qualified (or licensed) to
use the software that the Servicer is then currently using to service the
Accounts or obtains the right to use, or has its own, software which is adequate
to perform its duties under this Agreement, (d) has, in the reasonable judgment
of the Trustee, demonstrated the ability to professionally and competently
service a portfolio of similar accounts in accordance with customary standards
of skill and care and (e) has a net worth of at least $50,000,000 as of the end
of its most recent fiscal quarter.
"Enhancement Invested Amount" shall have the meaning, with
respect to any Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Euroclear Operator" shall mean Morgan Guaranty Trust Company
of New York, Brussels, Belgium office, as operator of the Euroclear System.
"Extended Trust Termination Date" shall have the meaning
specified in subsection 12.01(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Fees for Documents" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for fees for documents or
similar terms.
"Finance Charge Account" shall have the meaning specified in
subsection 4.02(b).
"Finance Charge Receivables" shall mean Receivables created in
respect of the Periodic Finance Charges, Annual Membership Fees, Cash Advance
Fees, Overlimit Fees, Returned Check Charges and Late Fees and similar fees and
charges, and Special Fees to the extent such Special Fees are categorized as
9
<PAGE> 16
Finance Charge Receivables. Finance Charge Receivables with respect to any
Monthly Period shall include the amount of Interchange (if any), Recoveries (if
any) and Discount Option Receivables (if any) and other amounts allocable to any
Series of Certificates pursuant to any Supplement with respect to such Monthly
Period (to the extent received by the Servicer during such Monthly Period and
available to be deposited into the Finance Charge Account or any Series Account,
as the case may be, on the Transfer Date following such Monthly Period).
"Floating Principal Allocation" shall have the meaning
specified in the related Supplement.
"Foreign Clearing Agency" shall mean CEDEL and the Euroclear
Operator.
"Global Certificate" shall have the meaning specified in
Section 6.13.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Group" shall mean, with respect to any Series, the group of
Series in which the related Supplement specifies that such Series shall be
included.
"Identified Pool" shall mean with respect to any Transferor,
the MasterCard and VISA accounts owned by such Transferor and identified by such
Transferor as the pool of MasterCard and VISA accounts of such Transferor from
which the Accounts will be selected.
"Ineligible Receivable" shall have the meaning specified in
subsection 2.04(d)(iii).
"Initial Closing Date" shall mean __________ __, 199_.
"Initial Investor Interest" shall mean, with respect to any
Series of Certificates, the amount stated in the related Supplement.
"Initial Transferor" shall mean Bank of America.
"Insolvency Event" shall have the meaning specified in
subsection 9.01(a).
"Insurance Proceeds" shall mean any amounts recovered by the
Servicer pursuant to any credit insurance policies covering any Obligor with
respect to Receivables under such Obligor's Account.
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<PAGE> 17
"Interchange" shall mean interchange fees payable to any
Transferor, in its capacity as credit card issuer, through VISA U.S.A. Inc. and
MasterCard International Inc.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended from time to time.
"Investor Account" shall mean each of the Finance Charge
Account, the Principal Account and the Distribution Account.
"Investor Certificate" shall mean any one of the certificates
(including, without limitation, the Bearer Certificates, the Registered
Certificates or the Global Certificates) issued by the Trust, executed by Bank
of America and authenticated by the Trustee substantially in the form (or forms
in the case of a Series with multiple classes) of the investor certificate
attached to the related Supplement or such other interest in the Trust deemed to
be an "Investor Certificate" in any related Supplement.
"Investor Certificateholder" shall mean the holder of record
of an Investor Certificate.
"Investor Charge-Off" shall have, with respect to each Series,
the meaning specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any
Series of Certificates, the meaning stated in the related Supplement.
"Investor Interest" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Percentage" shall have, with respect to Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted Accounts,
and any Series of Certificates, the meaning stated in the related Supplement.
"Late Fees" shall have the meaning specified in the Credit
Card Agreement applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including, without
11
<PAGE> 18
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 7.02 shall not be deemed to
constitute a Lien.
"Maximum Addition Amount" shall mean, unless otherwise
provided in a Supplement, with respect to any Addition Date, the number of
accounts originated by the Transferors after the Cut Off Date designated as
Additional Accounts pursuant to Section 2.06(b) or (c) without prior Rating
Agency confirmation of its then existing rating of any Series of Investor
Certificates then issued and outstanding described under subsection 2.06(d)
(vii) which would either (a) with respect to any three consecutive Monthly
Periods exceeds the product of (i) 15% and (ii) the number of Accounts as at the
end of the ninth Monthly Period preceding the commencement of such three Monthly
Periods (or the Cut Off Date, in the case of 199_) or (b) with respect to any
twelve Monthly Periods exceeds the product of (i) 20% and (ii) the number of
Accounts as of the first day of such twelve Monthly Periods (or the Cut-Off
Date, whichever is later); provided, however, that if the aggregate principal
balance in the Additional Accounts specified in clause (a) or clause (b) above,
as the case may be, shall exceed either (y) the product of (i) 15% and (ii) the
aggregate amount of Principal Receivables determined as of the first day of the
third preceding Monthly Period (or in the case of any Addition Date occurring on
or before [________ __, 199_], the aggregate amount of Principal Receivables on
the Initial Closing Date) minus the aggregate amount of Principal Receivables as
of the date each such Additional Account was added to the Trust in all of the
Accounts owned by any Transferor that have been designated as Additional
Accounts since the first day of the third preceding Monthly Period or the
Initial Closing Date, as the case may be, or (z) the product of (i) 20% and (ii)
the aggregate amount of Principal Receivables determined as of the first day of
the calendar year in which such Addition Date occurs (or in the case of an
Addition Date occurring on or before [__________ __, 199_], the aggregate amount
of Principal Receivables on the Initial Closing Date) minus the aggregate amount
of Principal Receivables as of the date each such Additional Account was added
to the Trust in all of the Accounts owned by any Transferor after the Cut Off
Date that have been designated as Additional Accounts since the first day of
such calendar year or the Initial Closing Date, as the case may be, the Maximum
Addition Amount shall be an amount equal to the lesser of the aggregate amount
of Principal Receivables specified in either clause (y) or clause (z) of this
proviso.
"Minimum Aggregate Principal Receivables" shall mean, unless
otherwise provided in a Supplement, as of the date of determination, an amount
equal to the sum of the numerators used
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<PAGE> 19
to calculate the Investor Percentages with respect to the allocation of
Collections of Principal Receivables for each Series then outstanding; provided,
that with respect to any Series in its Rapid Accumulation Period or such other
period as designated in the related Supplement with an Investor Interest as of
such date of determination equal to the Principal Funding Account Balance
relating to such Series taking into account any deposit to be made to the
Principal Funding Account on the Transfer Date following such date of
determination, the numerator used in the calculation of the Investor Percentage
with respect to Principal Receivables relating to such Series shall, solely for
the purpose of the definition of Minimum Aggregate Principal Receivables, be
deemed to equal zero.
"Minimum Transferor Interest" shall mean 7% (or such other
percentage as specified in the related Supplement) of the Average Principal
Receivables; provided, however, that the Transferors may reduce the Minimum
Transferor Interest upon (w) delivery to the Trustee of a Tax Opinion with
respect to such reduction, (x) 30 day's prior notice to the Trustee, each Rating
Agency and any Credit Enhancement Provider entitled to receive such notice
pursuant to the relevant Supplement, (y) written confirmation from each Rating
Agency that such reduction will not result in the reduction or withdrawal of the
respective ratings of such Rating Agency for any Series outstanding and (z)
delivery to the Trustee and each such Credit Enhancement Provider of an
Officer's Certificate from each Transferor stating that such Transferor
reasonably believes that such reduction will not, based on the facts known to
such officer at the time of such certification, then or thereafter cause a Pay
Out Event to occur with respect to any Series; provided further that the Minimum
Transferor Interest shall not at any time be less than 2%.
"Monthly Period" shall mean, unless otherwise defined in any
Supplement, the period from and including the first day of a calendar month to
and including the last day of a calendar month.
"Monthly Servicer Report" shall mean, a report substantially
in the form attached as Exhibit C to this Agreement, with such changes as the
Servicer may determine to be necessary or desirable; provided, however, that no
such change shall serve to exclude information required by this Agreement or any
Supplement.
"Moody's" shall mean Moody's Investors Service, Inc.
"New Issuance" shall have the meaning specified in subsection
6.09(b).
"New Issuance Date" shall have the meaning specified in
subsection 6.09(b).
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"New Issuance Notice" shall have the meaning specified in
subsection 6.09(b).
"Notice Date" shall have the meaning specified in subsection
2.06(d)(i).
"Obligor" shall mean, with respect to any Account, the Person
or Persons obligated to make payments with respect to such Account, including
any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any
Vice President or more senior officer of a Transferor or Servicer and delivered
to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for or an employee of the Person providing the opinion, and
who shall be reasonably acceptable to the Trustee; provided, however, that any
Tax Opinion or other opinion relating to federal income tax matters shall be an
opinion of nationally recognized tax counsel.
"Overlimit Fees" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for overlimit fees or similar
terms.
"Paired Series" shall mean (i) each Series which has been
paired with another Series (which Series may be prefunded or partially
prefunded), such that the reduction of the Investor Interest or Adjusted
Investor Interest of such Series results in the increase of the Investor
Interest of such other Series, as described in the related Supplements, and (ii)
such other Series.
"Participating Transferor" shall have the meaning specified in
subsection 2.06(d)(i).
"Participations" shall have the meaning specified in
subsection 2.06(a)(ii).
"Pay Out Commencement Date" shall mean, (a) with respect to
each Series, the date on which a Trust Pay Out Event is deemed to occur pursuant
to Section 9.01 and (b) with respect to any Series, the date on which a Series
Pay Out Event is deemed to occur pursuant to the Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a
Trust Pay Out Event or a Series Pay Out Event.
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.06 and shall initially be the Trustee.
"Periodic Finance Charges" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for finance charges (due to
periodic rate) or any similar term.
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"Permitted Investments" shall mean, unless otherwise provided
in the Supplement with respect to any Series, (a) book-entry securities or
negotiable instruments or securities represented by instruments in bearer or
registered form which evidence (i) obligations of or fully guaranteed by the
United States of America; (ii) demand deposits, time deposits or certificates of
deposit of any depositary institution or trust company incorporated under the
laws of the United States of America or any state thereof (or domestic branches
of foreign depository institutions or trust companies) and subject to
supervision and examination by federal or state banking or depositary
institution authorities; provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein, the certificates of
deposit or short-term deposits of such depositary institution or trust company
shall have a credit rating from Moody's and Standard & Poor's of P-1 and A-1+,
respectively; (iii) commercial paper, bank notes or any other debt obligation
having, at the time of the Trust's investment or contractual commitment to
invest therein, a rating from Moody's and Standard & Poor's of P-1 and A-1+,
respectively; (iv) bankers' acceptances issued by any depository institution or
trust company described in clause (a)(ii) above; and (v) repurchase agreements
transacted with either (A) an entity subject to the United States Bankruptcy
Code or (B) a financial institution insured by the FDIC or a broker-dealer with
retail customers that is under the jurisdiction of the Securities Investors
Protection Corp., in each case having a rating from Moody's and Standard &
Poor's of P-1 and A-1+, respectively; (b) demand deposits in the name of the
Trust or the Trustee in any depositary institution or trust company referred to
in clause (a)(ii) above; (c) any other investment if each Rating Agency confirms
in writing that such investment will not adversely affect its then current
rating of the Investor Certificates, provided that such investment will not
cause the Trust to be treated as an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
"Person" shall mean any legal person, including any
individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
["Pool Index File"] shall mean the file on each Transferor's
computer system that identifies MasterCard and VISA accounts of such Transferor,
which file is designated by such Transferor as its ["Pool Index File."]
"Principal Account" shall have the meaning specified in
subsection 4.02(b).
"Principal Funding Account" shall have the meaning specified
in the related Supplement.
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"Principal Funding Account Balance" shall have the meaning
specified in the related Supplement.
"Principal Receivable" shall mean each Receivable other than
(i) Finance Charge Receivables, and (ii) Receivables in Defaulted Accounts. A
Receivable shall be deemed to have been created at the end of the day on the
Date of Processing of such Receivable. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such day.
Any Receivables which the related Transferor is unable to transfer as provided
in subsection 2.05(d) shall not be included in calculating the aggregate amount
of Principal Receivables.
"Principal Shortfalls" shall mean, with respect to a Transfer
Date, the aggregate amount for all outstanding Series that the related
Supplements specify are "Principal Shortfalls" for such Transfer Date.
"Principal Terms" shall have the meaning, with respect to any
Series issued pursuant to a New Issuance, specified in subsection 6.09(c).
"Private Holder" shall mean each holder of a right to receive
interest or principal in respect of any direct or indirect interest in the Trust
including any financial instrument or contract the value of which is determined
in whole or in part by reference to the Trust (including the Trust's assets,
income or the Trust or distributions made by the Trust), excluding any interest
in the Trust represented by any Series or Class of Investor Certificates or any
other interest as to which the Transferor has provided to the Trustee an Opinion
of Counsel to the effect that such Series, Class or other interest will be
treated as debt or otherwise not as an equity interest in either the Trust or
the Receivables for federal income tax purposes, in each case, provided such
interest is not convertible or exchangeable into an interest in the Trust or the
Trust's income or equivalent value. Notwithstanding the immediately preceding
sentence, "Private Holder" shall also include any other Person that the
Transferor determines is (or may be) a "partner" within the meaning of Treasury
Regulation section 1.7704-1(h)(1)(ii) (including by reason of section
1.7704-1(h)(3)). Initially, the Private Holders include the holders of the
Transferor Certificate or any interest therein, of any Collateral Interest, of
any Enhancement Invested Amount, and of any similar interests in the Trust
represented by any other Class of any Series of Certificates, and the Servicer.
Any Person holding more than one interest in the Trust each of which separately
would cause such Person to be a Private Holder shall be treated as a single
Private Holder. Each holder of an interest in a Private Holder which is a
partnership, S corporation or grantor trust under the Internal Revenue Code
shall be treated as a Private Holder unless excepted with the consent of the
Transferor (which consent shall
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be based on an Opinion of Counsel generally to the effect that the action taken
pursuant to the consent will not cause the Trust to become a publicly traded
partnership treated as a corporation for federal income tax purposes).
"Qualified Institution" shall mean (i) a depositary
institution, which may include the Trustee, organized under the laws of the
United States or any one of the States thereof including the District of
Columbia, the deposits in which are insured by the FDIC and which at all times
has a short-term unsecured debt rating of at least A-1+ by Standard & Poor's and
P-1 by Moody's or (ii) a depositary institution acceptable to each Rating
Agency; provided, however, that an institution which shall have corporate trust
powers and which maintains the Collection Account, the Principal Account, the
Finance Charge Account, any Series Account or any other account maintained for
the benefit of Certificateholders as a fully segregated trust account with the
trust department of such institution shall not be required to meet the foregoing
rating requirements, and need only at all times have a long-term unsecured debt
rating of at least Baa3 by Moody's so long as Moody's is a Rating Agency.
"Rating Agency" shall mean, with respect to each Series, the
rating agency or agencies, if any, selected by the Transferors to rate the
Certificates, as specified in the related Supplement.
"Reassignment" shall have the meaning specified in subsection
2.07(b)(ii).
"Reassignment Date" shall have the meaning specified in
subsection 2.04(e).
"Receivable" shall mean any amount owing by the Obligors
including, without limitation, amounts owing for the payment of goods and
services, cash advances, access checks, Annual Membership Fees, Cash Advance
Fees, Periodic Finance Charges, Late Payment Fees and credit insurance premiums
and Special Fees, if any.
"Record Date" shall mean, with respect to any Distribution
Date, the last Business Day of the preceding Monthly Period.
"Recoveries" shall mean all amounts received (net of
out-of-pocket costs of collections) including Insurance Proceeds, with respect
to Receivables in Defaulted Accounts, provided that for so long as such amounts
cannot be traced to specific receivables, including the Receivables, Recoveries
shall mean such amount allocated to the Receivables as the Servicer shall
reasonably estimate, on or prior to each Determination Date.
"Registered Certificates" shall have the meaning specified in
Section 6.01.
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"Removal Date" shall mean the date on which Receivables in
certain designated Removed Accounts will be reassigned by the Trustee to the
related Transferor.
"Removal Notice Date" shall have the meaning specified in
Section 2.07(a).
"Removed Accounts" shall have the meaning specified in
subsection 2.07(a).
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether federal, state or local (including, without limitation, usury
laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee), including any
Vice President, any Assistant Secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any person who at
the time shall be an above-designated officer and also, with respect to a
particular officer to whom any corporate trust matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Returned Check Charges" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for returned payment check
fees or similar terms.
"Revolving Period" shall have, with respect to each Series,
the meaning specified in the related Supplement.
"SAIF" shall mean the Savings Association Insurance Fund
administered by the FDIC.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series" shall mean any series of Investor Certificates, which
may include within any such Series a Class or Classes of Investor Certificates
subordinate to another such Class or Classes of Investor Certificates.
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"Series Account" shall mean any account or accounts
established pursuant to a Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series,
the meaning specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to
any Series, the amount specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any
Series of Certificates, the date stated in the related Supplement.
"Service Transaction Fees" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for any service transaction
fees or similar terms.
"Servicer" shall mean initially Bank of America National
Association, and its permitted successors and assigns and thereafter any Person
appointed as successor as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section
10.01.
"Servicing Fee" shall have the meaning specified in Section
3.02.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to the
Trustee by the Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall mean, with
respect to any Transfer Date, the aggregate amount for all outstanding Series
that the related Supplements specify are to be treated as "Shared Excess Finance
Charge Collections" for such Transfer Date.
"Shared Principal Collections" shall mean, with respect to any
Transfer Date, the aggregate amount for all outstanding Series that the related
Supplements specify are to be treated as "Shared Excess Principal Collections"
for such Transfer Date.
"Special Fees" shall mean Receivables which are Draft Fees,
Service Transaction Fees and any other fees which are not now but from time to
time may be assessed on the Accounts. On or after the date on which any of such
Special Fees begin to be assessed on the Accounts, each Transferor may designate
in an Officer's Certificate whether such Special Fees charged by such
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Transferor shall be treated as Principal Receivables or Finance Charge
Receivables.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services.
"Successor Servicer" shall have the meaning specified in
subsection 10.02(a).
"Supplement" or "Series Supplement" shall mean, with respect
to any Series, a supplement to this Agreement complying with the terms of
Section 6.09 of this Agreement, executed in conjunction with any issuance of any
Series of Certificates (or, in the case of the issuance of Certificates on the
Initial Closing Date, the supplement executed in connection with the issuance of
such Certificates).
"Supplemental Certificate" shall have the meaning specified
in subsection 6.09(d).
"Tax Opinion" shall mean with respect to any action, an
Opinion of Counsel to the effect that, for federal income tax purposes, (a) such
action will not adversely affect the tax characterization as debt of Investor
Certificates of any outstanding Series or Class that were characterized as debt
at the time of their issuance, (b) following such action the Trust will not be
deemed to be an association (or publicly traded partnership) taxable as a
corporation and (c) such action will not cause or constitute an event in which
gain or loss would be recognized by any Investor Certificateholder.
"Termination Notice" shall have, with respect to any Series,
the meaning specified in subsection 10.01(d).
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.03 and shall initially be the Trustee's Corporate Trust
Office.
"Transfer Date" shall mean, unless otherwise specified in the
related Supplement, with respect to any Series, the Business Day immediately
prior to each Distribution Date.
"Transferors" shall mean, as of any date of determination,
Bank of America National Association, a national banking association and its
successors in interest and permitted assigns and each Additional Transferor, if
any, as of such date.
"Transferor Certificate" shall mean, collectively, the
certificate executed by Bank of America and authenticated by the Trustee,
substantially in the form of Exhibit A together with the Supplemental
Certificates.
"Transferor Interest" shall mean, on any date of
determination, the aggregate amount of Principal Receivables and the principal
amount on deposit in any Principal Funding Account (as defined in any
Supplement) at the end of the day immediately
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prior to such date of determination, minus the Aggregate Investor Interest at
the end of such day, minus the aggregate Enhancement Invested Amounts, if any,
for each Series outstanding at the end of such day, minus the aggregate
Collateral Interests not included in the Aggregate Investor Interests, if any,
for each Series outstanding at the end of such day.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Receivables, Finance Charge
Receivables and Receivables in Defaulted Accounts, a percentage equal to 100%
minus the Aggregate Investor Percentage with respect to such categories of
Receivables.
"Transferor Servicing Fee" shall have the meaning specified in
Section 3.02.
"Transferred Account" shall mean (a) an Account with respect
to which a new credit card account number has been issued by the Servicer or a
Transferor under circumstances resulting from a lost or stolen credit card or
from the transfer from one program to another program and not requiring standard
application and credit evaluation procedures under the Credit Card Guidelines or
(b) an Eligible Account resulting from the conversion of an Account that was a
standard account to a premium account or from a premium account to a standard
account, and which in either case can be traced or identified in the Pool Index
File with the designation "[_]" as a Transferred Account into which an Account
has been transferred by reference to or by way of the computer files or
microfiche lists delivered to the Trustee pursuant to Section 2.01 or 2.06;
provided, however, that the new account resulting from the issuance of such new
credit card account number or such conversion, as the case may be, shall be a
Transferred Account only to the extent that on the date such new credit card
account number was issued or such conversion was completed, the computer system
on which such new account is serviced is compatible, as determined by the
Servicer, with the reporting requirements of the Trust.
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Receivables now existing or hereafter
created and arising in connection with the Accounts, the Participations, if any,
all monies due or to become due with respect to the Receivables and the
Participations, all proceeds (as defined in Section 9-306 of the UCC as in
effect in the applicable jurisdiction) of the Receivables, Recoveries and
Insurance Proceeds relating to the Receivables, the right to receive certain
amounts paid or payable as Interchange (if provided for in any Supplement), such
funds as from time to time are deposited in the Collection Account, the Finance
Charge Account, the Principal Account, the Distribution Account and any Series
Account and the rights to any Credit Enhancement with respect to any Series.
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"Trust Extension" shall have the meaning specified in
subsection 12.01(a).
"Trust Pay Out Event" shall have, with respect to each Series,
the meaning specified in Section 9.01.
"Trust Termination Date" shall mean the earliest to occur of
(i) unless a Trust Extension shall have occurred, the first Business Day after
the Distribution Date on which the Investor Interest, the Collateral Interest,
the Enhancement Invested Amount and any other interest issued by the Trust, as
applicable, for each Series is zero, (ii) if a Trust Extension shall have
occurred, the Extended Trust Termination Date, (iii) [_________ __, ____] and
(iv) the date of any termination pursuant to Section 9.02.
"Trustee" shall mean [Trustee], a [Trustee's State of
Incorporation] banking corporation, and its successors and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee appointed as herein
provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction.
"Undivided Interest" shall mean the undivided interest in the
Trust evidenced by an Investor Certificate.
"Zero Balance Account" shall mean an Account with a Receivable
balance of zero which the Servicer may remove from its computer master file of
VISA and MasterCard accounts.
Section 1.02 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in Section 1.01, and accounting terms partially defined in Section 1.01
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles or regulatory accounting
principles, as applicable. To the extent that the definitions of accounting
terms herein are inconsistent with the meanings of such terms under generally
accepted accounting principles or regulatory accounting principles, the
definitions contained herein shall control.
(c) The agreements, representations and warranties of
Bank of America and any Additional Transferor in this Agreement
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and in any Supplement in each of its capacities as Transferor and, in the case
of Bank of America, as Servicer shall be deemed to be the agreements,
representations and warranties of Bank of America and such Additional Transferor
solely in each such capacity for so long as Bank of America and such Additional
Transferor, as the case may be, acts in each such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to any
Supplement or this Agreement as a whole and not to any particular provision of
this Agreement or any Supplement; and Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified. The Servicer shall, upon making such
determination, deliver to the Trustee and each Rating Agency an Officer's
Certificate to which shall be annexed the form of the related Exhibit, as so
changed. Upon the delivery of such Officer's Certificate to the Trustee, the
related Exhibit, as so changed, shall for all purposes of this Agreement
constitute such Exhibit. The Trustee may conclusively rely upon such Officer's
Certificate in determining whether the related Exhibit, as changed, conforms to
the requirements of this Agreement.
[End of Article I]
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ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Receivables. Each Transferor does
hereby transfer, assign, set-over, and otherwise convey to the Trust for the
benefit of the Certificateholders, without recourse, all of its right, title and
interest in and to all amounts, contract rights, accounts, general intangibles,
money and other property consisting of, arising from or related to the
Receivables existing at the close of business on the Cut Off Date, in the case
of Receivables arising in the initial Accounts, and on each Addition Date, in
the case of the Receivables arising in the Additional Accounts, and in each case
thereafter created from time to time until the termination of the Trust, all
monies due or to become due with respect to such Receivables (including all
Finance Charge Receivables), all amounts received with respect thereto, proceeds
of such Receivables, Insurance Proceeds relating to such Receivables and all
proceeds of any of the foregoing.
In connection with such transfer, assignment, set-over and
conveyance, each of the Transferors agrees to record and file, at its own
expense, financing statements (including any continuation statements with
respect to such financing statements when applicable) meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary to perfect the assignment of the Receivables and the proceeds thereof
to the Trust, and to deliver a file-stamped copy of such financing statements or
continuation statements or other evidence of such filing (which may, for
purposes of this Section 2.01, consist of telephone confirmation of such filing)
to the Trustee on or prior to the date of issuance of the Certificates, and in
the case of any continuation statements filed pursuant to this Section 2.01, as
soon as practicable after receipt thereof by any Transferor. The foregoing
transfer, assignment, set-over and conveyance to the Trust shall be made to the
Trustee, on behalf of the Trust, and each reference in this Agreement to such
transfer, assignment, set-over and conveyance shall be construed accordingly.
In connection with such transfer, each of the Transferors
agrees, at its own expense, on or prior to the Initial Closing Date (i) to
indicate in the Pool Index File maintained in its computer files that
Receivables created in connection with the Accounts (other than any Additional
Accounts) have been transferred to the Trust pursuant to this Agreement for the
benefit of the Certificateholders by identifying such Accounts in the Pool Index
File with the designation "[_]" and (ii) to deliver to the Trustee a computer
file or microfiche list containing a true and complete list of all such
Accounts, identified by account number and setting forth the Receivable balance
as of the Cut Off Date. Such file or list shall be marked as Schedule 1 to this
Agreement, delivered to the Trustee as confidential and proprietary, and is
hereby incorporated into and made a part of this Agreement. The Transferor
further agrees
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not to alter the file designation referenced in clause (i) of this paragraph
with respect to any Account during the term of this Agreement unless and until
such Account becomes a Removed Account. The Transferor shall hold such
information with respect to the Accounts and Transferred Accounts, prior to
delivery thereof to the Trustee, in trust for the benefit of the Trustee, on
behalf of the Trust.
The parties intend that if, and to the extent that, such
transfer is not deemed to be a sale, the Transferor shall be deemed hereunder to
have granted to the Trustee a first priority perfected security interest in all
of the Transferors' right, title and interest in, to and under the Receivables
existing at the close of business on the Cut Off Date, in the case of the
Receivables arising in the initial Accounts, and on each Addition Date, in the
case of the Receivables arising in the Additional Accounts relating to such
Addition Date, and in each case thereafter created from time to time until the
termination of the Trust, all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables), all proceeds of such
Receivables and all Insurance Proceeds relating to such Receivables and all
proceeds thereof, and that this Agreement shall constitute a security agreement
under applicable law.
Pursuant to the request of the Transferor, the Trustee shall
cause Certificates in authorized denominations evidencing the entire interest in
the Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.02.
Section 2.02 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on
behalf of the Trust, of all right, title and interest to the property now
existing and hereafter created, conveyed to the Trust pursuant to Section 2.01,
and declares that it shall maintain such right, title and interest, upon the
Trust herein set forth, for the benefit of all Certificateholders. The Trustee
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Agreement, the Transferors delivered to the Trustee the
computer file or microfiche list described in the third paragraph of Section
2.01.
(b) The Trustee hereby agrees not to disclose to any
Person any of the account numbers or other information contained in the computer
files or microfiche lists delivered to the Trustee by any Transferor pursuant to
Sections 2.01, 2.06 and 2.07 ("Account Information") except as is required in
connection with the performance of its duties hereunder or in enforcing the
rights of the Certificateholders or to a Successor Servicer appointed pursuant
to Section 10.02, as mandated pursuant to any Requirement of Law applicable to
the Trustee or as requested by any Person in connection with financing
statements filed with respect to the Trust. The Trustee agrees to take such
measures as shall be reasonably requested by any Transferor to protect and
maintain the security and confidentiality of such information, and, in
connection therewith, shall allow each Transferor to inspect the
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Trustee's security and confidentiality arrangements from time to time during
normal business hours. In the event that the Trustee is required by law to
disclose any Account Information, the Trustee shall provide the related
Transferor and the Servicer with prompt written notice, unless such notice is
prohibited by law, of any such request or requirement so that such Transferor
may request a protective order or other appropriate remedy. The Trustee shall
provide each related Transferor with written notice no later than five days
prior to any disclosure pursuant to this subsection 2.02(b).
(c) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.03 Representations and Warranties of the
Transferors. Bank of America, as a Transferor hereby represents and warrants to
the Trust as of the Initial Closing Date and each Additional Transferor hereby
represents and warrants to the Trust as of the date such Additional Transferor
becomes a Transferor:
(a) Organization and Good Standing. Such Transferor is a
national banking association duly organized and validly existing in good
standing under the laws of the United States and has full corporate power,
authority and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement and to execute
and deliver to the Trustee the Certificates pursuant hereto.
(b) Due Qualification. Such 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 such Transferor required under
federal and applicable state law; provided, however, that no representation or
warranty is made with respect to any qualifications, licenses or approvals which
the Trustee would have to obtain to do business in any state in which the
Trustee seeks to enforce any Receivable.
(c) Due Authorization. The execution and delivery of this
Agreement by such Transferor and, in the case of Bank of America, the execution
and delivery to the Trustee of the Certificates and the consummation by such
Transferor of the transactions provided for in this Agreement have been duly
authorized by such Transferor by all necessary corporate action on its part and
this Agreement will remain, from the time of its execution, an official record
of such Transferor.
(d) No Conflict. The execution and delivery of this
Agreement and, in the case of Bank of America, the Certificates, the performance
of the transactions contemplated by this
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Agreement and the fulfillment of the terms hereof will not conflict with, result
in any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which such Transferor is a party or by which it or any of its properties are
bound.
(e) No Violation. The execution and delivery of this
Agreement and, in the case of the Bank of America, the Certificates, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof will not conflict with or violate any
Requirements of Law applicable to such Transferor.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of such Transferor, threatened
against such Transferor before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of such Transferor,
would materially and adversely affect the performance by such Transferor of its
obligations under this Agreement, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of this
Agreement or the Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut Off Date, each
Account was an Eligible Account and no selection procedures adverse to the
Investor Certificateholders have been employed by the Transferors in selecting
the Accounts from among the Eligible Accounts in the Identified Pool.
(h) Transferor's Deposit Accounts. Deposits in such
Transferor's deposit accounts were insured by the FDIC to the limits provided by
law.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement and, in the case of Bank of America the Certificates, the performance
of the transactions contemplated by this Agreement and the fulfillment of the
terms hereof, have been obtained.
For the purposes of the representations and warranties
contained in this Section 2.03 and made by Bank of America on the Initial
Closing Date, "Certificates" shall mean the Certificates issued on the Initial
Closing Date. The representations and
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warranties set forth in this Section 2.03 shall survive the transfer and
assignment of the respective Receivables to the Trust, and termination of the
rights and obligations of the Servicer pursuant to Section 10.01. Each
Transferor hereby represents and warrants to the Trust, with respect to any
Series of Certificates, as of its Closing Date, unless otherwise stated in the
related Supplement, that the representations and warranties of the Transferor
set forth in Section 2.03 are true and correct as of such date (for the purposes
of such representations and warranties, "Certificates" shall mean the
Certificates issued on the related Closing Date). Upon discovery by the
Transferor, the Servicer or the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to each of the other parties hereto.
Section 2.04 Representations and Warranties of the Transferor
Relating to this Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment.
Bank of America hereby represents and warrants to the Trust as of the Initial
Closing Date and each Additional Transferor hereby represents and warrants to
the Trust as of the date such Additional Transferor becomes a Transferor:
(i) This Agreement constitutes a legal, valid and binding
obligation of such Transferor, enforceable against such Transferor in
accordance with its terms, except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and the rights of
creditors of national banking associations, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(ii) This Agreement constitutes either (A) a
valid transfer, assignment, set-over and conveyance to the Trust of all
right, title and interest of such Transferor in and to the Receivables
existing at the close of business on the Cut Off Date, in the case of
the Receivables arising in the initial Accounts, and on each Addition
Date, in the case of the Receivables arising in the Additional Accounts
relating to such Addition Date, and in each case thereafter created
from time to time until the termination of the Trust, all monies due or
to become due with respect to such Receivables (including all Finance
Charge Receivables), all amounts received with respect thereto, all
proceeds of such Receivables, Insurance Proceeds relating thereto and
the proceeds thereof and all of such property will be held by the Trust
free and clear of any Lien of any Person claiming through or under such
Transferors or any of its Affiliates except for (x) Liens permitted
under subsection 2.05(b), (y) the interest of the Transferor as Holder
of the Transferor Certificate or any Holder of a Supplemental
Certificate and (z) such Transferor's right, if any, to interest
accruing on, and investment earnings, if any, in respect of the Finance
Charge Account, the Principal Account or any Series Account,
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as provided in this Agreement or the related Supplement, or (B) a grant
of a security interest (as defined in the UCC as in effect in the
applicable jurisdiction) in such property to the Trust, which is
enforceable with respect to the existing Receivables, the proceeds
thereof and Insurance Proceeds relating thereto upon execution and
delivery of this Agreement, and which will be enforceable with respect
to such Receivables hereafter created, the proceeds thereof and
Insurance Proceeds relating thereto, upon such creation. If this
Agreement constitutes the grant of a security interest to the Trust in
such property, upon the filing of the financing statements described in
Section 2.01 and in the case of the Receivables hereafter created and
proceeds thereof and Insurance Proceeds relating thereto, upon such
creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC as in
effect in the applicable jurisdiction), except for Liens permitted
under subsection 2.05(b). Neither the Transferor nor any Person
claiming through or under the Transferor shall have any claim to or
interest in the Principal Account, the Finance Charge Account, the
Distribution Account or any Series Account, except for the Transferor's
rights to receive interest accruing on, and investment earnings in
respect of, the Finance Charge Account and Principal Account as
provided in this Agreement (or, if applicable, any Series Account as
provided in any Supplement) and, if this Agreement constitutes the
grant of a security interest in such property, except for the interest
of such Transferor in such property as a debtor for purposes of the UCC
as in effect in the applicable jurisdiction.
(b) Eligibility of Receivables. Bank of America hereby
represents and warrants to the Trust as of the Initial Closing Date and as of
each Addition Date on which Bank of America is a Participating Transferor, as
the case may be, and each Additional Transferor hereby represents and warrants
to the Trust as of the date such Additional Transferor becomes a Transferor and
as of each Addition Date on which such Additional Transferor is a Participating
Transferor, that:
(i) Each Receivable conveyed to the Trust by such
Transferor is an Eligible Receivable as of the Cut Off Date or the
Addition Date, as applicable.
(ii) Each Receivable conveyed to the Trust by such
Transferor then existing has been conveyed to the Trust by such
Transferor free and clear of any Lien of any Person claiming through or
under such Transferor or any of its Affiliates (other than Liens
permitted under subsection 2.05(b)) and in compliance, in all material
respects, with all Requirements of Law applicable to such Transferor.
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(iii) With respect to each Receivable conveyed to the Trust
by such Transferor then existing, all consents, licenses, approvals or
authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by
such Transferor in connection with the conveyance of such Receivable to
the Trust have been duly obtained, effected or given and are in full
force and effect.
(iv) On each day on which any new Receivable conveyed to
the Trust by such Transferor is created, such Transferor shall be
deemed to represent and warrant to the Trust that (A) each such
Receivable created on such day is an Eligible Receivable, (B) each
Receivable created on such day has been conveyed to the Trust in
compliance, in all material respects, with all Requirements of Law
applicable to the Transferor, (C) with respect to each such Receivable,
all consents, licenses, approvals or authorizations of or registrations
or declarations with, any Governmental Authority required to be
obtained, effected or given by such Transferor in connection with the
conveyance of such Receivable to the Trust have been duly obtained,
effected or given and are in full force and effect and (D) the
representations and warranties set forth in subsection 2.04(a) are true
and correct with respect to each Receivable created on such day as if
made on such day.
(v) As of the Initial Closing Date, Schedule 1 to this
Agreement, and as of the applicable Addition Date with respect to
Additional Accounts (other than Automatic Additional Accounts), and as
of the last day of each calendar quarter during which Automatic
Additional Accounts have been designated pursuant to Section 2.06(c),
the related computer file or microfiche list referred to in Section
2.06, is an accurate and complete listing in all material respects of
all the Accounts as of the Cut Off Date, or with respect to Additional
Accounts, as of the applicable Addition Date (or calendar quarter end,
as applicable), and the information contained therein with respect to
the identity of such Accounts and the Receivables existing thereunder
is true and correct in all material respects as of the Cut Off Date or
such applicable Addition Date. As of the Cut Off Date, the aggregate
amount of Receivables in all the Accounts was $______________, of which
$______________ were Principal Receivables.
(c) Notice of Breach. The representations and warranties
set forth in this Section 2.04 shall survive the transfer and assignment of the
respective Receivables to the Trust. Upon discovery by a Transferor, the
Servicer or the Trustee of a breach of any of the representations and warranties
set forth in this Section 2.04, the party discovering such breach shall give
prompt written notice to the other parties mentioned above. Each Transferor
agrees to cooperate with the Servicer and the Trustee in attempting to cure any
such breach.
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(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with
respect to a Receivable of any representations and warranties set forth
in subsection 2.04(b)(ii), or in the event that a Receivable is not an
Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (d) of the definition of Eligible
Receivable, and any of the following three conditions is met: (A) as a
result of such breach or event such Receivable is charged off as
uncollectible or the Trust's rights in, to or under such Receivable or
its proceeds are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien; (B)
the Lien upon the subject Receivable (1) arises in favor of the United
States of America or any State or any agency or instrumentality thereof
and involves taxes or liens arising under Title IV of ERISA or (2) has
been consented to by the Transferor which transferred such Receivable
to the Trust; or (C) the unsecured short-term debt rating of the
Transferor which transferred such Receivable to the Trust is not at
least P-1 by Moody's and the Lien upon the subject Receivable ranks
prior to the Lien created pursuant to this Agreement; then, upon the
earlier to occur of the discovery of such breach or event by the
Transferor or the Servicer or receipt by the Transferor which
transferred such Receivable to the Trust of written notice of such
breach or event given by the Trustee, each such Receivable shall be
automatically removed from the Trust on the terms and conditions set
forth in subsection 2.04(d)(iii).
(ii) Removal After Cure Period. In the event of a breach
of any of the representations and warranties set forth in subsection
2.04(b) other than a breach or event as set forth in clause (d)(i)
above, and as a result of such breach the related Account becomes a
Defaulted Account or the Trust's rights in, to or under the Receivable
or its proceeds are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien, then,
upon the expiration of 60 days (or such longer period as may be agreed
to by the Trustee in its sole discretion, but in no event later than
120 days) from the earlier to occur of the discovery of any such event
by either the Transferor which transferred such Receivable to the Trust
or the Servicer, or receipt by the Transferor which transferred such
Receivable to the Trust of written notice of any such event given by
the Trustee, each such Receivable shall be removed from the Trust on
the terms and conditions set forth in subsection 2.04(d)(iii);
provided, however, that no such removal shall be required to be made
if, on any day within such applicable period, such representations and
warranties with respect to such Receivable shall then be true and
correct in all material respects as if such Receivable had been created
on such day.
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(iii) Procedures for Removal. When the provisions of
subsection 2.04(d)(i) or (ii) above require removal of a Receivable,
the Transferor which transferred such Receivable to the Trust shall
accept reassignment of such Receivable (an "Ineligible Receivable") by
directing the Servicer to deduct the principal balance of each such
Ineligible Receivable from the Principal Receivables in the Trust and
to decrease the Transferor Interest by such amount. On and after the
date of such removal, each Ineligible Receivable shall be deducted from
the aggregate amount of Principal Receivables used in the calculation
of any Investor Percentage, the Transferor Percentage or the Transferor
Interest. In the event that the exclusion of an Ineligible Receivable
from the calculation of the Transferor Interest would cause the
Transferor Interest to be reduced below zero or would otherwise not be
permitted by law, the Transferor which transferred such Receivable to
the Trust shall concurrently make a deposit in the Collection Account
(for allocation as a Principal Receivable) in immediately available
funds prior to the Transfer Date related to such Monthly Period in
which such event occurred in an amount equal to the amount by which the
Transferor Interest would be reduced below zero. The portion of such
deposit allocated to the Investor Certificates of each Series shall be
distributed to the Investor Certificateholders of each Series in the
manner specified in Article IV, if applicable, on the Distribution Date
immediately following such Transfer Date. Upon the reassignment to the
applicable Transferor of an Ineligible Receivable, the Trust shall
automatically and without further action be deemed to transfer, assign,
set-over and otherwise convey to the applicable Transferor, without
recourse, representation or warranty, all the right, title and interest
of the Trust in and to such Ineligible Receivable, all monies due or to
become due with respect to such Ineligible Receivable (including all
Finance Charge Receivables) and all proceeds of such Ineligible
Receivable and Insurance Proceeds relating to such Ineligible
Receivable and Interchange (if any) allocated to such Ineligible
Receivable pursuant to any Supplement. Such reassigned Ineligible
Receivable shall be treated by the Trust as collected in full as of the
date on which it was transferred. The Trustee shall execute such
documents and instruments of transfer or assignment and take other
actions as shall reasonably be requested by the applicable Transferor
to evidence the conveyance of such Ineligible Receivable pursuant to
this subsection 2.04(d)(iii). The obligation of the applicable
Transferor set forth in this subsection 2.04(d)(iii), or the automatic
removal of such Receivable from the Trust, as the case may be, shall
constitute the sole remedy respecting any breach of the representations
and warranties set forth in the above-referenced subsections with
respect to such Receivable available to Certificateholders or the
Trustee on behalf of Certificateholders.
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(iv) Proceeds Held by Servicer. For the purposes of
subsections 2.04(d)(i) and (ii) above, proceeds of a Receivable shall
not be deemed to be impaired hereunder solely because such proceeds are
held by the Servicer (if the Servicer is a Transferor) for more than
the applicable period under Section 9-306(3) of the UCC as in effect in
the applicable jurisdiction.
(e) Reassignment of Trust Portfolio. In the event of a
breach of any of the representations and warranties of a Transferor set forth in
subsection 2.04(a), either the Trustee or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Aggregate
Investor Interest, by notice then given in writing to such Transferor (and to
the Trustee and the Servicer, if given by the Investor Certificateholders), may
direct such Transferor to accept reassignment of an amount of Principal
Receivables and Discount Option Receivables (as specified below) within 60 days
of such notice (or within such longer period as may be specified in such
notice), and such Transferor shall be obligated to accept reassignment of such
Principal Receivables and Discount Option Receivables on a Distribution Date
specified by such Transferor (such Distribution Date, the "Reassignment Date")
occurring within such applicable period on the terms and conditions set forth
below; provided, however, that no such reassignment shall be required to be made
if, at any time during such applicable period, the representations and
warranties contained in subsection 2.04(a) shall then be true and correct in all
material respects. The Transferor to which the above breach of representations
and warranties relates shall deposit on the Transfer Date (in next day funds)
preceding the Reassignment Date an amount equal to the reassignment deposit
amount for such Receivables in the Distribution Account or Series Account, as
provided in the related Supplement, for distribution to the Investor
Certificateholders pursuant to Article XII. The reassignment deposit amount with
respect to each Series for such reassignment, unless otherwise stated in the
related Supplement, shall be equal to (i) the Investor Interest of such Series
at the end of the day on the last day of the Monthly Period preceding the
Reassignment Date, less the amount, if any, previously allocated for payment of
principal to such Certificateholders on the related Distribution Date in the
Monthly Period in which the Reassignment Date occurs, plus (ii) an amount equal
to all interest accrued but unpaid on the Investor Certificates of such Series
at the applicable Certificate Rate through such last day, less the amount, if
any, previously allocated for payment of interest to the Certificateholders of
such Series on the related Distribution Date in the Monthly Period in which the
Reassignment Date occurs. Payment of the reassignment deposit amount with
respect to each Series, and all other amounts in the Distribution Account or the
applicable Series Account in respect of the preceding Monthly Period, shall be
considered a prepayment in full of the Receivables represented by the Investor
Certificates. On the Distribution Date following the Transfer Date on which
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such amount has been deposited in full into the Distribution Account or the
applicable Series Account, the Receivables and all monies due or to become due
with respect to such Receivables (including all Finance Charge Receivables), and
all proceeds of the Receivables and Insurance Proceeds relating to such
Receivables and Interchange (if any) allocated to the Receivables pursuant to
any Supplement shall be released to the Transferor making such reassignment
deposit after payment of all amounts otherwise due hereunder on or prior to such
dates and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as shall
be prepared by and as are reasonably requested by such Transferor to vest in
such Transferor, or its designee or assignee, all right, title and interest of
the Trust in and to the Receivables, all monies due or to become due with
respect to such Receivables (including all Finance Charge Receivables), and all
proceeds of the Receivables and Insurance Proceeds relating to such Receivables
and Interchange (if any) allocated to the Receivables pursuant to any
Supplement. If the Trustee or the Investor Certificateholders give notice
directing such Transferor to accept reassignment as provided above, the
obligation of such Transferor to accept reassignment of the Receivables and pay
the reassignment deposit amount pursuant to this subsection 2.04(e) shall
constitute the sole remedy respecting a breach of the representations and
warranties contained in subsection 2.04(a) available to the Investor
Certificateholders or the Trustee on behalf of the Investor Certificateholders.
Section 2.05 Covenants of the Transferor. Each Transferor
hereby covenants that:
(a) Receivables to be Accounts. Each Transferor will take
no action to cause any Receivable transferred to the Trust by such Transferor to
be evidenced by any instrument or chattel paper (as such terms are defined in
the UCC as in effect in the applicable jurisdiction). Each Receivable
transferred to the Trust by such Transferor shall be payable pursuant to a
contract which does not create a Lien on any goods purchased thereunder. Each
Transferor will take no action to cause any Receivable transferred to the Trust
by such Transferor to be anything other than an "account" or a "general
intangible" (as defined in the UCC as in effect in the applicable jurisdiction).
(b) Security Interests. Except for the conveyances
hereunder, each Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
Receivable transferred to the Trust by such Transferor, whether now existing or
hereafter created, or any interest therein; each Transferor will immediately
notify the Trustee of the existence of any Lien on any Receivable transferred to
the Trust by such Transferor; and each Transferor shall defend the right, title
and interest of the Trust in, to and under the Receivables transferred to the
Trust by such Transferor, whether now existing or hereafter created,
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against all claims of third parties claiming through or under such Transferor;
provided, however, that nothing in this subsection 2.05(b) shall prevent or be
deemed to prohibit any Transferor from suffering to exist upon any of the
Receivables transferred to the Trust by such Transferor any Liens for municipal
or other local taxes if such taxes shall not at the time be due and payable or
if such Transferor shall currently be contesting the validity thereof in good
faith by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.
(c) Credit Card Agreements and Account Guidelines. Each
Transferor shall comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines and all
applicable rules and regulations of VISA U.S.A., Inc. and MasterCard
International Inc. except insofar as any failure to comply or perform would not
materially and adversely affect the rights of the Trust or the
Certificateholders hereunder or under the Certificates. Each Transferor may
change the terms and provisions of the Credit Card Agreements or the Credit Card
Guidelines in any respect (including, without limitation, the reduction of the
required minimum monthly payment, the calculation of the amount, or the timing,
of charge offs and the Periodic Finance Charges and other fees to be assessed
thereon) only if such change (i) would not, in the reasonable belief of the
applicable Transferor, cause a Pay Out Event to occur, and (ii) is made
applicable to the comparable segment of the revolving credit card accounts owned
and serviced by the such Transferor which have characteristics the same as, or
substantially similar to, the Accounts that are the subject of such change,
except as otherwise restricted by an endorsement, sponsorship, or other
agreement between such Transferor and an unrelated third party or by the terms
of the Credit Card Agreements.
(d) Account Allocations.
(i) In the event that any Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including, without limitation, by reason
of the application of the provisions of Section 9.02 or an order by any
federal governmental agency having regulatory authority over such
Transferor or any court of competent jurisdiction that such Transferor
not transfer any additional Principal Receivables to the Trust) then,
in any such event, (A) such Transferor agrees to allocate and pay to
the Trust, after the date of such inability, all Collections with
respect to Principal Receivables and Discount Option Receivables, and
all amounts which would have constituted Collections with respect to
Principal Receivables and Discount Option Receivables but for such
Transferor's inability to transfer such Receivables (up to an
aggregate amount equal to the amount of Principal
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Receivables or Discount option Receivables, as the case may be, in the
Trust on such date); (B) such Transferor agrees to have such amounts
applied as Collections in accordance with Article IV; and (C) for only
so long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (A)
and (B) above, Principal Receivables (and all amounts which would have
constituted Principal Receivables or Discount Option Receivables, as
the case may be, but for such Transferor's inability to transfer
Receivables to the Trust) that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with Article IV, and all amounts that would have constituted
Principal Receivables or Discount Option Receivables, as the case may
be, but for such Transferor's inability to transfer Receivables to the
Trust shall be deemed to be Principal Receivables or Discount Option
Receivables, as the case may be, for the purpose of calculating (i) the
applicable Investor Percentage with respect to any Series and (ii) the
Aggregate Investor Percentage thereunder. If any Transferor is unable
pursuant to any Requirement of Law to allocate Collections as described
above, such Transferor agrees that it shall in any such event allocate,
after the occurrence of such event, payments on each Account with
respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with Article IV. The parties hereto agree
that Finance Charge Receivables, whenever created, accrued in respect
of Principal Receivables that have been conveyed to the Trust, or that
would have been conveyed to the Trust but for the above described
inability to transfer such Receivables, shall continue to be a part of
the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables and Discount Option Receivables to the Trust and
Collections with respect thereto shall continue to be allocated and
paid in accordance with Article IV.
(ii) In the event that, pursuant to subsection 2.04(d),
any Transferor accepts reassignment of an Ineligible Receivable as a
result of a breach of the representations and warranties in subsection
2.04(b) relating to such Receivable, then, in any such event, such
Transferor agrees to account for payments received with respect to such
Ineligible Receivable separately from its accounting for Collections on
Principal Receivables retained by the Trust. If payments received from
or on behalf of an Obligor are not specifically applicable either to an
Ineligible Receivable of such Obligor reassigned to a Transferor or to
the Receivables of such Obligor retained in the Trust, then the
applicable Transferor agrees to allocate payments proportionately based
on the total amount of
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Principal Receivables of such Obligor retained in the Trust and the
total amount owing by such Obligor on any Ineligible Receivables
reassigned to such Transferor, and the portion allocable to any
Principal Receivables retained in the Trust shall be treated as
Collections and deposited in accordance with the provisions of Article
IV.
(e) Conveyance of Accounts. Each Transferor covenants and
agrees that it will not convey, assign, exchange or otherwise transfer the
Accounts to any Person prior to the termination of this Agreement pursuant to
Article XII; provided, however, that each Transferor shall not be prohibited
hereby from conveying, assigning, exchanging or otherwise transferring the
Accounts in connection with a transaction complying with the provisions of
Section 7.02.
Section 2.06 Addition of Accounts.
(a)(i) If, (A) during any period of 30 consecutive days, the
Transferor Interest averaged over that period is less than the Minimum
Transferor Interest for that period the Transferors shall designate
additional eligible MasterCard or VISA accounts from the Identified
Pool (together with all other Accounts transfered to the Trust
pursuant to this Section 2.06, "Additional Accounts") to be included
as Accounts in a sufficient amount such that the average of the
Transferor Interest as a percentage of the Average Principal
Receivables for such 30 day period, computed by assuming
that the amount of the Principal Receivables of such Additional
Accounts shall be deemed to be outstanding in the Trust during
each day of such 30 day period, is at least equal to the Minimum
Transferor Interest, or (B) on any Record Date the aggregate amount of
Principal Receivables is less than the Minimum Aggregate Principal
Receivables (as adjusted for any Series having a Paired Series as
described in the Supplement for such Series), the Transferors shall
designate Additional Accounts to be included as Accounts in a
sufficient amount such that, after giving effect to such addition and
the addition of each other Transferor, the aggregate amount of
Principal Receivables will be equal to or greater than the Minimum
Aggregate Principal Receivables. Receivables from such Additional
Accounts shall be transferred to the Trust on or before the tenth
Business Day following such thirty-day period or Record Date, as the
case may be.
(ii) In lieu of, or in addition to, designating Additional
Accounts pursuant to clause (i) above, the Transferors may, subject to
any applicable conditions specified in paragraph (d) below, convey to
the Trust participations representing undivided interests in a pool of
assets primarily consisting of receivables arising under revolving
credit card accounts owned by a Transferor or any Affiliate of any
Transferor and collections thereon ("Participations"). The addition of
Participations in the
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Trust pursuant to this paragraph (a) or paragraph (b) below shall be
effected by an amendment hereto, dated as of the applicable Addition
Date, pursuant to Section 13.01(a). Notwithstanding anything in this
subsection 2.06(a)(ii) to the contrary, to the extent that such
Participations encompass previously issued credit-card or other asset-
backed securities, such securities (i) either will have been previously
registered under the Securities Act or will have been held for the
"holding period" prescribed by Rule 144(k) under the Securities Act and
(ii) will have been acquired in a bona fide secondary market
transaction, rather than from any Transferor or any Affiliate of any
Transferor or such securities will have otherwise been acquired in
compliance with the Securities Act.
(b) In addition to its obligation under subsection
2.06(a), each Transferor may, but shall not be obligated to, designate from time
to time Additional Accounts of such Transferor to be included as Accounts or
Participations to be included as property of the Trust, in either case as of the
applicable Addition Date.
(c)(i) Each Transferor may, from time to time, at its sole
discretion, subject to and in compliance with the limitations
specified in clause (ii) below and the applicable conditions
specified in paragraph (d) below, designate that all Eligible
Accounts arising in the Identified Pool on or after the date
of such designation be included as Accounts. The Addition Date
for any Automatic Additional Account is the date of creation
of such account. For purposes of this paragraph, Eligible
Accounts shall be deemed to include only revolving credit card
accounts in the Identified Pool (A) originated after _________
__, ____ by a Transferor or any Affiliate of a Transferor and
(B) of a type previously included as Accounts.
(ii) The Transferors shall not be permitted to
designate Automatic Additional Accounts pursuant to clause (i)
above with respect to any of the three consecutive Monthly
Periods commencing in January, April, July and October of each
calendar year, commencing in __________ __, ____, unless on or
before the first Business Day of any of such three consecutive
Monthly Periods, the Transferors shall have requested each
Rating Agency to notify, and each Rating Agency shall have
notified, the Transferors, the Servicer and the Trustee of the
limitations (other than the limitations described in this
Agreement), if any, on the right of the Transferors to
designate Automatic Additional Accounts during such three
consecutive Monthly Periods. Following the addition of any
such Automatic Additional Accounts the Servicer shall provide
information to Moody's with respect to such Additional
Accounts not later than the last Business Day of the month
following the quarterly period in which such addition occurs
in the form approved from time to time by Moody's and the
Servicer. Unless Standard & Poor's otherwise consents, no
Additional Accounts may be designated pursuant to subsections
2.06(b) or (c) if the number of Automatic Additional Accounts
plus the number of Accounts added pursuant to Section 2.06(a)
and (b), without the prior notice of Standard & Poor's as
described under Section 2.06(d)(vii), shall exceed the
Maximum Addition Amount; provided, however, if the Maximum
Addition Amount is exceeded as a result of additions pursuant
to Section 2.06(a), the Transferors shall have delivered
written notice to Moody's of any such addition. Unless
Moody's otherwise consents, the number of Automatic
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Additional Accounts added pursuant to this Section 2.06(c),
together with Additional Accounts added pursuant to
subsections 2.06(a) and (b), without prior notice of Moody's
as described under 2.06(d)(vii), shall not at any time exceed
the Maximum Addition Amount.
(iii) On or before March 31, June 30, September 30
or December 31 of each year commencing on the first such date
to follow any addition relating to Automatic Additional
Accounts, the Transferors shall have delivered to the Trustee
and each Rating Agency an Opinion of Counsel in accordance
with Section 13.02(d), with respect to the Automatic
Additional Accounts included as Accounts during the preceding
three Monthly Periods confirming the validity and perfection
of each transfer of such Automatic Additional Accounts. If
such Opinion of Counsel with respect to any Automatic
Additional Accounts is not so received, the right of the
Transferors to designate Automatic Additional Accounts will be
suspended until such time as each Rating Agency otherwise
consents in writing. If the Transferors are unable to deliver
an Opinion of Counsel with respect to any Automatic Additional
Account, such inability shall be deemed to be a breach of the
representation in subsection 2.04(b)(iv) with respect to the
Receivables in such Additional Account for purposes of Section
2.04(a)(i).
(d) Each Transferor agrees that any such transfer of
Receivables from Additional Accounts or Participations under subsections
2.06(a), (b) or (c) shall satisfy the following conditions (to the extent
provided below; provided, however, that the conditions set forth below (other
than the condition to deliver a written assignment as set forth in clause (ii)
and to represent and warrant as to the matters set forth in clauses (iii) and
(iv) below) shall not apply to the transferor of Automatic Additional Accounts):
(i) on or before the fifth Business Day prior to the
Addition Date with respect to additions pursuant to subsection 2.06(a)
and on or before the tenth Business Day prior to the Addition Date with
respect to additions pursuant to subsection 2.06(b) (the "Notice
Date"), each Transferor which is transferring any such Participation to
the Trust or owns any such Additional Account (each a "Participating
Transferor") shall give the Trustee, each Rating Agency and the
Servicer written notice that such Additional Accounts or Participations
will be included, which notice shall specify the approximate aggregate
amount of the Receivables to be transferred;
(ii) on or before the Addition Date (or the date of
initial designation in the case of Automatic Additional Accounts), each
Participating Transferor shall have delivered to the Trustee a written
assignment (including an acceptance by the Trustee on behalf of the
Trust for the benefit of the Investor
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Certificateholders) in substantially the form of Exhibit B
(the "Assignment") and each Participating Transferor shall have
indicated in its computer files that the Receivables created in
connection with the Additional Accounts have been transferred to the
Trust and, within five Business Days thereafter with respect to
Additional Accounts designated pursuant to subsection 2.06(a) and (b),
on the last day of each calendar quarter with respect to Automatic
Additional Accounts, or as otherwise agreed upon between each
Participating Transferor and the Trustee, each Participating Transferor
shall have delivered to the Trustee a computer file or microfiche list
containing a true and complete list of all Additional Accounts relating
to such Participating Transferor and identifying each Account relating
to such Participating Transferor by account number and the aggregate
amount of the Receivables in such Additional Accounts relating to such
Participating Transferor, as of the Addition Date, which computer file
or microfiche list shall be, as of the date of such Assignment,
incorporated into and made a part of such Assignment and such
Assignment shall be, as of such date, incorporated and made a part of
this Agreement;
(iii) Each Participating Transferor shall represent and
warrant that (x) with respect to Additional Accounts, each Additional
Account is, as of the Addition Date, an Eligible Account, and each
Receivable in such Additional Account is, as of the Addition Date, an
Eligible Receivable, (y) no selection procedures believed by such
Participating Transferor to be materially adverse to the interests of
the Investor Certificateholders were utilized in selecting the
Additional Accounts from the available Eligible Accounts from the
Identified Pool, and (z) as of the Addition Date, such Participating
Transferor is not insolvent;
(iv) Each Participating Transferor shall represent and
warrant that, as of the Addition Date, the Assignment constitutes
either (x) a valid transfer and assignment to the Trust of all right,
title and interest of such Participating Transferor in and to the
Receivables then existing and thereafter created and arising in
connection with the Additional Accounts, relating to such Participating
Transferor, all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables), all amounts
received with respect thereto and Insurance Proceeds relating to such
Receivables and all proceeds (as defined in the UCC as in effect in the
applicable jurisdiction) of any of the foregoing and Insurance Proceeds
relating thereto will be held by the Trust free and clear of any Lien
of any Person claiming through or under such Participating Transferor
or any of its Affiliates, except for (i) Liens permitted under
subsection 2.05(b), (ii) the interest of such Participating Transferor
as Holder of the Transferor Certificate and (iii) such Participating
Transferor's right to receive interest accruing on, and investment
earnings in respect of, the Finance Charge Account and the Principal
Account, or any Series Account as
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provided in this Agreement and any related Supplement or (y) a grant of
a security interest (as defined in the UCC as in effect in the
applicable jurisdiction), in such property to the Trust, which is
enforceable with respect to then existing Receivables of the Additional
Accounts, all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables), all amounts
received with respect thereto and Insurance Proceeds relating to such
Receivables and all proceeds (as defined in the UCC as in effect in the
applicable jurisdiction) of any of the foregoing upon the conveyance of
such Receivables to the Trust, and which will be enforceable with
respect to the Receivables thereafter created in respect of Additional
Accounts relating to such Participating Transferor conveyed on such
Addition Date, and Insurance Proceeds relating to such Receivables and
all proceeds (as defined in the UCC as in effect in the applicable
jurisdiction) of any of the foregoing upon such creation; and (z) if
the Assignment constitutes the grant of a security interest to the
Trust in such property, upon the filing of the financing statements as
described in Section 2.01 with respect to such Additional Accounts and
in the case of the Receivables thereafter created in such Additional
Accounts all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables), all amounts
received with respect thereto, and Insurance Proceeds relating to such
Receivables and all proceeds (as defined in the UCC as in effect in the
applicable jurisdiction) of any of the foregoing, upon such creation,
the Trust shall have a first priority perfected security interest in
such property (subject to Section 9-306 of the UCC as in effect in the
applicable jurisdiction), except for Liens permitted under subsection
2.05(b);
(v) Each Participating Transferor shall deliver an
Officer's Certificate substantially in the form of Schedule 2 to
Exhibit B to the Trustee confirming the items set forth in paragraphs
(ii), (iii) and (iv) above;
(vi) Each Participating Transferor shall deliver an
Opinion of Counsel with respect to the Receivables in the Additional
Accounts relating to such Participating Transferor to the Trustee (with
a copy to Moody's and Standard & Poor's) substantially in the form of
Exhibit E;
(vii) with respect to accounts designated pursuant to
subsection 2.06(b) and 2.06(c) in excess of the Maximum Addition Amount
and with respect to Participations, each Participating Transferor shall
have received notice from Standard & Poor's and Moody's that the
inclusion of such accounts as Additional Accounts or the inclusion of
such Participations to be included as property of the Trust, as the
case may be, will not result in the reduction or withdrawal of its then
existing rating of any
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Series of Investor Certificates then issued and outstanding; and
(e) The Initial Transferor may designate Affiliates of
the Initial Transferor to be included as Transferors ("Additional Transferors")
under this Agreement in an amendment hereto pursuant to subsection 13.01(a) and,
in connection with such designation, the Initial Transferor shall surrender the
Transferor Certificate to the Trustee in exchange for a newly issued Transferor
Certificate modified to reflect such Additional Transferor's interest in the
Transferor's Interest; provided, however, that prior to any such designation and
exchange the conditions set forth in subsection 6.03(b) shall have been
satisfied with respect thereto.
Section 2.07 Removal of Accounts.
(a) Subject to the conditions set forth below, each
Transferor may, but shall not be obligated to, designate Receivables from
Accounts relating to such Transferor for deletion and removal ("Removed
Accounts") from the Trust. On or before the fifth Business Day (the "Removal
Notice Date") prior to the date on which the designated Removed Accounts will be
reassigned by the Trustee to such Transferor designating such Accounts for
deletion and removal from the Trust (the "Removal Date"), such Transferor shall
give the Trustee and the Servicer written notice that the Receivables from such
Removed Accounts are to be reassigned to such Transferor.
(b) Each Transferor shall be permitted to designate and
require reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) the removal of any Receivables of any Removed
Accounts on any Removal Date shall not, in the reasonable belief of
such Transferor, (a) cause a Pay Out Event to occur; provided, however,
that for the purposes of this subsection 2.07(b)(i), the Receivables of
each Removed Account shall be considered to have been removed as of the
Removal Date, (b) cause the Transferor Interest as a percentage of the
aggregate amount of Principal Receivables to be less than the Minimum
Transferor Interest on such Removal Date, (c) cause the aggregate
amount of Principal Receivables to be less than the Minimum Aggregate
Principal Receivables, or (d) result in the failure to make any payment
specified in the related Supplement with respect to any Series;
(ii) on or prior to the Removal Date, such Transferor
shall have delivered to the Trustee for execution a written assignment
in substantially the form of Exhibit G (the "Reassignment") and, within
five Business Days (or as
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otherwise agreed upon between such Transferor and the Trustee)
thereafter, such Transferor shall have delivered to the Trustee a
computer file or microfiche list containing a true and complete list of
all Removed Accounts identified by account number and the aggregate
amount of the Receivables in such Removed Accounts as of the Removal
Date, which computer file or microfiche list shall as of the Removal
Date modify and amend and be made a part of this Agreement;
(iii) such Transferor shall represent and warrant that no
selection procedures believed by such Transferor to be materially
adverse to the interests of the Certificateholders were utilized in
selecting the Removed Accounts to be removed from the Trust;
(iv) as of the Removal Notice Date, either (a) the
Receivables are not more than 15% delinquent by [estimated] principal
amount and the weighted averaged delinquency of such Receivables is not
more than 60 days, or (b) the Receivables are not more than 7%
delinquent by [estimated] principal amount and the weighted average
delinquency of such Receivables is not more than 90 days;
(v) on or before the tenth Business Day prior to the
Removal Date, each Rating Agency shall have received notice of such
proposed removal of the Receivables of such Accounts and such
Transferor shall have received notice prior to the Removal Date from
such Rating Agency that such proposed removal will not result in a
downgrade or withdrawal of its then current rating of any outstanding
Series of the Investor Certificates;
(vi) on any Removal Notice Date, the amount of the
Principal Receivables of the Removed Accounts to be reassigned to such
Transferor on the related Removal Date shall not equal or exceed 5% of
the aggregate amount of the Principal Receivables on such Removal Date;
provided, that if any Series has been paid in full, the Principal
Receivables in such Removed Accounts may approximate the Investor
Interest of such Series as of the last day of the Revolving Period with
respect to such Series; and
(vii) such Transferor shall have delivered to the Trustee
an Officer's Certificate confirming the items set forth in clauses (i)
through (vi) above. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to such Transferor, and the Receivables
from the Removed Accounts shall no longer constitute a part of the Trust.
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Section 2.08 Discount Option. The Transferors may at any time,
upon at least 30 days' prior written notice to the Servicer, the Trustee, each
Credit Enhancement Provider and each Rating Agency, designate a percentage,
which may be a fixed percentage or a variable percentage based on a formula (the
"Discounted Percentage"), of the amount of Principal Receivables arising in all
of the Accounts to be treated on and after such designation, or for the period
specified, as Discount Option Receivables; provided, however, that no such
designation shall become effective on the date specified in the written notice
unless the following conditions have been satisfied:
(i) the designation of Discount Option Receivables shall
not, in the reasonable belief of the Transferors, cause a Pay Out Event
to occur or cause an event which with notice or the lapse of time or
both would constitute a Pay Out Event;
(ii) on or before the date specified in the written
notice, the Transferors shall have received written confirmation from
each Rating Agency that such designation will not result in a downgrade
or withdrawal of its then current rating of any outstanding Series of
Investor Certificates;
(iii) the Transferors shall have delivered to the Trustee
an Officer's Certificate confirming the items set forth in clauses (i)
and (ii) above. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
On and after the date of satisfaction of the above conditions,
in processing Collections of Principal Receivables of the Accounts the Servicer
shall deem the product of the Discounted Percentage and Collections of such
Principal Receivables as "Discount Option Receivable Collections" and shall
treat such Discount Option Receivable Collections for all purposes hereunder as
Collections of Finance Charge Receivables.
[End of Article II]
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) Bank of America agrees to act as the Servicer under
this Agreement. The Investor Certificateholders of each Series by their
acceptance of the related Certificates consent to Bank of America acting as
Servicer.
(b) The Servicer shall service and administer the
Receivables and shall collect payments due under the Receivables in accordance
with its customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables and in accordance with the Credit Card
Guidelines and shall have full power and authority, acting alone or through any
party properly designated by it hereunder, to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing and subject to
Section 10.01, the Servicer is hereby authorized and empowered (i) to make
withdrawals from the Collection Account as set forth in this Agreement, (ii)
unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.01, to instruct the
Trustee to make withdrawals and payments, from the Finance Charge Account, the
Principal Account and any Series Account, in accordance with such instructions
as set forth in this Agreement, (iii) unless such power and authority is revoked
by the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.01, to instruct the Trustee in writing, as set forth in this
Agreement, (iv) to execute and deliver, on behalf of the Trust for the benefit
of the Certificateholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (v) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements. The
Trustee agrees that it shall promptly follow the instructions of the Servicer to
withdraw funds from the Principal Account, the Finance Charge Account or any
Series Account and to take any action required under any Credit Enhancement at
such time as required under this Agreement. The Trustee shall execute at the
Servicer's written request such documents prepared by any Transferor and
acceptable to the Servicer as may be necessary
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or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(c) In the event that any Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of the application of
the provisions of Section 9.02 or the order of any federal governmental agency
having regulatory authority over such Transferor or any court of competent
jurisdiction that such Transferor not transfer any additional Principal
Receivables to the Trust) then, in any such event, (A) the Servicer agrees to
allocate, after such date, all Collections with respect to Principal Receivables
and Discount Option Receivables, and all amounts which would have constituted
Collections with respect to Principal Receivables and Discount Option
Receivables but for such Transferor's inability to transfer such Receivables (up
to an aggregate amount equal to the aggregate amount of Principal Receivables
and the amount of Discount Option Receivables in the Trust as of such date) in
accordance with subsection 2.05(d); (B) the Servicer agrees to apply such
amounts as Collections in accordance with Article IV, and (C) for only so long
as all Collections and all amounts which would have constituted Collections are
allocated and applied in accordance with clauses (A) and (B) above, Principal
Receivables and Discount Option Receivables and all amounts which would have
constituted Principal Receivables or Discount Option Receivables, as the case
may be, but for such Transferor's inability to transfer Receivables to the Trust
that are written off as uncollectible in accordance with this Agreement shall
continue to be allocated in accordance with Article IV and all amounts which
would have constituted Principal Receivables but for such Transferor's inability
to transfer Receivables to the Trust shall be deemed to be Principal Receivables
for the purpose of calculating the applicable Investor Percentage thereunder. If
the Servicer is unable pursuant to any Requirement of Law to allocate payments
on the Accounts as described above, the Servicer agrees that it shall in any
such event allocate, after the occurrence of such event, payments on each
Account with respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such payments applied as
Collections in accordance with Article IV. The parties hereto agree that Finance
Charge Receivables, whenever created, accrued in respect of Principal
Receivables which have been conveyed to the Trust, or which would have been
conveyed to the Trust but for the above described inability to transfer such
Receivables, shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Principal Receivables and Discount
Option Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV.
(d) In the event that pursuant to subsection 2.04(d), any
Transferor accepts reassignment of an Ineligible Receivable as a result of a
breach of the representations and warranties in
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subsection 2.04(b) relating to such Receivable, then, in any such event, the
Servicer agrees to account for payments received with respect to such Ineligible
Receivable separately from its accounting for Collections on Principal
Receivables retained by the Trust. If payments received from or on behalf of an
Obligor are not specifically applicable either to an Ineligible Receivable of
such Obligor reassigned to such Transferor or to Receivables of such Obligor
retained in the Trust, then the Servicer agrees to allocate payments
proportionately based on the total amount of Principal Receivables of such
Obligor retained in the Trust and the total amount owing by such Obligor on any
Ineligible Receivables reassigned to such Transferor, and the portion allocable
to any Principal Receivables retained in the Trust shall be treated as
Collections and deposited in accordance with the provisions of Article IV.
(e) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other credit card receivables.
(f) The Servicer shall maintain fidelity bond coverage
insuring against losses through wrongdoing of its officers and employees who are
involved in the servicing of credit card receivables covering such actions and
in such amounts as the Servicer believes to be commercially reasonable from time
to time.
Section 3.02 Servicing Compensation. As full compensation for
its servicing activities hereunder and as reimbursement for its expenses as set
forth in the immediately following paragraph, the Servicer shall be entitled to
receive a servicing fee (the "Servicing Fee") with respect to each Monthly
Period prior to the Termination of the Trust pursuant to Section 12.01, payable
monthly on the related Transfer Date, in an amount equal to one-twelfth of the
product of (a) the weighted average of the Series Servicing Fee Percentages with
respect to each outstanding Series (based upon the Series Servicing Fee
Percentage for each Series and the Investor Interest (or such other amount as
specified in the related Supplement) of such Series, in each case as of the last
day of the prior Monthly Period) and (b) the average amount of Principal
Receivables during the prior Monthly Period. The share of the Servicing Fee
allocable to Investor Certificates of a particular Series with respect to any
Monthly Period will each be determined in accordance with the relevant
Supplement. The portion of the Servicing Fee with respect to any Monthly Period
not so allocated to the Investor Certificates of a particular Series shall be
paid by the Holder of the Transferor Certificate on the related Transfer Date
and in no event shall the Trust, the Trustee or the Investor Certificateholders
of any Series be liable for the share of the Servicing Fee with respect to any
Monthly Period to be
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paid by the Holders of the Transferor Certificates (the "Transferor Servicing
Fee").
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.05 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by the Servicer
in connection with its activities hereunder; provided, that the Servicer shall
not be liable for any liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation any federal, state or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith).
The Servicer shall be required to pay such expenses for its own account and
shall not be entitled to any payment therefor other than the Servicing Fee.
Section 3.03 Representations and Warranties of the Servicer.
Bank of America, as initial Servicer, hereby makes, and any Successor Servicer
by its appointment hereunder shall make (with appropriate modifications to
Section 3.03(a) to reflect the Successor Servicer's organization) the following
representations and warranties on which the Trustee has relied in accepting the
Receivables in trust and in authenticating the Certificates issued on the
Initial Closing Date:
(a) Organization and Good Standing. The Servicer is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States and has full corporate power,
authority and legal right to own its properties and conduct its credit card
business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement.
(b) Due Qualification. The Servicer is not required to
qualify nor register as a foreign corporation in any state in order to service
the Receivables as required by this Agreement and has obtained all licenses and
approvals necessary in order to so service the Receivables as required under
federal and Arizona law. If the Servicer shall be required by any Requirement of
Law to so qualify or register or obtain such license or approval, then it shall
do so.
(c) Due Authorization. The execution, delivery, and
performance of this Agreement have been duly authorized by the Servicer by all
necessary corporate action on the part of the Servicer and this Agreement will
remain, from the time of its execution, an official record of the Servicer.
(d) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of the Servicer, enforceable in accordance
with its terms, except as enforceability may be
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limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general and the rights of creditors of national banking
associations.
(e) No Violation. The execution and delivery of this
Agreement by the Servicer, and the performance of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof applicable to the
Servicer, will not conflict with, violate, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any Requirement of Law applicable to the
Servicer or any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer, threatened
against the Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions contemplated
by this Agreement, seeking any determination or ruling that, in the reasonable
judgment of the Servicer, would materially and adversely affect the performance
by the Servicer of its obligations under this Agreement, or seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement.
(g) Compliance with Requirements of Law. The Servicer
shall duly satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Account, will maintain in effect
all qualifications required under Requirements of Law in order to service
properly each Receivable and the related Account and will comply in all material
respects with all other Requirements of Law in connection with servicing each
Receivable and the related Account the failure to comply with which would have a
material adverse effect on the Certificateholders or any Credit Enhancement
Provider.
Section 3.04 Reports and Records for the Trustee.
(a) Daily Reports. On each Business Day, the Servicer,
with prior notice, shall prepare and make available at the office of the
Servicer for inspection by the Trustee a record setting forth (i) the aggregate
amount of Collections processed by the Servicer on the preceding Business Day
and (ii) the aggregate amount of Receivables as of the close of business on the
preceding Business Day.
(b) Monthly Servicer's Certificate. Unless otherwise
stated in the related Supplement with respect to any Series, on each
Determination Date the Servicer shall forward, as provided
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in Section 13.05, to the Trustee, the Paying Agent, any Credit Enhancement
Provider and each Rating Agency, a certificate of a Servicing Officer in the
form of Exhibit C (which includes the Schedule thereto specified as such in each
Supplement) setting forth (i) the aggregate amount of Collections processed
during the preceding Monthly Period, (ii) the aggregate amount of the applicable
Investor Percentage of Collections of Principal Receivables processed by the
Servicer pursuant to Article IV during the preceding Monthly Period with respect
to each Series then outstanding, (iii) the aggregate amount of the applicable
Investor Percentage of Collections of Finance Charge Receivables processed by
the Servicer pursuant to Article IV during the preceding Monthly Period with
respect to each Series then outstanding, (iv) the aggregate amount of
Receivables processed as of the end of the last day of the preceding Monthly
Period, (v) the balance on deposit in the Finance Charge Account, the Principal
Account or any Series Account applicable to any Series then outstanding on such
Determination Date with respect to Collections processed by the Servicer during
the preceding Monthly Period, (vi) the aggregate amount, if any, of withdrawals,
drawings or payments under any Credit Enhancement, if any, for each Series then
outstanding required to be made with respect to the previous Monthly Period in
the manner provided in the related Supplement, (vii) the sum of all amounts
payable to the Investor Certificateholders of each Series (or for a Series of
more than one Class, each such Class) on the succeeding Distribution Date in
respect of Certificate Principal and Certificate Interest with respect to such
preceding Monthly Period and (viii) such other matters as are set forth in
Exhibit C.
Section 3.05 Annual Servicer's Certificate. On or before
[March 31] of each calendar year, beginning with [March 31, 199_], the Servicer
will deliver, as provided in Section 13.05, to the Trustee, any Credit
Enhancement Provider and the Rating Agency, an Officer's Certificate
substantially in the form of Exhibit D stating that (a) a review of the
activities of the Servicer during the twelve-month period ending on [March 31]
of such year, or for the initial period, from the Closing Date until [March 31,
199_], and of its performance under this Agreement was made under the
supervision of the officer signing such certificate and (b) to the best of such
officer's knowledge, based on such review, the Servicer has fully performed all
its obligations under this Agreement throughout such period, or, if there has
been a default in the performance of any such obligation, specifying each such
default known to such officer and the nature and status thereof. A copy of such
certificate may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
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Section 3.06 Annual Independent Accountants' Servicing Report.
(a) On or before [March 31] of each calendar year,
beginning with [March 31, 199_], the Servicer shall cause a firm or firms of
nationally recognized independent certified public accountants (who may also
render other services to the Servicer or any Transferor) to furnish, as provided
in Section 13.05, a report to the Trustee, any Credit Enhancement Provider and
the Rating Agency, to the effect that such firm has made a study and evaluation,
in accordance with generally accepted auditing standards, of the Servicer's
internal accounting controls relative to the servicing of Accounts under this
Agreement, and that, on the basis of such study and evaluation, such firm is of
the opinion (assuming the accuracy of any reports generated by the Servicer's
third party agents) that the system of internal accounting controls in effect on
the date set forth in such report, relating to servicing procedures performed by
the Servicer, taken as a whole, was sufficient for the prevention and detection
of errors and irregularities in amounts that would be material to the financial
statements of the Servicer and that such servicing was conducted in compliance
with the sections of this Agreement during the period covered by such report
(which shall be the period from January 1 of the preceding calendar year to and
including December 31 of such calendar year, or for the initial period, from the
Closing Date until [December 31, 199_]), except for such exceptions, errors or
irregularities as such firm shall believe to be immaterial to the financial
statements of the Servicer and such other exceptions, errors or irregularities
as shall be set forth in such report. Unless otherwise provided with respect to
any Series in the related Supplement, a copy of such report may be obtained by
any Investor Certificateholder by a request in writing to the Trustee addressed
to the Corporate Trust Office.
(b) On or before [March 31], of each calendar year, beginning
with [March 31, 199_], the Servicer shall cause a firm or firms of nationally
recognized independent certified public accountants (who may also render other
services to the Servicer or any Transferor) to furnish, as provided in Section
13.05, a report, prepared using generally accepted auditing standards, to the
Trustee and the Rating Agency to the effect that they have compared the
mathematical calculations of each amount set forth in the monthly certificates
forwarded by the Servicer pursuant to subsection 3.04(b) during the period
covered by such report (which shall be the period from January 1 of the
preceding calendar year to and including December 31 of such calendar year, or
for the initial period, from the Closing Date until [December 31, 199__]) with
the Servicer's computer reports which were the source of such amounts and that
on the basis of such comparison, such firm is of the opinion that such amounts
are in agreement, except for such exceptions as it believes to be immaterial to
the financial statements of the Servicer and such other exceptions as shall be
set forth in such report. A copy of
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such report may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
Section 3.07 Tax Treatment. Except as otherwise specified in a
Supplement with respect to a particular Series, each Transferor has entered into
this Agreement, and the Certificates will be issued, with the intention that (i)
the Investor Certificates will qualify under applicable federal, state and local
income and franchise tax law as indebtedness secured by the Receivables, and
(ii) the Trust shall not be treated as an association or publicly traded
partnership taxable as a corporation for purposes of federal income tax law.
Each Transferor, the Servicer, each Holder of the Transferor Certificate, each
Investor Certificateholder, and each Certificate Owner agree to treat and to
take no action inconsistent with the treatment of the Investor Certificates (or
beneficial interest therein) as such indebtedness for purposes of federal, state
and local income and franchise taxes, and each Transferor and each Holder of the
Transferor Certificate agree to take no action with respect to the Trust or any
interest therein which would cause the Trust to be treated as an association or
publicly traded partnership taxable as a corporation for purposes of federal
income tax law. Each Investor Certificateholder and the Holder of the Transferor
Certificate, by acceptance of its Certificate, and each Certificate Owner, by
acquisition of a beneficial interest in a Certificate, agree to be bound by the
provisions of this Section 3.07. Each Certificateholder agrees that it will
cause any Certificate Owner acquiring an interest in a Certificate through it to
comply with this Agreement as to treatment as indebtedness under applicable tax
law, as described in this Section 3.07. Subject to Section 11.11, the Trustee
shall treat the Trust as a security device only, and shall not file tax returns
or obtain an employer identification number on behalf of the Trust. The
provisions of this Agreement shall be construed in light of the foregoing
intended tax treatment.
Section 3.08 Notices to the Transferors. At all times that
Bank of America is acting as Servicer, Bank of America shall deliver or make
available to each other Transferor each certificate and report required to be
prepared, forwarded or delivered thereafter pursuant to Sections 3.04, 3.05 and
3.06. In the event that Bank of America is no longer acting as Servicer, any
Successor Servicer appointed pursuant to Section 10.02 shall deliver or make
available to each Transferor each certificate and report required to be
prepared, forwarded or delivered thereafter pursuant to Sections 3.04, 3.05 and
3.06.
Section 3.09 Reports to the Commission. The Servicer shall, on
behalf of the Trust, cause to be filed with the Securities and Exchange
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934 and the rules and regulations of the Securities
and Exchange Commission thereunder. Each Transferor shall, at the
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expense of the Servicer, cooperate in any reasonable request of the Servicer in
connection with such filings.
[End of Article III]
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 Rights of Certificateholders. Each Series of
Investor Certificates shall represent Undivided Interests in the Trust,
including the benefits of any Credit Enhancement issued with respect to such
Series and the right to receive the Collections and other amounts at the times
and in the amounts specified in this Article IV to be deposited in the Investor
Accounts and any other Series Account (if so specified in the related
Supplement) or to be paid to the Investor Certificateholders of such Series;
provided, however, that the aggregate interest represented by such Certificates
at any time in the Principal Receivables shall not exceed an amount equal to the
Investor Interest for such Series at such time. The Transferor Certificate shall
represent the remaining undivided interest in the Trust not allocated to the
Investor Certificates and the other interests issued by the Trust, including the
right to receive the Collections and other amounts at the times and in the
amounts specified in this Article IV to be paid to the Holder of the Transferor
Certificate; provided, however, that the aggregate interest represented by such
Transferor Certificate at any time in the Principal Receivables shall not exceed
the Transferor Interest at such time and such Certificate shall not represent
any interest in the Investor Accounts, except as provided in this Agreement, or
the benefits of any Credit Enhancement issued with respect to any Series.
Section 4.02 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit
of the Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, a non-interest bearing segregated account (the
"Collection Account") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Certificateholders,
or shall cause such Collection Account to be established and maintained, with an
office or branch located in the states of [City locations of the Servicer and
Trustee] of (i) the Servicer, or (ii) a Qualified Institution; provided,
however, that upon the insolvency of the Servicer, the Collection Account shall
not be permitted to be maintained with the Servicer. Pursuant to authority
granted to it pursuant to subsection 3.01(b), the Servicer shall have the
revocable power to withdraw funds from the Collection Account for the purposes
of carrying out its duties hereunder.
(b) The Finance Charge and Principal Accounts. The
Trustee, for the benefit of the Investor Certificateholders, shall establish and
maintain in the State of [State of Trustee's Location] with the Trustee, or
cause to be established and maintained in the State of [State of Trustee's
Location] with a
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Qualified Institution, in the name of the Trust two segregated trust accounts
(the "Finance Charge Account" and the "Principal Account," respectively),
bearing a designation clearly indicating that the funds therein are held for the
benefit of the Investor Certificateholders. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Finance
Charge Account and the Principal Account and in all proceeds thereof. The
Finance Charge Account and the Principal Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If, at any time, the institution holding the Principal
Account or the Finance Charge Account ceases to be a Qualified Institution, the
Trustee shall notify the Rating Agency and within 10 Business Days establish a
new Principal Account or Finance Charge Account, as the case may be, meeting the
conditions specified above with a Qualified Institution, and shall transfer any
cash or any investments to such new Principal Account or Finance Charge Account,
as the case may be. From the date such new Principal Account or Finance Charge
Account, as the case may be, is established, it shall be the "Principal Account"
or "Finance Charge Account." Pursuant to authority granted to it hereunder, the
Servicer shall have the revocable power to instruct the Trustee to withdraw
funds from the Finance Charge Account and Principal Account for the purpose of
carrying out the Servicer's duties hereunder. The Trustee at all times shall
maintain accurate records reflecting each transaction in the Principal Account
and the Finance Charge Account and that funds held therein shall at all times be
held in trust for the benefit of the Investor Certificateholders.
(c) The Distribution Account. The Trustee, for the
benefit of the Investor Certificateholders, shall cause to be established and
maintained in the name of the Trust, with an office or branch of a Qualified
Institution (other than a Transferor), a non-interest bearing segregated demand
deposit account (the "Distribution Account") bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Investor Certificateholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Distribution Account
and in all proceeds thereof. The Distribution Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholders.
(d) Series Accounts. If so provided in the related
Supplement, the Trustee, for the benefit of the Investor Certificateholders,
shall cause to be established and maintained in the name of the Trust, one or
more Series Accounts. Each such Series Account shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Investor Certificateholders of such Series. Each such Series Account will be a
trust account, if so provided in the related Supplement and will have the other
features and be applied as set forth in the related Supplement.
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(e) Administration of the Finance Charge and Principal
Accounts. Funds on deposit in the Principal Account and the Finance Charge
Account shall at all times be invested in Permitted Investments. Any such
investment shall mature and such funds shall be available for withdrawal on or
prior to the Transfer Date related to the Monthly Period in which such funds
were processed for collection, or if so specified in the related Supplement,
immediately preceding a Distribution Date. The Trustee shall maintain for the
benefit of the Investor Certificateholders possession of the negotiable
instruments or securities evidencing the Permitted Investments described in
clause (a) of the definition thereof from the time of purchase thereof until the
time of sale or maturity; provided, that no such investment shall be disposed of
prior to its maturity date. At the end of each month, all interest and earnings
(net of losses and investment expenses) on funds on deposit in the Principal
Account and the Finance Charge Account shall be deposited by the Trustee in a
separate deposit account with a Qualified Institution in the name of the
Servicer, or a Person designated in writing by the Servicer, which shall not
constitute a part of the Trust, or shall otherwise be turned over by the Trustee
to the Servicer not less frequently than monthly. Subject to the restrictions
set forth above, the Servicer, or a Person designated in writing by the
Servicer, of which the Trustee shall have received written notification thereof,
shall have the authority to instruct the Trustee with respect to the investment
of funds on deposit in the Principal Account and the Finance Charge Account. For
purposes of determining the availability of funds or the balances in the Finance
Charge Account and the Principal Account for any reason under this Agreement,
all investment earnings on such funds shall be deemed not to be available or on
deposit.
Section 4.03 Collections and Allocations.
(a) Collections. Except as provided below, the Servicer
shall deposit all Collections in the Collection Account as promptly as possible
after the Date of Processing of such Collections, but in no event later than the
second Business Day following such Date of Processing. In the event of the
insolvency of the Servicer, then, immediately upon the occurrence of such event
and thereafter, the Servicer shall deposit all Collections into the Collection
Account which shall be established and maintained with a Qualified Institution
other than the Servicer in accordance with subsection 4.02(a), and in no such
event shall the Servicer deposit any Collections thereafter into any account
established, held or maintained with the Servicer.
The Servicer shall allocate such amounts to each Series of
Investor Certificates and to the Holder of the Transferor Certificate in
accordance with this Article IV and shall withdraw the required amounts from the
Collection Account or pay such amounts to the Holder of the Transferor
Certificate in accordance
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with this Article IV, in both cases as modified by any Supplement. The Servicer
shall make such deposits or payments on the date indicated therein by wire
transfer or as otherwise provided in the Supplement for any Series of
Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary,
for so long as, and only so long as, Bank of America shall remain the Servicer
hereunder, and (a)(i) the Servicer provides to the Trustee a letter of credit
covering collection risk of the Servicer, and (ii) Bank of America shall not
have received a notice from any Rating Agency that such a letter of credit would
result in the lowering of such Rating Agency's then-existing rating of the
Investor Certificates, or (b) the Servicer shall have and maintain a certificate
of deposit or short-term deposit rating of P-1 by Moody's and of A-1 by Standard
& Poor's and deposit insurance provided by the FDIC, the Servicer need not
deposit Collections from the Collection Account into the Principal Account, the
Finance Charge Account or any Series Account, as provided in any Supplement, or
make payments to the Holder of the Transferor Certificate, prior to the close of
business on the day any Collections are deposited in the Collection Account as
provided in Article IV, but may make such deposits, payments and withdrawals on
each Transfer Date in an amount equal to the net amount of such deposits,
payments and withdrawals which would have been made but for the provisions of
this paragraph. If at any time the Servicer shall qualify to make deposits on
the Transfer Date as provided in this paragraph (or shall cease to be so
qualified) the Servicer shall deliver an Officer's Certificate to the Trustee
stating that the criteria set forth in (a)(i) and (ii) or (b) of this paragraph
have been satisfied (or have ceased to be satisfied). The Trustee may rely on
such Officer's Certificate without investigation or inquiry.
Notwithstanding anything else in this Agreement to the
contrary, with respect to any Monthly Period, whether the Servicer is required
to make monthly or daily deposits from the Collection Account into the Finance
Charge Account, the Principal Account or any Series Account, as provided in any
Supplement, (i) the Servicer will only be required to deposit Collections from
the Collection Account into the Finance Charge Account, the Principal Account or
any Series Account up to the required amount to be deposited into any such
deposit account or, without duplication, distributed on or prior to the related
Distribution Date to Investor Certificateholders or to any Credit Enhancement
Provider pursuant to the terms of any Supplement or agreement relating to such
Credit Enhancement and (ii) if at any time prior to such Distribution Date the
amount of Collections deposited in the Collection Account exceeds the amount
required to be deposited pursuant to clause (i) above, the Servicer will be
permitted to withdraw the excess from the Collection Account.
(b) Allocations for the Transferor Certificate.
Throughout the existence of the Trust, unless otherwise stated in
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any Supplement, the Servicer shall allocate to the Holder of the Transferor
Certificate an amount equal to the product of (A) the Transferor Percentage and
(B) the aggregate amount of such Collections allocated to Principal Receivables
and Finance Charge Receivables, respectively, in respect of each Monthly Period.
Notwithstanding anything in this Agreement to the contrary, unless otherwise
stated in any Supplement, the Servicer need not deposit this amount or any other
amounts so allocated to the Transferor Certificate pursuant to any Supplement
into the Collection Account and shall pay, or be deemed to pay, such amounts as
collected to the Holder of the Transferor Certificate.
(c) Adjustments for Miscellaneous Credits and Fraudulent
Charges. The Servicer shall be obligated to reduce on a net basis each Monthly
Period the aggregate amount of Principal Receivables used to calculate the
Transferor Interest as provided in this subsection 4.03(c) (a "Credit
Adjustment") with respect to any Principal Receivable (i) which was created in
respect of merchandise refused or returned by the Obligor thereunder or as to
which the Obligor thereunder has asserted a counterclaim or defense, (ii) which
is reduced by the Servicer by any rebate, refund, charge-back or adjustment
(including Servicer errors), (iii) which was created as a result of a
fraudulent or counterfeit charge or which is transferred to a credit card
account that would qualify, but for the application of the proviso in the
definition of the term "Transferred Account" in Section 1.01, as a Transferred
Account.
In the event that the inclusion of the amount of a Credit
Adjustment in the calculation of the Transferor Interest would cause the
Transferor Interest to be an amount less than zero, the Transferor which owns
the Account to which such Credit Adjustment is made shall make a deposit, no
later than the Business Day following the Date of Processing of such Credit
Adjustment, in the Principal Account (for allocation as Collections of Principal
Receivables pursuant to Article IV) in immediately available funds in an amount
equal to the amount by which such Credit Adjustment exceeds the Transferor
Interest on such Date of Processing.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
[End of Article IV]
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ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article V]
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ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. Subject to Sections 6.10 and
6.13, the Investor Certificates of each Series and any Class thereof may be
issued in bearer form (the "Bearer Certificates") with attached interest coupons
and a special coupon (collectively, the "Coupons") or in fully registered form
(the "Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the related Supplement. The Transferor
Certificate shall be substantially in the form of Exhibit A. The Investor
Certificates and the Transferor Certificate shall, upon issue pursuant hereto or
to Section 6.09 or Section 6.10, be executed and delivered by the Transferors to
the Trustee for authentication and redelivery as provided in Sections 2.01 and
6.02. Any Investor Certificate shall be issuable in a minimum denomination of
$1,000 Undivided Interest and integral multiples thereof, unless otherwise
specified in any Supplement. The Transferor Certificate shall also be issued as
a single certificate. Each Certificate shall be executed by manual or facsimile
signature on behalf of the Transferors by its President or any Vice President.
Certificates bearing the manual or facsimile signature of the individual who
was, at the time when such signature was affixed, authorized to sign on behalf
of the Transferors or the Trustee shall not be rendered invalid, notwithstanding
that such individual has ceased to be so authorized prior to the authentication
and delivery of such Certificates or does not hold such office at the date of
such Certificates. Unless otherwise provided in the related Supplement, no
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication
except Bearer Certificates which shall be dated the applicable Issuance Date as
provided in the related Supplement.
Section 6.02 Authentication of Certificates. Contemporaneously
with the initial assignment and transfer of the Receivables, whether now
existing or hereafter created and the other components to the Trust, the Trustee
shall authenticate and deliver the initial Series of Investor Certificates, upon
the written order of the Transferors, to the underwriters for the sale of the
Book-Entry Certificates evidenced by such Investor Certificates, and against
payment to the Transferors of the Initial Investor Interest (net of any purchase
or underwriting discount). Upon the receipt of such payment and the issuance of
the Investor
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Certificates, such Investor Certificates shall be fully paid and non-assessable.
The Trustee shall authenticate and deliver the Transferor Certificate to Bank of
America or its designee simultaneously with its delivery to the Transferors of
the initial Series of Investor Certificates. Upon a New Issuance as provided in
Section 6.09 and the satisfaction of certain other conditions specified therein,
the Trustee shall authenticate and deliver the Investor Certificates of
additional Series (with the designation provided in the related Supplement),
upon the order of the Transferors, to the Persons designated in such Supplement.
Upon the order of the Transferors, the Certificates of any Series shall be duly
authenticated by or on behalf of the Trustee, in authorized denominations. If
specified in the related Supplement for any Series, the Trustee shall
authenticate and deliver outside the United States the Global Certificate that
is issued upon original issuance thereof, upon the written order of the
Transferors, to the Depository against payment of the purchase price therefor.
If specified in the related Supplement for any Series, the Trustee shall
authenticate Book-Entry Certificates that are issued upon original issuance
thereof, upon the written order of the Transferors, to a Clearing Agency or its
nominee as provided in Section 6.10 against payment of the purchase price
thereof.
Section 6.03 Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at the office or
agency to be maintained by a transfer agent and registrar (the "Transfer Agent
and Registrar"), in accordance with the provisions of Section 11.16, a register
(the "Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. The Trustee is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate is issued as a Global
Certificate, the Trustee may, or if and so long as any Series of Investor
Certificates are listed on the Luxembourg Stock Exchange and such exchange shall
so require, the Trustee shall appoint a co-transfer agent and co-registrar in
Luxembourg or another European city. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context otherwise requires. The Trustee shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' written notice
to the Servicer. In the event that the Trustee shall no longer be the Transfer
Agent and Registrar, the Trustee shall appoint a successor Transfer Agent and
Registrar.
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Upon surrender for registration of transfer of any Certificate
at any office or agency of the Transfer Agent and Registrar, the Transferors
shall execute, subject to the provisions of subsection 6.03(c), and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Interests; provided, that the provisions of this paragraph
shall not apply to Bearer Certificates.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same Series
in authorized denominations of like aggregate Undivided Interests, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency. At the option of any Holder of Registered Certificates, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose. At the option of a Bearer Certificateholder, subject to applicable laws
and regulations (including without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of like aggregate
Undivided Interests in the Trust, in the manner specified in the Supplement for
such Series, upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this Section 6.03 shall
have attached thereto (or be accompanied by) all unmatured Coupons, provided
that any Bearer Certificate so surrendered after the close of business on the
Record Date preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to such
Distribution Date.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Transferors shall execute, and the Trustee shall
authenticate and (unless the Transfer Agent and Registrar is different than the
Trustee, in which case the Transfer Agent and Registrar shall) deliver, the
Investor Certificates of such Series which the Certificateholder making the
exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the Trustee and the
Transfer Agent and Registrar duly executed by the Certificateholder thereof or
his attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.03 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the transfer of or exchange any Investor Certificate of
any Series
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for a period of 15 days preceding the due date for any payment with
respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer or exchange of
Certificates, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer and exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee. The Trustee shall cancel and destroy the
Global Certificates upon its exchange in full for Definitive Certificates and
shall deliver a certificate of destruction to the Transferors. Such certificate
shall also state that a certificate or certificates of each Foreign Clearing
Agency to the effect referred to in Section 6.13 was received with respect to
each portion of the Global Certificate exchanged for Definitive Certificates.
The Transferors shall execute and deliver to the Trustee or
the Transfer Agent and Registrar, as applicable, Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary to
enable the Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.09 or 7.02, in no
event shall the Transferor Certificate or any interest therein be transferred
hereunder, in whole or in part, unless the Transferors shall have consented in
writing to such transfer and unless the Trustee shall have received (1)
confirmation in writing from each Rating Agency that such transfer will not
result in a lowering or withdrawal of its then-current rating of any Series of
Investor Certificates, and (2) an Opinion of Counsel that such transfer does not
adversely affect the conclusions reached in any of the federal income tax
opinions dated the applicable Closing Date issued in connection with the
original issuance of any Series of Investor Certificates; provided further, that
no interest in the Transferor Certificate may be transferred unless its initial
offering price would be at least $20,000 and it cannot be subdivided for resale
into units smaller than a unit the initial offering price of which would have
been at least $20,000, absent an Opinion of Counsel to the effect that such
transfer would not cause the Trust to be treated as a publicly traded
partnership under the Code. In connection with any transfer of an interest in
the Transferor Certificate, the holder (including the Transferor or any
subsequent transferee) thereof shall not sell, trade or transfer any interest
therein or cause any interest therein to be marketed on or through either (i) an
"established securities market" within
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the meaning of Section 7704(b)(1) of the Internal Revenue Code, including
without limitation an interdealer quotation system that regularly disseminates
firm buy or sell quotations by identified brokers or dealers by electronic means
or otherwise or (ii) a "secondary market" within the meaning of Internal Revenue
Code section 7704(b)(2), including a market wherein interests in the Transferor
Certificate are regularly quoted by any person making a market in such interests
and a market wherein any person regularly makes available bid or offer quotes
with respect to interests in the Transferor Certificate and stands ready to
effect buy or sell transactions at the quoted prices for itself or on behalf of
others.
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend relating
to the restrictions on transfer of such Registered Certificates (which legend
shall be set forth in the Supplement relating to such Investor Certificates)
shall be effected only if the conditions set forth in such related Supplement
are satisfied.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall promptly
seek instructions from the Servicer regarding such transfer. The Transfer Agent
and Registrar and the Trustee shall be entitled to receive written instructions
signed by a Servicing Officer prior to registering any such transfer or
authenticating new Registered Certificates, as the case may be. The Servicer
hereby agrees to indemnify the Transfer Agent and Registrar and the Trustee and
to hold each of them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on any such written
instructions furnished pursuant to this subsection 6.03(c).
(d) The Transfer Agent and Registrar will maintain at its
expense in [Name of City and State] (and subject to this Section 6.03, if
specified in the related Supplement for any Series, any other city designated in
such Supplement) an office or offices or an agency or agencies where Investor
Certificates of such Series may be surrendered for registration of transfer or
exchange.
Section 6.04 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate (together, in the case of Bearer
Certificates, with all unmatured Coupons, if any, appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the
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absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Transferors shall execute and the Trustee shall
authenticate and (unless the Transfer Agent and Registrar is different from the
Trustee, in which case the Transfer Agent and Registrar shall) deliver (in
compliance with applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate Undivided Interest. In connection with the issuance of any
new Certificate under this Section 6.04, the Trustee or the Transfer Agent and
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Transfer Agent
and Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section 6.04 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 6.05 Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat a
Certificateholder as the owner of the related Certificate for the purpose of
receiving distributions pursuant to Article V (as described in any Supplement)
and for all other purposes whatsoever, and neither the Trustee, the Paying
Agent, the Transfer Agent and Registrar nor any agent of any of them shall be
affected by any notice to the contrary; provided, however, that in determining
whether the holders of Investor Certificates evidencing the requisite Undivided
Interests have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Investor Certificates owned by the Transferors, the
Servicer or any Affiliate thereof shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Investor Certificates which a Responsible Officer in the
Corporate Trust Office of the Trustee knows to be so owned shall be so
disregarded. Investor Certificates so owned that have been pledged in good faith
shall not be disregarded as outstanding, if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Investor Certificates and that the pledgee is not a Transferor, the Servicer or
an Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of them may treat
the holder of a Bearer Certificate or Coupon as the owner of such Bearer
Certificate or Coupon for the purpose of receiving distributions pursuant to
Article IV and Article XII and for all other purposes whatsoever, and neither
the Trustee, the Paying Agent, the Transfer Agent and Registrar
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nor any agent of any of them shall be affected by any notice to the contrary.
Certificates so owned which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding, if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Investor Certificates and that the pledgee is not a Transferor, the
Servicer or an Affiliate thereof.
Section 6.06 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V hereof. Any Paying Agent
shall have the revocable power to withdraw funds from such appropriate account
or accounts for the purpose of making distributions referred to above. The
Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke such
power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is the Paying Agent) determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect or for other good cause. The Trustee (or the Servicer if the
Trustee is the Paying Agent) shall notify Moody's and Standard & Poor's of the
removal of any Paying Agent. The Paying Agent, unless the Supplement with
respect to any Series states otherwise, shall initially be the Trustee. If any
form of Investor Certificate is issued as a Global Certificate, or if and so
long as any Series of Investor Certificates are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Trustee shall appoint a
co-paying agent in Luxembourg or another European city. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Servicer. In the event that the Trustee shall no longer be the Paying Agent, the
Trustee shall appoint a successor to act as Paying Agent (which shall be a bank
or trust company). The provisions of Sections 11.01, 11.02 and 11.03 shall apply
to the Trustee also in its role as Paying Agent, for so long as the Trustee
shall act as Paying Agent. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long
as the Investor Certificates of such Series are outstanding, the Transferors
shall maintain a co-paying agent in New York City (for Registered Certificates
only) or any other city designated in such Supplement which, if and so long as
any Series of Investor Certificates is listed on the Luxembourg Stock Exchange
or other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
(b) The Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to the Trustee an instrument
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in which such Paying Agent shall agree with the Trustee that such Paying Agent
will hold all sums, if any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders and shall agree, and if the Trustee is
the Paying Agent it hereby agrees, that it shall comply with all requirements of
the Internal Revenue Code regarding the withholding by the Trustee of payments
in respect of federal income taxes due from Certificate Owners.
Section 6.07 Access to List of Certificateholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or the
Paying Agent, respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and addresses of the
Investor Certificateholders as of the most recent Record Date for payment of
distributions to Investor Certificateholders. Unless otherwise provided in the
related Supplement, holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 10% of the Investor Interest of the Investor
Certificates of any Series (the "Applicants") may apply in writing to the
Trustee, and if such application states that the Applicants desire to
communicate with other Investor Certificateholders of any Series with respect to
their rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford such Applicants access during normal business
hours to the most recent list of Certificateholders held by the Trustee and
shall give the Servicer notice that such request has been made, within five
Business Days after the receipt of such application. Such list shall be as of a
date no more than 45 days prior to the date of receipt of such Applicants'
request. Every Certificateholder, by receiving and holding a Certificate, agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor
any of their respective agents shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was obtained.
Section 6.08 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating
agents with respect to the Certificates which shall be authorized to act on
behalf of the Trustee in authenticating the Certificates in connection with the
issuance, delivery, registration of transfer, exchange or repayment of the
Certificates. Whenever reference is made in this Agreement to the authentication
of Certificates by the Trustee or the
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Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an authenticating agent and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent. Each authenticating agent must be acceptable to the
Transferors.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Trustee and to the Transferors. The
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the
Transferors. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Trustee or the Transferors, the Trustee promptly may appoint a
successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent. No successor authenticating agent
shall be appointed unless acceptable to the Trustee and the Transferors.
(d) The Trustee agrees to pay each authenticating agent
from time to time reasonable compensation for its services under this Section
6.08, and the Trustee shall be entitled to be reimbursed and the Servicer shall
reimburse the Trustee for such reasonable payments actually made, subject to the
provisions of Section 11.05.
(e) The provisions of Sections 11.01, 11.02 and 11.03
shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
6.08, the Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication in
substantially the following form:
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This is one of the certificates described in the Pooling and
Servicing Agreement.
__________________________________
as Authenticating Agent
for the Trustee,
By:_______________________________
Authorized Officer
Section 6.09 New Issuances.
(a) Upon the issuance of a new Series of Investor
Certificates, the Trustee shall issue to or upon the order of the Holder of the
Transferor Certificate under Section 6.01, for execution and redelivery to the
Trustee for authentication under Section 6.02, one or more new Series of
Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the related Supplement and shall bear,
upon its face, the designation for such Series to which it belongs, as selected
by the Transferors. Except as specified in any Supplement for a related Series,
all Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Credit Enhancement provided for any Series shall not be available for any other
Series) without preference, priority or distinction on account of the actual
time or times of authentication and delivery, all in accordance with the terms
and provisions of this Agreement and the related Supplement.
(b) The Holder of the Transferor Certificate may permit a
new Series of Investor Certificates to be issued (a "New Issuance") by notifying
the Trustee, in writing at least three (3) days in advance (an "New Issuance
Notice") of the date upon which the New Issuance is to occur (a "New Issuance
Date"). Any New Issuance Notice shall state the designation of any Series (and
Class thereof, if applicable) to be issued on the New Issuance Date and, with
respect to each such Series: (a) its Initial Investor Interest (or the method
for calculating such Initial Investor Interest) (b) its Certificate Rate (or the
method for allocating interest payments or other cash flows to such Series), if
any, and (c) the Credit Enhancement Provider, if any, with respect to such
Series. On the New Issuance Date, the Trustee shall authenticate and deliver any
such Series of Investor Certificates only upon delivery to it of the following:
(a) a Supplement satisfying the criteria set forth in subsection 6.09(c)
executed by the Transferors and specifying the Principal Terms of such Series,
(b) the applicable Credit Enhancement, if any, (c) the agreement, if any,
pursuant to which the Credit Enhancement Provider agrees to provide the Credit
Enhancement, if any, (d) except to the extent otherwise provided in the
Supplement relating to such Series, a Tax Opinion with respect to the issuance
of such Series, (e) written confirmation from each Rating Agency that the New
Issuance will not result in such Rating Agency's reducing or
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withdrawing its rating on any then outstanding Series as to which it is a Rating
Agency and (f) an Officer's Certificate signed by a Vice President (or any more
senior officer) of the Transferors, that on the New Issuance Date (i) the
Transferors, after giving effect to the New Issuance, would not be required to
add Additional Accounts pursuant to subsection 2.06(a) and (ii) after giving
effect to such New Issuance, the Transferor Interest would be at least equal to
the Minimum Transferor Interest. Upon satisfaction of such conditions, the
Trustee shall cancel the existing Transferor Certificate or applicable Investor
Certificates, as the case may be, and issue, as provided above, such Series of
Investor Certificates and a new Transferor Certificate, dated the New Issuance
Date. There is no limit to the number of New Issuances that may be performed
under this Agreement.
(c) In conjunction with a New Issuance, the parties
hereto shall execute a Supplement, which shall specify the relevant terms with
respect to any newly issued Series of Investor Certificates, which may include
without limitation: (i) its name or designation, (ii) an Initial Investor
Interest or the method of calculating the Initial Investor Interest, (iii) the
method of determining any adjusted Investor Interest, if applicable, (iv) the
Certificate Rate (or formula for the determination thereof), (v) the Closing
Date, (vi) each rating agency rating such Series, (vii) the name of the Clearing
Agency, if any, (viii) the rights of the Holder of the Transferor Certificate
that have been transferred to the Holders of such Series pursuant to such New
Issuance (including any rights to allocations of Collections of Finance Charge
Receivables and Principal Receivables), (ix) the interest payment date or dates
and the date or dates from which interest shall accrue, (x) the periods during
which or dates on which principal will be paid or accrued, (xi) the method of
allocating Collections with respect to Principal Receivables for such Series
and, if applicable, with respect to other Series and the method by which the
principal amount of Investor Certificates of such Series shall amortize or
accrete and the method for allocating Collections with respect to Finance Charge
Receivables and Receivables in Defaulted Accounts, (xii) any other Collections
with respect to Receivables or other amounts available to be paid with respect
to such Series, (xiii) the names of any accounts to be used by such Series and
the terms governing the operation of any such account and use of moneys therein,
(xiv) the Series Servicing Fee and the Series Servicing Fee Percentage, (xv) the
Minimum Transferor Interest and, the Series Termination Date, (xvi) the terms of
any Credit Enhancement with respect to such Series, and the Credit Enhancement
Provider, if applicable, (xvii) the base rate applicable to such Series, (xviii)
the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xix) any deposit into any account provided for
such Series, (xx) the number of Classes of such Series, and if more than one
Class, the rights and priorities of each such Class, (xxi) whether Interchange
or other fees will be included in the funds available to be paid for such
Series, (xxii) the
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priority of any Series with respect to any other Series, (xxiii) the Minimum
Aggregate Principal Receivables (xxiv) whether such Series will be part of a
Group, (xxv) whether such Series will or may be a Paired Series and the Series
with which it will be paired, if applicable, and (xxvi) any other relevant terms
of such Series (including whether or not such Series will be pledged as
collateral for an issuance of any other securities, including commercial paper)
(all such terms, the "Principal Terms" of such Series). The terms of such
Supplement may modify or amend the terms of this Agreement solely as applied to
such new Series. If on the date of the issuance of such Series there is issued
and outstanding one or more Series of Investor Certificates and no Series of
Investor Certificates is currently rated by a Rating Agency, then as a condition
to such New Issuance a nationally recognized investment banking firm or
commercial bank shall also deliver to the Trustee an officer's certificate
stating, in substance, that the New Issuance will not have an adverse effect on
the timing or distribution of payments to such other Series of Investor
Certificates then issued and outstanding.
(d) The Transferors may instruct the Trustee and upon receipt of such
instruction, the Trustee shall alter the Transferor Certificate to provide for
one or more additional certificates (each a "Supplemental Certificate"), the
terms of which shall be defined in a supplement to this Agreement (which
supplement shall be subject to subsection 13.01(a) only to the extent that it
amends any of the terms of this Agreement), to be delivered to or upon the order
of the Transferors (or the Holder of a Supplemental Certificate, in the case of
the transfer or exchange thereof, as provided below), upon satisfaction of the
following conditions:
(i) The Transferors shall have given written notice to each
Rating Agency of such Supplemental Certificate issuance;
(ii) the Transferor Interest (excluding the interest
represented by any Supplemental Certificate) shall not be less than 2%
of the total amount of Principal Receivables as of the date of, and
after giving effect to, such exchange; and
(iii) if any Series of Investor Certificates are outstanding
that were characterized as debt at the time of their issuance, the
Transferors shall have delivered to the Trustee and each Rating Agency a
Tax Opinion, dated the date of such transfer, with respect thereto.
Any Supplemental Certificate may be transferred only upon satisfaction of the
conditions set forth in clause (ii) above.
(e) The Transferor Certificate (or any interest therein) may be
transferred to a Person which is a member of the "affiliated group" of which
the Corporation is the "common parent" (as such terms are defined in Section
1504(a) of the Code); provided that (i) if any Series of Investor Certificates
are outstanding that were characterized as debt at the time of their issuance,
the Transferors shall have delivered to the Trustee and each Rating Agency a Tax
Opinion, dated the date of such transfer, with respect thereto, and (ii) any
such transferee shall be deemed to be a "Transferor" for purposes of
Sections 7.04 and 9.02.
Section 6.10 Book-Entry Certificates. Unless otherwise
provided in any related Supplement, the Investor Certificates, upon original
issuance, shall be issued in the form of typewritten Certificates representing
the Book-Entry Certificates, to be delivered to the depository specified in such
Supplement (the "Depository") which shall be the Clearing Agency or Foreign
Clearing Agency, by or on behalf of such Series. The Investor Certificates of
each Series shall, unless otherwise provided in the related Supplement,
initially be registered on the Certificate Register in the name of the nominee
of the Clearing Agency or Foreign Clearing Agency. No Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the related Series of Investor Certificates, except as provided in Section
6.12. Unless and until definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to Certificate Owners
pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be in full
force and effect with respect to each such Series;
(ii) the Transferors, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including
the making of distributions on the Investor Certificates of each such
Series) as the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section
6.10 conflict with any other provisions of this Agreement, the
provisions of this Section 6.10 shall control with respect to each such
Series; and
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(iv) the rights of Certificate Owners of each such Series
shall be exercised only through the Clearing Agency or Foreign Clearing
Agency and the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement applicable to a Series, unless and until Definitive
Certificates of such Series are issued pursuant to Section 6.12, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Investor Certificates to such Clearing
Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for distribution
to Holders of Investor Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the
Transferors advise the Trustee in writing that the Clearing Agency or Foreign
Clearing Agency is no longer willing or able to discharge properly its
responsibilities under the applicable Depository Agreement, and (B) the Trustee
is or the Transferors are unable to locate a qualified successor, (ii) the
Transferors, at their option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or Foreign Clearing
Agency with respect to any Series of Certificates or (iii) after the occurrence
of a Servicer Default, Certificate Owners of a Series representing beneficial
interests aggregating not less than 50% of the Investor Interest of such Series
advise the Trustee and the applicable Clearing Agency or Foreign Clearing Agency
through the applicable Clearing Agency Participants in writing that the
continuation of a book-entry system through the applicable Clearing Agency or
Foreign Clearing Agency is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners of such Series, through
the applicable Clearing Agency Participants, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners of such
Series requesting the same. Upon surrender to the Trustee of the Investor
Certificates of such Series by the applicable Clearing Agency or Foreign
Clearing Agency, accompanied by registration instructions from the applicable
Clearing Agency or Foreign Clearing Agency for registration, the Trustee shall
issue the Definitive Certificates of such Series. Neither the Transferors nor
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of
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Definitive Certificates of such Series all references herein to obligations
imposed upon or to be performed by the applicable Clearing Agency or Foreign
Clearing Agency shall be deemed to be imposed upon and performed by the Trustee,
to the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates of such
Series as Certificateholders of such Series hereunder.
Section 6.13 Global Certificate; Euro-Certificate Exchange
Date. If specified in the related Supplement for any Series, the Investor
Certificates may be initially issued in the form of a single temporary Global
Certificate (the "Global Certificate") in bearer form, without interest coupons,
in the denomination of the Initial Investor Interest and substantially in the
form attached to the related Supplement. Unless otherwise specified in the
related Supplement, the provisions of this Section 6.13 shall apply to such
Global Certificate. The Global Certificate will be authenticated by the Trustee
upon the same conditions, in substantially the same manner and with the same
effect as the Definitive Certificates. The Global Certificate may be exchanged
in the manner described in the related Supplement for Registered or Bearer
Certificates in definitive form.
Section 6.14 Meetings of Certificateholders.
To the extent provided by the Supplement for any Series issued
in whole or in part in Bearer Certificates, the Servicer or the Trustee may at
any time call a meeting of the Certificateholders of such Series, to be held at
such time and at such place as the Servicer or the Trustee, as the case may be,
shall determine, for the purpose of approving a modification of or amendment to,
or obtaining a waiver of, any covenant or condition set forth in this Agreement
with respect to such Series or in the Certificates of such Series, subject to
Section 13.01 of this Agreement.
Section 6.15 Uncertificated Classes. Notwithstanding anything
to the contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
[End of Article VI]
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ARTICLE VII
OTHER MATTERS RELATING
TO EACH TRANSFEROR
Section 7.01 Liability of each Transferor. Each Transferor
shall be liable in accordance herewith to the extent of the obligations
specifically undertaken by the Transferor.
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor.
(a) A Transferor shall not consolidate with or merge into
any other Person or convey or transfer its properties and assets substantially
as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
such Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of such Transferor substantially as
an entirety shall be, if such Transferor is not the surviving entity,
organized and existing under the laws of the United States of America
or any State or the District of Columbia, and shall be a national
banking association, state banking corporation or other entity which is
not subject to the bankruptcy laws of the United States of America and
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of such Transferor, as
applicable hereunder, and shall benefit from all the rights granted to
such Transferor, as applicable hereunder. To the extent that any right,
covenant or obligation of a Transferor, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity. In
furtherance hereof, in applying this Section 7.02 to a successor
entity, Section 9.02 hereof shall be applied by reference to events of
involuntary liquidation, receivership or conservatorship applicable to
such successor entity as shall be set forth in the officer's
certificate described in subsection 7.02(a) (ii);
(ii) such Transferor shall have delivered to the Trustee
an Officer's Certificate signed by a Vice President (or any more senior
officer) of such Transferor stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section 7.02 and that all conditions precedent herein provided for
relating to such transaction have been complied with and an Opinion of
Counsel that such supplemental agreement is legal, valid and binding;
and
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(iii) such Transferor shall have delivered notice to each
Rating Agency of such consolidation, merger, conveyance or transfer.
(b) The obligations of a Transferor hereunder shall not
be assignable nor shall any Person succeed to the obligations of a Transferor
hereunder except for mergers, consolidations, assumptions or transfers in
accordance with the provisions of the foregoing paragraph.
Section 7.03 Limitation on Liability. The directors, officers,
employees or agents of any Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders, any Credit Enhancement Provider or
any other Person hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the execution of this
Agreement and any Supplement and the issuance of the Certificates; provided,
however, that this provision shall not protect the officers, directors,
employees, or agents of any Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. Except as provided in Section 7.04, the
Transferor shall not be under any liability to the Trust, the Trustee, the
Certificateholders, any Credit Enhancement Provider or any other Person for any
action taken or for refraining from the taking of any action in its capacity as
a Transferor pursuant to this Agreement or any Supplement whether arising from
express or implied duties under this Agreement or any Supplement; provided,
however, that this provision shall not protect any Transferor against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Each Transferor and any director,
officer, employee or agent of each Transferor may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
Section 7.04 Liabilities. Notwithstanding any provision of
this Agreement (including without limitation Sections 3.02, 7.03, 8.03, 8.04 and
11.11), by entering into this Agreement, each Transferor agrees, without
duplication, to be liable, directly to the injured party, for the entire amount
of any losses, claims, damages or liabilities (other than those incurred by an
Investor Certificateholder in the capacity of an investor in the Investor
Certificates) arising out of or based on each of the arrangements created by
this Agreement and the actions of the Servicer taken pursuant hereto (to the
extent any property of the Trust is remaining after the Investor
Certificateholders and Credit Enhancement providers have been paid in full are
insufficient to pay such losses, claims, damages
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or liabilities) as though this Agreement created a partnership under the New
York Uniform Partnership Act in which each Transferor was a general partner. The
rights to the injured party provided by this Section 7.04 shall run directly to
and be enforceable by such party subject to the limitations hereof. In the event
of the appointment of a Successor Servicer, the Successor Servicer will (from
its own assets and not from the assets of the Trust) indemnify and hold harmless
each Transferor against and from any losses, claims, damages and liabilities of
such Transferor as described in this Section arising from the actions or
omissions of such Successor Servicer.
[End Of Article VII]
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ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.01 Liability of the Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
the Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer substantially as an
entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall be a state or national banking association or other
entity which is not subject to the bankruptcy laws of the United States
of America and, if the Servicer is not the surviving entity, shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to the Trustee in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Servicer hereunder
(to the extent that any right, covenant or obligation of the Servicer,
as applicable hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to
such successor entity);
(ii) the Servicer shall have delivered to the Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.02
and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with respect to the
Servicer; and
(iii) the Servicer shall have delivered notice to the
Rating Agency of such consolidation, merger, conveyance or transfer.
Section 8.03 Limitation on Liability of the Servicer and
Others. The directors, officers, employees or agents of the Servicer shall not
be under any liability to the Trust, the Trustee, the Certificateholders, any
Credit Enhancement Provider or any other Person hereunder or pursuant to any
document
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delivered hereunder, it being expressly understood that all such liability is
expressly waived and released as a condition of, and as consideration for, the
execution of this Agreement and any Supplement and the issuance of the
Certificates; provided, however, that this provision shall not protect the
directors, officers, employees and agents of the Servicer against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. Except as provided in Section 8.04 with
respect to the Trust and the Trustee, its officers, directors, employees and
agents, the Servicer shall not be under any liability to the Trust, the Trustee,
its officers, directors, employees and agents, the Certificateholders or any
other Person for any action taken or for refraining from the taking of any
action in its capacity as Servicer pursuant to this Agreement or any Supplement;
provided, however, that this provision shall not protect the Servicer against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of its
reckless disregard of its obligations and duties hereunder or under any
Supplement. The Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Receivables in accordance with this Agreement which in its
reasonable opinion may involve it in any expense or liability.
Section 8.04 Servicer Indemnification of the Trust and the
Trustee. The Servicer shall indemnify and hold harmless the Trust and the
Trustee, its officers, directors, employees and agents, from and against any
reasonable loss, liability, expense, damage or injury suffered or sustained by
reason of any acts or omissions or alleged acts or omissions of the Servicer
with respect to activities of the Trust or the Trustee pursuant to this
Agreement or any Supplement, including, but not limited to any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that the Servicer shall not indemnify the Trustee if
such acts, omissions or alleged acts or omissions constitute or are caused by
fraud, negligence, or willful misconduct by the Trustee; provided further, that
the Servicer shall not indemnify the Trust, the Investor Certificateholders or
the Certificate Owners for any liabilities, costs or expenses of the Trust with
respect to any action taken by the Trustee at the request of the Investor
Certificateholders; provided further, that the Servicer shall not indemnify the
Trust, the Investor Certificateholders or the Certificate Owners as to any
losses, claims or damages incurred by any of them in their capacities as
investors, including without limitation losses incurred as a result of Defaulted
Accounts or Receivables which are written off
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as uncollectible; and provided further, that the Servicer shall not indemnify
the Trust, the Investor Certificateholders or the Certificate Owners for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation,
any federal, state, local or foreign income or franchise taxes or any other tax
imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith) required to be paid by
the Trust, the Investor Certificateholders or the Certificate Owners in
connection herewith to any taxing authority. Any such indemnification shall not
be payable from the assets of the Trust. The provisions of this indemnity shall
run directly to and be enforceable by an injured party subject to the
limitations hereof and shall survive the termination of this Trust and the
resignation or removal of the Trustee.
Section 8.05 The Servicer Not to Resign. The Servicer shall
not resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel and as to clause (ii) by an Officer's Certificate, each to
such effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02 hereof. If the Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer hereunder.
Section 8.06 Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the Trustee access to
the documentation regarding the Accounts and the Receivables in such cases where
the Trustee is required in connection with the enforcement of the rights of the
Investor Certificateholders, or by applicable statutes or regulations to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and (iv) at offices
designated by the Servicer. Nothing in this Section 8.06 shall derogate from the
obligation of any Transferor, the Trustee or the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.06
as a result of such obligations shall not constitute a breach of this Section
8.06.
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Section 8.07 Delegation of Duties. In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines. Any such delegations shall not relieve the Servicer of its liability
and responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.05 hereof. Notification of any such
delegation shall be given to each Rating Agency.
Section 8.08 Examination of Records. The Servicer shall
clearly and unambiguously identify each Account (including any Additional
Account designated pursuant to Section 2.06) in its computer or other records to
reflect that the Receivables arising in such Account have been conveyed to the
Trust pursuant to this Agreement. The Servicer shall, prior to the sale or
transfer to a third party of any receivable held in its custody, examine its
computer and other records to determine that such receivable is not a
Receivable.
[End of Article VIII]
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ARTICLE IX
PAY OUT EVENTS
Section 9.01 Pay Out Events. If any one of the following
events (each, a "Trust Pay Out Event") shall occur:
(a) any Transferor or other Holder of the Transferor
Certificate shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to such Transferor or other
Holder of the Transferor Certificate or all or substantially all of its
property, or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against any Transferor or
other Holder of the Transferor Certificate; or any Transferor or other Holder of
the Transferor Certificate shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations (any
such event, an "Insolvency Event");
(b) any Transferor shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement; or
(c) the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company" within the meaning
of the Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates shall occur
without any notice or other action on the part of the Trustee or the Investor
Certificateholders immediately upon the occurrence of such event.
Section 9.02 Additional Rights upon the Occurrence of Certain
Events. (a) If an Insolvency Event occurs with respect to any Transferor or
other Holder of the Transferor Certificate, each Transferor shall on the day any
such Insolvency Event occurs (the "Appointment Date"), immediately cease to
transfer Principal Receivables and Discount Option Receivables to the Trust and
shall promptly give notice to the Trustee thereof. Notwithstanding any cessation
of the transfer to the Trust of additional Principal Receivables and Discount
Option Receivables, Principal Receivables and Discount Option Receivables
transferred to the Trust prior to the occurrence of such Insolvency Event,
Collections in respect of such Principal Receivables, Discount Option
Receivables and Finance Charge Receivables (whenever created) accrued in
respect of such Principal Receivables and Discount Option Receivables shall
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continue to be a part of the Trust. Upon the Appointment Date, this Agreement
and the Trust shall terminate, subject to the liquidation, winding-up and
dissolution procedures described below. Within 15 days of the Appointment Date,
the Trustee shall (i) publish a notice in an Authorized Newspaper that an
Insolvency Event has occurred, that the Trust has terminated and that the
Trustee intends to sell, dispose of or otherwise liquidate the Receivables on
commercially reasonable terms and in a commercially reasonable manner and (ii)
give notice to Certificateholders and other interested persons described below
describing the provisions of this Section and requesting instructions from such
Holders. Unless the Trustee shall have received instructions within 60 days from
the date notice pursuant to clause (i) above is first published from (x) Holders
of Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of each Series or, with respect to any Series with two or more
Classes, of each Class, and (y) any Transferor (other than the Transferor that
is the subject of such Insolvency Event), and each holder of an interest in the
Transferor Interest (including any Holder of a Supplemental Certificate) not
subject to the Insolvency Event (including any permitted successor or assignee
under Section 7.02) and (z) each Person designated by any Transferor to the
Trustee in an Officer's Certificate or Series Supplement prior to the occurrence
of the Insolvency Event, to the effect that such Persons disapprove of the
liquidation of the Receivables and wish to reconstitute the Trust pursuant to
the terms of this Agreement (as amended in connection with such reconstitution),
the Trustee shall promptly sell, dispose of or otherwise liquidate the
Receivables in a commercially reasonable manner and on commercially reasonable
terms, which shall include the solicitation of competitive bids. The Trustee may
obtain a prior determination from any such conservator, receiver or liquidator
of a Transferor or other Holder of the Transferor Certificate that the terms and
manner of any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Sections 9.01 and 9.02 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Receivables and any Participation Interests pursuant to
paragraph (a) ("Insolvency Proceeds") shall be immediately deposited in the
Collection Account. The Trustee shall determine conclusively the amount of the
Insolvency Proceeds which are deemed to be Finance Charge Receivables and
Principal Receivables, allocating Insolvency Proceeds to Finance Charge
Receivables and Principal Receivables in the same proportion as the amount of
Finance Charge Receivables and Principal Receivables bear to one another on the
prior Determination Date. The Insolvency Proceeds shall be allocated in
accordance with the terms of Article IV of each Supplement and distributed to
Investor Certificateholders in accordance with the terms of each Supplement.
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(c) The Trustee may appoint an agent or agents to assist
with its responsibilities pursuant to this Article IX with respect to
competitive bids.
[End of Article IX]
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ARTICLE X
SERVICER DEFAULTS
Section 10.01 Servicer Defaults. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing, withdrawal,
or payment under any Credit Enhancement on or before the date occurring 10
Business Days after the date such payment, transfer, deposit withdrawal or
drawing or such instruction or notice is required to be made or given, as the
case may be, under the terms of this Agreement;
(b) failure on the part of the Servicer duly to observe
or perform in any respect any other covenants or agreements of the Servicer set
forth in this Agreement, which has a material adverse effect on the Investor
Certificateholders of any Series and which continues unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee, or to
the Servicer and the Trustee by the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 50% of the Investor Interest of
any Series adversely affected thereby and continues to materially adversely
affect such Investor Certificateholders for such period; or the Servicer shall
delegate its duties under this Agreement, except as permitted by Section 8.07;
(c) any representation, warranty or certification made by
the Servicer in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a material
adverse effect on the Investor Certificateholders of any Series and which
continues to be incorrect in any material respect for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 50% of the Investor Interest of
any Series adversely affected thereby and continues to materially adversely
affect such Investor Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of
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debt, marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer, and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or the Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make any
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Interest, by notice then
given in writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement. After receipt
by the Servicer of such Termination Notice, and on the date that a Successor
Servicer shall have been appointed by the Trustee pursuant to Section 10.02, all
authority and power of the Servicer under this Agreement shall pass to and be
vested in a Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the Servicer
to execute or deliver such documents or instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights and obligations. The Servicer agrees to cooperate
with the Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder
including, without limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including, without limitation, all authority over all Collections
which shall on the date of transfer be held by the Servicer for deposit, or
which have been deposited by the Servicer, in the Collection Account, the
Finance Charge Account, the Principal Account, and any Series Account, or which
shall thereafter be received with respect to the Receivables, and in assisting
the Successor Servicer and in enforcing all rights to Insurance Proceeds and
Interchange (if any) applicable to the Trust. The Servicer shall promptly
transfer its electronic records or electronic copies thereof relating to the
Receivables to the Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance with
this Section 10.01 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer
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reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests. The Servicer shall, on
the date of any servicing transfer, transfer all of its rights and obligations
under the Credit Enhancement with respect to any Series to the Successor
Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.01(a) for a period of 10 Business Days
or under subsection 10.01(b) or (c) for a period of 60 Business Days, shall not
constitute a Servicer Default if such delay or failure could not be prevented by
the exercise of reasonable diligence by the Servicer and such delay or failure
was caused by an act of God or the public enemy, acts of declared or undeclared
war, public disorder, rebellion, riot or sabotage, epidemics, landslides,
lightning, fire, hurricanes, tornadoes, earthquakes, nuclear disasters or
meltdowns, floods, power outages or similar causes. The preceding sentence shall
not relieve the Servicer from using its best efforts to perform its obligations
in a timely manner in accordance with the terms of this Agreement and the
Servicer shall provide the Trustee, any Credit Enhancement Provider, each
Transferor and the Holders of Investor Certificates with an Officer's
Certificate giving prompt notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts so to perform
its obligations.
Section 10.02 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.01, the Servicer shall continue to
perform all servicing functions under this Agreement until the date specified in
the Termination Notice or otherwise specified by the Trustee in writing or, if
no such date is specified in such Termination Notice, or otherwise specified by
the Trustee, until a date mutually agreed upon by the Servicer and Trustee. The
Trustee shall notify each Rating Agency of such removal of the Servicer. The
Trustee shall, as promptly as possible after the giving of a Termination Notice
appoint a successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Trustee. The Trustee may obtain bids from any potential
successor servicer. If the Trustee is unable to obtain any bids from any
potential successor servicer and the Servicer delivers an Officer's Certificate
to the effect that it cannot in good faith cure the Servicer Default which gave
rise to a Termination Notice, and if the Trustee is legally unable to act as
Successor Servicer, then the Trustee shall notify each Credit Enhancement
Provider of the proposed sale of the Receivables and shall provide each such
Credit Enhancement Provider an opportunity to bid on the Receivables and shall
offer each Transferor the right of first refusal to acquire the Receivables
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transferred by such Transferor on terms equivalent to the best purchase offer as
determined by the Trustee, but in no event less than an amount equal to the
Aggregate Investor Interest on the date of such acquisition plus all interest
accrued but unpaid on all of the outstanding Investor Certificates at the
applicable Certificate Rate through the date of such acquisition; provided,
however, that if the short-term deposits or long-term unsecured debt obligations
of such Transferor (or if neither such deposits nor such obligations of such
Transferor are rated by Moody's, if Moody's is a Rating Agency with respect to
any Series of Certificates outstanding, then of the holding company of such
Transferor so long as such holding company shall be [BankAmerica] Corporation)
are not rated at the time of such acquisition at least P-3 or Baa3,
respectively, by Moody's, if Moody's is a Rating Agency with respect to any
Series of Certificates outstanding, no such acquisition by such Transferor shall
occur unless such Transferor shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee that such acquisition would not constitute a
fraudulent conveyance by such Transferor. The proceeds of such purchase or
acquisition shall be deposited in the Distribution Account or any Series
Account, as provided in the related Supplement, for distribution to the Investor
Certificateholders of each outstanding Series pursuant to Section 12.03 of this
Agreement. In the event that a Successor Servicer has not been appointed and has
not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Trustee without further action shall automatically be appointed
the Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of VISA or MasterCard credit card
receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be
the successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Any Successor Servicer, by its
acceptance of its appointment, will automatically agree to be bound by the terms
and provisions of each Credit Enhancement.
(c) In connection with such appointment and assumption,
the Trustee shall be entitled to such compensation, or may make such
arrangements for the compensation of the Successor Servicer out of Collections,
as it and such Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee permitted to
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the Servicer pursuant to Section 3.02. Each Transferor agrees that if the
Servicer is terminated hereunder, it will agree to deposit with the Trustee a
portion of the Collections in respect of Finance Charge Receivables that it is
entitled to receive pursuant to Article IV to pay its share of the compensation
of the Successor Servicer.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.01 and shall pass to and be
vested in the Transferors and, without limitation, the Transferors are hereby
authorized and empowered to execute and deliver, on behalf of the Successor
Servicer, as attorney-in-fact or otherwise, all documents and other instruments,
and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Successor Servicer
agrees to cooperate with the Transferors in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Transferors in such electronic form as the
Transferors may reasonably request and shall transfer all other records,
correspondence and documents to the Transferors in the manner and at such times
as the Transferors shall reasonably request. To the extent that compliance with
this Section 10.02 shall require the Successor Servicer to disclose to the
Transferors information of any kind which the Successor Servicer deems to be
confidential, the Transferors shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
Section 10.03 Notification to Certificateholders. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give prompt written notice thereof to the Trustee, Standard &
Poor's, Moody's and any Credit Enhancement Provider and the Trustee shall give
notice to the Investor Certificateholders at their respective addresses
appearing in the Certificate Register. Upon any termination or appointment of a
Successor Servicer pursuant to this Article X, the Trustee shall give prompt
written notice thereof to Investor Certificateholders at their respective
addresses appearing in the Certificate Register.
Section 10.04 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66 2/3% of
the Investor Interest of each Series adversely affected by any default by the
Servicer or Transferor may, on behalf of all Certificateholders of such Series,
waive any default by the Servicer or Transferor in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits or payments of interest or principal relating to such
Series pursuant to Article IV which default does not result from the failure of
the Paying
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Agent to perform its obligations to make any required deposits or payments of
interest and principal in accordance with Article IV. Upon any such waiver of a
past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
[End of Article X]
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ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer
Default and after the curing of all Servicer Defaults which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If a Responsible Officer has received written notice
that a Servicer Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they substantially conform to the requirements of this
Agreement.
(c) Subject to subsection 11.01(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act or its own misconduct;
provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50%
of the Investor Interest of any Series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee in
relation to such Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer referred to in clauses (a) and (b) of
Section 10.01 unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written notice
of such failure from the Servicer or any Holders of Investor
Certificates evidencing
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Undivided Interests aggregating not less than 10% of the Investor
Interest of any Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer under this Agreement except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in accordance with
the terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.01(f), the
Trustee shall have no power to vary the corpus of the Trust including, without
limitation, the power to (i) accept any substitute obligation for a Receivable
initially assigned to the Trust under Section 2.01 or 2.06 hereof, (ii) add any
other investment, obligation or security to the Trust, except for an addition
permitted under Section 2.06 or (iii) withdraw from the Trust any Receivables,
except for a withdrawal permitted under Sections 2.07, 9.02, 10.02, 12.01 or
12.02 or subsections 2.04(d), 2.04(e) or Article IV.
(g) Subject to subsection 11.01(d) above, in the event
that the Paying Agent or the Transfer Agent and Registrar (if other than the
Trustee) shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated promptly to perform such obligation, duty or agreement in the manner
so required.
(h) If any Transferor has agreed to transfer any of its
credit card receivables (other than the Receivables) to another Person, upon the
written request of such Transferor, the Trustee will enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the Trust
and such other Person in such Transferor's credit card receivables; provided,
that the Trust shall not be required to enter into any intercreditor agreement
which could adversely affect the interests of such Certificateholders and, upon
the request of the Trustee, the Transferor will deliver an Opinion of Counsel on
any
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matters relating to such intercreditor agreement, reasonably requested by the
Trustee.
Section 11.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in
acting on, or in refraining from acting in accord with, any assignment of
Receivables in Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment instructions
and notification to the Trustee, the monthly Certificateholder's statement, any
resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement by the
proper party or parties;
(b) the Trustee may consult with counsel, and any Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any Credit
Enhancement, or to institute, conduct or defend any litigation hereunder or in
relation hereto, at the request, order or direction of any of the
Certificateholders or any Credit Enhancement Provider, pursuant to the
provisions of this Agreement, unless such Certificateholders or Credit
Enhancement Provider shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligations, upon the occurrence of any Servicer Default (which has not
been cured), to exercise such of the rights and powers vested in it by this
Agreement and any Credit Enhancement, and to use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(e) the Trustee shall not be bound to make any
investigation into the facts of matters stated in any assignment of Receivables
in Additional Accounts, the initial report, the monthly Servicer's certificate,
the annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholder's statement, any
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resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Investor Interest of any
Series;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian, and the Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney or
custodian appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.01(a), the
Trustee shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for the purpose
of establishing the presence or absence of defects, the compliance by each
Transferor with its representations and warranties or for any other purpose.
Section 11.03 Trustee Not Liable for Recitals in Certificates.
The Trustee assumes no responsibility for the correctness of the recitals
contained in this Agreement and in the Certificates (other than the certificate
of authentication on the Certificates). Except as set forth in Section 11.15,
the Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee shall
not be accountable for the use or application by any Transferor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to any Transferor or to the holder of the
Transferor Certificate in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Principal Account or the Finance
Charge Account, or any Series Account by the Servicer.
Section 11.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates or Supplemental Certificates with the same rights as it would have
if it were not the Trustee.
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses.
The Servicer covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to receive, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the Trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, subject to Section 8.04, the
Servicer will pay or reimburse the Trustee (without reimbursement from any
Investor Account, any Series Account or otherwise) upon its request for all
reasonable expenses, disbursements and advances incurred or
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made by the Trustee in accordance with any of the provisions of this Agreement
except any such expense, disbursement or advance as may arise from its own
negligence or bad faith and except as provided in the following sentence. If the
Trustee is appointed Successor Servicer pursuant to Section 10.02, the
provisions of this Section 11.05 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.05 shall
survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 11.06 Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be a corporation organized and doing
business under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least Baa3 by Moody's and BBB- by Standard
& Poor's having, in the case of an entity that is subject to risk-based capital
adequacy requirements, risk-based capital of at least $50,000,000 or, in the
case of an entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 11.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
Section 11.07 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged
from the Trust hereby created by giving written notice thereof to the Servicer.
Upon receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 11.06 hereof and shall fail to
resign after written request therefor by the Transferors, or if at any time the
Trustee shall be legally
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unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Transferors
may, but shall not be required to, remove the Trustee and promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
(c) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 11.07 shall not become effective until acceptance of appointment by the
successor trustee as provided in Section 11.08 hereof and any liability of the
Trustee arising hereunder shall survive such appointment of a successor trustee.
Section 11.08 Successor Trustee.
(a) Any successor trustee appointed as provided in
Section 11.07 hereof shall execute, acknowledge and deliver to the Transferors
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and the Transferors
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.08 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section 11.06 hereof
and shall be an Eligible Servicer, and, if Standard & Poor's is then a Rating
Agency, unless Standard & Poor's shall have consented to such appointment.
(c) Upon acceptance of appointment by a successor trustee
as provided in this Section 11.08, such successor trustee shall mail notice of
such succession hereunder to all Certificateholders at their addresses as shown
in the Certificate Register.
Section 11.09 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be
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a party, or any Person succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be eligible under the provisions of Section 11.06 hereof, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the trust, or any part thereof, and, subject
to the other provisions of this Section 11.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
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(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be
required to file tax returns, the Trustee, as soon as practicable after it is
made aware of such requirement, shall prepare or cause to be prepared any tax
returns required to be filed by the Trust and, to the extent possible, shall
file such returns at least five days before such returns are due to be filed.
The Trustee is hereby authorized to sign any such return on behalf of the Trust.
The Servicer shall prepare or shall cause to be prepared all tax information
required by law to be distributed to Certificateholders and shall deliver such
information to the Trustee at least five days prior to the date it is required
by law to be distributed to Certificateholders. The Servicer, upon request, will
furnish the Trustee with all such information known to the Servicer as may be
reasonably required in connection with the preparation of all tax returns of the
Trust. In no event shall the Trustee or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation
federal, state, local or foreign income or excise taxes or any other tax imposed
on or measured by income (or any interest or penalty with respect thereto or
arising from a failure to comply therewith).
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any Series
of Certificates may be
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prosecuted and enforced by the Trustee without the possession of any of the
Certificates or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of any Series of
Certificateholders in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default
shall occur and be continuing, the Trustee, in its discretion may, subject to
the provisions of Section 10.01 and 11.14, proceed to protect and enforce its
rights and the rights of any Series of Certificateholders under this Agreement
by a suit, action or proceeding in equity or at law or otherwise, whether for
the specific performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted in this Agreement or
for the enforcement of any other legal, equitable or other remedy as the
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Trustee or any Series of Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee.
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Interest (or, with respect to any remedy,
trust or power that does not relate to all Series, 50% of the Aggregate Investor
Interest of the Investor Certificates of all Series to which such remedy, trust
or power relates) shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that, subject to
Section 11.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Investor
Certificates.
Section 11.15 Representations and Warranties of Trustee. The
Trustee represents and warrants that:
(i) the Trustee is a banking corporation organized,
existing and authorized to engage in the business of banking under the
laws of the State of [Trustee's State of Incorporation];
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(ii) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement; and
(iii) this Agreement has been duly executed and delivered
by the Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee
will maintain at its expense in the Borough of Manhattan, the City of
[__________] an office or offices, or agency or agencies, where notices and
demands to or upon the Trustee in respect of the Certificates and this Agreement
may be served. The Trustee initially appoints its Corporate Trust Office as its
office for such purposes in [__________]. The Trustee will give prompt written
notice to the Servicer and to Certificateholders (or in the case of Holders of
Bearer Certificates, in the manner provided for in the related Supplement) of
any change in the location of the Certificate Register or any such office or
agency.
[End of Article XI]
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ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust.
(a) The respective obligations and responsibilities of
each Transferor, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as hereafter
set forth) shall terminate, except with respect to the duties described in
Section 11.05 and subsections 2.04(c) and 12.03(b), on the Trust Termination
Date; provided, however, that the Trust shall not terminate on the date
specified in clause (i) of the definition of "Trust Termination Date" if each of
the Servicer and the Holder of the Transferor Certificate notify the Trustee in
writing, not later than __ Business Days preceding such date, that they desire
that the Trust not terminate on such date, which notice (such notice, a "Trust
Extension") shall specify the date on which the Trust shall terminate (such
date, the "Extended Trust Termination Date"); provided, however, that the
Extended Trust Termination Date shall be not later than __________ ____, ____.
The Servicer and the Holder of the Transferor Certificate may, on any date
following the Trust Extension, so long as no Series of Certificates is
outstanding, deliver a notice in writing to the Trustee changing the Extended
Trust Termination Date.
(b) All principal or interest with respect to any Series
of Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Investor Interest of any Series of
Certificates is greater than zero on its Series Termination Date (after giving
effect to all transfers, withdrawals, deposits and drawings to occur on such
date and the payment of principal to be made on such Series on such date), the
Trustee will sell or cause to be sold, and pay the proceeds first, to all
Certificateholders of such Series pro rata and in accordance with the priority
for each Class within such Series as provided in the related Supplement, in
final payment of all principal of and accrued interest on such Series of
Certificates, and second, as provided in the related Supplement, an amount of
Principal Receivables and the related Finance Charge Receivables (or interests
therein) up to 110% of the sum of the Investor Interest of such Series plus the
Enhancement Invested Amount or the Collateral Interest (if not included in the
Investor Interest) of such Series, if any, at the close of business on such date
(but not more than the applicable Investor Percentage of Principal Receivables
and the related Finance Charge Receivables on such date for such Series). The
Trustee shall notify each Credit Enhancement Provider of the proposed sale of
such Receivables and shall provide each Credit Enhancement Provider an
opportunity to bid on such Receivables. Each Transferor shall be permitted to
acquire such Receivables, to the extent arising in Accounts owned by such
Transferor and
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shall have a right of first refusal with respect thereto. Any proceeds of such
sale in excess of such principal and interest paid and such other amounts paid
pursuant to the related Supplement shall be paid to the Holder of the Transferor
Certificate. Upon such Series Termination Date with respect to the applicable
Series of Certificates, final payment of all amounts allocable to any Investor
Certificates of such Series shall be made in the manner provided in Section
12.03.
Section 12.02 Optional Purchase. (a) If so provided in any
Supplement, the Transferors may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series of Certificates on a
Distribution Date specified in such Supplement by depositing into the
Distribution Account or the applicable Series Account, not later than the
Transfer Date preceding such Distribution Date, for application in accordance
with Section 12.03, the amount specified in such Supplement; provided, however
that if the short-term deposits or long-term unsecured debt obligations of each
Transferor (or, if neither such deposits nor such obligations of each Transferor
are rated by Moody's, then the short-term deposits or long-term unsecured debt
obligations of the holding company of each Transferor so long as such holding
company is [BankAmerica] Corporation) are not rated at the time of such purchase
of Certificates at least P-3 or Baa3, respectively, by Moody's, no such event
shall occur unless each Transferor not satisfying the rating criteria described
above in this subsection 12.02(a) shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee that such deposit into the Distribution Account or any
Series Account as provided in the related Supplement would not constitute a
fraudulent conveyance of such Transferor.
(b) The amount deposited pursuant to subsection 12.02(a)
shall be paid to the Investor Certificateholders of the related Series pursuant
to Section 12.03 on the related Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased by the Transferors
pursuant to subsection 12.02(a) shall be delivered by the Transferors upon such
purchase to, and be canceled by, the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the Transferors. The
Investor Interest of each Series which is purchased by the Transferors pursuant
to subsection 12.02(a) shall, for the purposes of the definition of "Transferor
Interest," be deemed to be equal to zero on the Distribution Date following the
making of the deposit, and the Transferor Interest shall thereupon be deemed to
have been increased by the Investor Interest of such Series.
Section 12.03 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Certificateholders of any Series may
surrender their Certificates for payment of the
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final distribution with respect to such Series and cancellation, shall be given
(subject to at least two Business Days prior notice from the Servicer to the
Trustee) by the Trustee to Investor Certificateholders of such Series mailed not
later than the fifth day of the month of such final distribution (or in the
manner provided by the Supplement relating to such Series) specifying (i) the
Distribution Date (which shall be the Distribution Date in the month (x) in
which the deposit is made pursuant to Section 9.02 or subsection 2.04(e),
10.02(a), or subsection 12.02(a) of this Agreement or such other section as may
be specified in the related Supplement, or (y) in which the related Series
Termination Date occurs) upon which final payment of such Investor Certificates
will be made upon presentation and surrender of such Investor Certificates at
the office or offices therein designated (which, in the case of Bearer
Certificates, shall be outside the United States), (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Investor Certificates at the office or offices therein
specified. The Servicer's notice to the Trustee in accordance with the preceding
sentence shall be accompanied by an Officers' Certificate setting forth the
information specified in Article V of this Agreement covering the period during
the then current calendar year through the date of such notice and setting forth
the date of such final distribution. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the time such notice is
given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant
to subsection 12.01(a) or the occurrence of the Series Termination Date with
respect to any Series, all funds then on deposit in the Finance Charge Account,
the Principal Account, the Distribution Account or any Series Account applicable
to the related Series shall continue to be held in trust for the benefit of the
Certificateholders of the related Series and the Paying Agent or the Trustee
shall pay such funds to the Certificateholders of the related Series upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the event
that all of the Investor Certificateholders of any Series shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice (or, in the case of Bearer Certificates, publication notice) to the
remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one and one-half years after the second notice with respect
to a Series, all the Investor Certificates of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the
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remaining Investor Certificateholders of such Series concerning surrender of
their Certificates, and the cost thereof shall be paid out of the funds in the
Distribution Account or any Series Account held for the benefit of such Investor
Certificateholders. The Trustee and the Paying Agent shall pay to the
Transferors upon request any monies held by them for the payment of principal or
interest which remains unclaimed for two years. After payment to the
Transferors, Investor Certificateholders entitled to the money must look to the
Transferors for payment as general creditors unless an applicable abandoned
property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferors.
Section 12.04 Termination Rights of Holder of Transferor
Certificate. Upon the termination of the Trust pursuant to Section 12.01, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Transferor Certificate, the Trustee shall execute a written
reconveyance substantially in the form of Exhibit H pursuant to which it shall
reconvey to the Holder of the Transferor Certificate (without recourse,
representation or warranty) all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, all moneys due or to
become due with respect to such Receivables (including all accrued interest
theretofore posted as Finance Charge Receivables and all other Finance Charge
Receivables) and all proceeds of such Receivables and Insurance Proceeds
relating to such Receivables and Interchange (if any) allocable to the Trust
pursuant to any Supplement, except for amounts held by the Trustee pursuant to
subsection 12.03(b). The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Transferor Certificate to vest in such Holder all
right, title and interest which the Trust had in the Receivables.
Section 12.05 Defeasance.
Notwithstanding anything to the contrary in this Agreement or
any Supplement:
(a) The Transferors may at their option be discharged
from their obligations with respect to all of the Investor Certificates issued
by the Trust or any specified Series thereof on the date the applicable
conditions set forth in Section 12.05(c) are satisfied ("Defeasance"); provided,
however, that the following rights, obligations, powers, duties and immunities
shall survive until otherwise terminated or discharged hereunder: (A) the rights
of Holders of Investor Certificates of the Trust
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or any specified Series thereof to receive, solely from the trust fund provided
for in Section 12.05(c), payments in respect of principal of and interest on
such Investor Certificates when such payments are due; (B) the Transferors'
obligations with respect to such Series of Certificates under Sections 6.03,
6.04 and 12.03; (C) the rights, powers, trusts, duties and immunities of the
Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder; and
(D) this Section 12.05.
(b) Subject to Section 12.05(c), the Transferors at their
option may use Collections allocated to the Investor Certificates to be
defeased to purchase Permitted Investments rather than additional Receivables
for transfer to the Trust until such time as no Receivables remain in the Trust.
(c) The following shall be the conditions to Defeasance
under Section 12.05(a): (1) the Transferors irrevocably shall have deposited or
caused to be deposited with the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds in
trust for making the payments described below (A) Dollars in an amount, or (B)
Permitted Investments which through the scheduled payment or principal and
interest in respect thereof will provide, not later than the due date of payment
thereon, money in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and, which shall be applied by the Trustee to
pay and discharge, all remaining scheduled interest and principal payments on
all outstanding Investor Certificates of the Trust or any specified Series
thereof on the dates scheduled for such payments in this Agreement and the
applicable Supplements and all amounts owed to the Credit Enhancement Provider
for any Series if so provided in the related Supplements or agreements with such
Provider; (2) prior to its first exercise of its right to substitute money or
Permitted Investments for Receivables, the Transferors shall deliver to the
Trustee (x) an Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Trust being required to
register as an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, and (y) an Opinion of Counsel with respect to such
deposit and termination to the effect that it will not cause the Trust or any
portion thereof to be treated as an association or publicly traded partnership
taxable as a corporation; and (3) such deposit and termination of obligations
will not result in a Pay Out Event for any Series.
[End Of Article XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment.
(a) This Agreement or any Supplement may be amended in
writing from time to time by the Servicer, each Transferor and the Trustee,
without the consent of any of the Certificateholders; provided, that such action
shall not, as evidenced by an Officer's Certificate from Transferor addressed
and delivered to the Trustee, adversely affect in any material respect the
interests of any Investor Certificateholder; provided further, that each Rating
Agency shall have notified each Transferor, the Servicer and the Trustee in
writing that such action will not result in a reduction or withdrawal of the
rating of any outstanding Series or Class to which it is a Rating Agency. This
Agreement or any Supplement may be amended in writing by the Servicer, each
Transferor and the Trustee, without the consent of any of the Certificateholders
to provide for additional Credit Enhancement or substitute Credit Enhancement
with respect to a Series (so long as the amount of such substitute Credit
Enhancement, unless otherwise provided in any related Supplement, is equal to
the original Credit Enhancement for such Series), to change the definition of
Eligible Account, to effect the designation of any Additional Transferor or to
provide for the addition to the Trust of a Participation; provided, that such
action shall not, in the reasonable belief of each Transferor, as evidenced by
an Officer's Certificate, adversely affect in any material respect the interests
of any Investor Certificateholders; provided further, that each Rating Agency
shall have notified each Transferor, the Servicer and the Trustee in writing
that such action will not result in a reduction or withdrawal of the rating of
any outstanding Series or Class to which it is a Rating Agency.
(b) This Agreement or any Supplement may also be amended
in writing from time to time by the Servicer, the Transferors and the Trustee
with the consent of the Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 66 2/3% of the Investor Interest of each
outstanding Series adversely affected by such amendment for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or any Supplement or modifying in any manner the
rights of Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificates of such Series without the consent of each Investor
Certificateholders of such Series, (ii) change the definition of or the manner
of calculating the Investor Interest, the Investor Percentage or the Investor
Default Amount of such Series without the consent of each Investor
Certificateholder of such Series or (iii) reduce the
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aforesaid percentage required to consent to any such amendment, without the
consent of each Investor Certificateholder of all Series adversely affected. The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
(c) Notwithstanding anything in this Section 13.01 to the
contrary, the Series Supplement with respect to any Series may be amended on the
items and in accordance with the procedures provided in such Series Supplement.
(d) Promptly after the execution of any such amendment
(other than an amendment pursuant to paragraph (a) or (h)), the Trustee shall
furnish notification of the substance of such amendment to each Investor
Certificateholder of each Series adversely affected and to each Rating Agency
providing a rating for such Series.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Certificate-holders shall
be subject to such reasonable requirements as the Trustee may prescribe.
(f) Any Series Supplement executed and delivered pursuant
to Section 6.09 and any amendments regarding the addition to or removal of
Receivables from the Trust as provided in Sections 2.06 and 2.07, executed in
accordance with the provisions hereof, shall not be considered amendments to
this Agreement for the purpose of subsections 13.01(a), (b) or (h).
(g) This Agreement and any Supplement will be amended by
the Servicer and the Trustee at the direction of the Transferors without the
consent of any of the Certificateholders or Credit Enhancement Providers (i) to
add, modify or eliminate such provisions as may be necessary or advisable in
order to enable all or a portion of the Trust to qualify as, and to permit an
election to be made to cause the Trust to be treated as, a "financial asset
securitization investment trust" as described in the provisions of the "Seven
Year Balanced Budget Act of 1995," H.R. 2491, 104th Cong., 1st Sess. (1995), or
to enable the Trust to qualify and an election to be made for similar treatment
under such comparable subsequent federal income tax provisions as may ultimately
be enacted into law, and (ii) in connection with any such election, to modify or
eliminate existing provisions of this Agreement and any Supplement relating to
the intended federal income tax treatment of the Certificates and the Trust in
the absence of the election. Any amendment under this subsection is subject only
to the requirements that (i) each Transferor delivers to the Trustee an
Officer's Certificate to the effect
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that the proposed amendments meet the requirements set forth in this subsection
and (ii) each Rating Agency will have notified the Transferor, the Servicer and
the Trustee in writing that the amendment will not result in a reduction or
withdrawal of the rating of any outstanding Series or Class to which it is a
Rating Agency. The amendments which the Transferors may make without the consent
of Certificateholders or Credit Enhancement Providers in connection with any
election described in this subsection may include, without limitation, the
elimination of any sale of Receivables and termination of the Trust upon the
occurrence of an Insolvency Event pursuant to Section 9.02 hereof.
(h) This Agreement and any Supplement will be amended by
the Servicer and the Trustee at the direction of the Transferors without the
consent of any of the Certificateholders or Credit Enhancement Providers (i) to
add, modify or eliminate such provisions as may be necessary or advisable in
order to enable (x) the transfer to the Trust of all or any portion of the
Receivables to be derecognized under generally accepted accounting principals
("GAAP") by the transferor to the Trust of such Receivables or (y) the Trust to
avoid becoming a member of any Transferor's consolidated group under GAAP, and
(ii) in connection with any such addition, modification or elimination, without
limiting the generality of the foregoing clause (i), to cause the Receivables to
be transferred by a Transferor first to a bankruptcy remote Affiliate and from
the Affiliate to the Trust. Any amendment under this subsection is subject only
to the requirements that (i) each Transferor delivers to the Trustee an
Officer's Certificate to the effect that the proposed amendment meets the
requirements set forth in this subsection and (ii) each Rating Agency will have
notified the Transferor, the Servicer and the Trustee in writing that the
amendment will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class as to which it is a Rating Agency.
(i) This Agreement and any Supplement may be amended by
the Servicer and the Trustee at the direction of the Transferors without the
consent of any of the Certificateholders or Credit Enhancement Providers (i) to
add, modify or eliminate such provisions as may be necessary or advisable in
order to enable all or a portion of the Trust to qualify as a partnership for
federal income tax purposes under applicable regulations on the classification
of entities as partnerships or corporations under the Internal Revenue Code
adopted as final regulations after the date hereof, and (ii) to the extent that
such regulations eliminate or modify the need therefor, to modify or eliminate
existing provisions of this Agreement and any Supplement relating to the
intended availability of partnership treatment of the Trust for federal income
tax purposes, including, without limitation, eliminating the provisions of
Section 9.02 relating to the sale of the Receivables and termination of the
Trust upon the occurrence of an Insolvency and the provisions of Section 7.04
relating to the liability of the Transferor as a general partner. Any
amendment under this subsection is subject only to the requirements that (i)
each Transferor delivers to the Trustee an Officer's Certificate to the effect
that the proposed amendments meet the requirements set forth in this subsection
and (ii) each Rating Agency will have notified the Transferor, the Servicer and
the Trustee in writing that the amendment will not result in a reduction or
withdrawal of the rating of any outstanding Series or Class to which it is a
Rating Agency.
Section 13.02 Protection of Right, Title and Interest to
Trust.
(a) The Servicer shall cause this Agreement, all
amendments hereto and/or all financing statements and continuation statements
and any other necessary documents covering the Certificateholders and the
Trustee's right, title and interest to the Trust to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of the Certificateholders or
the Trustee, as the case may be, hereunder to all property comprising the Trust.
The Servicer shall deliver to the Trustee file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing. The
Transferors shall cooperate fully with the Servicer in connection with the
obligations set forth
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above and will execute any and all documents reasonably required to fulfill the
intent of this subsection 13.02(a).
(b) Within 30 days after any Transferor makes any change
in its name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC as in
effect in the applicable jurisdiction, such Transferor shall give the Trustee
notice of any such change and shall file such financing statements or amendments
as may be necessary to continue the perfection of the Trust's security interest
in the Receivables and the proceeds thereof.
(c) Each Transferor and the Servicer will give the
Trustee prompt written notice of any relocation of any office from which it
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC as in effect in the applicable jurisdiction
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables and the proceeds
thereof. Each Transferor and the Servicer will at all times maintain each office
from which it services Receivables and its principal executive office within the
United States of America.
(d) The Servicer will deliver to the Trustee and with
respect to clause (i) to Standard & Poor's (i) upon each date that any
Additional Accounts (other than Automatic Additional Accounts) are to be
included in the Accounts pursuant to Section 2.06, an Opinion of Counsel
substantially in the form of Exhibit E (ii) on each date specified in subsection
2.06(c) with respect to the inclusion of Automatic Additional Accounts as
Accounts, an Opinion of Counsel substantially in the form of Exhibit E; and
(iii) on or before [March 31] of each year, beginning with [March 31, 199_], an
Opinion of Counsel, substantially in the form of Exhibit F.
Section 13.03 Limitation on Rights of Certificate-holders.
(a) The death or incapacity of any Certificateholder
shall not operate to terminate this Agreement or the Trust, nor shall such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
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(b) No Certificateholder shall have any right to vote
(except with respect to the Investor Certificateholders as provided in Section
13.01 hereof) or in any manner otherwise control the operation and management of
the Trust, or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
(c) No Certificateholder shall have any right by virtue
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given written notice to the Trustee, and
unless the Holders of Certificates evidencing Undivided Interests aggregating
more than 50% of the Investor Interest of any Series which may be adversely
affected but for the institution of such suit, action or proceeding, shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 13.03, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 13.04 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF [NEW YORK] WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, sent by facsimile to, sent by courier at or mailed by
registered mail, return receipt requested, to (a) in the case of Bank of America
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as a Transferor and the Servicer, to Bank of America National Association, [1825
E. Buckeye Road, Financial Management 3719, Phoenix, Arizona 85034, Attention:
Chief Financial Officer], (b) in the case of the Trustee, to the Corporate Trust
Office, (c) in the case of the Credit Enhancement Provider for a particular
Series, the address, if any, specified in the Supplement relating to such
Series, (d) in the case of any Additional Transferor, the address, if any
specified in the amendment to this Agreement pursuant to which such Additional
Transferor became a Transferor and (e) in the case of the Rating Agency for a
particular Series, the address, if any, specified in the Supplement relating to
such Series; or, as to each party, at such other address as shall be designated
by such party in a written notice to each other party. Unless otherwise provided
with respect to any Series in the related Supplement any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register, or with respect to any notice required or permitted to be
made to the Holders of Bearer Certificates, by publication in the manner
provided in the related Supplement. If and so long as any Series or Class is
listed on the Luxembourg Stock Exchange and such Exchange shall so require, any
notice to Investor Certificateholders shall be published in an authorized
newspaper of general circulation in Luxembourg within the time period prescribed
in this Agreement. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
Section 13.06 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the
Certificates or rights of the Certificateholders thereof.
Section 13.07 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 8.02, this Agreement
may not be assigned by the Servicer without the prior consent of Holders of
Investor Certificates evidencing Undivided Interests aggregating not less than
662/3% of the Investor Interest of each Series on a Series by Series basis.
Section 13.08 Certificates Non-Assessable and Fully Paid. It
is the intention of the parties to this Agreement that the Certificateholders
shall not be personally liable for obligations of the Trust, that the Undivided
Interests represented by the Certificates shall be non-assessable for any losses
or expenses of the Trust or for any reason whatsoever, and that Certificates
upon authentication thereof by the Trustee
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pursuant to Sections 2.01 and 6.02 are and shall be deemed fully paid.
Section 13.09 Further Assurances. Each Transferor and the
Servicer agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation statements
relating to the Receivables for filing under the provisions of the UCC as in
effect in any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee, any Credit
Enhancement Provider or the Investor Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders and, to the extent provided in the related Supplement, to the
Credit Enhancement Provider named therein, and their respective successors and
permitted assigns. Except as otherwise provided in this Article XIII and Section
7.04 hereof, no other Person will have any right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that
an action may be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder, unless such provision requires a specific
percentage of Investor Certificateholders.
(b) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer
in
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reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.14 Rule 144A Information. For so long as any of the
Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each Transferor,
the Servicer, the Trustee and the Credit Enhancement Provider for such Series
agree to cooperate with each other to provide to any Investor Certificateholders
of such Series or Class and to any prospective purchaser of Certificates
designated by such an Investor Certificateholder upon the request of such
Investor Certificateholder or prospective purchaser, any information required to
be provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16 Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
[End of Article XIII]
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IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
BANK OF AMERICA NATIONAL
ASSOCIATION,
TRANSFEROR AND SERVICER
By:_______________________________
Name:
Title:
[TRUSTEE]
TRUSTEE
By:_______________________________
Name:
Title:
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EXHIBIT A
TRANSFEROR CERTIFICATE
No. 1 One Unit
BA MASTER CREDIT CARD TRUST
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY BE SOLD ONLY PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT WILL
BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an
Undivided Interest in the
BA Master Credit Card Trust
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard(R) and VISA(R)** credit card receivables generated or
acquired by Bank of America National Association and other assets and interests
constituting the Trust under the Pooling and Servicing Agreement described
below.
(Not an interest in or an obligation of
Bank of America National Association
or any Affiliate thereof.)
This certifies that BANK OF AMERICA NATIONAL ASSOCIATION (the
"Holder") is the registered owner of an undivided interest in a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under selected MasterCard(R)
and VISA(R) credit card accounts (the "Accounts") of Bank of America National
Association (the "Transferor") a national banking association organized under
the laws of the United States, all monies due or to become due in payment of the
Receivables (including all Finance Charge Receivables), all proceeds of such
Receivables and Insurance Proceeds relating to the Receivables, the other assets
and interests constituting the Trust and the proceeds thereof pursuant to a
Pooling and Servicing Agreement dated as of __________ __, 199_, as supplemented
by any Supplement relating
- -----------------------
** MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A. Inc., respectively.
<PAGE> 121
to a Series of Investor Certificates (the "Pooling and Servicing Agreement"), by
and between Bank of America National Association, as Transferor and Servicer,
and [Trustee], as Trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereinbelow.
To the extent not defined herein, the capitalized terms used
herein have the meanings assigned to them in the Pooling and Servicing
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the Holder by
virtue of the acceptance hereof assents and by which the Holder is bound.
This Certificate has not been registered or qualified under
the Securities Act of 1933, as amended, or any state securities law. No sale,
transfer or other disposition of this Certificate shall be permitted other than
in accordance with the provisions of Section 6.03, 6.09 or 7.02 of the Pooling
and Servicing Agreement.
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and of amounts advanced to
cardholders as cash advances, and of Finance Charge Receivables which arise
generally from Periodic Finance Charges and other fees and charges, as more
fully specified in the Pooling and Servicing Agreement.
This Certificate is the Transferor Certificate (the
"Certificate"), which represents an Undivided Interest in the Trust, including
the right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement to be paid to the
Holder of the Transferor Certificate. The aggregate interest represented by this
Certificate in the Principal Receivables in the Trust shall not at any time
exceed the Transferor Interest at such time. In addition to this Certificate,
Series of Investor Certificates will be issued to investors pursuant to the
Pooling and Servicing Agreement, each of which will represent an Undivided
Interest in the Trust. This Certificate shall not represent any interest in the
Investor Accounts, any Series Accounts or any Credit Enhancement, except to the
extent provided in the Pooling and Servicing Agreement. The Transferor Interest
on any date of determination will be an amount equal to the aggregate amount of
Principal Receivables and the principal amount on deposit in any Principal
Funding Account (as defined in any Supplement) at the end of the day immediately
prior to such date of determination, minus the Aggregate Investor Interest at
the end of such day, minus the aggregate Enhancement Invested Amounts, if any,
for each Series outstanding at the end of such day, minus the aggregate
Collateral Interests not included in the Aggregate Investor Interests, if any,
for each Series outstanding at the end of such day.
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The Servicer shall deposit all Collections in the Collection
Account as promptly as possible after the Date of Processing of such
Collections, but in no event later than the second Business Day following such
Date of Processing (except as provided below and except as provided in any
Supplement to the Pooling and Servicing Agreement). Unless otherwise stated in
any Supplement, throughout the existence of the Trust, the Servicer shall
allocate to the Holder of the Certificate an amount equal to the product of (A)
the Transferor Percentage and (B) the aggregate amount of such Collections
allocated to Principal Receivables and Finance Charge Receivables, respectively,
in respect of each Monthly Period. Notwithstanding the first sentence of this
paragraph, the Servicer need not deposit this amount or any other amounts so
allocated to the Certificate pursuant to the Pooling and Servicing Agreement
into the Collection Account and shall pay, or be deemed to pay, such amounts as
collected to the Holder of the Certificate.
Bank of America National Association, as Servicer, is entitled
to receive as servicing compensation a monthly servicing fee. The portion of the
servicing fee which will be allocable to the Holder of the Certificate pursuant
to the Pooling and Servicing Agreement will be payable by the Holder of the
Certificate and neither the Trust nor the Trustee or the Investor
Certificateholders will have any obligations to pay such portion of the
servicing fee.
This Certificate does not represent an obligation of, or any
interest in, the Transferor or the Servicer, and neither the Certificates nor
the Accounts or Receivables are insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Certificate is
limited in right of payment to certain Collections respecting the Receivables,
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
Upon the termination of the Trust pursuant to Section 12.01 of
the Pooling and Servicing Agreement, the Trustee shall assign and convey to the
Holder of the Certificate (without recourse, representation or warranty) all
right, title and interest of the Trust in the Receivables, whether then existing
or thereafter created, all monies due or to become due with respect thereto
(including all accrued interest theretofore posted as Finance Charge
Receivables) and all proceeds thereof and Insurance Proceeds relating thereto
and Interchange allocable to the Trust pursuant to any Supplement, except for
amounts held by the Trustee pursuant to Section 12.03(b) of the Pooling and
Servicing Agreement. The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Certificate to vest in such Holder all right,
title and interest which the Trustee had in the Receivables.
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<PAGE> 123
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and Servicing Agreement,
or be valid for any purpose.
A-4
<PAGE> 124
IN WITNESS WHEREOF Bank of America National Association has
caused this Certificate to be duly executed under its official seal.
By:_________________________
Authorized Officer
Date:
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<PAGE> 125
Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate referred to in the
within-mentioned Pooling and Servicing Agreement.
[Trustee]
as Trustee
By:___________________________
Authorized Officer
A-6
<PAGE> 126
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
ASSIGNMENT No. ____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS,
dated as of __________ ____, ____ by and between [____________________], a
[___________________] organized under the laws of [__________________] ("[Name
of Transferor]"), to [Trustee], a banking corporation organized and existing
under the laws of the State of [Trustee's State of Incorporation] (the
"Trustee") pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, [Name of Transferor] and the Trustee are parties to
the Pooling and Servicing Agreement, dated as of __________ __, 199_
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement,
[Name of Transferor] wishes to designate Additional Accounts of [Name of
Transferor] to be included as Accounts and to convey the Receivables of such
Additional Accounts, whether now existing or hereafter created, to the Trust as
part of the corpus of the Trust (as each such term is defined in the Pooling and
Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such
designation and conveyance subject to the terms and conditions
hereof;
NOW, THEREFORE, [Name of Transferor] and the Trustee hereby
agree as follows:
1. Defined Terms. All terms defined in the
Pooling and Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the
Additional Accounts designated hereby, __________, ____.
"Notice Date" shall mean, with respect to the
Additional Accounts designated hereby, __________, ____ (which shall be
a date on or prior to the fifth Business Day prior to the Addition Date
with respect to additions pursuant to subsection 2.06(a) of the Pooling
and Servicing Agreement and the tenth Business Day prior to the
Addition Date with respect to additions pursuant to subsection 2.06(b)
of the Pooling and Servicing Agreement).
<PAGE> 127
2. Designation of Additional Accounts. [Name
of Transferor] shall deliver to the Trustee not later than __
Business Days after the Addition Date, a computer file or microfiche
list containing a true and complete list of each MasterCard and VISA
account which as of the Addition Date shall be deemed to be an
Additional Account, such accounts being identified by account number
and by the amount of Receivables in such accounts as of the close of
business on the Addition Date. Such list shall be delivered __ Business
Days after the date of this Agreement and shall be marked as Schedule 1
to this Assignment and, as of the Addition Date, shall be incorporated
into and made a part of this Assignment.
3. Conveyance of Receivables.
(a) [Name of Transferor] does hereby transfer,
assign, set-over and otherwise convey to the Trust for the benefit of
the Certificateholders, without recourse on and after the Addition
Date, all right, title and interest of [Name of Transferor] in and to
the Receivables now existing and hereafter created in the Additional
Accounts designated hereby, all monies due or to become due with
respect thereto (including all Finance Charge Receivables) and all
proceeds of such Receivables, Insurance Proceeds relating to such
Receivables and the proceeds thereof.
(b) In connection with such transfer, [Name of
Transferor] agrees to record and file, at its own expense, financing
statements with respect to the Receivables now existing and hereafter
created in the Additional Accounts designated hereby (which may be a
single financing statement with respect to each location for filing
with respect to all such Receivables) for the transfer of accounts as
defined in Section 9-106 of the UCC as in effect in the applicable
jurisdiction meeting the requirements of applicable state law in such
manner and such jurisdictions as are necessary to perfect the
assignment of such Receivables to the Trust, and to deliver a
file-stamped copy of such financing statements or other evidence of
such filing (which may, for purposes of this Section 3, consist of
telephone confirmation of such filing) to the Trustee on or prior to
the date of this Agreement.
(c) In connection with such transfer, [Name of
Transferor] further agrees, at its own expense, on or prior to the date
of this Assignment to indicate in its computer files that Receivables
created in connection with the Additional Accounts designated hereby
have been transferred to the Trust pursuant to this Assignment for the
benefit of the Certificateholders.
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<PAGE> 128
4. Acceptance by Trustee. The Trustee hereby
acknowledges its acceptance on behalf of the Trust for the benefit of
the Certificateholders of all right, title and interest previously held
by [Name of Transferor] in and to the Receivables now existing and
hereafter created, and declares that it shall maintain such right,
title and interest, upon the Trust herein set forth, for the benefit of
all Certificateholders.
5. Representations and Warranties of [Name of
Transferor]. [Name of Transferor] hereby represents and warrants to
the Trust as of the Addition Date:
(a) Legal Valid and Binding Obligation. This
Assignment constitutes a legal, valid and binding obligation
of [Name of Transferor] enforceable against [Name of
Transferor] in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of
creditors' rights in general and the rights of creditors of
national banking associations and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(b) Eligibility of Accounts and Receivables.
Each Additional Account designated hereby is an Eligible
Account and each Receivable in such Additional Account is an
Eligible Receivable.
(c) Selection Procedures. No selection
procedures believed by [Name of Transferor] to be materially
adverse to the interests of the Investor Certificateholders
were utilized in selecting the Additional Accounts designated
hereby from the available Eligible Accounts in the Identified
Pool.
(d) Insolvency. [Name of Transferor] is
not insolvent and, after giving effect to the conveyance
set forth in Section 3 of this Assignment, will not be
insolvent.
(e) Security Interest. This Assignment
constitutes either: (i) a valid transfer and assignment to the
Trust of all right, title and interest of [Name of Transferor]
in and to Receivables now existing and hereafter created in
the Additional Accounts designated hereby, and all proceeds
(as defined in the UCC as in effect in the applicable
jurisdiction) of such Receivables and Insurance Proceeds
relating thereto, and such Receivables and any proceeds
thereof and Insurance Proceeds relating thereto will be held
by the Trust free and clear of any Lien of any Person claiming
B-3
<PAGE> 129
through or under [Name of Transferor] or any of its Affiliates
except for (x) Liens permitted under subsection 2.05(b) of the
Pooling and Servicing Agreement, (y) the interest of the
holder of the Transferor Certificate and (z) [Name of
Transferor]'s right to receive interest accruing on, and
investment earnings in respect of, the Finance Charge Account
and the Principal Account as provided in the Pooling and
Servicing Agreement; or (ii) a grant of a security interest
(as defined in the UCC as in effect in the applicable
jurisdiction) in such property to the Trust, which is
enforceable with respect to existing Receivables of the
Additional Accounts, the proceeds (as defined in the UCC as in
effect in the applicable jurisdiction) thereof and Insurance
Proceeds relating thereto, upon the conveyance of such
Receivables to the Trust, and which will be enforceable with
respect to the Receivables thereafter created in respect of
Additional Accounts designated hereby, the proceeds (as
defined in the UCC as in effect in the applicable
jurisdiction) thereof and Insurance Proceeds relating thereto,
upon such creation; and (iii) if this Assignment constitutes
the grant of a security interest to the Trust in such
property, upon the filing of the financing statements
described in Section 3 of this Assignment with respect to the
Additional Accounts designated hereby and in the case of the
Receivables of such Additional Accounts thereafter created and
the proceeds (as defined in the UCC as in effect in the
applicable jurisdiction) thereof, and Insurance Proceeds
relating to such Receivables, upon such creation, the Trust
shall have a first priority perfected security interest in
such property (subject to Section 9-306 of the UCC as in
effect in the applicable jurisdiction), except for Liens
permitted under subsection 2.05(b) of the Pooling and
Servicing Agreement.
6. Conditions Precedent. The acceptance by the
Trustee set forth in Section 4 and the amendment of the Pooling and
Servicing Agreement set forth in Section 7 are subject to the
satisfaction, on or prior to the Addition Date, of the following
conditions precedent:
(a) Officer's Certificate. [Name of
Transferor] shall have delivered to the Trustee a certificate
of a Vice President or more senior officer substantially in
the form of Schedule 2 hereto, certifying that (i) all
requirements set forth in Section 2.06 of the Pooling and
Servicing Agreement for designating Additional Accounts and
conveying the Principal Receivables of such Account, whether
now existing or hereafter created, have been satisfied and
(ii) each of the representations and warranties made by
B-4
<PAGE> 130
[Name of Transferor] in Section 5 is true and correct as of
the Addition Date. The Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries
with regard to the matters set forth therein, and shall incur
no liability in so relying.
(b) Opinion of Counsel. [Name of Transferor]
shall have delivered to the Trustee an Opinion of Counsel with
respect to the Additional Accounts designated hereby
substantially in the form of Exhibit E to the Pooling and
Servicing Agreement.
(c) Additional Information. [Name of
Transferor] shall have delivered to the Trustee such
information as was reasonably requested by the Trustee
to satisfy itself as to the accuracy of the representation
and warranty set forth in subsection 5(d) to this Agreement.
7. Amendment of the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement is hereby amended to provide that
all references therein to the "Pooling and Servicing Agreement," to
"this Agreement" and "herein" shall be deemed from and after the
Addition Date to be a dual reference to the Pooling and Servicing
Agreement as supplemented by this Assignment. Except as expressly
amended hereby, all of the representations, warranties, terms,
covenants and conditions to the Pooling and Servicing Agreement shall
remain unamended and shall continue to be, and shall remain, in full
force and effect in accordance with its terms and except as expressly
provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or a consent to noncompliance with any term
or provisions of the Pooling and Servicing Agreement.
8. Counterparts. This Assignment may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
9. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
[NEW YORK], WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS.
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<PAGE> 131
IN WITNESS WHEREOF, the undersigned have caused this
Assignment of Receivables in Additional Accounts to be duly executed and
delivered by their respective duly authorized officers on the day and year first
above written.
[Name of Transferor]
Association
By: ________________________
Name:
Title:
[Trustee]
as Trustee
By: ________________________
Name:
Title:
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<PAGE> 132
Schedule 1
to Assignment of
Receivables in
Additional Accounts
ADDITIONAL ACCOUNTS
B-7
<PAGE> 133
Schedule 2
to Assignment of
Receivables in
Additional Accounts
[Name of Transferor]
BA Master Credit Card Trust
Officer's Certificate
____________________, a duly authorized officer of [Name of
Transferor], a [____________________] ("[Name of Transferor]"), hereby certifies
and acknowledges on behalf of Bank of America that to the best of his knowledge
the following statements are true on __________, ____, (the "Addition Date"),
and acknowledges on behalf of [Name of Transferor] that this Officer's
Certificate will be relied upon by [Trustee] as Trustee (the "Trustee") of the
BA Master Credit Card Trust in connection with the Trustee entering into
Assignment No. ____ of Receivables in Additional Accounts, dated as of the
Addition Date (the "Assignment"), by and between [Name of Transferor] and the
Trustee, in connection with the Pooling and Servicing Agreement, dated as of
__________ __, 199_, as heretofore supplemented and amended (the "Pooling and
Servicing Agreement") pursuant to which [Name of Transferor], as Transferor and
Servicer, and the Trustee are parties. The undersigned hereby certifies and
acknowledges on behalf of [Name of Transferor] that:
(a) On or prior to the Addition Date, [Name of Transferor] has
delivered to the Trustee the Assignment (including an acceptance by the Trustee
on behalf of the Trust for the benefit of the Investor Certificateholders) and
[Name of Transferor] has indicated in its computer files that the Receivables
created in connection with the Additional Accounts have been transferred to the
Trust and within __ Business Days after the Addition Date [Name of Transferor]
shall deliver to the Trustee a computer file or microfiche list containing a
true and complete list of all Additional Accounts identified by account number
and the aggregate amount of the Receivables in such Additional Accounts as of
the Addition Date, which computer file or microfiche list shall be as of the
date of such Assignment, incorporated into and made a part of such Assignment
and the Pooling and Servicing Agreement.
(b) Legal, Valid and Binding Obligation. The Assignment
constitutes a legal, valid and binding obligation of [Name of Transferor],
enforceable against [Name of Transferor] in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and the rights of
creditors of national banking associations and except
B-8
<PAGE> 134
as such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(c) Eligibility of Accounts. Each Additional Account
designated pursuant to the Assignment is an Eligible Account and each Receivable
in such Additional Account is an Eligible Receivable.
(d) Selection Procedures. No selection procedures believed by
[Name of Transferor] to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts designated
hereby from the available Eligible Accounts in the Identified Pool.
(e) Insolvency. [Name of Transferor] is not insolvent and,
after giving effect to the conveyance set forth in Section 3 of the Assignment,
will not be insolvent.
(f) Security Interest. The Assignment constitutes either: (i)
a valid transfer and assignment to the Trust of all right, title and interest of
[Name of Transferor] in and to Receivables now existing and hereafter created in
the Additional Accounts designated pursuant to the Assignment, and all proceeds
(as defined in the UCC as in effect in the applicable jurisdiction) of such
Receivables and Insurance Proceeds relating thereto, and such Receivables and
any proceeds thereof and Insurance Proceeds relating thereto will be held by the
Trust free and clear of any Lien of any Person claiming through or under the
Transferor or any of its Affiliates except for (x) Liens permitted under
subsection 2.05(b) of the Pooling and Servicing Agreement, (y) the interest of
[Name of Transferor] as holder of the Transferor Certificate and (z) [Name of
Transferor]'s right to receive interest accruing on, and investment earnings in
respect of, the Finance Charge Account and the Principal Account as provided in
the Pooling and Servicing Agreement and any Supplement; or (ii) a grant of a
security interest (as defined in the UCC as in effect in the applicable
jurisdiction) in such property to the Trust, which is enforceable with respect
to the existing Receivables of the Additional Accounts designated pursuant to
the Assignment, the proceeds (as defined in the UCC as in effect in the
applicable jurisdiction) thereof and Insurance Proceeds relating thereto upon
the conveyance of such Receivables to the Trust, and which will be enforceable
with respect to the Receivables thereafter created in respect of Additional
Accounts designated pursuant to the Assignment, the proceeds (as defined in the
UCC as in effect in the applicable jurisdiction) thereof and Insurance Proceeds
relating thereto, upon such creation; and (iii) if the Assignment constitutes
the grant of a security interest to the Trust in such property, upon the filing
of the financing statements described in Section 3 of the Assignment with
respect to the Additional Accounts designated pursuant to the Assignment and in
the case of the Receivables of such Additional Accounts thereafter created and
the proceeds (as defined in the UCC as in effect in the
B-9
<PAGE> 135
applicable jurisdiction) thereof, and Insurance Proceeds relating to such
Receivables, upon such creation, the Trust shall have a first priority perfected
security interest in such property (subject to Section 9-306 of the UCC as in
effect in the applicable jurisdiction) except for Liens permitted under
subsection 2.05(b) of the Pooling and Servicing Agreement.
(g) Requirements of Pooling and Servicing Agreement.
All requirements set forth in Section 2.06 of the Pooling and Servicing
Agreement for designating Additional Accounts and conveying the Principal
Receivables of such Accounts, whether now existing or hereafter created, have
been satisfied.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day
of __________, ____.
[Name of Transferor]
By: ________________________
Name:
Title:
B-10
<PAGE> 136
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
Bank of America National Association
----------------------------------------
BA MASTER CREDIT CARD TRUST
----------------------------------------
1. Capitalized terms used in this Certificate have
their respective meanings set forth in the Pooling and Servicing
Agreement; provided, that the "preceding Monthly Period" shall mean the
Monthly Period immediately preceding the calendar month in which this
Certificate is delivered. This Certificate is delivered pursuant to
subsection 3.04(b) of the Pooling and Servicing Agreement. References
herein to certain sections and subsections are references to the
respective sections and subsections of the Pooling and Servicing
Agreement.
2. Bank of America National Association is
Servicer under the Pooling and Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. The date of this Certificate is a Determination
Date under the Pooling and Servicing Agreement.
<TABLE>
<S> <C>
5. The aggregate amount of Collections processed during
the preceding Monthly Period was equal to (excluding Annual Membership Fees
and Interchange).............................................................. $__________
6. The Aggregate Investor Percentage of Receivables
processed by the Servicer during the preceding Monthly Period was equal to.... $__________
7. The Aggregate Investor Percentage of
Collections of Finance Charge Receivables processed by the Servicer
during the preceding Monthly Period was equal to (excluding Annual
Membership Fees and Interchange).............................................. $__________
8. The aggregate amount of Receivables processed by
the Servicer as of the end of the last day of the preceding Monthly Period.... $__________
</TABLE>
<PAGE> 137
<TABLE>
<S> <C>
9. Of the balance on deposit in the Finance Charge
Account, the amount attributable to the Aggregate Investor Percentage
of Collections processed by the Servicer during the preceding Monthly
Period........................................................................ $__________
10. Of the balance on deposit in the Principal
Account, the amount attributable to the Aggregate Investor
Percentage of Collections processed by the Servicer during the preceding
Monthly Period................................................................ $__________
11. The aggregate amount, if any, of withdrawals, drawings
or payments under any Credit Enhancement, if any, required to be made with
respect to any Series outstanding for the preceding Monthly Period............ $__________
12. The Aggregate Investor Percentage of Collections of
Principal Receivables processed by the Servicer during the current month is
equal to ..................................................................... $__________
13. The amount equal to the Aggregate Investor Percentage
of Annual Membership Fees deposited to the Finance Charge Account or any
Series Account on or before the Transfer Date during the current month is
equal to ..................................................................... $__________
14. The aggregate amount of Interchange to be deposited
in the Finance Charge Account on the Transfer Date of the current month is
equal to ..................................................................... $__________
15. The aggregate amount of all sums payable to the
Investor Certificateholder of each Series on the succeeding Distribution Date
with respect to Certificate Principal......................................... $__________
16. The aggregate amount of all sums payable to the
Investor Certificateholder of each Series on the succeeding Distribution Date
with respect to Certificate Interest.......................................... $__________
</TABLE>
17. To the knowledge of the undersigned, there are
no Liens on any Receivables in the Trust except as described below:
[If applicable, insert "None."]
C-2
<PAGE> 138
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this certificate this ____ day of __________, ____.
Bank of America National
Association
By: ________________________
Name:
Title:
C-3
<PAGE> 139
Schedule to Monthly
Servicer's Certificate*
Bank of America National Association
----------------------------------------
BA MASTER CREDIT CARD TRUST
----------------------------------------
* A separate schedule is to be attached for each Series, with
appropriate changes and additions to reflect the specifics of
the related Series Supplement.
C-4
<PAGE> 140
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
Bank of America National Association
----------------------------------------
BA MASTER CREDIT CARD TRUST
----------------------------------------
The undersigned, a duly authorized representative of Bank of
America National Association ("Bank of America"), as Servicer pursuant to the
Pooling and Servicing Agreement dated as of __________ __, 199_ (the "Pooling
and Servicing Agreement") by and between Bank of America and the [Trustee], as
trustee (the "Trustee") does hereby certify that:
1. Bank of America is Servicer under the Pooling
and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this Certificate
to the Trustee.
3. This Certificate is delivered pursuant to
Section 3.05 of the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during
[the period from the Closing date until] [the twelve-month period
ended] __________ ____ was conducted under the supervision of the
undersigned.
5. Based on such review, the Servicer has, to the
best of the knowledge of the undersigned, fully performed all its
obligations under the Pooling and Servicing Agreement throughout such
period and no default in the performance of such obligations has
occurred or is continuing except as set forth in paragraph 6 below.
6. The following is a description of each default in
the performance of the Servicer's obligations under the provisions of
the Pooling and Servicing Agreement, including any Supplement, known to
the undersigned to have been made during such period which sets forth
in detail (i) the nature of each such default, (ii) the action taken by
the Servicer, if any, to remedy each such default and (iii) the current
status of each such default:
[If applicable, insert "None."]
<PAGE> 141
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this ____ day of __________, ____.
________________________
Name:
Title:
D-2
<PAGE> 142
EXHIBIT E
FORM OF OPINION OF COUNSEL REGARDING ADDITIONAL ACCOUNTS
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 2.06(d)(vi)
OF THE POOLING AND SERVICING AGREEMENT
The opinions set forth below may be subject to normal and
customary certain qualifications, assumptions, limitations and exceptions.
1. The Assignment has been duly authorized, executed and
delivered by the Transferor and constitutes the legal, valid and binding
agreement of the Transferor, enforceable against the Transferor in accordance
with its terms subject to (A) the effect of bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation and other similar laws relating to or
affecting the rights and remedies of creditors generally and the rights and
remedies of creditors of national banking associations, and (B) the application
of principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).
2. The Pooling and Servicing Agreement and the Assignment
create in favor of the Trustee a security interest in the rights of the
Transferor in such of the Additional Receivables as constitute accounts. To the
extent that such security interest is not an interest of a buyer of accounts,
then the Pooling and Servicing and the Assignment create in favor of the Trustee
a security interest in the rights of the Transferor in the proceeds of such
Additional Receivables. Upon the filing of the Financing Statement, such
security interests will be perfected and of first priority.
3. To the extent that transactions contemplated by the
Pooling and Servicing Agreement and the Assignment do not constitute a sale by
the Transferor to the Trustee of such of the Additional Receivables as
constitute general intangibles or the proceeds thereof, the Pooling and
Servicing Agreement and the Assignment create in favor of the Trustee a security
interest in the rights of the Transferor in such of the Additional Receivables
as constitute general intangibles and the proceeds thereof. Upon the filing of
the Financing Statement, such security interest will be perfected and of first
priority.
<PAGE> 143
EXHIBIT F
FORM OF ANNUAL OPINION OF COUNSEL
The opinions set forth below, which are to be delivered
pursuant to subsection 13.02(d)(ii) of the Pooling and Servicing Agreement, may
be subject to normal and customary qualifications, assumptions, limitations and
exceptions.
1. The Pooling and Servicing Agreement creates in favor of
the Trustee a security interest in the rights of the Transferor in such of the
Receivables as constitute accounts. To the extent that such security interest
is not an interest of a buyer of accounts, then the Pooling and Servicing
creates in favor of the Trustee a security interest in the rights of the
Transferor in the proceeds of such Receivables. Such security interests is
perfected and of first priority.
2. To the extent that transactions contemplated by the
Pooling and Servicing Agreement do not constitute a sale by the Transferor to
the Trustee of such of the Receivables as constitute general intangibles or the
proceeds thereof, the Pooling and Servicing Agreement creates in favor of the
Trustee a security interest in the rights of the Transferor in such of the
Receivables as constitute general intangibles and the proceeds thereof. Such
security interest is perfected and of first priority.
<PAGE> 144
EXHIBIT G
FORM OF REASSIGNMENT OF RECEIVABLES
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as of __________
____, ____, by and between [______________], a [______________________]
organized under the laws of [__________] (the "Bank"), and [Trustee], a banking
corporation organized under the laws of the State of [Trustee's State of
Incorporation] (the "Trustee") pursuant to the Pooling and Servicing Agreement
referred to below.
W I T N E S S E T H:
WHEREAS, the Bank and the Trustee are parties to the Pooling
and Servicing Agreement, dated as of __________ __, 199_ (hereinafter as such
agreement may have been, or may from time to time be, amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Bank wishes remove all Receivables from certain designated Accounts of the Bank
(the "Removed Accounts") and to cause the Trustee to reconvey the Receivables of
such Removed Accounts, whether now existing or hereafter created, from the Trust
to the Bank (as each such term is defined in the Pooling and Servicing
Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
to reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, the Bank and the Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the
Pooling and Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Removal Date" shall mean, with respect to the
Removed Accounts designated hereby, __________, ____.
"Removal Notice Date" shall mean, with respect to the
Removed Accounts designated hereby, __________, ____ (which shall be a
date on or prior to the fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Bank shall
deliver to the Trustee, not later than __ Business Days after the
Removal Date, a computer file or microfiche list containing a true and
complete list of each MasterCard and VISA account which as of the
Removal Date shall be
<PAGE> 145
deemed to be a Removed Account, such accounts being identified by
account number and by the aggregate amount of Receivables in such
accounts as of the close of business on the Removal Date. Such list
shall be marked as Schedule 1 to this Reassignment and shall be
incorporated into and made a part of this Reassignment as of the
Removal Date.
3. Conveyance of Receivables.
(a) The Trust does hereby reconvey to the Bank,
without recourse on and after the Removal Date, all right, title and
interest of the Trust in and to the Receivables now existing and
hereafter created in the Removed Accounts designated hereby, all monies
due or to become due with respect thereto (including all Finance Charge
Receivables), all proceeds (as defined in Section 9-306 of the UCC as
in effect in the [name of applicable jurisdiction(s)]) of such
Receivables, Insurance Proceeds relating to such Receivables and the
proceeds thereof.
(b) In connection with such transfer, the Trustee
agrees to execute and deliver to the Bank on or prior to the date of
this Reassignment, a termination statement with respect to the
Receivables now existing and hereafter created in the Removed Accounts
designated hereby (which may be a single termination statement with
respect to all such Receivables) evidencing the release by the Trust of
its Lien on the Receivables in the Removed Accounts, and meeting the
requirements of applicable state law, in such manner and such
jurisdictions as are necessary to remove such Lien.
4. Representations and Warranties of the Bank.
The Bank hereby represents and warrants to the Trust as of the Removal
Date:
(a) Legal Valid and Binding Obligation. This
Reassignment constitutes a legal, valid and binding obligation
of the Bank enforceable against the Bank in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and the rights of
creditors of national banking associations and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(b) Selection Procedures. No selection
procedures believed by the Bank to be materially adverse to
the interests of the Investor Certificateholders were utilized
in selecting the Removed Accounts designated hereby.
G-2
<PAGE> 146
5. Conditions Precedent. The amendment of the
Pooling and Servicing Agreement set forth in Section 6 hereof is
subject to the satisfaction, on or prior to the Removal Date, of the
following condition precedent:
The Bank shall have delivered to the Trustee
an Officer's Certificate certifying that (i) as of the Removal
Date, all requirements set forth in Section 2.07 of the
Pooling and Servicing Agreement for designating Removed
Accounts and reconveying the Receivables of such Removed
Accounts, whether now existing or hereafter created, have been
satisfied, and (ii) each of the representations and warranties
made by the Bank in Section 4 hereof is true and correct as of
the Removal Date. The Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries
with regard to the matters set forth therein, and shall incur
no liability in so relying.
6. Amendment of the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement is hereby amended to provide that
all references therein to the "Pooling and Servicing Agreement," to
"this Agreement" and "herein" shall be deemed from and after the
Removal Date to be a dual reference to the Pooling and Servicing
Agreement as supplemented by this Reassignment. Except as expressly
amended hereby, all of the representations, warranties, terms,
covenants and conditions to the Pooling and Servicing Agreement shall
remain unamended and shall continue to be, and shall remain, in full
force and effect in accordance with its terms and except as expressly
provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or a consent to non-compliance with any term
or provision of the Pooling and Servicing Agreement.
7. Counterparts. This Reassignment may be executed
in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
8. Governing Law. THIS REASSIGNMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [NEW YORK],
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
G-3
<PAGE> 147
IN WITNESS WHEREOF, the undersigned have caused this
Reassignment of Receivables to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
[Name of Transferor]
By: ________________________
Name:
Title:
[Trustee]
as Trustee
By: ________________________
Name:
Title:
G-4
<PAGE> 148
Schedule 1
to Reassignment
of Receivables
---------------
REMOVED ACCOUNTS
----------------
G-5
<PAGE> 149
EXHIBIT H
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE OF RECEIVABLES, dated as of __________ __, ____,
by and between [Name of Transferor], a [__________________] organized under the
laws of [___________] (the "Transferor"), and [Trustee], a banking corporation
organized and existing under the laws of [Trustee's State of Incorporation] (the
"Trustee") pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the
Pooling and Servicing Agreement dated as of __________ __, 199_ (hereinafter as
such agreement may have been, or may from time to time be, amended, supplemented
or otherwise modified, the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to cause the Trustee to reconvey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trust to
the Transferor pursuant to the terms of Section 12.04 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to subsection
12.01(a) of the Pooling and Servicing Agreement (as each such term is defined in
the Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey Receivables
subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Reconveyance Date" shall mean __________, ____.
2. Return of Lists of Accounts. The Trustee shall deliver to
the Transferor, not later than __ Business Days after the Reconveyance Date,
each and every computer file or microfiche list of Accounts delivered to the
Trustee pursuant to the terms of the Pooling and Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby
reconvey to the Transferor, without recourse, on and after the Reconveyance
Date, all right, title and interest of the Trust in and to each and every
Receivable now existing and hereafter created in the Accounts, all monies due or
to become due with respect thereto (including all Finance Charge Receivables),
all
<PAGE> 150
proceeds (as defined in Section 9-306 of the UCC as in effect in the [name of
applicable jurisdiction(s)]) of such Receivables and Insurance Proceeds relating
to such Receivables and any Interchange, except for amounts, if any, held by the
Trustee pursuant to subsection 12.03(b) of the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Transferor on or prior to the date of this
Reconveyance, such UCC termination statements as the Transferor may reasonably
request, evidencing the release by the Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
5. Governing Law. THIS RECONVEYANCE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
H-2
<PAGE> 151
IN WITNESS WHEREOF, the undersigned have caused this
Reconveyance of Receivables to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
[Name of Transferor]
By: ________________________
Name:
Title:
[Trustee],
as Trustee
By: ________________________
Name:
Title:
H-3
<PAGE> 152
SCHEDULE 1
LIST OF ACCOUNTS
Delivered to Trustee only
[Deemed Incorporated]
<PAGE> 1
- --------------------------------------------------------------------------------
BANK OF AMERICA NATIONAL ASSOCIATION
Transferor and Servicer
and
[NAME OF TRUSTEE]
Trustee
on behalf of the Series 199_-_ Certificateholders
---------------------------------------
SERIES 199_-_ SUPPLEMENT
Dated as of ______ __, 199_
to
POOLING AND SERVICING AGREEMENT
Dated as of __________ __, 199_
---------------------------------------
BA MASTER CREDIT CARD TRUST
Series 199_-_
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. Designation.......................................................................... 1
SECTION 2. Definitions.......................................................................... 1
SECTION 3. Servicing Compensation and Assignment of
Interchange.......................................................................... 20
SECTION 4. Reassignment and Transfer Terms...................................................... 22
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 4.04 Rights of Certificateholders and the
Collateral Interest Holder.................................................. 22
SECTION 4.05 Allocations................................................................. 23
SECTION 4.06 Determination of Monthly Interest........................................... 27
SECTION 4.07 Determination of Monthly Principal.......................................... 29
SECTION 4.08 Coverage of Required Amount................................................. 30
SECTION 4.09 Monthly Payments............................................................ 31
SECTION 4.10 Investor Charge-Offs........................................................ 35
SECTION 4.11 Excess Spread; SHARED Excess Finance
Charge Collections.......................................................... 37
SECTION 4.12 Reallocated Principal Collections........................................... 38
SECTION 4.13 Shared Excess Finance Charge
Collections................................................................. 39
SECTION 4.14 Shared Excess Principal Collections......................................... 40
SECTION 4.15 Principal Funding Account................................................... 40
SECTION 4.16 Reserve Account............................................................. 41
SECTION 4.17 Determination of [Index].................................................... 43
SECTION 4.18 Transferor's or Servicer's Failure
to Make a Deposit or Payment................................................ 44
SECTION 8. Article V of the Agreement........................................................... 44
SECTION 5.01 Distributions............................................................... 44
SECTION 5.02 Monthly Series 199_-_ Certificateholders'
Statement................................................................... 45
SECTION 9. Series 199_-_ Pay Out Events......................................................... 47
SECTION 10. Series 199_-_ Termination............................................................ 49
SECTION 11. Counterparts......................................................................... 49
SECTION 12. Periodic Finance Charges and Other Fees.............................................. 49
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 13. Governing Law........................................................................ 49
SECTION 14. No Petition.......................................................................... 49
SECTION 15. Tax Representation and Covenant...................................................... 49
SECTION 16. Certain Tax Related Amendments....................................................... 50
</TABLE>
EXHIBITS
- --------
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions and
Notification to the Trustee
EXHIBIT C Form of Monthly Series 199_-_ Certificateholders'
Statement
ii
<PAGE> 4
Series 199_-_ SUPPLEMENT, dated as of ______ __, 199_ (this "Series
Supplement"), between BANK OF AMERICA NATIONAL ASSOCIATION, a national banking
association, as Transferor and Servicer, and [NAME OF TRUSTEE], as Trustee under
the Pooling and Servicing Agreement, dated as of _________ __, 199_, between
Bank of America National Association and the Trustee (as amended, the
"Agreement").
Pursuant to this Series Supplement, the Transferor and the Trust
shall create a 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 199_-_
Certificates." The two classes shall be designated the Class A
[Floating-Rate][Fixed- Rate] Asset Backed Certificates, Series 199_-_ (the
"Class A Certificates") and the Class B [Floating-Rate] [Fixed-Rate] Asset
Backed Certificates, Series 199_-_ (the "Class B Certificates"). The Class A
Certificates and the Class B Certificates shall be substantially in the form of
Exhibits A-1 and A-2 hereto, respectively. In addition, there is hereby created
a third Class of an uncertificated interest in the Trust which shall be deemed
to be an "Investor Certificate" for all purposes under the Agreement and this
Series Supplement, except as expressly provided herein, and which shall be known
as the Collateral Interest, Series 199_-_ (the "Collateral Interest").
(b) Series 199_-_ shall be included in SHARED Excess Finance Charge
Group [ONE] and THE Shared EXCESS Principal Collections Group (as defined
below). Series 199_-_ 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 and clauses (a) and (c) of the definition of "Tax
Opinion" in Section 1.01 of the Agreement shall not be applicable to the
Collateral Interest.
SECTION 2. Definitions.
In the event that any term or provision contained herein shall
conflict with or be inconsistent with any provision contained in the Agreement,
the terms and provisions of this Series Supplement shall govern. All Article,
Section or subsection references herein shall mean Articles, Sections or
subsections of the Agreement, except as otherwise provided
<PAGE> 5
herein. All capitalized terms not otherwise defined herein are defined in the
Agreement. Each capitalized term defined herein shall relate only to the
Investor Certificates and no other Series of Certificates issued by the Trust.
"Acceptable Successor Servicer" shall mean, [Name of Trustee] or
any other Servicer [approved by the Rating Agencies to be an Acceptable
Successor Servicer].
"Accumulation Period" shall mean, solely for the purposes of the
definition of Shared Excess Principal Collections Group Monthly Principal
Payment as such term is defined in each Supplement relating to the Shared
Excess Principal Collections Group, the Controlled Accumulation Period.
"Accumulation Period Factor" shall mean, for each Monthly Period, a
fraction, the numerator of which is equal to the sum of the initial investor
interests (or other amounts specified in the applicable Supplement) of all
outstanding Series, and the denominator of which is equal to the sum of (a) the
Initial Investor Interest, (b) the initial investor interests (or other amounts
specified in the applicable Supplement) of all outstanding Series (other than
Series 199_-_) which are not expected to be in their revolving periods, and (c)
the initial investor interests (or other amounts specified in the applicable
Supplement) of all other outstanding Series which are not allocating Shared
Excess Principal Collections to other Series and are in their revolving periods.
"Accumulation Period Length" shall have the meaning assigned such
term in subsection 4.09(i).
"Accumulation Shortfall" shall initially mean zero and shall
thereafter mean, with respect to any Transfer Date with respect to the
Controlled Accumulation Period, the excess, if any, of the Controlled Deposit
Amount for such Transfer Date over the amount deposited into the Principal
Funding Account pursuant to subsection 4.09(e)(i) with respect to the Class A
Certificates.
"Adjusted Investor Interest" shall mean, with respect to any date
of determination, an amount equal to the sum of (a) the Class A Adjusted
Investor Interest, (b) the Class B Investor Interest and (c) the Collateral
Interest.
"Aggregate Investor Default Amount" shall mean, with respect to any
Monthly Period, the sum of the Investor Default Amounts in respect of such
Monthly Period.
"Available Investor Principal Collections" shall mean with respect
to any Monthly Period, an amount equal to (a) the Investor Principal Collections
for such Monthly Period, minus (b) the amount of Reallocated Collateral
Principal Collections and Reallocated Class B Principal Collections with respect
to such
2
<PAGE> 6
Monthly Period which pursuant to Section 4.12 are required to fund the Class A
Required Amount and the Class B Required Amount, plus (c) the amount of Shared
Excess Principal Collections with respect to the Shared Excess Principal
Collections Group that are allocated to Series 199_-_ in accordance with
subsection 4.14(b).
"Available Reserve Account Amount" shall mean, with respect to any
Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account on
such date (after taking into account any interest and earnings retained in the
Reserve Account pursuant to subsection 4.16(b) on such date, but before giving
effect to any deposit made or to be made pursuant to subsection 4.11(i) to the
Reserve Account on such date) and (b) the Required Reserve Account Amount.
"Base Rate" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Monthly Interest, each for the related Interest Period, and the
Certificateholder Servicing Fee and the Servicer Interchange, each with respect
to such Monthly Period and the denominator of which is the Investor Interest as
of the close of business on the last day of such Monthly Period.
"Certificateholder Servicing Fee" shall have the meaning specified
in subsection 3(a) hereof.
"Class A Additional Interest" shall have the meaning specified in
subsection 4.06(a).
"Class A Adjusted Investor Interest" shall mean, with respect to
any date of determination, an amount equal to the Class A Investor Interest
minus the Principal Funding Account Balance on such date of determination.
"Class A Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class A Floating Allocation of the
Collections of Finance Charge Receivables allocated to the Investor Certificates
and deposited in the Finance Charge Account for such Monthly Period (or to be
deposited in the Finance Charge Account on the related Transfer Date with
respect to the preceding Monthly Period pursuant to the third paragraph of
subsection 4.03(a) of the Agreement and subsection 3(b) of this Series
Supplement), excluding the portion of Collections of Finance Charge Receivables
attributable to Servicer Interchange, (b) with respect to any Monthly Period
during the Controlled Accumulation Period prior to the payment in full of the
Class A Investor Interest, the Principal Funding Investment Proceeds arising
pursuant to subsection 4.15(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 subsections 4.16(b) and 4.16(d).
3
<PAGE> 7
"Class A Certificate Rate" shall mean [from the Closing Date
through _____ __, 199_, from _____ __, 199_ through ____ __, 199_ and with
respect to each Interest Period thereafter,] a per annum rate equal to ____% per
annum [in excess of [Index] as determined on the related [Index] Determination
Date].
"Class A Certificateholder" shall mean the Person in whose name a
Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any of the certificates executed
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1 hereto.
"Class A Deficiency Amount" shall have the meaning specified in
subsection 4.06(a).
"Class A Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class A Investor Interest as of the close of business on the last day of the
Revolving Period; provided, that if Series 199_-_ is paired with a Paired Series
and a Pay Out Event occurs with respect to such Paired Series during the
Controlled Accumulation Period, the Transferor may, by written notice delivered
to the Trustee and the Servicer, designate a different numerator (provided that
such numerator is not less than the Class A Adjusted Investor Interest (less the
balance on deposit in the Principal Account) as of the last day of the revolving
period for such Paired Series, and the denominator of which is equal to the
numerator used to determine the Fixed Investor Percentage with respect to such
Monthly Period.
"Class A Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Adjusted Investor
Interest as of the close of business on the last day of the preceding Monthly
Period and the denominator of which is equal to the Adjusted Investor Interest
as of the close of business on such day; provided, however, that, with respect
to the first Monthly Period, the Class A Floating Allocation shall mean the
percentage equivalent of a fraction, the numerator of which is the Class A
Initial Investor Interest and the denominator of which is the Initial Investor
Interest.
"Class A Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class A Certificates, which is $___________.
"Class A Investor Allocation" shall mean, with respect to any
Monthly Period, (a) with respect to Default Amounts and Finance Charge
Receivables at any time and Principal Receivables
4
<PAGE> 8
during the Revolving Period, the Class A Floating Allocation and (b) with
respect to Principal Receivables during the Controlled Accumulation Period or
Rapid Amortization Period, the Class A Fixed Allocation.
"Class A Investor Charge-Off" shall have the meaning specified in
subsection 4.10(a).
"Class A Investor Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Class A Floating
Allocation applicable for the related Monthly Period.
"Class A Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to Class A
Certificateholders prior to such date and minus (c) the excess, if any, of the
aggregate amount of Class A Investor Charge-Offs pursuant to subsection 4.10(a)
over Class A Investor Charge-Offs reimbursed pursuant to subsection 4.11(b)
prior to such date of determination; provided, however, that the Class A
Investor Interest may not be reduced below zero.
"Class A Monthly Interest" shall mean the monthly interest
distributable in respect of the Class A Certificates as calculated in accordance
with subsection 4.06(a).
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in accordance
with subsection 4.07(a).
"Class A Required Amount" shall have the meaning specified in
subsection 4.08(a).
"Class A Scheduled Payment Date" shall mean the __________ ____
Distribution Date.
"Class A Servicing Fee", shall have the meaning specified in
subsection 3(a) of this Series Supplement.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.06(b).
"Class B Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the Class B Floating Allocation of the Collections of
Finance Charge Receivables allocated to the Investor Certificates and deposited
in the Finance Charge Account for such Monthly Period (or to be deposited in the
Finance Charge Account on the related Transfer Date with respect to the
preceding Monthly Period pursuant to the third paragraph of subsection 4.03(a)
of the Agreement and subsection 3(b) of this Series Supplement), excluding the
portion
5
<PAGE> 9
of Collections of Finance Charge Receivables attributable to Servicer
Interchange.
"Class B Certificate Rate" shall mean [from the Closing Date
through _____ __, 199_, from _____ __, 199_ through ____ __, 199_ and with
respect to each Interest Period thereafter,] a per annum rate equal to ____% per
annum [in excess of [Index], as determined on the related [Index] Determination
Date].
"Class B Certificateholder" shall mean the Person in whose name a
Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any of the certificates executed
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2 hereto.
"Class B Deficiency Amount" shall have the meaning specified in
subsection 4.06(b).
"Class B Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the close of business on the last day of the
Revolving Period; provided, that if Series 199_-_ is paired with a Paired Series
and a Pay Out Event occurs with respect to such Paired Series during the
Controlled Accumulation Period, the Transferor may, by written notice delivered
to the Trustee and the Servicer, designate a different numerator (provided that
such numerator is not less than the Class B Investor Interest (less, if the
Class A Fixed Allocation is zero, the balance on deposit in the Principal
Account [and the Principal Funding Account, in each case] to the extent not
subtracted in reducing the Class A Fixed Allocation to zero) as of the last day
of the revolving period for such Paired Series), and the denominator of which is
equal to the numerator used in determining the Fixed Investor Percentage
with respect to such Monthly Period.
"Class B Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided, however, that, with respect to the first
Monthly Period, the Class B Floating Allocation shall mean the percentage
equivalent of a fraction, the numerator of which is the Class B Initial Investor
Interest and the denominator of which is the Initial Investor Interest.
6
<PAGE> 10
"Class B Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class B Certificates, which is $__________.
"Class B Investor Allocation" shall mean, with respect to any
Monthly Period, (a) with respect to Default Amounts and Finance Charge
Receivables at any time and Principal Receivables during the Revolving Period,
the Class B Floating Allocation and (b) with respect to Principal Receivables
during the Controlled Accumulation Period or Rapid Amortization Period, the
Class B Fixed Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(b).
"Class B Investor Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Class B Floating
Allocation applicable for the related Monthly Period.
"Class B Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to Class B
Certificateholders prior to such date, minus (c) the aggregate amount of Class B
Investor Charge-Offs for all prior Transfer Dates pursuant to subsection
4.10(b), minus (d) the aggregate amount of the Reallocated Class B Principal
Collections allocated pursuant to subsection 4.12(a) on all prior Transfer Dates
for which the Collateral Interest has not been reduced, minus (e) an amount
equal to the amount by which the Class B Investor Interest has been reduced on
all prior Transfer Dates pursuant to subsection 4.10(a) and plus (f) the
aggregate amount of Excess Spread allocated and available on all prior Transfer
Dates pursuant to subsection 4.11(d) for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
that the Class B Investor Interest may not be reduced below zero.
"Class B Monthly Interest" shall mean the monthly interest
distributable in respect of the Class B Certificates as calculated in accordance
with subsection 4.06(b).
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in accordance
with subsection 4.07(b).
"Class B Required Amount" shall have the meaning specified in
subsection 4.08(b).
"Class B Scheduled Payment Date" shall mean the __________ ____
Distribution Date.
7
<PAGE> 11
"Class B Servicing Fee" shall have the meaning specified in
subsection 3(a) hereof.
"Closing Date" shall mean ______ __, 199_.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables during the Revolving Period, the Collateral
Floating Allocation and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Rapid Amortization Period, the Collateral
Fixed Allocation.
"Collateral Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Collateral Floating Allocation of the
Collections of Finance Charge Receivables allocated to the Investor Certificates
and deposited in the Finance Charge Account for such Monthly Period (or to be
deposited in the Finance Charge Account on the related Transfer Date with
respect to the preceding Monthly Period pursuant to the third paragraph of
subsection 4.03 (a) of the Agreement and subsection 3(b) of this Series
Supplement), excluding the portion of Collections of Finance Charge Receivables
attributable to Servicer Interchange.
"Collateral Charge-Offs" shall have the meaning specified in
subsection 4.10(c).
"Collateral Default Amount" shall mean, with respect to any
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Collateral Floating
Allocation applicable for the elated Monthly Period.
"Collateral Fixed Allocation" shall mean, with respect to any
Monthly Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period; provided, that if Series 199_-_ is paired with a Paired Series and a Pay
Out Event occurs with respect to such Paired Series during the Controlled
Accumulation Period, the Transferor may, by written notice delivered to the
Trustee and the Servicer, designate a different numerator (provided that such
numerator is not less than the Collateral Interest (less, if the Class B Fixed
Allocation is zero, the balance on deposit in the Principal Account, to the
extent not subtracted in reducing the Class B Fixed Allocation to zero) as of
the last day of the revolving period for such Paired Series), and the
denominator of which is equal to the numerator used in determining the Fixed
Investor Percentage with respect to such Monthly Period.
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"Collateral Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Collateral Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided, however, that, with respect to the first
Monthly Period, the Collateral Floating Allocation shall mean the percentage
equivalent of a fraction, the numerator of which is the Collateral Initial
Interest and the denominator of which is the Initial Investor Interest.
"Collateral Initial Interest" shall mean the aggregate initial
principal amount of the Collateral Interest, which is $___________.
"Collateral Interest" shall mean, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the right to
receive, to the extent necessary to make the required payments to the Collateral
Interest Holder under this Series Supplement, the portion of Collections
allocable thereto under the Agreement and this Series Supplement, and funds on
deposit in the Collection Account allocable thereto pursuant to the Agreement
and this Series Supplement; provided, however, that, with respect to any date,
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 subsection
4.10(c), minus (d) the aggregate amount of Reallocated Principal Collections
allocated pursuant to subsections 4.12(a) and (b) on all prior Transfer Dates,
minus (e) an amount equal to the amount by which the Collateral Interest has
been reduced on all prior Transfer Dates pursuant to subsections 4.10(a) and
(b), and plus (f) the aggregate amount of Excess Spread allocated and available
on all prior Transfer Dates pursuant to subsection 4.11(h) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e);
provided further, however, that the Collateral Interest may not be reduced below
zero.
"Collateral Interest Holder" shall mean the entity so designated in
the Loan Agreement.
"Collateral Interest Servicing Fee" shall have the meaning
specified in subsection 3(a) hereof.
"Collateral Monthly Interest" shall mean the monthly interest
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.06(c).
"Collateral Monthly Principal" shall mean the monthly principal
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.07(c).
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"Collateral Rate" shall mean, for any Interest Period, the rate
specified in the Loan Agreement.
"Controlled Accumulation Amount" shall mean (a) for any Transfer
Date with respect to the Controlled Accumulation Period prior to the payment in
full of the Class A Investor Interest, $__________; provided, however, that if
the Accumulation Period Length is determined to be less than 12 months pursuant
to subsection 4.09(i), the Controlled Accumulation Amount for each Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest will be equal to (i) the product of (x) the
Class A Initial Investor Interest and (y) the Accumulation Period Factor for
such Monthly Period divided by (ii) the Required Accumulation Factor Number and
(b) for any Transfer Date with respect to the Controlled Accumulation Period
after payment in full of the Class A Investor Interest, an amount equal to the
Class B Investor Interest as of such Transfer Date.
"Controlled Accumulation Period" shall mean, unless a Pay Out Event
shall have occurred prior thereto, the period commencing at the close of
business on __________ ____, ____ or such later date as is determined in
accordance with subsection 4.09(i) and ending on the first to occur of (a) the
commencement of the Rapid Amortization Period and (b) the Series 199_-_
Termination Date.
"Controlled Deposit Amount" shall mean, with respect to any
Transfer Date, the sum of (a) the Controlled Accumulation Amount for such
Transfer Date and (b) any Accumulation Shortfall remaining at the close of
business on the immediately preceding Transfer Date.
"Covered Amount" shall mean an amount, determined as of the
Transfer Date with respect to any Interest Period, equal to the product of (a)
(i) a fraction, the numerator of which is the actual number of days in such
Interest Period and the denominator of which is 360, times (ii) the Class A
Certificate Rate in effect with respect to such Interest Period and (b) the
Principal Funding Account Balance as of the Record Date preceding such Transfer
Date.
"Credit Enhancement" shall mean (a) with respect to the Class A
Certificates, the subordination of the Class B Certificates and the Collateral
Interest, and (b) with respect to the Class B Certificates, the subordination of
the Collateral Interest.
"Credit Enhancement Provider" shall mean the Collateral Interest
Holder.
"Cumulative Series Finance Charge Shortfall" shall mean the sum of
the Series Finance Charge Shortfalls (as such term is defined in each of the
related Series Supplements) for each Series in the Shared Excess Principal
Collections Group.
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<PAGE> 14
"Cumulative Series Principal Shortfall" shall mean the sum of the
Series Principal Shortfalls (as such term is defined in each of the related
Series Supplements) for each Series in the Shared Excess Principal Collections
Group.
"Daily Principal Shortfall" shall mean, on any date of
determination, the excess of the Shared Excess Principal Collections Group
Monthly Principal Payment for the Monthly Period relating to such date over the
month to date amount of Collections processed in respect of Principal
Receivables for such Monthly Period allocable to investor certificates of all
outstanding Series in the Shared Excess Principal Collections Group, not
subject to reallocation, which are on deposit or to be deposited in the
Principal Account on such date.
"Deficiency Amount" shall mean, at any time of determination, the
sum of the Class A Deficiency Amount and the Class B Deficiency Amount.
"Distribution Date" shall mean ____ __, 199_ and the _________ day
of each calendar month thereafter, or if such ___________ day is not a Business
Day, the next succeeding Business Day.
"Excess Spread" shall mean, with respect to any Transfer Date, the
sum of the amounts with respect to such Transfer Date, if any, specified
pursuant to subsections 4.09(a)(iv), 4.09(b)(iii) and 4.09(c)(ii).
"Fixed Investor Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is the
Investor Interest as of the close of business on the last day of the Revolving
Period, AND THE DENOMINATOR OF WHICH IS THE GREATER OF (A) THE AGGREGATE AMOUNT
OF PRINCIPAL RECEIVABLES IN THE TRUST DETERMINED AS OF THE CLOSE 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, however, that if Series 199_-_ is
paired with a Paired Series and a Pay Out Event occurs with respect to such
Paired Series during the Controlled Accumulation Period, the Transferor may, by
written notice delivered to the Trustee and the Servicer, designate a different
numerator (provided that such numerator is not less than the Adjusted Investor
Interest (less the balance on deposit in the Principal Account) as of the last
day of the revolving period for such Paired Series); provided, however, that
with respect to any Monthly Period in which an Addition Date occurs or in which
a Removal Date occurs 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, the denominator determined
pursuant to clause (a) hereof shall be (i) the
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<PAGE> 15
aggregate amount of Principal Receivables in the Trust as of the close of
business on the last day of the prior Monthly Period for the period from and
including the first day of such Monthly Period to but excluding the related
Addition Date or Removal Date and (ii) the aggregate amount of Principal
Receivables in the Trust as of the beginning of the day on the related Addition
Date or Removal Date after adjusting for the aggregate amount of Principal
Receivables added to or removed from the Trust on the related Addition Date or
Removal Date, for the period from and including the related Addition Date or
Removal Date to and including the last day of such Monthly Period.
"Floating Investor Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is the Adjusted Investor Interest as of the close of business on the last day of
the preceding Monthly Period (or with respect to the first Monthly Period, the
Initial Investor Interest) and the denominator of which is the greater of (a)
the aggregate amount of Principal Receivables as of the close of business on the
last day of the preceding Monthly Period (or with respect to the first calendar
month in the first Monthly Period, the aggregate amount of Principal Receivables
in the Trust as of the opening of business on the Closing Date, and with respect
to the second calendar month in the first Monthly Period, the aggregate amount
of Principal Receivables as of the close of business on the last day of the
first calendar month in the first Monthly Period) and (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 or Principal Receivables, as applicable, for all outstanding
Series on such date of determination; provided, however, that with respect to
any Monthly Period in which an Addition Date occurs or in which a Removal Date
occurs 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, the denominator determined pursuant to clause
(a) hereof shall be (A) the aggregate amount of Principal Receivables in the
Trust as of the close of business on the last day of the prior Monthly Period
for the period from and including the first day of such Monthly Period to but
excluding the related Addition Date or Removal Date and (B) the aggregate amount
of Principal Receivables in the Trust as of the beginning of the day on the
related Addition Date or Removal Date after adjusting for the aggregate amount
of Principal Receivables added to or removed from the Trust on the related
Addition Date or Removal Date, for the period from and including the related
Addition Date or Removal Date to and including the last day of such Monthly
Period.
"[Index]" shall mean, for any Interest Period, the [description of
[Index]] determined by the Trustee for each Interest Period in accordance with
the provisions of Section 4.17.
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<PAGE> 16
"[Index] Determination Date" shall mean [description of dates on
which [Index] is determined.
"Initial Investor Interest" shall mean $___________.
"Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the previous Distribution Date through the
day preceding such Distribution Date, except that the initial Interest Period
shall be the period from and including the Closing Date through the day
preceding the initial Distribution Date.
"Investor Certificateholder" shall mean (a) with respect to the
Class A Certificates, the holder of record of a Class A Certificate, (b) with
respect to the Class B Certificates, the holder of record of a Class B
Certificate and (c) with respect to the Collateral Interest, the Collateral
Interest Holder.
"Investor Certificates" shall mean the Class A Certificates, the
Class B Certificates and the Collateral Interest.
"Investor Default Amount" shall mean, with respect to any
Receivable in a Defaulted Account, an amount equal to the product of (a) the
Default Amount and (b) the Floating Investor Percentage on the day such Account
became a Defaulted Account.
"Investor Interest" shall mean, on any date of determination, an
amount equal to the sum of (a) the Class A Investor Interest, (b) the Class B
Investor Interest and (c) the Collateral Interest, each as of such date.
"Investor Percentage" shall mean for any Monthly Period, (a) with
respect to Finance Charge Receivables and Default Amounts at any time and
Principal Receivables during the Revolving Period, the Floating Investor
Percentage and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or the Rapid Amortization Period, the Fixed Investor
Percentage.
"Investor Principal Collections" shall mean, with respect to any
Monthly Period, the sum of (a) the aggregate amount deposited into the Principal
Account for such Monthly Period pursuant to subsections 4.05(a)(ii), (iii) and
(iv), 4.05(b)(ii), (iii) and (iv) or 4.05(c)(ii), in each case, as applicable to
such Monthly Period and (b) the aggregate amount to be treated as Investor
Principal Collections pursuant to subsections 4.09(a)(iii) and 4.11(a) (to the
extent allocable to the Class A Investor Default Amount), (b), (c) (to the
extent allocable to the Class B Investor Default Amount), (d), (g) and (h) for
such Monthly Period (other than such amount paid from Reallocated Principal
Collections), and (c) the aggregate amount
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<PAGE> 17
of Unallocated Principal Collections deposited into the Principal Account
pursuant to subsection 4.05(d).
"Investor Servicing Fee" shall have the meaning specified in
subsection 3(a) hereof.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee, and the Collateral Interest Holder, dated as of ______
__, 199_, as amended or modified from time to time.
"Monthly Interest" shall mean, with respect to any Transfer Date,
the sum of (a) the Class A Monthly Interest, the Class A Additional Interest, if
any, and the unpaid Class A Deficiency Amount, if any; (b) the Class B Monthly
Interest, the Class B Additional Interest, if any, and the unpaid Class B
Deficiency Amount, if any, and (c) the Collateral Monthly Interest, each with
respect to such Transfer Date.
"Monthly Period" shall have the meaning specified in the Agreement,
except that the first Monthly Period with respect to the Investor Certificates
shall begin on and include the Closing Date and shall end on and include _____
____, 199_.
"Net Servicing Fee Rate" shall mean (a) so long as the Transferor,
an Affiliate thereof or an Acceptable Successor Servicer is the Servicer, ____%
per annum and (b) if the Transferor, an Affiliate thereof or an Acceptable
Successor Servicer is no longer the Servicer, __% per annum.
"Pay Out Commencement Date" shall mean the date on which a Trust
Pay Out Event is deemed to occur pursuant to Section 9.01 or a Series 199_-_ Pay
Out Event is deemed to occur pursuant to Section 9 hereof.
"Portfolio Adjusted Yield" shall mean, with respect to any Transfer
Date, the average of the percentages obtained for each of the three preceding
Monthly Periods by subtracting the Base Rate from the Portfolio Yield for such
Monthly Period and deducting ___% from the result for each Monthly Period.
"Portfolio Yield" shall mean, with respect to any Monthly Period,
the annualized percentage equivalent of a fraction, the numerator of which is an
amount equal to the sum of (a) the amount of Collections of Finance Charge
Receivables deposited into the Finance Charge Account and allocable to the
Investor Certificates for such Monthly Period, (b) the Principal Funding
Investment Proceeds deposited into the Finance Charge Account on the Transfer
Date related to such Monthly Period, and (c) the amount of the Reserve Draw
Amount (up to the Available Reserve Account Amount) plus any amounts of interest
and earnings described in Section 4.16, each deposited into the Finance Charge
Account on the Transfer Date relating to such Monthly Period, such sum to be
calculated on a cash basis after subtracting the
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<PAGE> 18
Aggregate Investor Default Amount for such Monthly Period, and the denominator
of which is the Investor Interest as of the close of business on the last day of
such Monthly Period.
"Principal Funding Account" shall have the meaning set forth in
subsection 4.15(a).
"Principal Funding Account Balance" shall mean, with respect to any
date of determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with respect to
each Transfer Date, the investment earnings on funds in the Principal Funding
Account (net of investment expenses and losses) for the period from and
including the immediately preceding Transfer Date to but excluding such Transfer
Date.
"Principal Funding Investment Shortfall" shall mean, with respect
to each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date are less than the Covered Amount determined as of such Transfer
Date.
"Rapid Amortization Period" shall mean the Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (a) the Series 199_-_ Termination Date and (b) the termination of the Trust
pursuant to Section 12.01.
"Rating Agency" shall mean Moody's and Standard & Poor's.
"Rating Agency Condition" shall mean the notification in writing by
each Rating Agency to the Transferor, the Servicer and the Trustee that an
action will not result in any Rating Agency reducing or withdrawing its then
existing rating of the investor certificates of any outstanding Series or class
of a Series with respect to which it is a Rating Agency.
"Reallocated Class B Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsection 4.12(a) in an amount not to exceed the product of (a)
the Class B Investor Allocation with respect to the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage with respect to the Monthly
Period relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables with respect to the Monthly Period relating to such
Transfer Date; provided, however, that such amount shall not exceed the Class B
Investor Interest after giving effect to any Class B Investor Charge-Offs for
such Transfer Date.
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"Reallocated Collateral Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsections 4.12 (a) and (b) in an amount not to exceed the
product of (a) the Collateral Allocation with respect to the Monthly Period
relating to such Transfer Date and (b) the Investor Percentage with respect to
the Monthly Period relating to such Transfer Date and (c) the amount of
Collections of Principal Receivables with respect to the Monthly Period relating
to such Transfer Date; provided, however, that such amount shall not exceed the
Collateral Interest after giving effect to any Collateral Charge-Offs for such
Transfer Date.
"Reallocated Principal Collections" shall mean the sum of (a)
Reallocated Class B Principal Collections and (b) Reallocated Collateral
Principal Collections.
"Required Accumulation Factor Number" shall be equal to a fraction,
rounded upwards to the nearest whole number, the numerator of which is one and
the denominator of which is equal to the lowest monthly principal payment rate
on the Accounts, expressed as a decimal, for the 12 months preceding the date of
such calculation.
"Required Collateral Interest" shall mean (a) initially,
$__________ and (b) on any Transfer Date thereafter, ____% of the sum of the
Class A Adjusted Investor Interest and the Class B Investor Interest on such
Transfer Date, after taking into account deposits into the Principal Funding
Account on such Transfer Date and payments to be made on the related
Distribution Date, and the Collateral Interest on the prior Transfer Date, after
any adjustments to be made on such date, but not less than $__________;
provided, however, that (x) if either (i) there is a reduction in the Collateral
Interest pursuant to clause (c), (d) or (e) of the definition of such term or
(ii) a Pay Out Event with respect to the Investor Certificates has occurred, the
Required Collateral Interest for any Transfer Date shall equal the Required
Collateral Interest for the Transfer Date immediately preceding such reduction
or Pay Out Event, (y) in no event shall the Required Collateral Interest exceed
the sum of the outstanding principal amounts of (i) the Class A Certificates and
(ii) the Class B Certificates, each as of the last day of the Monthly Period
preceding such Transfer Date after taking into account the payments to be made
on the related Distribution Date and (z) the Required Collateral Interest may be
reduced at the Transferor's option at any time to a lesser amount if the
Transferor, the Servicer, the Collateral Interest Holder and the Trustee have
been provided evidence that the Rating Agency Condition shall have been
satisfied.
"Required Reserve Account Amount" shall mean, with respect to any
Transfer Date on or after the Reserve Account Funding Date, an amount equal to
(a) ___% of the outstanding principal balance of the Class A Certificates or (b)
any other
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<PAGE> 20
amount designated by the Transferor; provided, however, that if such designation
is of a lesser amount, the Transferor shall (i) provide the Servicer, the
Collateral Interest Holder and the Trustee with evidence that the Rating Agency
Condition shall have been satisfied and (ii) deliver to the Trustee a
certificate of an authorized officer to the effect that, based on the facts
known to such officer at such time, in the reasonable belief of the Transferor,
such designation will not cause a Pay Out Event or an event that, after the
giving of notice or the lapse of time, would cause a Pay Out Event to occur with
respect to Series 199_-_.
"Reserve Account" shall have the meaning specified in subsection
4.16(a).
"Reserve Account Funding Date" shall mean the Transfer Date which
occurs not later than the earliest of (a) the Transfer Date with respect to the
Monthly Period which commences 3 months prior to the commencement of the
Controlled Accumulation Period; (b) the first Transfer Date for which the
Portfolio Adjusted Yield is less than __%, but in such event the Reserve Account
Funding Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period which commences 12 months prior to the
commencement of the Controlled Accumulation Period; (c) the first Transfer Date
for which the Portfolio Adjusted Yield is less than __%, 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 commencement of the Controlled Accumulation Period; and (d) the first
Transfer Date for which the Portfolio Adjusted Yield is less than __%, 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 commencement of the Controlled Accumulation
Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date
following the Reserve Account Funding Date, the amount, if any, by which the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" shall have the meaning specified in
subsection 4.16(c).
"Revolving Period" shall mean the period from and including the
Closing Date to, but not including, the earlier of (a) the day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Series 199_-_", shall mean the Series of the BA Master Credit
Card Trust represented by the Investor Certificates.
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<PAGE> 21
"Series 199_-_ Certificateholders" shall mean the holder of record
of a Series 199_-_ Certificate.
"Series 199_-_ Certificates" shall mean the Class A Certificates
and the Class B Certificates.
"Series 199_-_ Pay Out Event" shall have the meaning specified in
Section 9 hereof.
"Series 199_-_ Termination Date" shall mean the earliest to occur
of (a) the Distribution Date on which the Investor Interest is paid in full, (b)
the ______ ____ Distribution Date and (c) the Trust Termination Date.
"Series Finance Charge Shortfall" shall mean with respect to any
Transfer Date, the excess, if any, of (a) the aggregate amount to be distributed
pursuant to subsections 4.11(a) though (j) over (b) the aggregate amount of
Excess Spread for such Transfer Date.
"Series Principal Shortfall" shall mean with respect to any
Transfer Date, the excess, if any, of (a) (i) with respect to any Transfer Date
relating to the Controlled Accumulation Period, the sum of (A) the Controlled
Deposit Amount for such Transfer Date, and (B) the excess, if any, of the
Collateral Interest for such Transfer Date over the Required Collateral Interest
for such Transfer Date and (ii) with respect to any Transfer Date during the
Rapid Amortization Period, the Adjusted Investor Interest over (b) the Investor
Principal Collections minus the Reallocated Principal Collections (other than
Reallocated Principal Collections available to pay the Class A Investor Default
Amount and the Class B Investor Default Amount) for such Transfer Date.
"Series Servicing Fee Percentage" shall mean __%.
"Servicer Interchange" shall mean, for any Monthly Period, the
portion of Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account with respect to such
Monthly Period that is attributable to Interchange; provided, however, that
Servicer Interchange for a Monthly Period shall not exceed one-twelfth of the
product of (i) the Adjusted Investor Interest as of the last day of such Monthly
Period and (ii) ___%.
"Shared Excess Finance Charge Collections" shall mean, with respect
to any Distribution Date, either (a) the amount allocated to the Investor
Certificates which may be applied to the Series Finance Charge Shortfall with
respect to other outstanding Series in Shared Excess Finance Charge Group [ONE]
or (b) the amounts allocated to the investor certificates of other Series in
Shared Excess Finance Charge Group [ONE] which the applicable Supplements for
such Series specify are to be treated as "Shared Excess Finance Charge
Collections" and which
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<PAGE> 22
may be applied pursuant to Section 4.11 with respect to the Investor
Certificates.
"Shared Excess Principal Collections" shall mean, with respect to
any Distribution Date, either (a) the amount allocated to the Investor
Certificates which may be applied to the Series Principal Shortfall with respect
to other outstanding Series in the Shared Excess Principal Collections Group or
(b) the amounts allocated to the investor certificates of other Series in the
Shared Excess Principal Collections Group which the applicable Supplements for
such Series specify are to be treated as "Shared Principal Collections" and
which may be applied to cover the Series Principal Shortfall with respect to the
Investor Certificates.
"Shared Excess Principal Collections Group" shall mean Series
199_-_ and each other Series specified in the related Supplement to be included
in the Shared Excess Principal Collections Group.
"Shared Excess Principal Collections Group Monthly Principal
Payment" shall mean with respect to any Monthly Period, for all Series in the
Shared Excess Principal Collections Group (including Series 199_-2) which are in
an Amortization Period or Accumulation Period (as such terms are defined in the
related Supplements for all Series in the Shared Excess Principal Collections
Group), the sum of (a) the Controlled Distribution Amount for the related
Transfer Date for any Series in its Controlled Amortization Period (as such
terms are defined in the related Supplements for all Series in the Shared Excess
Principal Collections Group), (b) the Controlled Deposit Amount for the related
Transfer Date for any Series in its Accumulation Period, other than its Rapid
Accumulation Period, if applicable (as such terms are defined in the related
Supplements for all Series in the Shared Excess Principal Collections Group),
(c) the Investor Interest as of the end of the prior Monthly Period taking into
effect any payments to be made on the following Distribution Date for any Series
in the Shared Excess Principal Collections Group in its Principal Amortization
Period or Rapid Amortization Period (as such terms are defined in the related
Supplements for all Series in the Shared Excess Principal Collections Group),
(d) the Adjusted Investor Interest as of the end of the prior Monthly Period
taking into effect any payments or deposits to be made on the following Transfer
Date and Distribution Date for any Series in the Shared Excess Principal
Collections Group in its Rapid Accumulation Period (as such terms are defined in
the related Supplements for all Series in the Shared Excess Principal
Collections Group), (e) the excess of the Collateral Interest as of the Transfer
Date occurring in such Monthly Period over the Required Collateral Interest for
the related Transfer Date, assuming no Accumulation Shortfall and (f) such other
amounts as may be specified in the related Supplements for all Series in the
Shared Excess Principal Collections Group.
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"Unallocated Principal Collections" shall have the meaning
specified in subsection 4.05(d).
SECTION 3. Servicing Compensation and Assignment of Interchange.
(a) The share of the Servicing Fee allocable to Series 199_-_ with respect to
any Transfer Date (the "Investor Servicing Fee") shall be equal to one-twelfth
of the product of (i) the Series Servicing Fee Percentage and (ii) the Adjusted
Investor Interest as of the last day of the Monthly Period preceding such
Transfer Date; provided, however, that with respect to the first Transfer Date,
the Investor Servicing Fee shall be equal to $_______. On each Transfer Date for
which the Transferor, an Affiliate of the Transferor, or an Acceptable Successor
Servicer is the Servicer, the Servicer Interchange with respect to the related
Monthly Period that is on deposit in the Finance Charge Account shall be
withdrawn from the Finance Charge Account and paid to the Servicer in payment of
a portion of the Investor Servicing Fee with respect to such Monthly Period.
Should the Servicer Interchange on deposit in the Finance Charge Account on any
Transfer Date with respect to the related Monthly Period be less than
one-twelfth of ____% of the Adjusted Investor Interest as of the last day of
such Monthly Period, the Investor Servicing Fee with respect to such Monthly
Period will not be paid to the extent of such insufficiency of Servicer
Interchange on deposit in the Finance Charge Account. The Servicer Interchange
with respect to the first Transfer Date shall be equal to $_______. The share of
the Investor Servicing Fee allocable to the Class A Investor Interest with
respect to any Transfer Date (the "Class A Servicing Fee") shall be equal to
one-twelfth of the product of (i) the Class A Floating Allocation, (ii) the Net
Servicing Fee Rate and (iii) the Adjusted Investor Interest as of the last day
of the Monthly Period preceding such Transfer Date; provided, however, that with
respect to the first Transfer Date, the Class A Servicing Fee shall be equal to
$_______. The share of the Investor Servicing Fee allocable to the Class B
Investor Interest with respect to any Transfer Date (the "Class B Servicing
Fee") shall be equal to one-twelfth of the product of (i) the Class B Floating
Allocation, (ii) the Net Servicing Fee Rate and (iii) the Adjusted Investor
Interest as of the last day of the Monthly Period preceding such Transfer Date;
provided, however, that with respect to the first Transfer Date, the Class B
Servicing Fee shall be equal to $______. The share of the Investor Servicing Fee
allocable to the Collateral Interest with respect to any Transfer Date (the
"Collateral Interest Servicing Fee", together with the Class A Servicing Fee and
the Class B Servicing Fee, the "Certificateholder Servicing Fee") shall be equal
to one-twelfth of the product of (i) the Collateral Floating Allocation, (ii)
the Net Servicing Fee Rate and (iii) the Adjusted Investor Interest as of the
last day of the Monthly Period preceding such Transfer Date; provided, however,
that with respect to the first Transfer Date, the Collateral Interest Servicing
Fee shall be equal to $______. Except as specifically provided above, the
Servicing Fee shall be paid by the cash flows from the Trust
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allocated to the Transferor or the certificateholders of other Series (as
provided in the related Supplements) and in no event shall the Trust, the
Trustee or the Investor Certificateholders be liable therefor. The Class A
Servicing Fee shall be payable to the Servicer solely to the extent amounts are
available for distribution in respect thereof pursuant to subsections
4.09(a)(ii) and 4.11(a). The Class B Servicing Fee shall be payable solely to
the extent amounts are available for distribution in respect thereof pursuant to
subsections 4.09(b)(ii) and 4.11(c). The Collateral Interest Servicing Fee shall
be payable solely to the extent amounts are available for distribution in
respect thereof pursuant to subsection 4.11(f) or if applicable subsection
4.09(c)(i).
(b) On or before each Transfer Date, the Transferor shall notify
the Servicer of the amount of Interchange to be included as Collections of
Finance Charge Receivables and allocable to the Investor Certificateholders with
respect to the preceding Monthly Period as determined pursuant to this
subsection 3(b). Such amount of Interchange shall be equal to the product of (i)
the total amount of Interchange paid or payable to the Transferor with respect
to such Monthly Period, (ii) a fraction the numerator of which is the aggregate
amount of cardholder charges for goods and services in the Accounts with respect
to such Monthly Period and the denominator of which is the aggregate amount of
cardholder charges for goods and services in all MasterCard and VISA consumer
revolving credit card accounts owned by the Transferor with respect to such
Monthly Period and (iii) the Investor Percentage with regard to Finance Charge
Receivables. On each Transfer Date, the Transferor shall pay to the Servicer,
and the Servicer shall deposit into the Finance Charge Account, in immediately
available funds, the amount of Interchange to be so included as Collections of
Finance Charge Receivables allocable to the Investor Certificates with respect
to the preceding Monthly Period. The Transferor hereby assigns, sets-over,
conveys, pledges and grants a security interest and lien to the Trustee for the
benefit of the Investor Certificateholders in Interchange and the proceeds of
Interchange, as set forth in this subsection 3(b). In connection with the
foregoing grant of a security interest, this Series Supplement shall constitute
a security agreement under applicable law. To the extent that a Supplement for a
related Series, other than Series 199_-_, assigns, sets-over, conveys, pledges
or grants a security interest in Interchange allocable to the Trust, all
investor certificates of any such Series (except as otherwise specified in any
such Supplement) and the Investor Certificates shall rank pari passu and be
equally and ratably entitled as provided herein to the benefits of such
Interchange without preference or priority on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Series Supplement and other related Supplements.
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SECTION 4. Reassignment and Transfer Terms. The Investor
Certificates shall be subject to retransfer to the Transferor at its option, in
accordance with the terms specified in subsection 12.02(a), on any Distribution
Date on or after the Distribution Date on which the Investor Interest is reduced
to an amount less than or equal to 5% of the Initial Investor Interest. The
deposit required in connection with any such repurchase shall include the
amount, if any, on deposit in the Principal Funding Account and will be equal to
the sum of (a) the Investor Interest and (b) accrued and unpaid interest on the
Investor Certificates through the day preceding the Distribution Date on which
the repurchase occurs.
SECTION 5. Delivery and Payment for the Investor Certificates. The
Transferor shall execute and deliver the Series 199_-_ Certificates to the
Trustee for authentication in accordance with Section 6.01. The Trustee shall
deliver such Certificates when authenticated in accordance with Section 6.02.
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 6.01 and 6.10.
(b) The Depository for Series 199_-_ 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 4.01, 4.02 and 4.03
shall be read in their entirety as provided in the Agreement. Article IV (except
for Sections 4.01, 4.02 and 4.03 thereof) shall be read in its entirety as
follows and shall be applicable only to the Investor Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.04 Rights of Certificateholders and the Collateral
Interest Holder. The Investor Certificates shall represent undivided interests
in the Trust, consisting of the right to receive, to the extent necessary to
make the required payments with respect to such Investor Certificates at the
times and in the amounts specified in this Agreement, (a) the Floating Investor
Percentage and Fixed Investor Percentage (as applicable from time to time) of
Collections received with respect to the Receivables and (b) funds on deposit in
the Collection Account, the Finance Charge Account, the Principal Account, the
Principal Funding Account, the Reserve Account and the Distribution
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Account. The Collateral Interest shall be subordinate to the Class A
Certificates and the Class B Certificates. The Class B Certificates shall be
subordinate to the Class A Certificates. The Transferor Certificate shall not
represent any interest in the Collection Account, the Finance Charge Account,
the Principal Account, the Principal Funding Account, the Reserve Account or the
Distribution Account, except as specifically provided in this Article IV.
SECTION 4.05 Allocations.
(a) Allocations During the Revolving Period. During the Revolving
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, allocate to the Investor
Certificateholders or the Holder of the Transferor Certificate and pay or
deposit from the Collection Account the following amounts as set forth below:
(i) Allocate to the Investor Certificateholders the product of (y)
the Investor Percentage on the Date of Processing of such Collections
and (z) the aggregate amount of Collections of Finance Charge
Receivables on such Date of Processing, and of that allocation, deposit
in the Finance Charge Account an amount equal to either (I) (A) prior to
the [Index] Determination Date occurring in such Monthly Period, an
amount equal to the product of (1) the Investor Percentage on the Date
of Processing of such Collections and (2) the aggregate amount of
Collections of Finance Charge Receivables on such Date of Processing,
and (B) on and after the [Index] Determination Date occurring during
such Monthly Period, the difference between (1) the Monthly Interest
with respect to the immediately following Transfer Date (plus, if the
Transferor or an Affiliate of the Transferor is not the Servicer, the
Certificateholder Servicing Fee for such Transfer Date plus the amount
of any Certificateholder Servicing Fee due but not paid to the Servicer
on any prior Transfer Date) and (2) the amounts previously deposited in
the Finance Charge Account with respect to the current Monthly Period
pursuant to this subsection 4.05(a)(i) or (II) the amount of Collections
of Finance Charge Receivables allocated to the Investor
Certificateholders on such Date of Processing pursuant to this
subsection 4.05(a)(i); provided, however, that if a deposit pursuant to
subsection 4.05(a)(i)(I) is made on any Date of Processing, on the
related Transfer Date, the Servicer shall withdraw from the Collection
Account and deposit into the Finance Charge Account an amount equal to
the amount of Collections of Finance Charge Receivables that have been
allocated to the Investor Certificateholders during the related Monthly
Period but not previously deposited in the Finance Charge Account. Funds
deposited into the Finance Charge Account pursuant to this subsection
4.05(a)(i) shall be applied in accordance with Section 4.09.
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(ii) Deposit into the Principal Account an amount equal to the
product of (A) the Collateral Allocation on the Date of Processing of
such Collections, (B) the Investor Percentage on the Date of Processing
of such Collections and (C) the aggregate amount of Collections
processed in respect of Principal Receivables on such Date of Processing
to be applied first in accordance with Section 4.12 and then in
accordance with subsection 4.09(d).
(iii) Deposit into the Principal Account an amount equal to the
product of (A) the Class B Investor Allocation on the Date of Processing
of such Collections, (B) the Investor Percentage on the Date of
Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing to be applied first in accordance with Section 4.12 and
then in accordance with subsection 4.09(d).
(iv) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Class A Investor Allocation on the Date of Processing
of such Collections, (2) the Investor Percentage on the Date of
Processing of such Collections and (3) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing; provided, however, that the amount deposited into the
Principal Account pursuant to this subsection 4.05(a)(iv)(A) shall not
exceed the Daily Principal Shortfall, and (B) pay to the Holder of the
Transferor Certificate an amount equal to the excess, if any, identified
in the proviso to clause (A) above; provided, however, that the amount
to be paid to the Holder of the Transferor Certificate pursuant to this
subsection 4.05(a)(iv)(B) with respect to any Date of Processing shall
be paid to the Holder of the Transferor Certificate only if the
Transferor Interest on such Date of Processing is greater than zero
(after giving effect to the inclusion in the Trust of all Receivables
created on or prior to such Date of Processing and the application of
payments referred to in subsection 4.03(b)) and otherwise shall be
considered as Unallocated Principal Collections and deposited into the
Principal Account in accordance with subsection 4.05(d); provided
further, however, that in no event shall the amount payable to the
Holder of the Transferor Certificate pursuant to this subsection
4.05(a)(iv)(B) be greater than the Transferor Interest on such Date of
Processing.
(b) Allocations During the Controlled Accumulation Period. During
the Controlled Accumulation Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account,
allocate to the Investor Certificateholders or the Holder of the Transferor
Certificate and pay or deposit from the Collection Account the following amounts
as set forth below:
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(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of Collections processed in
respect of Finance Charge Receivables on such Date of Processing to be
applied in accordance with Section 4.09.
(ii) Deposit into the Principal Account an amount equal to the
product of (A) the Collateral Allocation on the Date of Processing of
such Collections, (B) the Investor Percentage on the Date of Processing
of such Collections and (C) the aggregate amount of Collections
processed in respect of Principal Receivables on such Date of Processing
to be applied first in accordance with Section 4.12 and then in
accordance with subsection 4.09(e).
(iii) Deposit into the Principal Account an amount equal to the
product of (A) the Class B Investor Allocation on the Date of Processing
of such Collections, (B) the Investor Percentage on the Date of
Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing to be applied first in accordance with Section 4.12 and
then in accordance with subsection 4.09(e).
(iv) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Class A Investor Allocation on the Date of Processing
of such Collections, (2) the Investor Percentage on the Date of
Processing of such Collections and (3) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing; provided, however, that the amount deposited into the
Principal Account pursuant to this subsection 4.05(b)(iv)(A) shall not
exceed the Daily Principal Shortfall, and (B) pay to the Holder of the
Transferor Certificate an amount equal to the excess, if any, identified
in the proviso to clause (A) above, if any; provided, however, that the
amount to be paid to the Holder of the Transferor Certificate pursuant
to this subsection 4.05(b)(iv)(B) with respect to any Date of Processing
shall be paid to the Holder of the Transferor Certificate only if the
Transferor Interest on such Date of Processing is greater than zero
(after giving effect to the inclusion in the Trust of all Receivables
created on or prior to such Date of Processing and the application of
payments referred to in subsection 4.03(b)) and otherwise shall be
considered as Unallocated Principal Collections and deposited into the
Principal Account in accordance with subsection 4.05(d); provided
further, however, that in no event shall the amount payable to the
Holder of the Transferor Certificate pursuant to this subsection
4.05(b)(iv)(B) be greater than the Transferor Interest on such Date of
Processing.
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(c) Allocations During the Rapid Amortization Period. During the
Rapid Amortization Period, the Servicer shall, prior to the close of business on
the day any Collections are deposited in the Collection Account, allocate to the
Investor Certificateholders and pay or deposit from the Collection Account the
following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of Collections processed in
respect of Finance Charge Receivables on such Date of Processing to be
applied in accordance with Section 4.09.
(ii) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Investor Percentage on the Date of Processing of such
Collections and (2) the aggregate amount of Collections processed in
respect of Principal Receivables on such Date of Processing; provided,
however, that the amount deposited into the Principal Account pursuant
to this subsection 4.05(c)(ii)(A) shall not exceed the sum of the
Investor Interest as of the close of business on the last day of the
prior Monthly Period (after taking into account any payments to be made
on the Distribution Date relating to such prior Monthly Period and
deposits and any adjustments to be made to the Investor Interest to be
made on the Transfer Date relating to such Monthly Period) and any
Reallocated Principal Collections relating to the Monthly Period in
which such deposit is made and (B) pay to the Holder of the Transferor
Certificate an amount equal to the excess, if any, identified in the
proviso to clause (A) above; provided, however, that the amount to be
paid to the Holder of the Transferor Certificate pursuant to this
subsection 4.05(c)(ii)(B) with respect to any Date of Processing shall
be paid to the Holder of the Transferor Certificate only if the
Transferor Interest on such Date of Processing is greater than zero
(after giving effect to the inclusion in the Trust of all Receivables
created on or prior to such Date of Processing and the application of
payments referred to in subsection 4.03(b)) and otherwise shall be
considered as Unallocated Principal Collections and deposited into the
Principal Account in accordance with subsection 4.05(d); provided
further, however, that in no event shall the amount payable to the
Holder of the Transferor Certificate pursuant to this subsection
4.05(c)(ii)(B) be greater than the Transferor Interest on such Date of
Processing.
(d) Unallocated Principal Collections. Any Collections in respect
of Principal Receivables or Finance Charge Receivables not allocated and paid to
the Holder of the Transferor Certificate because of the limitations contained in
subsections 4.05(a)(iv)(B), 4.05(b)(iv)(B) and 4.05(c)(ii)(B) and any amounts
allocable to the Investor Certificates deposited in the Principal
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Account pursuant to subsections 2.04(d)(iii) and 4.03(c) ("Unallocated Principal
Collections") shall be held in the Principal Account and, prior to the
commencement of the Controlled Accumulation Period or the Rapid Amortization
Period, shall be paid to the Holder of the Transferor Certificate when, and only
to the extent that, the Transferor Interest is greater than zero. For each
Transfer Date with respect to the Controlled Accumulation Period or the Rapid
Amortization Period, any such Unallocated Principal Collections held in the
Principal Account on such Transfer Date shall be included in the Investor
Principal Collections which to the extent available shall be distributed as
Available Investor Principal Collections to be applied pursuant to Section 4.09
on such Transfer Date.
With respect to the Investor Certificates, and notwithstanding
anything in the Agreement or this Series Supplement to the contrary, whether or
not the Servicer is required to make monthly or daily deposits from the
Collection Account into the Finance Charge Account or the Principal Account
pursuant to subsections 4.05(a), 4.05(b) and 4.05(c), with respect to any
Monthly Period (i) the Servicer will only be required to deposit Collections
from the Collection Account into the Finance Charge Account or the Principal
Account up to the required amount to be deposited into any such deposit account
or, without duplication, distributed on or prior to the related Distribution
Date to the Investor Certificateholders and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection Account
exceeds the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to withdraw the excess from the Collection Account.
SECTION 4.06 Determination of Monthly Interest.
(a) The amount of monthly interest distributable to the Class A
Certificates shall be an amount equal to the product of (i)(A) a fraction, the
numerator of which is [the actual number of days in the related Interest
Period][30] and the denominator of which is 360, times (B) the Class A
Certificate Rate in effect with respect to the related Interest Period, times
(ii) 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, however, that in addition to Class A Monthly Interest an
amount equal to the amount of any unpaid Class A Deficiency Amounts, as defined
below, plus an amount equal to the product of (A) (1) a fraction, the numerator
of which is [the actual number of days in the related Interest Period][30] and
the denominator of which is 360, times (2) the sum of the Class A Certificate
Rate in effect with respect to the related Interest Period, plus __% per annum,
and (B) any Class A Deficiency Amount from the prior Transfer Date, as defined
below (or the portion thereof which has not theretofore been paid to Class A
Certificateholders) (the "Class A Additional Interest") shall also be
distributable to the Class
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A Certificates, and on such Transfer Date the Trustee shall deposit such funds,
to the extent available, into the Distribution Account. The "Class A Deficiency
Amount" for any Transfer Date shall be equal to the excess, if any, of the
aggregate amount accrued pursuant to this subsection 4.06(a) as of the prior
Interest Period over the amount actually transferred to the Distribution Account
for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall be an amount equal to the product of (i)(A) a fraction, the
numerator of which [is the actual number of days in the related Interest
Period][30] and the denominator of which is 360, times (B) the Class B
Certificate Rate in effect with respect to the related Interest Period, times
(ii) 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, however, that in addition to the Class B Monthly Interest
an amount equal to the amount of any unpaid Class B Deficiency Amounts, as
defined below, plus an amount equal to the product of (A) (1) a fraction, the
numerator of which [is the actual number of days in the related Interest
Period][30] and the denominator of which is 360, times (2) the sum of the Class
B Certificate Rate in effect with respect to the related Interest Period, plus
__% per annum, and (B) any Class B Deficiency Amount from the prior Transfer
Date, as defined below (or the portion thereof which has not theretofore been
paid to Class B Certificateholders) (the "Class B Additional Interest") shall
also be distributable to the Class B Certificates, and on such Transfer Date the
Trustee shall deposit such funds, to the extent available, into the Distribution
Account. The "Class B Deficiency Amount" for any Transfer Date shall be equal to
the excess, if any, of the aggregate amount accrued pursuant to this subsection
4.06(b) as of the prior Interest Period over the amount actually transferred to
the Distribution Account for payment of such amount.
(c) The amount of monthly interest distributable to the Collateral
Interest, which shall be an amount equal to the product of (i) (A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Collateral Rate in
effect with respect to the related Interest Period, and (ii) the Collateral
Interest determined as of the Record Date preceding such Transfer Date (the
"Collateral Monthly Interest"); provided, however, that for the purposes of
determining Collateral Monthly Interest only, the Collateral Rate shall not
exceed a per annum rate of __% in excess of [Index] as determined on the related
[Index] Determination Date.
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SECTION 4.07 Determination of Monthly Principal.
(a) The amount of monthly principal distributable from the
Principal Account with respect to the Class A Certificates on each Transfer Date
("Class A Monthly Principal"), beginning with the Transfer Date in the month
following the month in which the Controlled Accumulation Period or, if earlier,
the Rapid Amortization Period, begins, shall be equal to the least of (i) the
Available Investor Principal Collections on deposit in the Principal Account
with respect to such Transfer Date, (ii) for each Transfer Date with respect to
the Controlled Accumulation Period prior to the Class A Scheduled Payment Date,
the Controlled Deposit Amount for such Transfer Date and (iii) the Class A
Adjusted Investor Interest on such Transfer Date prior to any deposit into the
Principal Funding Account on such Transfer Date.
(b) The amount of monthly principal distributable from the
Principal Account with respect to the Class B Certificates on each Transfer Date
(the "Class B Monthly Principal"), for the Controlled Accumulation Period,
beginning with the Transfer Date following the Monthly Period in which the Class
A Investor Interest has been paid in full, and during the Rapid Amortization
Period, beginning with the Transfer Date immediately preceding the Distribution
Date on which the Class A Investor Interest has been paid in full, shall be an
amount equal to the lesser of (i) the Available Investor Principal Collections
on deposit in the Principal Account with respect to such Transfer Date (minus
the portion of such Available Investor Principal Collections applied to Class A
Monthly Principal on such Transfer Date) and (ii) the Class B Investor Interest
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.10 and 4.12) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (A) during the Revolving
Period following any reduction of the Required Collateral Interest pursuant to
clause (z) of the proviso in the definition thereof, an amount equal to the
lesser of (1) the excess, if any, of the Collateral Interest (after taking into
account any adjustments to be made on such Transfer Date pursuant to Sections
4.10 and 4.12) over the Required Collateral Interest on such Transfer Date and
(2) the Available Investor Principal Collections on such Transfer Date or (B)
during the Controlled Accumulation Period or Rapid Amortization Period, an
amount equal to the lesser of (1) the excess, if any, of the Collateral Interest
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.10 and 4.12) over the Required Collateral Interest on
such Transfer Date, and (2) the excess, if any, of (i) the Available Investor
Principal Collections on such Transfer Date over (ii) the sum of the Class A
Monthly Principal and the Class B Monthly Principal for such Transfer Date.
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SECTION 4.08 Coverage of Required Amount.
(a) On or before each Transfer Date, the Servicer shall determine
the amount (the "Class A Required Amount"), if any, by which the sum of (i) the
Class A Monthly Interest for such Transfer Date, plus (ii) the Class A
Deficiency Amount, if any, for such Transfer Date, plus (iii) the Class A
Additional Interest, if any, for such Transfer Date, plus (iv) the Class A
Servicing Fee for the prior Monthly Period plus (v) the Class A Servicing Fee,
if any, due but not paid on any prior Transfer Date, plus (vi) the Class A
Investor Default Amount, if any, for the prior Monthly Period, exceeds the Class
A Available Funds for the related Monthly Period.
(b) On or before each Transfer Date, the Servicer shall also
determine the amount (the "Class B Required Amount"), if any, equal to the sum
of (i) the amount, if any, by which the sum of (A) the Class B Monthly Interest
for such Transfer Date, plus (B) the Class B Deficiency Amount, if any, for such
Transfer Date plus (C) the Class B Additional Interest, if any, for such
Transfer Date, plus (D) the Class B Servicing Fee for the prior Monthly Period
plus (E) the Class B Servicing Fee, if any, due but not paid on any prior
Transfer Date, exceeds the Class B Available Funds for the related Monthly
Period plus (ii) the Class B Investor Default Amount, if any, for the prior
Monthly Period.
(c) In the event that the sum of the Class A Required Amount and
the Class B Required Amount for such Transfer Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount or Class B Required Amount on or before such Transfer Date. In
the event that the Class A Required Amount for such Transfer Date is greater
than zero, all or a portion of the Excess Spread with respect to such Transfer
Date in an amount equal to the Class A Required Amount, to the extent available,
for such Transfer Date shall be distributed from the Finance Charge Account on
such Transfer Date pursuant to subsection 4.11(a). In the event that the Class A
Required Amount for such Transfer Date exceeds the amount of Excess Spread with
respect to such Transfer Date, the Collections of Principal Receivables
allocable to the Collateral Interest and the Collections of Principal
Receivables allocable to the Class B Certificates with respect to the prior
Monthly Period shall be applied as specified in Section 4.12. In the event that
the Class B Required Amount for such Transfer Date exceeds the amount of Excess
Spread available to fund the Class B Required Amount pursuant to subsection
4.11(c), the Collections of Principal Receivables allocable to the Collateral
Interest (after application to the Class A Required Amount) shall be applied as
specified in Section 4.12; provided, however, that the sum of any payments
pursuant to this paragraph shall not exceed the sum of the Class A Required
Amount and Class B Required Amount.
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SECTION 4.09 Monthly Payments. On or before each Transfer Date, the
Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to withdraw and the Trustee,
acting in accordance with such instructions, shall withdraw on such Transfer
Date or the related Distribution Date, as applicable, to the extent of available
funds, the amounts required to be withdrawn from the Finance Charge Account, the
Principal Account, the Principal Funding Account and the Distribution Account as
follows:
(a) An amount equal to the Class A Available Funds deposited into
the Finance Charge Account for the related Monthly Period shall be distributed
on each Transfer Date in the following priority:
(i) an amount equal to Class A Monthly Interest for such Transfer
Date, plus the amount of any Class A Deficiency Amount for such Transfer
Date, plus the amount of any Class A Additional Interest for such
Transfer Date, shall be deposited by the Servicer or the Trustee into
the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for such Transfer
Date plus the amount of any Class A Servicing Fee due but not paid to
the Servicer on any prior Transfer Date shall be distributed to the
Servicer;
(iii) an amount equal to the Class A Investor Default Amount, if
any, for the preceding Monthly Period shall be treated as a portion of
Investor Principal Collections and deposited into the Principal Account
on such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.11.
(b) An amount equal to the Class B Available Funds deposited into
the Finance Charge Account for the related Monthly Period shall be distributed
on each Transfer Date in the following priority:
(i) an amount equal to the Class B Monthly Interest for such
Transfer Date, plus the amount of any Class B Deficiency Amount for such
Transfer Date, plus the amount of any Class B Additional Interest for
such Transfer Date, shall be deposited by the Servicer or the Trustee
into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such Transfer
Date, plus the amount of any Class B Servicing Fee due but not paid to
the Servicer on any prior Transfer Date shall be distributed to the
Servicer; and
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(iii) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.11.
(c) An amount equal to the Collateral Available Funds deposited
into the Finance Charge Account for the related Monthly Period shall be
distributed on each Transfer Date in the following priority:
(i) if the Transferor, an Affiliate of the Transferor or an
Acceptable Successor Servicer is no longer the Servicer, an amount equal
to the Collateral Interest Servicing Fee for such Transfer Date plus the
amount of any Collateral Interest Servicing Fee due but not paid to the
Servicer on any prior Transfer Date shall be distributed to the
Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.11.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections deposited into the Principal Account for the
related Monthly Period shall be distributed on each Transfer Date in the
following priority:
(i) AN AMOUNT EQUAL TO THE COLLATERAL MONTHLY PRINCIPAL FOR SUCH
TRANSFER DATE SHALL BE DISTRIBUTED TO THE COLLATERAL INTEREST HOLDER IN
ACCORDANCE WITH THE LOAN AGREEMENT;
(ii) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections and the denominator of which is equal to the sum
of the Available Investor Principal Collections available for sharing as
specified in the related Series Supplement for each Series in the Shared
Excess Principal Collections Group and (2) the Cumulative Series
Principal Shortfall and (B) Available Investor Principal Collections
shall remain in the Principal Account to be treated as Shared Excess
Principal Collections and applied to Series in the Shared Excess
Principal Collections Group other than this Series 199_-_; and
(iii) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections for such Transfer Date over (B) the
applications specified in subsection 4.09(d)(i) above shall be paid to
the Holder of the Transferor Certificate; provided, however, that the
amount to be paid to the Holder of the Transferor Certificate pursuant
to this subsection 4.09(d)(ii) with respect to such Transfer Date shall
be paid to the Holder of the Transferor Certificate only if the
Transferor Interest on such Date of Processing is greater than zero
(after
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giving effect to the inclusion in the Trust of all Receivables created
on or prior to such Transfer Date and the application of payments
referred to in subsection 4.03(b)) and otherwise shall be considered as
Unallocated Principal Collections and deposited into the Principal
Account in accordance with subsection 4.05(d); provided further,
however, that in no event shall the amount payable to the Holder of the
Transferor Certificate pursuant to this subsection 4.09(d)(ii) be
greater than the Transferor Interest on such Transfer Date.
(e) During the Controlled Accumulation Period or the Rapid
Amortization Period, an amount equal to the Available Investor Principal
Collections deposited into the Principal Account for the related Monthly Period
shall be distributed on each Transfer Date in the following priority:
(i) an amount equal to the Class A Monthly Principal for such
Transfer Date, shall be (A) during the Controlled Accumulation Period,
deposited into the Principal Funding Account, and (B) during the Rapid
Amortization Period, deposited into the Distribution Account;
(ii) after giving effect to the distribution referred to in clause
(i) above, an amount equal to the Class B Monthly Principal shall be
deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer Date
immediately preceding the Series 199_-_ Termination Date, in which case
on the Series 199_-_ Termination Date) after giving effect to the
distribution referred to in clauses (i) and (ii) above, an amount equal
to Collateral Monthly Principal shall be distributed to the Collateral
Interest Holder in accordance with the Loan Agreement;
(iv) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsections 4.09(e)(i), (ii) and (iii) above and the denominator of
which is equal to the sum of the Available Investor Principal
Collections available for sharing as specified in the related Series
Supplement for each Series in the Shared Excess Principal Collections
Group and (2) the Cumulative Series Principal Shortfall and (B) the
Available Investor Principal Collections shall remain in the Principal
Account to be treated as Shared Excess Principal Collections and
applied to Series in the Shared Excess Principal Collections Group
other than this Series 199_-_; and
(v) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections over (B) the applications specified in
subsections 4.09(e)(i) through (iv) above shall be paid to the Holder of
the Transferor
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Certificate; provided, however, that the amount to be paid to the Holder
of the Transferor Certificate pursuant to this subsection 4.09(e)(v)
with respect to such Transfer Date shall be paid to the Holder of the
Transferor Certificate only if the Transferor Interest on such Date of
Processing is greater than zero (after giving effect to the inclusion in
the Trust of all Receivables created on or prior to such Transfer Date
and the application of payments referred to in subsection 4.03(b)) and
otherwise shall be considered as Unallocated Principal Collections and
deposited into the Principal Account in accordance with subsection
4.05(d); provided further, however, that in no event shall the amount
payable to the Holder of the Transferor Certificate pursuant to this
subsection 4.09(e)(v) be greater than the Transferor Interest on such
Transfer Date.
(f) On the earlier to occur of (i) the first Transfer Date with
respect to the Rapid Amortization Period and (ii) the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in the
Principal Funding Account.
(g) On each Distribution Date, the Trustee shall pay in accordance
with subsection 5.01(a) to the Class A Certificateholders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.09(a)(i) on the preceding Transfer Date and (b) to the Class B
Certificateholders from the Distribution Account, the amount deposited into the
Distribution Account pursuant to subsection 4.09(b)(i) on the preceding Transfer
Date.
(h) On the earlier to occur of (i) the first Distribution Date with
respect to the Rapid Amortization Period and (ii) the Class A Scheduled Payment
Date and on each Distribution Date thereafter, the Trustee, acting in accordance
with instructions from the Servicer, shall pay in accordance with Section 5.01
from the Distribution Account the amount so deposited into the Distribution
Account pursuant to subsections 4.09(e) and (f) on the related Transfer Date in
the following priority:
(i) an amount equal to the lesser of such amount on deposit in the
Distribution Account and the Class A Investor Interest shall be paid to
the Class A Certificateholders; and
(ii) for each Distribution Date with respect to the Rapid
Amortization Period and on the Class B Scheduled Payment Date, after
giving effect to the distributions referred to in clause (i) above, an
amount equal to the lesser of such amount on deposit in the Distribution
Account
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and the Class B Investor Interest shall be paid to the Class B
Certificateholders.
(i) The Controlled Accumulation Period is scheduled to commence at the
close of business on __________ ____, ____; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 12
months, the date on which the Controlled Accumulation Period actually
commences will be delayed to the first Business Day of the month that is the
number of whole months prior to the Class A Scheduled Payment Date at least
equal to the Accumulation Period Length and, as a result, the number of
Monthly Periods in the Controlled Accumulation Period will at least equal the
Accumulation Period Length. On the Determination Date immediately preceding
the __________ ____ Distribution Date, and each Determination Date thereafter
until the Controlled Accumulation Period begins, the Servicer will determine
the "Accumulation Period Length" which will equal the number of whole months
such that the sum of the Accumulation Period Factors for each month during
such period will be equal to or greater than the Required Accumulation Factor
Number; provided, however, that the Accumulation Period Length will not be
determined to be less than one month.
SECTION 4.10 Investor Charge-Offs.
(a) On or before each Transfer Date, the Servicer shall calculate
the Class A Investor Default Amount. If on any Transfer Date, the Class A
Investor Default Amount for the prior Monthly Period exceeds the sum of the
amount allocated with respect thereto pursuant to subsection 4.09(a)(iii),
subsection 4.11(a) and Section 4.12 with respect to such Monthly Period, the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer Date)
will be reduced by the amount of such excess, but not by more than the lesser of
the Class A Investor Default Amount and the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date) for such Transfer Date. In the
event that such reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest will be reduced to zero, and the Class B
Investor Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal Collections on such Transfer
Date) will be reduced by the amount by which the Collateral Interest would have
been reduced below zero. In the event that such reduction would cause the Class
B Investor Interest to be a negative number, the Class B Investor Interest will
be reduced to zero, and the Class A Investor Interest will be reduced by the
amount by which the Class B Investor Interest would have been reduced below
zero, but not by more than the Class A Investor Default Amount for such Transfer
Date (a "Class A Investor Charge-Off"). If the Class A Investor Interest has
been reduced by the amount of any Class A Investor Charge-Offs, it will be
reimbursed on any Transfer Date (but not
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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
subsection 4.11(b).
(b) On or before each Transfer Date, the Servicer shall calculate
the Class B Investor Default Amount. If on any Transfer Date, the Class B
Investor Default Amount for the prior Monthly Period exceeds the amount of
Excess Spread and Reallocated Collateral Principal Collections which are
allocated and available to fund such amount pursuant to subsection 4.11(c) and
Section 4.12, the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on such
Transfer Date and any adjustments with respect thereto as described in
subsection 4.10(a) above) will be reduced by the amount of such excess but not
by more than the lesser of the Class B Investor Default Amount and the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer Date and
any adjustments with respect thereto as described in subsection 4.10(a) above)
for such Transfer Date. In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest shall be
reduced to zero and the Class B Investor Interest shall be reduced by the amount
by which the Collateral Interest would have been reduced below zero, but not by
more than the Class B Investor Default Amount for such Transfer Date (a "Class B
Investor Charge-Off"). The Class B Investor Interest will also be reduced by the
amount of Reallocated Class B Principal Collections in excess of the Collateral
Interest pursuant to Section 4.12 and the amount of any portion of the Class B
Investor Interest allocated to the Class A Certificates to avoid a reduction in
the Class A Investor Interest pursuant to subsection 4.10(a) above. The Class B
Investor Interest will thereafter be reimbursed (but not to an amount in excess
of the unpaid principal balance of the Class B Certificates) on any Transfer
Date by the amount of Excess Spread allocated and available for that purpose as
described under subsection 4.11(d).
(c) On or before each Transfer Date, the Servicer shall calculate
the Collateral Default Amount. If on any Transfer Date, the Collateral Default
Amount for the prior Monthly Period exceeds the amount of Excess Spread which is
allocated and available to fund such amount pursuant to subsection 4.11(g), the
Collateral Interest will be reduced by the amount of such excess but not by more
than the lesser of the Collateral Default Amount and the Collateral Interest for
such Transfer Date (a "Collateral Charge-Off"). The Collateral Interest will
also be reduced by the amount of Reallocated Principal Collections pursuant to
Section 4.12 and the amount of any portion of the Collateral Interest allocated
to the Class A Certificates or the Class B Certificates to avoid a reduction in
the Class A Investor Interest, pursuant to subsection 4.10(a), or the Class B
Investor Interest, pursuant to subsection 4.10(b), respectively. The Collateral
Interest will thereafter be
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reimbursed on any Transfer Date by the amount of the Excess Spread allocated and
available for that purpose as described under subsection 4.11(h).
SECTION 4.11 Excess Spread; SHARED Excess Finance Charge
Collections. On or before each Transfer Date, the Servicer shall instruct the
Trustee in writing (which writing shall be substantially in the form of Exhibit
B hereto) to apply Excess Spread and SHARED Excess Finance Charge Collections
allocated to Series 199_-_ with respect to the related Monthly Period to make
the following distributions on each Transfer Date in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date shall be used to fund the Class A Required Amount
and be applied in accordance with, and in the priority set forth in, subsection
4.09(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date shall be used to fund the Class B Required Amount
and be applied first in accordance with, and in the priority set forth in,
subsection 4.09(b) and then any remaining amount available to pay the Class B
Investor Default Amount shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced below the initial Class B Investor Interest
for reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate amount of such reductions
which have not been previously reimbursed) shall be treated as a portion of
Investor Principal Collections and deposited into the Principal Account on such
Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the
amount of any past due Collateral Monthly Interest for such Transfer Date shall
be paid to the Collateral Interest Holder in accordance with the Loan Agreement;
(f) if the Transferor, an Affiliate of the Transferor or an
Acceptable Successor Servicer is the Servicer, an amount equal to the aggregate
amount of accrued but unpaid Collateral Interest Servicing Fees shall be paid to
the Servicer;
(g) an amount equal to the Collateral Default Amount, if any, for
the prior Monthly Period shall be treated as a
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portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for reasons
other than the payment of principal to the Collateral Interest Holder (but not
in excess of the aggregate amount of such reductions which have not been
previously reimbursed) shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(i) on each Transfer Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account terminates as
described in Section 4.16(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; and
(j) an amount equal to the aggregate of any other amounts then due
to the Collateral Interest Holder out of collections of Excess Spread and SHARED
Excess Finance Charge Collections allocated to Series 199_-_ pursuant to the
Loan Agreement shall be distributed to the Collateral Interest Holder for
application in accordance with the Loan Agreement; and
(k) the balance, if any, will constitute a portion of Shared Excess
Finance Charge Collections for such Distribution Date and will be available for
allocation to other Series in Shared Excess Finance Charge Collections Group
[ONE].
SECTION 4.12 Reallocated Principal Collections. On or before each
Transfer Date, the Servicer shall instruct the Trustee in writing (which writing
shall be substantially in the form of Exhibit B hereto) to withdraw from the
Principal Account and apply Reallocated Principal Collections (applying all
Reallocated Collateral Principal Collections in accordance with subsections
4.12(a) and (b) prior to applying any Reallocated Class B Principal Collections
in accordance with subsection 4.12(a) for any amounts still owing after the
application of Reallocated Collateral Principal Collections) with respect to
such Transfer Date, to make the following distributions on each Transfer Date in
the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii) the amount
of Excess Spread with respect to the related Monthly Period, shall be applied in
accordance with, and in the priority set forth in, subsection 4.09(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 amount
of Excess Spread allocated and
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available to the Class B Certificates pursuant to subsection 4.11(c) on such
Transfer Date shall be applied first pursuant to subsections 4.09(b)(i) and
(ii), and in the priority set forth in subsection 4.09(b), and then pursuant to
subsection 4.11(c).
On each Transfer Date, the Collateral Interest shall be reduced by
the amount of Reallocated Collateral Principal Collections and by the amount of
Reallocated Class B Principal Collections for such Transfer Date. In the event
that such reduction would cause the Collateral Interest (after giving effect to
any Collateral Charge-Offs for such Transfer Date) to be a negative number, the
Collateral Interest (after giving effect to any Collateral Charge-Offs for such
Transfer Date) shall be reduced to zero and the Class B Investor Interest shall
be reduced by the amount by which the Collateral Interest would have been
reduced below zero. In the event that the reallocation of Reallocated Principal
Collections would cause the Class B Investor Interest (after giving effect to
any Class B Investor Charge-Offs for such Transfer Date) to be a negative number
on any Transfer Date, Reallocated Principal Collections shall be reallocated on
such Transfer Date in an aggregate amount not to exceed the amount which would
cause the Class B Investor Interest (after giving effect to any Class B Investor
Charge-Offs for such Transfer Date) to be reduced to zero.
SECTION 4.13 Shared Excess Finance Charge Collections.
(a) The portion of Shared Excess Finance Charge Collections on
deposit in the Finance Charge Account equal to the amount of Shared Excess
Finance Charge Collections allocable to Series 199_-_ on any Transfer Date shall
be applied as Shared Excess Finance Charge Collections pursuant to Section 4.11
and pursuant to such Section 4.11 shall be deposited in the Distribution Account
or to the extent not needed to make distributions pursuant to Section 4.11,
shall be paid to the Holder of the Transferor Certificate.
(b) Shared Excess Finance Charge Collections allocable to Series
199_-_ with respect to any Transfer Date shall mean an amount equal to the
Series Finance Charge Shortfall, if any, with respect to Series 199_-_ for such
Transfer Date; provided, however, that if the aggregate amount of Shared Excess
Finance Charge Collections for all Series in Shared Excess Finance Charge
Collections Group [ONE] for such Transfer Date is less than the Cumulative
Series Finance Charge Shortfall for such Transfer Date, then Shared Excess
Finance Charge Collections allocable to Series 199_-_ on such Transfer Date
shall equal the product of (i) Shared Excess Finance Charge Collections for all
Series in Shared Excess Finance Charge Collections Group [ONE] for such Transfer
Date and (ii) a fraction, the numerator of which is the Series Finance Charge
Shortfall with respect to Series 199_-_ for such Transfer Date and the
denominator of which is the aggregate amount of Cumulative Series Finance Charge
Shortfall for all
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Series in Shared Excess Finance Charge Collections Group [ONE] for such Transfer
Date.
(c) Notwithstanding anything else in this Agreement to the
contrary, the provisions of this Section 4.13 shall terminate and the
application of Shared Excess Finance Charge Collections among the Series within
Shared Excess Finance Charge Collections Group [One] shall continue only until
such time, if any, at which the Transferor shall deliver to the Trustee an
Officer's Certificate to the effect that, in the reasonable belief of the
Transferor, the continued application of Shared Excess Finance Charge
Collections among the Series within Shared Excess Finance Charge Collections
Group [One] would have adverse regulatory implications with respect to the
Transferor. Following the delivery by the Transferor of such an Officer's
Certificate to the Trustee, there will not be any further application of Shared
Excess Finance Charge Collections among the Series within Shared Excess Finance
Charge Collections Group [One].
SECTION 4.14 Shared Excess Principal Collections.
(a) The portion of Shared Excess Principal Collections on deposit
in the Principal Account equal to the amount of Shared Excess Principal
Collections with respect to THE Shared Excess Principal Collections Group
allocable to Series 199_-_ on any Transfer Date shall be applied as an Available
Investor Principal Collection pursuant to Section 4.09 and pursuant to such
Section 4.09 shall be deposited in the Distribution Account or distributed in
accordance with the Loan Agreement.
(b) Shared Excess Principal Collections with respect to THE Shared
Excess Principal Collections Group allocable to Series 199_-_ with respect to
any Transfer Date shall mean an amount equal to the Series Principal Shortfall,
if any, with respect to Series 199_-_ for such Transfer Date; provided, however,
that if the aggregate amount of Shared Excess Principal Collections for all
Series for such Transfer Date is less than the Cumulative Series Principal
Shortfall for such Transfer Date, then Shared Excess Principal Collections
allocable to Series 199_-_ on such Transfer Date shall equal the product of (i)
Shared Excess Principal Collections for all Series in THE SHARED Excess
Principal Collections Group for such Transfer Date and (ii) a fraction, the
numerator of which is the Series Principal Shortfall with respect to Series
199_-_ for such Transfer Date and the denominator of which is the aggregate
amount of Cumulative Series Principal Shortfall for all Series for such Transfer
Date.
SECTION 4.15 Principal Funding Account.
(a) The Trustee shall establish and maintain with a Qualified
Institution, which may be the Trustee, in the name of the Trust, on behalf of
the Trust, for the benefit of the Investor Certificateholders, a segregated
trust account with the corporate trust department of such Qualified Institution
(the "Principal Funding Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Investor
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Principal Funding Account and in
all proceeds thereof. The Principal Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If at any time the institution holding the Principal Funding
Account ceases to be a Qualified Institution, the Transferor shall notify the
Trustee, and the Trustee upon being notified (or the Servicer on its behalf)
shall, within 10 Business Days, establish a new Principal Funding Account
meeting the conditions specified above with a Qualified Institution, and shall
transfer any cash or any investments to such new Principal Funding Account. The
Trustee, at the direction of the Servicer, shall (i) make withdrawals from the
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Principal Funding Account from time to time, in the amounts and for the purposes
set forth in this Series Supplement, and (ii) on each Transfer Date (from and
after the commencement of the Controlled Accumulation Period) prior to
termination of the Principal Funding Account make a deposit into the Principal
Funding Account in the amount specified in, and otherwise in accordance with,
subsection 4.09(e).
(b) Funds on deposit in the Principal Funding Account shall be
invested at the direction of the Servicer by the Trustee in Permitted
Investments EVIDENCING OBLIGATIONS OF ANY OF THE CORPORATION OR OF ANY AFFILIATE
THEREOF; PROVIDED, HOWEVER, THAT IF NO OBLIGATIONS OF THE CORPORATION OR OF ANY
AFFILIATE THEREOF SHALL QUALIFY AS PERMITTED INVESTMENTS, NOTWITHSTANDING THE
PRECEDING, THE FUNDS ON DEPOSIT IN THE PRINCIPAL FUNDING ACCOUNT SHALL BE
INVESTED BY THE TRUSTEE IN PERMITTED INVESTMENTS. Funds on deposit in the
Principal Funding Account on any Transfer Date, after giving effect to any
withdrawals from the Principal Funding Account on such Transfer Date, shall be
invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Transfer Date. The Trustee
shall maintain for the benefit of the Investor Certificateholders possession of
the negotiable instruments or securities, if any, evidencing such Permitted
Investments. No Permitted Investment shall be disposed of prior to its maturity.
On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each Transfer Date
thereafter with respect to the Controlled Accumulation Period, the Trustee,
acting at the Servicer's direction given on or before such Transfer Date, shall
transfer from the Principal Funding Account to the Finance Charge Account the
Principal Funding Investment Proceeds on deposit in the Principal Funding
Account, for application as Class A Available Funds applied pursuant to
subsection 4.09(a)(i).
An amount equal to any Principal Funding Investment Shortfall shall
be deposited in the Finance Charge Account on each Transfer Date from the
Reserve Account to the extent funds are available pursuant to subsection
4.16(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 4.16 Reserve Account.
(a) The Trustee shall establish and maintain with a Qualified
Institution, which may be the Trustee, in the name of the Trust, on behalf of
the Trust, for the benefit of the Investor Certificateholders, a segregated
trust account with the corporate trust department of such Qualified Institution
(the "Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Certificateholders.
The Trustee shall possess all
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right, title and interest in all funds on deposit from time to time in the
Reserve Account and in all proceeds thereof. The Reserve Account shall be under
the sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If at any time the institution holding the Reserve Account
ceases to be a Qualified Institution, the Transferor shall notify the Trustee,
and the Trustee upon being notified (or the Servicer on its behalf) shall,
within 10 Business Days, establish a new Reserve Account meeting the conditions
specified above with a Qualified Institution, and shall transfer any cash or any
investments to such new Reserve Account. The Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Reserve Account from time to time
in an amount up to the Available Reserve Account Amount at such time, for the
purposes set forth in this Series Supplement, and (ii) on each Transfer Date
(from and after the Reserve Account Funding Date) prior to termination of the
Reserve Account make a deposit into the Reserve Account in the amount specified
in, and otherwise in accordance with, subsection 4.11(i).
(b) Funds on deposit in the Reserve Account shall be invested at
the direction of the Servicer by the Trustee in Permitted Investments EVIDENCING
OBLIGATIONS OF ANY OF THE CORPORATION OR OF ANY AFFILIATE THEREOF; PROVIDED,
HOWEVER, THAT IF NO OBLIGATIONS OF THE CORPORATION OR OF ANY AFFILIATE THEREOF
SHALL QUALIFY AS PERMITTED INVESTMENTS, NOTWITHSTANDING THE PRECEDING, THE FUNDS
ON DEPOSIT IN THE RESERVE ACCOUNT SHALL BE INVESTED BY THE TRUSTEE IN PERMITTED
INVESTMENTS. Funds on deposit in the Reserve Account on any Transfer Date, after
giving effect to any withdrawals from the Reserve Account on such Transfer Date,
shall be invested in such investments that will mature so that such funds will
be available for withdrawal on or prior to the following Transfer Date. The
Trustee shall maintain for the benefit of the Investor Certificateholders
possession of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. No Permitted Investment shall be disposed of prior to its
maturity. On each Transfer Date, all interest and earnings (net of losses and
investment expenses) accrued since the preceding Transfer Date on funds on
deposit in the Reserve Account shall be retained in the Reserve Account (to the
extent that the Available Reserve Account Amount is less than the Required
Reserve Account Amount) and the balance, if any, shall be deposited into the
Finance Charge Account and included in Class A Available Funds for such Transfer
Date. For purposes of determining the availability of funds or the balance in
the Reserve Account for any reason under this Series Supplement, except as
otherwise provided in the preceding sentence, investment earnings on such funds
shall be deemed not to be available or on deposit.
(c) On or before each Transfer Date with respect to the Controlled
Accumulation Period prior to the payment in full of the Class A Investor
Interest and on or before the first Transfer Date with respect to the Rapid
Amortization Period, the
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Servicer shall calculate the "Reserve Draw Amount" which shall be equal to the
Principal Funding Investment Shortfall with respect to each Transfer Date with
respect to the Controlled Accumulation Period or the first Transfer Date with
respect to the Rapid Amortization Period; provided, however, that such amount
will be reduced to the extent that funds otherwise would be available for
deposit in the Reserve Account under subsection 4.11(i) with respect to such
Transfer Date.
(d) In the event that for any Transfer Date the Reserve Draw Amount
is greater than zero, the Reserve Draw Amount, up to the Available Reserve
Account Amount, shall be withdrawn from the Reserve Account on such Transfer
Date by the Trustee (acting in accordance with the instructions of the
Servicer), deposited into the Finance Charge Account and included in Class A
Available Funds for such Transfer Date.
(e) In the event that the Reserve Account Surplus on any Transfer
Date, after giving effect to all deposits to and withdrawals from the Reserve
Account with respect to such Transfer Date, is greater than zero, the Trustee,
acting in accordance with the instructions of the Servicer, shall withdraw from
the Reserve Account, and pay in accordance with the Loan Agreement, an amount
equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) if the Controlled Accumulation
Period has not commenced, the first Transfer Date relating to the Rapid
Amortization Period and (iii) if the Controlled Accumulation Period has
commenced, the earlier of the first Transfer Date with respect to the Rapid
Amortization Period and the Transfer Date immediately preceding the Class A
Scheduled Payment Date, the Trustee, acting in accordance with the instructions
of the Servicer, after the prior payment of all amounts owing to the Series
199_-_ Certificateholders that are payable from the Reserve Account as provided
herein, shall withdraw from the Reserve Account and pay in accordance with the
Loan Agreement, all amounts, if any, on deposit in the Reserve Account and the
Reserve Account shall be deemed to have terminated for purposes of this Series
Supplement.
SECTION 4.17 Determination of [Index].
(a) On each [Index] Determination Date, the Trustee shall determine
[Index] on the basis of [description of determination of [Index]].
[(b) The Class A Certificate Rate and Class B Certificate Rate
applicable to the then current and the immediately preceding Interest Periods
may be obtained by any Investor Certificateholder by telephoning the Trustee at
its Corporate Trust Office at (___) ___-____.]
43
<PAGE> 47
[(c) On each [Index] Determination Date prior to 12:00 noon New
York City time, the Trustee shall send to the Servicer by facsimile notification
of [Index] for the following Interest Period.]
SECTION 4.18 Transferor's or Servicer's Failure to Make a Deposit
or Payment.
If the Servicer or the Transferor fails to make, or give
instructions to make, any payment or deposit (other than as required by
subsections 2.04(d) and (e) and 12.02(a) or Sections 10.02 and 12.01) required
to be made or given by the Servicer or Transferor, respectively, at the time
specified in the Agreement (including applicable grace periods), the Trustee
shall make such payment or deposit from the applicable Investor Account without
instruction from the Servicer or Transferor. The Trustee shall be required to
make any such payment, deposit or withdrawal hereunder only to the extent that
the Trustee has sufficient information to allow it to determine the amount
thereof; provided, however, that the Trustee shall in all cases be deemed to
have sufficient information to determine the amount of interest payable to the
Series 199_-_ Certificateholders on each Distribution Date. The Servicer shall,
upon request of the Trustee, promptly provide the Trustee with all information
necessary to allow the Trustee to make such payment, deposit or withdrawal. Such
funds or the proceeds of such withdrawal shall be applied by the Trustee in the
manner in which such payment or deposit should have been made by the Transferor
or the Servicer, as the case may be.
SECTION 8. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Certificateholders:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.01 Distributions. (a) On each Distribution Date, the
Trustee shall distribute (in accordance with the certificate delivered on or
before the related Transfer Date by the Servicer to the Trustee pursuant to
subsection 3.04(b)) to each Class A Certificateholder of record on the
immediately preceding Record Date (other than as provided in subsection 2.04(e)
or Section 12.03 respecting a final distribution) such Certificateholder's pro
rata share (based on the aggregate Undivided Interests represented by Class A
Certificates held by such Certificateholder) of amounts on deposit in the
Distribution Account as are payable to the Class A Certificateholders pursuant
to Section 4.09 by check mailed to each Class A Certificateholder (at such
Certificateholder's address as it appears in the Certificate Register), except
that with respect to Class A
44
<PAGE> 48
Certificates registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds.
(b) On each Distribution Date, the Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer Date
by the Servicer to the Trustee pursuant to subsection 3.04(b)) to each Class B
Certificateholder of record on the immediately preceding Record Date (other than
as provided in subsection 2.04(e) or Section 12.03 respecting a final
distribution) such Certificateholder's pro rata share (based on the aggregate
Undivided Interests represented by Class B Certificates held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class B Certificateholders pursuant to Section 4.09 by check
mailed to each Class B Certificateholder (at such Certificateholder's address as
it appears in the Certificate Register), except that with respect to Class B
Certificates registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds.
SECTION 5.02 Monthly Series 199_-_ Certificateholders' Statement.
(a) On or before each Distribution Date, the Trustee shall forward
to each Series 199_-_ Certificateholder, each Rating Agency and the Collateral
Interest Holder a statement substantially in the form of Exhibit C to this
Series Supplement prepared by the Servicer, delivered to the Trustee and setting
forth, among other things, the following information (which, in the case of
subclauses (i) and (ii) below, shall be stated on the basis of an original
principal amount of $1,000 per Certificate and, in the case of subclauses (ix)
and (x) shall be stated on an aggregate basis and on the basis of an original
principal amount of $1,000 per Certificate, as applicable):
(i) the amount of the current distribution allocable to Class A
Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal, respectively;
(ii) the amount of the current distribution allocable to Class A
Monthly Interest, Class A Deficiency Amounts, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amounts, Class B
Additional Interest and Collateral Monthly Interest, and any accrued and
unpaid Collateral Monthly Interest, respectively;
(iii) the amount of Collections of Principal Receivables processed
during the related Monthly Period and allocated in respect of the Class
A Certificates, the Class B Certificates and the Collateral Interest,
respectively;
(iv) the amount of Collections of Finance Charge Receivables
processed during the related Monthly Period and
45
<PAGE> 49
allocated in respect of the Class A Certificates, the Class B
Certificates and the Collateral Interest, respectively;
(v) the aggregate amount of Principal Receivables, the Investor
Interest, the Adjusted Investor Interest, the Class A Investor Interest,
the Class A Adjusted Investor Interest, the Class B Investor Interest,
the Collateral Interest, the Floating Investor Percentage, the Class A
Floating Allocation, the Class B Floating Allocation, the Collateral
Floating Allocation and the Fixed Investor Percentage, Class A Fixed
Allocation, the Class B Fixed Allocation and the Collateral Fixed
Allocation with respect to the Principal Receivables in the Trust as of
the end of the day on the Record Date;
(vi) the aggregate amount of Principal Receivables arising in
Rebate Accounts with respect to the Principal Receivables in the Trust
as of the end of the day on the Record Date;
(vii) the aggregate outstanding balance of Accounts which were 30
to 59, 60 to 89 and 90 or more days delinquent as of the end of the day
on the Record Date;
(viii) the Aggregate Investor Default Amount, the Class A Investor
Default Amount, the Class B Investor Default Amount and the Collateral
Default Amount for the related Monthly Period;
(ix) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Charge-Offs for the related Monthly
Period;
(x) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Charge-Offs reimbursed on the
Transfer Date immediately preceding such Distribution Date;
(xi) the amount of the Class A Servicing Fee, the Class B Servicing
Fee, the Collateral Servicing Fee and the Servicer Interchange for the
related Monthly Period;
(xii) the Portfolio Yield for the preceding Monthly Period;
(xiii) the amount of Reallocated Collateral Principal Collections
and Reallocated Class B Principal Collections with respect to such
Distribution Date;
(xiv) the Class B Investor Interest and the Collateral Interest as
of the close of business on such Distribution Date;
46
<PAGE> 50
(xv) [Index] for the Interest Period ending on such Distribution
Date;
(xvi) the Principal Funding Account Balance on the related Transfer
Date;
(xvii) the Accumulation Shortfall;
(xviii) the Principal Funding Investment Proceeds transferred to
the Finance Charge Account on the related Transfer Date;
(xix) the Principal Funding Investment Shortfall on the related
Transfer Date;
(xx) the amount of Class A Available Funds and Class B Available
Funds on deposit in the Finance Charge Account on the related Transfer
Date; and
(xxi) such other items as are set forth in Exhibit C to this Series
Supplement.
(b) Annual Certificateholders' Tax Statement. On or before January
31 of each calendar year, beginning with calendar year 1997, the Trustee shall
distribute to each Person who at any time during the preceding calendar year was
a Series 199_-_ Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular monthly
report to Series 199_-_ Certificateholders, as set forth in subclauses (i), (ii)
and (iii) in subsection 5.02(a), aggregated for such calendar year or the
applicable portion thereof during which such Person was a Series 199_-_
Certificateholder, together with such other customary information (consistent
with the treatment of the Certificates as debt) as the Servicer deems necessary
or desirable to enable the Series 199_-_ Certificateholders to prepare their tax
returns. Such obligations of the Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Internal Revenue Code as from time
to time in effect.
SECTION 9. Series 199_-_ Pay Out Events. If any one of the
following events shall occur with respect to the Investor Certificates:
(a) failure on the part of the Transferor (i) to make any payment
or deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any other covenants or agreements of the
Transferor set forth in the Agreement or this Series Supplement, which failure
has a material adverse effect on the Series 199_-_ Certificateholders (which
determination shall be made without
47
<PAGE> 51
reference to the amount of the Collateral Interest) and which continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by the Holders
of Investor Certificates evidencing Undivided Interests aggregating not less
than __% of the Investor Interest of this Series 199_-_, and continues to affect
materially and adversely the interests of the Series 199_-_ Certificateholders
(which determination shall be made without reference to the amount of the
Collateral Interest) for such period;
(b) any representation or warranty made by the Transferor in the
Agreement or this Series Supplement, or any information contained in a computer
file or microfiche list required to be delivered by the Transferor pursuant to
Section 2.01 or 2.06, (i) shall prove to have been incorrect in any material
respect when made or when delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by the Holders
of Investor Certificates evidencing Undivided Interests aggregating not less
than __% of the Investor Interest of this Series 199_-_, and (ii) as a result of
which the interests of the Series 199_-_ Certificateholders are materially and
adversely affected (which determination shall be made without reference to the
amount of the Collateral Interest) and continue to be materially and adversely
affected for such period; provided, however, that a Series 199_-_ Pay Out Event
pursuant to this subsection 9(b) hereof shall not be deemed to have occurred
hereunder if the Transferor has accepted reassignment of the related Receivable,
or all of such Receivables, if applicable, during such period in accordance with
the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for such
period;
(d) the Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by subsection
2.06(a);
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 199_-_ Certificateholders; or
(f) the Class A Investor Interest shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Investor Interest shall not be
paid in full on the Class B Scheduled Payment Date;
48
<PAGE> 52
then, in the case of any event described in subsection 9(a), (b) or (e) hereof,
after the applicable grace period set forth in such subparagraphs, either the
Trustee or Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than __% of the Investor Interest of this Series 199_-_ by
notice then given in writing to the Transferor and the Servicer (and to the
Trustee if given by the Certificateholders) may declare that a pay out event (a
"Series 199_-_ Pay Out Event") has occurred as of the date of such notice, and
in the case of any event described in subsection 9(c), (d) or (f) hereof, a
Series 199_-_ Pay Out Event shall occur without any notice or other action on
the part of the Trustee or the Investor Certificateholders immediately upon the
occurrence of such event.
SECTION 10. Series 199_-_ Termination. The right of the Investor
Certificateholders to receive payments from the Trust will terminate on the
first Business Day following the Series 199_-_ Termination Date.
SECTION 11. 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 12. Periodic Finance Charges and Other Fees. The Transferor
hereby agrees that, except as otherwise required by any Requirement of Law, or
as is deemed by the Transferor to be necessary in order for the Transferor to
maintain its credit card business, based upon a good faith assessment by the
Transferor, in its sole discretion, of the nature of the competition in the
credit card business, 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, the Transferor's reasonable expectation of the Portfolio
Yield as of such date would be less than the then Base Rate.
SECTION 13. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. No Petition. The Transferor, the Servicer and the
Trustee, by entering into this Series Supplement and each Investor
Certificateholder, by accepting a Series 199_-_ Certificate hereby covenant and
agree that they will not at any time institute against the Trust, or join in any
institution against the Trust of, any bankruptcy proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Investor Certificateholders, the Agreement or this
Series Supplement.
SECTION 15. Tax Representation and Covenant. Any holder of an
interest in the Trust acquired pursuant to Section 12.01(b) in respect of the
Series 199_-_ Certificates shall be
49
<PAGE> 53
required to represent and covenant in connection with such acquisition that (x)
it has neither acquired, nor will it sell, trade or transfer any interest in the
Trust or cause any interest in the Trust to be marketed on or through either (i)
an "established securities market" within the meaning of Code section 7704 (b)
(1), including without limitation an interdealer quotation system that regularly
disseminates firm buy or sell quotations by identified brokers or dealers by
electronic means or otherwise or (ii) a "secondary market (or the substantial
equivalent thereof)" within the meaning of Code section 7704(b) (2), including a
market wherein interests in the Trust are regularly quoted by any person making
a market in such interests and a market wherein any person regularly makes
available bid or offer quotes with respect to interests in the Trust and stands
ready to effect buy or sell transactions at the quoted prices for itself or on
behalf of others, (y) unless the Transferor consents otherwise, such holder (i)
is properly classified as, and will remain classified as, a "corporation" as
described in Code section 7701(a)(3) and (ii) is not, and will not become, an S
corporation as described in Code section 1361, and (z) it will (i) cause any
participant with respect to such interest otherwise permitted hereunder to make
similar representations and covenants for the benefit of the Transferor and the
Trust and (ii) forward a copy of such representations and covenants to the
Trustee. Each such holder shall further agree in connection with its acquisition
of such interest that, in the event of any breach of its (or its participant's)
representation and covenant that it (or its participant) is and shall remain
classified as a corporation other than an S corporation, the Transferor shall
have the right to procure a replacement investor to replace such holder (or its
participant), and further that such holder shall take all actions necessary to
permit such replacement investor to succeed to its rights and obligations as a
holder (or to the rights of its participant).
SECTION 16. Certain Tax Related Amendments. In addition to any
other provisions relating to amendments in either the Agreement or this Series
Supplement, this Series Supplement may be amended by the Transferor without the
consent of the Servicer, Trustee or any Investor Certificateholder if the
Transferor provides the Trustee with (i) an Opinion of Counsel to the effect
that such amendment or modification would reduce the risk the Trust would be
treated as taxable as a publicly traded partnership pursuant to Code section
7704 and (ii) a certificate that such amendment or modification would not
materially and adversely affect any Investor Certificateholder; provided,
however, that no such amendment shall be deemed effective without the Trustee's
consent, if the Trustee's rights, duties and obligations hereunder are thereby
modified.
50
<PAGE> 54
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Series 199_-_ Supplement to be duly executed by their
respective officers as of the day and year first above written.
BANK OF AMERICA NATIONAL
ASSOCIATION,
Transferor and Servicer
By:__________________________
Name: __________________
Title: _________________
[NAME OF TRUSTEE],
Trustee
By:__________________________
Name: __________________
Title: _________________
51
<PAGE> 55
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 BANK OF AMERICA NATIONAL ASSOCIATION 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. _________
BA MASTER CREDIT CARD TRUST
CLASS A [FLOATING-RATE][FIXED-RATE]
ASSET BACKED CERTIFICATE, SERIES 199_-_
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard(R) and VISA(R)* credit card receivables generated or
acquired by Bank of America National Association and other assets and interests
constituting the Trust under the Pooling and Servicing Agreement described
below.
Proceeds from the assets in the related Trust will be the only source of
payments on the Certificates. The Certificates do not represent an obligation of
or interest in the Transferor, BankAmerica Corporation, Bank of America NT&SA or
any of their affiliates. Neither the Certificates nor the underlying Receivables
or other assets of the Trust are insured or guaranteed by any governmental
agency or instrumentality or by BankAmerica Corporation, Bank of America NT&SA
or any of their affiliates.
- -------------
* MasterCard(R) and VISA(R) are federally registered servicemarks
of MasterCard International Inc. and of Visa U.S.A. Inc., respectively.
<PAGE> 56
This certifies that CEDE & CO. (the "Class A Certificateholder") is
the registered owner of an Undivided Interest in a trust (the "Trust"), the
corpus of which consists of a portfolio of receivables (the "Receivables") now
existing or hereafter created and arising in connection with selected MasterCard
and VISA credit card accounts (the "Accounts") of Bank of America National
Association, a national banking association organized and existing under the
laws of the United States of America, all monies due or to become due in payment
of the Receivables (including all Finance Charge Receivables), the right to
certain amounts received as Interchange and Recoveries (if any), the benefits of
the Collateral Interest, all proceeds of the foregoing and the other assets and
interests constituting the Trust pursuant to a Pooling and Servicing Agreement
dated as of ___________ __, 199_ as supplemented by the Series 199_-_ Supplement
dated as of ______ __, 199_ (collectively, as amended from time to time, the
"Pooling and Servicing Agreement"), by and between Bank of America National
Association as Transferor (the "Transferor") and as Servicer (the "Servicer"),
and [Name of Trustee], as Trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth herein. To the extent not defined
herein, capitalized terms used herein have the respective meanings assigned to
them in the Pooling and Servicing Agreement.
The Series 199_-_ 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 herein and in the Pooling and Servicing Agreement.
The Transferor has structured the Pooling and Servicing Agreement
and the Series 199_-_ Certificates with the intention that the Series 199_-_
Certificates will qualify under applicable tax law as indebtedness, and each of
the Transferor, the Holder of the Transferor Certificate, the Servicer and each
Series 199_-_ Certificateholder (or Series 199_-_ Certificate Owner) by
acceptance of its Series 199_-_ Certificate (or in the case of a Series 199_-_
Certificate Owner, by virtue of such Series 199_-_ Certificate Owner's
acquisition of a beneficial interest therein), agrees to treat and to take no
action inconsistent with the treatment of the Series 199_-_ 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. Each Series 199_-_ Certificateholder agrees that it will
cause any Series 199_-_ Certificate Owner acquiring an interest in a Series
199_-_ Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 199_-_ Certificates as indebtedness for certain
tax purposes.
This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as
A-1-2
<PAGE> 57
amended from time to time, the Class A Certificateholder by virtue of the
acceptance hereof assents and by which the Class A Certificateholder is bound.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Class A Certificate
shall not be entitled to any benefit under the Pooling and Servicing Agreement,
or be valid for any purpose.
A-1-3
<PAGE> 58
IN WITNESS WHEREOF, Bank of America National Association has caused
this Class A Certificate to be duly executed.
By:__________________________
Authorized Officer
Date: ______ __, 199_
A-1-4
<PAGE> 59
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Series 199_-_ Class A Certificates referred to
in the within-mentioned Pooling and Servicing Agreement.
[NAME OF TRUSTEE],
Trustee
By:_____________________________
Authorized Signatory
<PAGE> 60
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 BANK OF AMERICA NATIONAL ASSOCIATION 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.
------------
BA MASTER CREDIT CARD TRUST
CLASS A [FLOATING-RATE][FIXED-RATE]
ASSET BACKED CERTIFICATE, SERIES 199 -
- -
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard(R) and VISA(R)* credit card receivables generated or
acquired by Bank of America National Association and other assets and interests
constituting the Trust under the Pooling and Servicing Agreement described
below.
- --------------------------------------------------------------------------------
Proceeds from the assets in the related Trust will be the only source of
payments on the Certificates. The Certificates do not represent an obligation of
or interest in the Transferor, BankAmerica Corporation, Bank of America NT&SA or
any of their affiliates. Neither the Certificates nor the underlying Receivables
or other assets of the Trust are insured or guaranteed by any governmental
agency or instrumentality or by BankAmerica Corporation, Bank of America NT&SA
or any of their affiliates.
- --------------------------------------------------------------------------------
- ----------------
* MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of Visa U.S.A. Inc., respectively.
<PAGE> 61
This certifies that CEDE & CO. (the "Class B Certificateholder") is the
registered owner of an Undivided Interest in a trust (the "Trust"), the corpus
of which consists of a portfolio of receivables (the "Receivables") now existing
or hereafter created and arising in connection with selected MasterCard and VISA
credit card accounts (the "Accounts") of Bank of America National Association, a
national banking association organized and existing under the laws of the United
States of America, all monies due or to become due in payment of the Receivables
(including all Finance Charge Receivables), the right to certain amounts
received as Interchange and Recoveries (if any), the benefits of the Collateral
Interest, all proceeds of the foregoing and the other assets and interests
constituting the Trust pursuant to a Pooling and Servicing Agreement dated as of
_________ __, 199_ as supplemented by the Series 199_-_ Supplement dated as of
______ __, 199_ (collectively, as amended from time to time the "Pooling and
Servicing Agreement"), by and between Bank of America National Association as
Transferor (the "Transferor") and as Servicer (the "Servicer"), and [Name of
Trustee], as Trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth herein. To the extent not defined herein,
capitalized terms used herein have the respective meanings assigned to them in
the Pooling and Servicing Agreement.
The Series 199_-_ 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 herein and in the Pooling and Servicing Agreement.
The Transferor has structured the Pooling and Servicing Agreement and the Series
199_-_ Certificates with the intention that the Series 199_-_ Certificates will
qualify under applicable tax law as indebtedness, and each of the Transferor,
the Holder of the Transferor Certificate, the Servicer and each Series 199_-_
Certificateholder (or Series 199_-_ Certificate Owner) by acceptance of its
Series 199_-_ Certificate (or in the case of a Series 199_-_ Certificate owner,
by virtue of such Series 199_-_ Certificate Owner's acquisition of a beneficial
interest therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 199_-_ 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. Each Series
199_-_ Certificateholder agrees that it will cause any Series 199_-_ Certificate
owner acquiring an interest in a Series 199_-_ Certificate through it to comply
with the Pooling and Servicing Agreement as to treatment of the Series 199_-_
Certificates as indebtedness for certain tax purposes.
This Class B Certificate is issued under and is subject to the terms, provisions
and conditions of the Pooling and Servicing
A-2-2
<PAGE> 62
Agreement, to which Pooling and Servicing Agreement, as amended from time to
time, the Class B Certificateholder by virtue of the acceptance hereof assents
and by which the Class B Certificateholder is bound.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Class B Certificate
shall not be entitled to any benefit under the Pooling and Servicing Agreement,
or be valid for any purpose.
A-2-3
<PAGE> 63
IN WITNESS WHEREOF, Bank of America National Association has caused
this Class B Certificate to be duly executed.
By:_____________________________
Authorized Officer
Date: ______ __, 199_
A-2-4
<PAGE> 64
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Series 199_-_ Class B Certificates referred to in
the within-mentioned Pooling and Servicing Agreement.
[NAME OF TRUSTEE],
Trustee
By:_____________________________
Authorized Signatory
<PAGE> 65
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND NOTIFICATION
TO THE TRUSTEE
BANK OF AMERICA NATIONAL ASSOCIATION
BA MASTER CREDIT CARD TRUST SERIES 199_-_
MONTHLY PERIOD ENDING _________ __, ____
Capitalized terms used in this notice have their respective meanings
set forth in the Pooling and Servicing Agreement. References herein to certain
sections and subsections are references to the respective sections and
subsections of the Pooling and Servicing Agreement as supplemented by the Series
199_-_ Supplement. This notice is delivered pursuant to Section 4.09.
A. Bank of America is the Servicer under the Pooling and Servicing
Agreement.
B. The undersigned is a Servicing Officer.
C. The date of this notice is on or before the related Transfer Date under
the Pooling and Servicing Agreement.
I. INSTRUCTION TO MAKE A WITHDRAWAL
Pursuant to Section 4.09, the Servicer does hereby instruct the Trustee
(i) to make withdrawals from the Finance Charge Account, the Principal Account,
and the Principal Funding Account on _________ __, ____, which date is a
Transfer Date under the Pooling and Servicing Agreement, in aggregate amounts
set forth below in respect of the following amounts and (ii) to apply the
proceeds of such withdrawals in accordance with subsection 3(a) of the Series
199_-_ Supplement and Section 4.09 of the Pooling and Servicing Agreement:
A. Pursuant to subsection 3(a) of the
Series 199_-_ Supplement:
1. Servicer Interchange $___________
B. Pursuant to subsection 4.09(a)(i):
1. Class A Monthly Interest at the Class A
Certificate Rate on the Class A Investor
Interest $___________
2. Class A Deficiency Amount $___________
3. Class A Additional Interest $___________
C. Pursuant to subsection 4.09(a)(ii):
1. Class A Servicing Fee $___________
<PAGE> 66
2. Accrued and unpaid Class A
Servicing Fee $___________
D. Pursuant to subsection 4.09(a)(iii):
1. Class A Investor Default
Amount $___________
E. Pursuant to subsection 4.09(a)(iv):
1. Portion of Excess Spread
from Class A Available Funds
to be allocated and
distributed as provided in
Section 4.11 $___________
F. Pursuant to subsection 4.09(b)(i):
1. Class B Monthly Interest at
the Class B Certificate Rate
on the Class B Investor
Interest $___________
2. Class B Deficiency Amount $___________
3. Class B Additional Interest $___________
G. Pursuant to subsection 4.09(b)(ii):
1. Class B Servicing Fee $___________
2. Accrued and unpaid Class B
Servicing Fee $___________
H. Pursuant to subsection 4.09(b)(iii):
1. Portion of Excess Spread
from Class B Available Funds
to be allocated and
distributed as provided in
Section 4.11 $___________
I. Pursuant to subsection 4.09(c)(i):
1. Collateral Interest
Servicing Fee, if applicable $___________
2. Accrued and unpaid
Collateral Interest
Servicing Fee, if applicable $___________
J. Pursuant to subsection 4.09(c)(ii):
1. Portion of Excess Spread
from Collateral Available
Funds to be allocated and
distributed as provided in
Section 4.11 $___________
Total $
===========
B-2
<PAGE> 67
K. Pursuant to subsection 4.09(d)(i):
1. Amount to be treated as
Shared Excess Principal Collections $___________
L. Pursuant to subsection 4.09(d)(ii):
1. Amount to be paid to the
Holder of the Seller
Certificate $___________
2. Unallocated Principal
Collections $___________
M. Pursuant to subsection 4.09(e)(i):
1. Class A Monthly Principal $___________
N. Pursuant to subsection 4.09(e)(ii):
1. Class B Monthly Principal $___________
O. Pursuant to subsection 4.09(e)(iii)
1. Collateral Monthly Principal
to be applied in accordance
with the Loan Agreement $___________
P. Pursuant to subsection 4.09(e)(iv):
1. Amount to be treated as
Shared Excess Principal Collections $___________
Q. Pursuant to subsection 4.09(e)(v):
1. Amount to be paid to the
Holder of the Seller
Certificate $___________
2. Unallocated Principal
Collections $___________
Total $
===========
R. Pursuant to subsection 4.09(f):
1. Amount to be withdrawn from
the Principal Funding
Account and deposited into
the Distribution Account $___________
B-3
<PAGE> 68
II. INSTRUCTION TO MAKE CERTAIN PAYMENTS
Pursuant to Section 4.09, the Servicer does hereby instruct the Trustee
to pay in accordance with Section 5.01 from the Distribution Account on
_________ __, ____, which date is a Distribution Date under the Pooling and
Servicing Agreement, amounts so deposited in the Distribution Account pursuant
to Section 4.09 as set forth below:
A. Pursuant to subsection 4.09(g);
1. Amount to be distributed to
Class A Certificateholders $___________
2. Amount to be distributed to
Class B Certificateholders $___________
B. Pursuant to subsection 4.09(h)(i):
1. Amount to be distributed to
the Class A
Certificateholders $___________
C. Pursuant to subsection 4.09(h)(ii):
1. Amount to be distributed to
the Class B
Certificateholders $___________
III. APPLICATION OF EXCESS SPREAD
Pursuant to Section 4.11, the Servicer does hereby instruct the Trustee
to apply the Excess Spread with respect to the related Monthly Period and to
make the following distributions in the following priority:
A. The amount equal to the Class A
Required Amount, if any, which will be
used to fund the Class A Required Amount
and be applied in accordance with, and
in the priority set forth in, subsection
4.09(a) $___________
B. The amount equal to the aggregate
amount of Class A Investor
Charge-Offs which have not been
previously reimbursed (after
giving effect to the allocation
on such Transfer Date of certain
other amounts applied for that
purpose) which will be treated as
a portion of Investor Principal
Collections and deposited into
the Principal Account on such
Transfer Date $___________
B-4
<PAGE> 69
C. The amount equal to the Class B
Required Amount, if any, which
will be used to fund the Class B
Required Amount and be applied
first in accordance with, and in
the priority set forth in,
subsection 4.09(b) and then any
amount available to pay the Class
B Investor Default Amount shall
be treated as a portion of
Investor Principal Collections
and deposited into the Principal
Account $___________
D. The amount equal to the aggregate
amount by which the Class B
Investor Interest has been
reduced below the initial Class B
Investor Interest for reasons
other than the payment of
principal to the Class B
Certificateholders (but not in
excess of the aggregate amount of
such reductions which have not
been previously reimbursed) which
will be treated as a portion of
Investor Principal Collections
and deposited into the Principal
Account $___________
E. The amount equal to the
Collateral Monthly Interest plus
the amount of any past due
Collateral Monthly Interest which
will be paid to the Collateral
Interest Holder for application
in accordance with the Loan
Agreement $___________
F. The amount equal to the
aggregate amount of accrued but
unpaid Collateral Interest
Servicing Fees which will be paid
to the Servicer if the Seller or
an Acceptable Successor Servicer
is the Servicer, $___________
G. The amount equal to the
Collateral Default Amount, if
any, for the prior Monthly Period
which will be treated as a
portion of Investor Principal
Collections and deposited into
the Principal Account $___________
B-5
<PAGE> 70
H. The amount equal to the aggregate
amount by which the Collateral
Interest has been reduced below
the Required Collateral Interest
for reasons other than the
payment of principal to the
Collateral Interest Holder (but
not in excess of the aggregate
amount of such reductions which
have not been previously
reimbursed) which will be treated
as a portion of Investor
Principal Collections and
deposited into the Principal
Account $___________
I. On each Transfer Date from and
after the Reserve Account Funding
Date, but prior to the date on
which the Reserve Account
terminates as described in
subsection 4.16(f), the amount up
to the excess, if any, of the
Required Reserve Account Amount
over the Available Reserve
Account Amount which shall be
deposited into the Reserve
Account $___________
J. The balance, if any, after giving
effect to the payments made
pursuant to subparagraphs (a)
through (i) above which shall be
deposited into the Distribution
Account and applied in accordance
with the provisions of the Loan
Agreement $___________
IV. REALLOCATED PRINCIPAL COLLECTIONS
Pursuant to Section 4.12, the Servicer does hereby instruct the Trustee
to withdraw from the Principal Account and apply Reallocated Principal
Collections pursuant to Section 4.12 with respect to the related Monthly Period
in the following amounts:
A. Reallocated Collateral Principal $___________
Receivables
B. Reallocated Class B Principal $___________
Receivables
B-6
<PAGE> 71
V. ACCRUED AND UNPAID AMOUNTS
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and unpaid
with respect to all Monthly Periods preceding the current calendar month
A. Subsections 4.09(a)(i) and (b)(i):
(1) The aggregate amount of the Class
A Deficiency Amount $___________
(2) The aggregate amount of Class B
Deficiency Amount $___________
B. Subsections 4.09(a)(ii) and (b)(ii):
The aggregate amount of all accrued and
unpaid Investor Monthly Servicing Fees $___________
C. Section 4.10:
The aggregate amount of all
unreimbursed Investor Charge Offs $___________
B-7
<PAGE> 72
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this __th day of __________, ____.
BANK OF AMERICA NATIONAL
ASSOCIATION
TRANSFEROR AND SERVICER
By:_________________________
Name:
Title:
B-8
<PAGE> 73
EXHIBIT C
FORM OF MONTHLY SERIES 199_-_ CERTIFICATEHOLDERS' STATEMENT
Series 199_-_
BANK OF AMERICA NATIONAL ASSOCIATION
---------------------------------------------
BA MASTER CREDIT CARD TRUST
---------------------------------------------
The information which is required to be prepared with respect to the
distribution date of ______ __, ____ and with respect to the performance of the
Trust during the related Monthly Period.
Capitalized terms used in this Statement have their respective meanings
set forth in the Pooling and Servicing Agreement.
<TABLE>
A. Information Regarding the Current Monthly Distribution
(Stated on the Basis of $1,000 Original Certificate
Principal Amount)
<S> <C> <C>
1. The amount of the current monthly
distribution in respect of Class A
Monthly Principal..................................................... $__________
2. The amount of the current monthly
distribution in respect of Class B
Monthly Principal..................................................... $__________
3. The amount of the current monthly
distribution in respect of
Collateral Monthly Principal.......................................... $__________
4. The amount of the current monthly
distribution in respect of Class A
Monthly Interest ..................................................... $__________
5. The amount of the current monthly
distribution in respect of Class A
Deficiency Amounts.................................................... $__________
The amount of the current monthly
6. distribution in respect of Class A
Additional Interest................................................... $__________
7. The amount of the current monthly
distribution in respect of Class B
Monthly Interest...................................................... $__________
</TABLE>
<PAGE> 74
<TABLE>
<S> <C> <C>
8. The amount of the current monthly
distribution in respect of Class B
Deficiency Amounts.................................................... $__________
9. The amount of the current monthly
distribution in respect of Class B
Additional Interest................................................... $__________
10 The amount of the current monthly
. distribution in respect of
Collateral Monthly Interest........................................... $__________
The amount of the current monthly
11 distribution in respect of any
. accrued and unpaid Collateral
Monthly Interest...................................................... $__________
B. Information Regarding the Performance of the Trust
1. Collection of Principal Receivables
(a) The aggregate amount of
Collections of Principal
Receivables processed during
the related Monthly Period
which were allocated in respect
of the Class A Certificates............................... $__________
(b) The aggregate amount of
Collections of Principal
Receivables processed during
the related Monthly Period
which were allocated in respect
of the Class B Certificates............................... $__________
(c) The aggregate amount of
Collections of Principal
Receivables processed during
the related Monthly Period
which were allocated in respect
of the Collateral Interest................................ $__________
2. Principal Receivables in the Trust
(a) The aggregate amount of
Principal Receivables in the
Trust as of the end of the day
on the last day of the related
Monthly Period............................................ $__________
(b) The amount of Principal
Receivables in the Trust
represented by the Investor
Interest of Series 199_-_ as
of the end of the day on
the last day of the related
Monthly Period ........................................... $__________
</TABLE>
C-2
<PAGE> 75
<TABLE>
<S> <C>
(c) The amount of Principal
Receivables in the Trust
represented by the Series
199_-_ Adjusted Investor
Interest as of the end of the
day on the last day of the
related Monthly Period.................................... $__________
(d) The amount of Principal
Receivables in the Trust
represented by the Class A
Investor Interest as of the end
of the day on the last day of
the related Monthly Period................................ $__________
(e) The amount of Principal
Receivables in the Trust
represented by the Class A
Adjusted Investor Interest as
of the end of day on the last
day of the related Monthly
Period ................................................... $__________
(f) The amount of Principal
Receivables in the Trust
represented by the Class B
Investor Interest as of the end
of the day on the last day of
the related Monthly Period ............................... $__________
(g) The amount of Principal
Receivables in the Trust
represented by the Collateral
Interest as of the end of the
day on the last day of the
related Monthly Period.................................... $__________
(h) The Floating Investor
Percentage with respect to the
related Monthly Period ................................... ____%
(i) The Class A Floating Allocation
with respect to the related
Monthly Period............................................ ____%
(j) The Class B Floating Allocation
with respect to the related
Monthly Period............................................ ____%
(k) The Collateral Floating
Allocation with respect to the
related Monthly Period.................................... ____%
(l) The Fixed Investor Percentage
with respect to the related
Monthly Period............................................ ____%
</TABLE>
C-3
<PAGE> 76
<TABLE>
<S> <C>
(m) The Class A Fixed Allocation
with respect to the related
Monthly Period............................................ ____%
The Class B Fixed Allocation
(n) with respect to the related
Monthly Period ........................................... ____%
(o) The Collateral Fixed Allocation
with respect to the related
Monthly Period............................................ ____%
</TABLE>
3. Delinquent Balances
The aggregate amount of outstanding balances in the
Accounts which were delinquent as of the end of the day
on the last day of the related Monthly Period:
<TABLE>
<CAPTION>
Aggregate Percentage
Account of Total
Balance Receivables
<S> <C> <C> <C>
(a) 30 - 59 days:............. $__________ ____%
(b) 60 - 89 days:............. ____%
$----------
(c) 90 - or more days:......... $__________ ____%
Total: ____%
$__________
</TABLE>
4. Investor Default Amount
<TABLE>
<S> <C>
(a) The Aggregate Investor Default
Amount for the related Monthly
Period.................................................. $__________
(b) The Class A Investor Default
Amount for the related Monthly
Period.................................................. $__________
(c) The Class B Investor Default
Amount for the related Monthly
Period.................................................. $__________
</TABLE>
C-4
<PAGE> 77
<TABLE>
<S> <C> <C>
(d) The Collateral Default
Amount for the related Monthly
Period.................................................. $__________
</TABLE>
C-5
<PAGE> 78
6. Investor Charge Offs
<TABLE>
<S> <C> <C>
(a) The aggregate amount of Class
A Investor Charge Offs for the
related Monthly Period.................................. $__________
(b) The aggregate amount of Class
A Investor Charge Offs set
forth in 5(a) above per $1,000
of original certificate
principal amount........................................ $__________
(c) The aggregate amount of Class
B Investor Charge Offs for the
related Monthly Period.................................. $__________
(d) The aggregate amount of Class
B Investor Charge Off set
forth in 5(c) above per $1,000
of original certificate
principal amount........................................ $__________
(e) The aggregate amount of
Collateral Charge Offs for the
related Monthly Period.................................. $__________
(f) The aggregate amount of
Collateral Charge Offs set
forth in 5(e) above per $1,000
of original certificate
principal amount........................................ $__________
(g) The aggregate amount of Class
A Investor Charge Offs
reimbursed on the Transfer
Date immediately preceding
this Distribution Date.................................. $__________
(h) The aggregate amount of Class A Investor
Charge Offs set forth in 5(g) above per
$1,000 original certificate principal amount
reimbursed on the Transfer Date immediately
preceding this Distribution
Date.................................................... $__________
(i) The aggregate amount of Class
B Investor Charge Offs
reimbursed on the Transfer
Date immediately preceding
this Distribution Date.................................. $__________
</TABLE>
C-6
<PAGE> 79
<TABLE>
<S> <C> <C>
(j) The aggregate amount of Class B Investor
Charge Offs set forth in 5(i) above per
$1,000 original certificate principal amount
reimbursed on the Transfer Date immediately
preceding this Distribution
Date.................................................... $__________
(k) The aggregate amount of
Collateral Charge Offs
reimbursed on the Transfer
Date immediately preceding
this Distribution Date.................................. $__________
(l) The aggregate amount of Collateral Charge
Offs set forth in 5(k) above per $1,000
original certificate principal amount
reimbursed on the Transfer Date immediately
preceding Distribution Date............................. $__________
7. Investor Servicing Fee
(a) The amount of the Class A
Servicing Fee payable by the
Trust to the Servicer for the
related Monthly Period.................................. $__________
(b) The amount of the Class B
Servicing Fee payable by the
Trust to the Servicer for the
related Monthly Period.................................. $__________
(c) The amount of the Collateral
Servicing Fee payable by the
Trust to the Servicer for the
related Monthly Period.................................. $__________
(d) the amount of Servicer
Interchange payable by the
Trust to the Servicer for the
related Monthly Period.................................. $__________
8. Reallocations
(a) The amount of Reallocated
Collateral Principal
Collections with respect to
this Distribution Date.................................. $__________
(b) The amount of Reallocated
Class B Principal Collections
with respect to this
Distribution Date....................................... $__________
</TABLE>
C-7
<PAGE> 80
<TABLE>
<S> <C> <C>
(c) The Collateral Interest as of
the close of business on this
Distribution Date....................................... $__________
(d) The Class B Investor Interest
as of the close of business on
this Distribution Date.................................. $__________
9. Collection of Finance Charge Receivables
(a) The aggregate amount of Collections of
Finance Charge Receivables processed during
the related Monthly Period which were
allocated in respect of the Class A
Certificates............................................ $__________
(b) The aggregate amount of Collections of
Finance Charge Receivables processed during
the related Monthly Period which were
allocated in respect of the Class B
Certificates............................................ $__________
(c) The aggregate amount of Collections of
Finance Charge Receivables processed during
the related Monthly Period which were
allocated in respect of the Collateral
Interest................................................ $__________
10. Principal Funding Account
(a) The principal amount on
deposit in the Principal
Funding Account on the related
Transfer Date........................................... $__________
(b) The Accumulation Shortfall
with respect to the related
Monthly Period.......................................... $__________
The Principal Funding
(c) Investment Proceeds
deposited in the Finance
Charge Account on the
related Transfer Date................................... $__________
(d) The amount of all or the
portion of the Reserve Draw
Amount deposited in the
Finance Charge Account on the
related Transfer Date from the
Reserve Account......................................... $__________
</TABLE>
C-8
<PAGE> 81
<TABLE>
<S> <C> <C>
11. Reserve Draw Amount................................................. $__________
12. Available Funds
(a) The amount of Class A
Available Funds on deposit in
the Finance Charge Account on
the related Transfer Date............................... $__________
(b) The amount of Class B
Available Funds on deposit in
the Finance Charge Account on
the related Transfer Date............................... $__________
(c) The amount of Collateral
Available Funds on deposit in
the Finance Charge Account on
the related Transfer Date............................... $__________
13. Portfolio Yield
(a) The Portfolio Yield for the
related Monthly Period.................................. ____%
(b) The Portfolio Adjusted Yield ____%
for the related Monthly Period..........................
C. Floating-Rate Determinations
1. [Index] for the Interest Period
ending on this Distribution Date.................................... ____%
</TABLE>
BANK OF AMERICA NATIONAL
ASSOCIATION
TRANSFEROR AND SERVICER
By:______________________
Name:
Title:
C-9
<PAGE> 82
SCHEDULE TO EXHIBIT C
SCHEDULE TO MONTHLY SERVICER'S CERTIFICATE
MONTHLY PERIOD ENDING _________ __, ____
BANK OF AMERICA NATIONAL ASSOCIATION
BA MASTER CREDIT CARD TRUST SERIES 199_-_
1. The aggregate amount of the Investor
Percentage of Collections of Principal
Receivables....................................... $__________
2. The aggregate amount of the Investor
Percentage of Collections of Finance
Charge Receivables (excluding
Interchange)...................................... $__________
3. The aggregate amount of the Investor
Percentage of Interchange......................... $__________
4. The aggregate amount of Servicer
Interchange....................................... $__________
5. The aggregate amount of funds on
deposit in Finance Charge Account
allocable to the Series 199_-_
Certificates ..................................... $__________
6. The aggregate amount of funds on
deposit in the Principal Account
allocable to the Series 199_-_
Certificates ..................................... $__________
7. The aggregate amount of funds on
deposit in the Principal Funding
Account allocable to the Series 199_-_
Certificates ..................................... $__________
8. The aggregate amount to be withdrawn
from the Finance Charge Account and
paid in accordance with the Loan
Agreement pursuant to Section 4.11 ............... $__________
9. The excess, if any, of the Required
Collateral Interest over the Collateral
Interest ......................................... $__________
10. The Collateral Interest on the Transfer
Date of the current calendar month,
after giving effect to the deposits and
withdrawals specified above, is equal
to................................................ $__________
11. The amount of Monthly Interest,
Deficiency Amounts and Additional
Interest payable to the
(i) Class A Certificateholders.................... $__________
<PAGE> 83
(ii) Class B Certificateholders.................. $__________
(iii) Collateral Interest Holder................. $__________
12. The amount of principal payable to the
(i) Class A Certificateholders.................. $__________
(ii) Class B Certificateholders.................. $__________
(iii) Collateral Interest Holder ................ $__________
13. The sum of all amounts payable to the
(i) Class A Certificateholders................... $__________
(ii) Class B Certificateholders ................ $__________
(iii) Collateral Interest Holder ................ $__________
14. To the knowledge of the undersigned, no
Series 199_-_ Pay Out Event or Trust
Pay Out Event has occurred except as
described below:
None
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate this __th day of __________, ____.
BANK OF AMERICA NATIONAL
ASSOCIATION
TRANSFEROR AND SERVICER
By:_______________________
Name:
Title:
S-2
<PAGE> 1
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED ,
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED ,
$
BA MASTER CREDIT CARD TRUST
$ CLASS A [FLOATING-RATE] [ %] ASSET BACKED CERTIFICATES, SERIES
199 -
$ CLASS B [FLOATING-RATE] [ %] ASSET BACKED CERTIFICATES, SERIES
199 -
BANK OF AMERICA NATIONAL ASSOCIATION
TRANSFEROR AND SERVICER
------------------------
Each Class A [Floating-Rate] [ %] Asset Backed Certificate, Series 199 -
(collectively, the "Class A Certificates") and each Class B [Floating-Rate]
[ %] Asset Backed Certificate, Series 199 - (collectively, the "Class B
Certificates" and together with the Class A Certificates, the "Certificates")
represents an undivided interest in the assets of, and the right to receive
certain payments from, the BA Master Credit Card Trust (the "Trust"), to be
created pursuant to a Pooling and Servicing Agreement between Bank of America
National Association ("Bank of America"), as transferor and servicer, and
, as trustee. The property of the Trust includes receivables (the
"Receivables") generated from time to time in a portfolio of MasterCard(R) and
VISA(R) revolving credit card accounts (the "Accounts"), all monies due and to
become due in payment of the Receivables, all proceeds of the Receivables and
proceeds of any credit insurance policies relating to the Receivables, any
Enhancements, all monies on deposit in certain bank accounts of the Trust
(including any permitted investment in which any such monies are invested) and
the right to receive Interchange allocable to the Certificates, as described
herein.
(Continued on next page)
THERE CURRENTLY IS NO SECONDARY MARKET FOR THE CERTIFICATES, AND THERE IS
NO ASSURANCE THAT ONE WILL DEVELOP. POTENTIAL INVESTORS SHOULD CONSIDER, AMONG
OTHER THINGS, THE INFORMATION SET FORTH IN "RISK FACTORS" BEGINNING ON PAGE 19
IN THE PROSPECTUS.
PROCEEDS FROM THE ASSETS IN THE TRUST WILL BE THE ONLY SOURCE OF PAYMENTS ON
THE CERTIFICATES. THE CERTIFICATES DO NOT REPRESENT AN OBLIGATION OF OR INTEREST
IN THE TRANSFEROR, BANKAMERICA CORPORATION, BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, OR ANY OF THEIR AFFILIATES. NEITHER THE CERTIFICATES NOR
THE UNDERLYING RECEIVABLES OR OTHER ASSETS OF THE TRUST ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY THE TRANSFEROR,
BANKAMERICA CORPORATION, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
OR ANY OF THEIR AFFILIATES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT TRANSFEROR(1)(2)
- --------------------------------------------------------------------------------------------------------
Per Class A Certificate............................ % % %
- --------------------------------------------------------------------------------------------------------
Per Class B Certificate............................ % % %
- --------------------------------------------------------------------------------------------------------
Total.............................................. $ $ $
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, at the Class A Certificate Rate or the Class
B Certificate Rate, as applicable, from , 199 .
(2) Before deduction of expenses estimated to be $ .
------------------------
This Prospectus Supplement and the related Prospectus may be used by BA
Securities, Inc., an affiliate of the Transferor and Servicer, in connection
with offers and sales related to market-making transactions in the Certificates.
BA Securities, Inc. may act as principal or agent in such transactions. Such
sales will be made at prices related to prevailing market prices at the time of
sale or otherwise.
The Certificates are offered by the Underwriters when, as and if issued by
the Trust and accepted by the Underwriters and subject to the Underwriters'
right to reject orders in whole or in part. It is expected that the Certificates
will be delivered in book-entry form on or about , 199 , through the
facilities of The Depository Trust Company[, Cedel Bank, societe anonyme, and
the Euroclear System].
------------------------
Underwriters of the Class A Certificates
[ ] [ ]
Underwriters of the Class B Certificates
------------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 199
<PAGE> 2
(Continued from previous page)
In addition, the Collateral Interest (as described herein) will be issued
in the initial amount of $ and will be subordinated to the Certificates
as described herein. Bank of America initially will own the remaining undivided
interest in the Trust not represented by the Certificates, the Collateral
Interest and the other interests issued by the Trust from time to time and will
service the Receivables. Bank of America may from time to time offer other
Series of certificates that evidence undivided interests in certain assets of
the Trust, which may have terms significantly different from the Certificates,
and may establish other trusts from time to time having assets substantially
similar to the assets of the Trust.
Certain capitalized terms used herein are defined elsewhere in this
Prospectus Supplement and the accompanying Prospectus. Listings of the pages on
which such terms are defined are found in the "Index of Terms for Prospectus
Supplement" beginning on page S-48 herein and in the "Index of Terms for
Prospectus" on page 69 of the Prospectus.
Interest will accrue on the Class A Certificates from , 199
(the "Closing Date") [through , 199 and from , 199 through
, 199 and with respect to each Interest Period thereafter,] at the
rate of % per annum [above the [Name of [Index]] ("[Index]"), determined as
described herein, prevailing on the related [Index] Determination Date with
respect to such period] (the "Class A Certificate Rate"). Interest will accrue
on the Class B Certificates from the Closing Date [through , 199 and
from , 199 through , 199 and with respect to each
Interest Period thereafter,] at the rate of % per annum [above [Index]
prevailing on the related [Index] Determination Date with respect to each such
period] (the "Class B Certificate Rate"). The initial [Index] Determination Date
is , 19 . Interest with respect to the Certificates will be
distributed on , 199 and on the th day of each month thereafter
(or, if such th day is not a business day, the next succeeding business day)
(each, a "Distribution Date"). Principal on the Class A Certificates is
scheduled to be distributed on the Distribution Date (the "Class A
Scheduled Payment Date"), but may be paid earlier or later under certain limited
circumstances described herein. Principal on the Class B Certificates is
scheduled to be distributed on the Distribution Date (the "Class B
Scheduled Payment Date"), but may be paid earlier or later under certain limited
circumstances described herein. See "Maturity Assumptions."
The Class B Certificates will be subordinated to the Class A Certificates
as described herein. The Collateral Interest will be subordinated to the Class A
Certificates and the Class B Certificates as described herein.
[Application will be made to list the Certificates on the Luxembourg Stock
Exchange.]
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
The Certificates offered hereby constitute a separate Series of
certificates being offered by the [Transferor] [Trust] from time to time
pursuant to its Prospectus dated , 199 . This Prospectus Supplement
does not contain complete information about the offering of the Certificates.
Additional information is contained in the Prospectus and purchasers are urged
to read both this Prospectus Supplement and the Prospectus in full. Sales of the
Certificates may not be consummated unless the purchaser has received both this
Prospectus Supplement and the Prospectus.
S-2
<PAGE> 3
SUMMARY OF TERMS
The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and the
accompanying Prospectus. Certain capitalized terms used in this summary are
defined elsewhere in this Prospectus Supplement and the accompanying Prospectus.
A listing of the pages on which some of such terms are defined is found in the
"Index of Terms for Prospectus Supplement" herein and the "Index of Terms for
Prospectus" in the Prospectus.
TYPE OF SECURITIES......Class A [Floating-Rate] [ %] Asset Backed
Certificates, Series 199 - (the "Class A
Certificates") and Class B [Floating-Rate] [ %]
Asset Backed Certificates, Series 199 - (the "Class B
Certificates," and together with the Class A
Certificates, the "Certificates").
OVERVIEW OF THE
TRANSACTION.............The Trust is to be formed for the purpose of holding the
Receivables and to provide for the issuance of the
Certificates and other similar securities. Each
Certificate evidences a specific undivided interest
in the assets of the Trust allocated to the
Certificates and represents the right to receive a
portion of the collections on the Receivables. Such
collections will be used to pay interest and
principal due on such Certificate on the applicable
payment date. The Class A Certificates will also have
the benefits of excess collections of finance
charges, as described herein, and the subordination
of the Class B Certificates and the Collateral
Interest. The Class B Certificates will also have the
benefits of excess collections of finance charges not
needed to cover shortfalls in respect of the Class A
Certificates and the subordination of the Collateral
Interest not used for the benefit of the Class A
Certificates. The Class B Certificates therefore bear
a greater risk of loss of principal and of shortfalls
in payments of interest than the Class A
Certificates. Accordingly, the Class A Certificates
will receive a higher credit rating than the Class B
Certificates. See "-- Class A Certificate Rating" and
"-- Class B Certificate Rating." For a description of
the subordination of the Class B Certificates, see
"-- Subordination of the Class B Certificates and the
Collateral Interest" and "Description of the
Certificates -- Subordination" herein and "Risk
Factors -- Effect of Subordination" and "-- Limited
Credit Enhancement" in the Prospectus.
Both the Class A Certificates and the Class B
Certificates are subject to possible repayment
earlier than expected if certain events called Pay
Out Events occur. See "Description of the
Certificates -- Pay Out Events" herein and in the
Prospectus. Both the Class A Certificates and the
Class B Certificates are also subject to potential
delayed repayment if the principal payment rate on
the Receivables decreases. See "Maturity Assumptions"
herein and in the Prospectus and "Risk
Factors -- Timing of Payments and Maturity" in the
Prospectus. In no event, however, will principal be
paid on the Class B Certificates prior to the payment
in full of the Class A Certificates.
NON-RECOURSE
OBLIGATIONS.............Proceeds from the assets in the Trust will be the
only source of payments on the Certificates. The
Certificates do not represent an obligation of or
interest in the Transferor, BankAmerica Corporation,
Bank of America NT&SA or any of their affiliates.
None of the Certificates, the underlying Receivables
or the other assets of the Trust are insured or
guaranteed by any governmental agency or
instrumentality or by the Transferor, BankAmerica
Corporation, Bank of America NT&SA or any of their
affiliates.
S-3
<PAGE> 4
For a discussion of other risk factors applicable to the
Certificates, see "Risk Factors" in the Prospectus.
TRUST...................The BA Master Credit Card Trust (the "Trust") will be
formed pursuant to a pooling and servicing agreement
(as amended from time to time, the "Agreement"),
between Bank of America National Association ("Bank
of America" or the "Bank"), as transferor (in such
capacity, the "Transferor") and as servicer of the
Receivables, and , as trustee (the
"Trustee"), which will be supplemented by the
supplement relating to the Certificates (the "Series
199 - Supplement") (the term "Agreement," unless the
context requires otherwise, refers to the Agreement
as supplemented by the Series 199 - Supplement). As
used in this Prospectus Supplement, the term
"Certificateholders" refers to holders of the
Certificates, the term "Class A Certificateholders"
refers to holders of the Class A Certificates and the
term "Class B Certificateholders" refers to holders
of the Class B Certificates.
TRUST ASSETS............The assets of the Trust will include receivables (the
"Receivables") arising under certain MasterCard(R)
and VISA(R)1 revolving credit card accounts (the
"Accounts") selected from a pool of MasterCard and
VISA accounts identified by the Bank from the
portfolio of such accounts owned by the Bank (the
"Identified Pool"), all monies due or to become due
in payment of the Receivables, all proceeds of the
Receivables and proceeds of credit insurance policies
relating to the Receivables, any Enhancements, all
monies and other property on deposit in certain bank
accounts of the Trust (including any permitted
investment in which any such monies are invested, but
excluding investment earnings on such amounts, except
as otherwise specified herein), and the right to
receive Interchange allocable to the Certificates
(which right may not be afforded to other Series
issued by the Trust). The Certificateholders will not
be entitled to the benefits of any Enhancement issued
with respect to any Series other than Series 199 - ,
and the holders of certificates of other Series will
not be entitled to the benefits of any Enhancement
issued with respect to this Series 199 - . "Series
199 - " shall mean the Series of the Trust
represented by the Certificates.
At the formation of the Trust, the Transferor will
convey to the Trustee for the benefit of the Trust
all Receivables existing under certain Accounts that
were selected from the Identified Pool based on
criteria provided in the Agreement as applied
on , (the "Cut-Off Date") and will
convey to the Trustee all Receivables arising under
the Accounts from time to time thereafter until the
termination of the Trust. In addition, pursuant to
the Agreement, the Bank may, at its option, or may be
obligated to (subject to certain limitations and
conditions) designate Additional Accounts for
inclusion in the Trust. Also, the Agreement provides
that in lieu of Additional Accounts or in addition
thereto, the Bank may, subject to certain conditions,
include Participations in the Trust. See "The
Receivables" herein and "Description of the
Certificates -- Addition of Trust Assets" in the
Prospectus.
- ---------------
1. MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Incorporated and Visa U.S.A. Inc., respectively.
S-4
<PAGE> 5
CERTIFICATE INTEREST AND
PRINCIPAL...............Each of the Certificates offered hereby represents the
right to receive certain payments from the assets of
the Trust. The Trust's assets will be allocated among
the Class A Certificateholders (the "Class A Investor
Interest"), the Class B Certificateholders (the
"Class B Investor Interest"), the Collateral Interest
Holder (the "Collateral Interest," and together with
the Class A Investor Interest and the Class B
Investor Interest, the "Investor Interest"), the
interest of the holders of other undivided interests
in the Trust issued pursuant to the Agreement and
applicable Series Supplements and the Transferor (the
"Transferor Interest"), as described below. The
Collateral Interest in the initial amount of
$ (which amount represents % of the
amount of the initial Investor Interest) constitutes
Credit Enhancement for the Certificates. The provider
of such Credit Enhancement is referred to herein as
the "Collateral Interest Holder." Allocations will be
made to the Collateral Interest, and the Collateral
Interest Holder will have voting and certain other
rights, as if the Collateral Interest were a
subordinated class of Certificates. The Transferor
Interest will represent the right to the assets of
the Trust not allocated to the Class A Investor
Interest, the Class B Investor Interest, the
Collateral Interest or the holders of other undivided
interests in the Trust. The principal amount of the
Transferor Interest will fluctuate as the amount of
Receivables in the Trust changes from time to time.
The Class A Certificates will represent the right to
receive from the assets of the Trust allocated to the
Class A Certificates, funds up to (but not in excess
of) the amounts required to make (a) payments of
interest accruing from , 199 (the
"Closing Date") [through , 199 , from
, 199 through , 199 and with
respect to each Interest Period thereafter,] at the
rate of % per annum [above the [name of [Index]]
("[Index]"), determined as described herein,
prevailing on the related [Index] Determination Date]
(such rate, the "Class A Certificate Rate"), and (b)
payments of principal on the Class A Scheduled
Payment Date or, under certain limited circumstances,
during the Rapid Amortization Period, to the extent
of the Class A Investor Interest, which may be less
than the unpaid principal balance of the Class A
Certificates in certain circumstances described
herein.
The Class B Certificates will represent the right to
receive, from the assets of the Trust allocated to
the Class B Certificates, funds up to (but not in
excess of) the amounts required to make (a) payments
of interest accruing from the Closing Date [through
, 199 , from , 199 through
, 199 and with respect to each Interest
Period thereafter,] at the rate of % per annum
[above [Index], determined as described herein,
prevailing on the related [Index] Determination Date]
(such rate, the "Class B Certificate Rate") and (b)
payments of principal on the Class B Scheduled
Payment Date or, under certain limited circumstances,
during the Rapid Amortization Period, to the extent
of the Class B Investor Interest, which may be less
than the unpaid principal balance of the Class B
Certificates in certain circumstances described
herein. No principal will be paid to the Class B
Certificateholders until the Class A Investor
Interest is paid in full. See "Description of the
Certificates -- Subordination."
S-5
<PAGE> 6
The aggregate principal amount of the Class A Investor
Interest and the Class B Investor Interest will,
except as otherwise provided herein, remain fixed at
$ and $ , respectively. The Class A
Investor Interest will decline in certain
circumstances if the Default Amounts allocated to the
Class A Certificates exceed funds allocable thereto
as described herein and the Class B Investor Interest
and the Collateral Interest are zero. The Class B
Investor Interest will decline in certain
circumstances as a result of (a) the reallocation of
collections of Principal Receivables otherwise
allocable to the Class B Investor Interest to fund
certain payments in respect of the Class A
Certificates and (b) the allocation to the Class B
Investor Interest of certain Default Amounts,
including such amounts otherwise allocable to the
Class A Investor Interest when the Collateral
Interest is zero. During the Controlled Accumulation
Period, for the sole purpose of allocating
collections of Finance Charge Receivables and Default
Amounts with respect to each Monthly Period, an
amount equal to the amount on deposit in the
Principal Funding Account from time to time will be
subtracted from the Class A Investor Interest (as so
reduced, the "Class A Adjusted Investor Interest" and
together with the Class B Investor Interest and the
Collateral Interest, the "Adjusted Investor
Interest").
The Class A Certificates, the Class B Certificates and
the Collateral Interest will each include the right
to receive (but only to the extent needed to make
required payments under the Agreement) varying
percentages of collections of Finance Charge
Receivables and Principal Receivables and will be
allocated varying percentages of Default Amounts
during each calendar month, or with respect to
collections relating to the first Distribution Date,
during the period from and including the Closing Date
through , 199 (in each case, a "Monthly
Period"). Collections of Finance Charge Receivables
and Default Amounts at all times, and collections of
Principal Receivables during the Revolving Period,
will be allocated to the Investor Interest based on
the Floating Investor Percentage and will be further
allocated among the Class A Investor Interest, the
Class B Investor Interest and the Collateral Interest
based on the Class A Floating Allocation, the Class B
Floating Allocation and the Collateral Floating
Allocation, respectively, applicable during the
related Monthly Period. Collections of Principal
Receivables during the Controlled Accumulation Period
and the Rapid Amortization Period will be allocated
to the Investor Interest based on the Fixed Investor
Percentage and will be further allocated among the
Class A Investor Interest, the Class B Investor
Interest and the Collateral Interest based on the
Class A Fixed Allocation, the Class B Fixed
Allocation and the Collateral Fixed Allocation,
respectively. See "Description of the
Certificates -- Allocation Percentages" and "-- Pay
Out Events" herein and "Description of the
Certificates -- Pay Out Events" in the Prospectus.
The Transferor initially will own the Transferor
Interest. The Transferor may tender the certificate
that represents the Transferor Interest (the
"Transferor Certificate") or, if provided in the
relevant Series Supplement, certificates of any
Series and the Transferor Certificate, to the Trustee
and, upon satisfying certain conditions, cause the
Trustee to issue one or more new Series, as described
in "Description of the Certificates -- New Issuances"
in the Prospectus. The certificates of any new Series
will be issued
S-6
<PAGE> 7
pursuant to the Agreement and a related Series
Supplement. See "Description of the Certificates"
herein and in the Prospectus.
The final distribution of principal and interest on the
Certificates will be made no later than the
Distribution Date in the manner provided in
"Description of the Certificates -- Final Payment of
Principal; Termination" in the Prospectus. Series
199 - will terminate on the earliest to occur of
(a) the Distribution Date on which the Investor
Interest is paid in full, (b) the Distribution Date
or (c) the Trust Termination Date (such earliest to
occur, the "Series 199 - Termination Date"). After
the Series 199 - Termination Date, the Trust will
have no further obligation to pay principal or
interest on the Certificates.
RECEIVABLES.............The Receivables arise in Accounts that have been
selected from the Identified Pool based on criteria
provided in the Agreement as applied on the Cut-Off
Date. The Receivables consist of Principal
Receivables and Finance Charge Receivables. In
addition, certain amounts of Interchange attributed
to cardholder charges for goods and services in the
Accounts will be allocated to the Certificates and
treated as Finance Charge Receivables. See "Bank of
America's Credit Card Activities -- Interchange" in
the Prospectus.
The aggregate amount of Receivables in the Accounts as
of the beginning of the day on , 199 was
$ comprised of $ of Principal
Receivables and $ of Finance Charge
Receivables. The amount of Finance Charge Receivables
will not affect the amount of the Investor Interest
represented by the Certificates and the Collateral
Interest or the amount of the Transferor Interest,
all of which are determined on the basis of the
amount of Principal Receivables in the Trust. The
aggregate interest in the Principal Receivables in
the Trust evidenced by the Certificates and the
Collateral Interest will never exceed the amount of
the Investor Interest regardless of the total amount
of Principal Receivables in the Trust at any time.
DENOMINATIONS...........Beneficial interests in the Certificates will be offered
for purchase in denominations of $1,000 and integral
multiples thereof.
REGISTRATION OF
CERTIFICATES............The Certificates initially will be represented by
Certificates registered in the name of Cede, as the
nominee of DTC. No Certificate Owner will be entitled
to receive a Definitive Certificate, except under the
limited circumstances described herein. Transfers
will be made in accordance with the rules and
operating procedures described herein. See
"Description of the Certificates -- Definitive
Certificates" in the Prospectus.
SERVICING FEE...........The Servicer will receive a monthly fee as servicing
compensation from the Trust on each Transfer Date. On
each Transfer Date, Servicer Interchange with respect
to the related Monthly Period that is on deposit in
the Finance Charge Account will be withdrawn from the
Finance Charge Account and paid to the Servicer in
respect of the Investor Servicing Fee. In addition,
the Class A Servicing Fee, the Class B Servicing Fee
and the Collateral Interest Servicing Fee will be
paid on each Transfer Date as described under
"Description of the Certificates -- Servicing
Compensation and Payment of Expenses." See also
"Description of the Certificates -- Servicing
Compensation and Payment of Expenses" in the
Prospectus.
S-7
<PAGE> 8
INTEREST................Interest on the Certificates for each Interest Period
will be distributed on , 199 , and on the
th day of each month thereafter, or if such day is
not a business day, on the next succeeding business
day (each, a "Distribution Date"), in an amount equal
to (a) with respect to the Class A Certificates, the
product of (i) [the actual number of days in the
related Interest Period divided by 360] [a fraction,
the numerator of which is one and the denominator of
which is 12] and (ii) the Class A Certificate Rate
and (iii) the outstanding principal balance of the
Class A Certificates as of the preceding Record Date
(or in the case of the first Distribution Date, as of
the Closing Date) and (b) with respect to the Class B
Certificates, the product of (i) [the actual number
of days in the related Interest Period divided by
360] [a fraction, the numerator of which is one and
the denominator of which is 12] and (ii) the Class B
Certificate Rate and (iii) the outstanding principal
balance of the Class B Certificates as of the
preceding Record Date (or in the case of the first
Distribution Date, as of the Closing Date). Interest
for any Distribution Date due but not paid on such
Distribution Date will be payable on the next
succeeding Distribution Date, together with
additional interest on such amount at the applicable
Certificate Rate plus 2% per annum (such amount, as
applicable, "Additional Interest").
The "Interest Period" with respect to any Distribution
Date, will be the period from and including the
previous Distribution Date through the day preceding
such Distribution Date, except the initial Interest
Period will be the period from and including the
Closing Date through the day preceding the initial
Distribution Date. Interest payments will be funded
from the portion of Finance Charge Receivables
collected during the Monthly Period immediately
preceding the related Distribution Date (or with
respect to the first Distribution Date, from and
including the Closing Date through ,
199 ) and certain other available amounts (a) with
respect to the Class A Certificates, allocated to the
Class A Investor Interest, and, if necessary, from
Excess Spread and Reallocated Principal Collections
(to the extent available), (b) with respect to the
Class B Certificates, allocated to the Class B
Investor Interest and, if necessary, from Excess
Spread and Reallocated Collateral Principal
Collections (to the extent available) and (c) with
respect to the Collateral Interest, from Excess
Spread. See "Description of the
Certificates -- Reallocation of Cash Flows" and
"-- Application of Collections -- Payment of
Interest, Fees and Other Items" herein and "Risk
Factors -- Limited Credit Enhancement" in the
Prospectus.
REVOLVING PERIOD........The "Revolving Period" with respect to the Certificates
means the period from and including the Closing Date
to, but not including, the earlier of (a) the
commencement of the Controlled Accumulation Period
and (b) the commencement of the Rapid Amortization
Period. The controlled accumulation period with
respect to the Certificates (the "Controlled
Accumulation Period") is scheduled to begin at the
close of business on , 199 . Subject to
the conditions set forth under "Description of the
Certificates -- Postponement of Controlled
Accumulation Period," the day on which the Revolving
Period ends and the Controlled Accumulation Period
begins may be delayed to no later than the close of
business on , 199 . During the Revolving
Period, Available Investor Principal Collections
otherwise allocable to the Investor Interest will,
subject to certain limitations and unless a reduction
in the Required Collateral Interest
S-8
<PAGE> 9
has occurred, be treated as Shared Excess Principal
Collections and allocated to the holders of other
Series of certificates within the Shared Excess
Principal Collections Group issued and outstanding
or, subject to certain limitations, paid to the
holder of the Transferor Certificate. See
"Description of the Certificates -- Principal
Payments." See "Description of the
Certificates -- Pay Out Events" for a discussion of
the events which might lead to the termination of the
Revolving Period prior to the commencement of the
Controlled Accumulation Period.
CONTROLLED ACCUMULATION
PERIOD..................Unless a Pay Out Event has occurred, the Controlled
Accumulation Period will begin at the close of
business on the last day of the Revolving Period and
will end on the earliest of (i) the commencement of
the Rapid Amortization Period, (ii) payment of the
Investor Interest in full and (iii) the Series
199 - Termination Date. During the Controlled
Accumulation Period, prior to the payment of the
Class A Investor Interest in full, amounts equal to
the least of (a) the Available Investor Principal
Collections for the related Monthly Period, (b) the
sum of the applicable Controlled Accumulation Amount
for such Monthly Period and the applicable
Accumulation Shortfall, if any (such applicable sum,
the "Controlled Deposit Amount" for such Monthly
Period) and (c) the Class A Adjusted Investor
Interest on such Transfer Date will be deposited
monthly in a trust account established by the
Servicer (the "Principal Funding Account") on each
Transfer Date beginning with the Transfer Date in the
month following the commencement of the Controlled
Accumulation Period until the Principal Funding
Account Balance is equal to the Class A Investor
Interest. On each Transfer Date during the Controlled
Accumulation Period after the Distribution Date on
which the Class A Investor Interest has been paid in
full, an amount equal to the lesser of (a) Available
Investor Principal Collections for the related
Monthly Period and (b) the Class B Investor Interest
on such Transfer Date will be deposited into the
Distribution Account for distribution to the Class B
Certificateholders until the Class B Investor
Interest has been paid in full. If, for any Monthly
Period, the Available Investor Principal Collections
for such Monthly Period exceed the applicable
Controlled Deposit Amount, the amount of such excess
will be first paid to the Collateral Interest Holder
to the extent that the Collateral Interest exceeds
the Required Collateral Interest and then will be
treated as Shared Excess Principal Collections and
allocated to the holders of other Series of
certificates within the Shared Excess Principal
Collections Group issued and outstanding or, subject
to certain limitations, paid to the holder of the
Transferor Certificate. If for any Monthly Period the
Available Investor Principal Collections for such
Monthly Period are less than the applicable
Controlled Deposit Amount, the amount of such
deficiency will be the applicable "Accumulation
Shortfall" for the succeeding Monthly Period. See
"Description of the Certificates -- Application of
Collections." Also see "Prospectus
Summary -- Controlled Accumulation Period" in the
Prospectus for a general description of the purpose
of this feature and its effect on Certificateholders.
Unless a Pay Out Event shall have occurred, prior to the
payment of the Class A Investor Interest in full, all
funds on deposit in the Principal Funding Account
will be invested by the Trustee at the direction of
the Servicer in Permitted Investments. Investment
earnings (net of investment losses and expenses) on
funds on deposit in the Principal Funding Account
S-9
<PAGE> 10
(the "Principal Funding Investment Proceeds") during
the Controlled Accumulation Period will be applied as
Class A Available Funds. If, on any Transfer Date,
the Principal Funding Investment Proceeds for the
related Interest Period are less than the product of
(a) a fraction, the numerator of which is the actual
number of days in the related Interest Period and the
denominator of which is 360, (b) the Class A
Certificate Rate in effect with respect to the
related Interest Period and (c) the Principal Funding
Account Balance as of the Record Date preceding such
Transfer Date (the "Covered Amount"), the amount of
such deficiency (the "Principal Funding Investment
Shortfall") shall be paid, to the extent available,
from the Reserve Account and, if necessary, from
Excess Spread, Shared Excess Finance Charge
Collections and Reallocated Principal Collections.
Funds on deposit in the Principal Funding Account will
be available to pay the Class A Certificateholders in
respect of the Class A Investor Interest on the Class
A Scheduled Payment Date. If the aggregate principal
amount of deposits made to the Principal Funding
Account is insufficient to pay the Class A Investor
Interest in full on the Class A Scheduled Payment
Date, the Rapid Amortization Period will commence as
described below. Although it is anticipated that
during the Controlled Accumulation Period prior to
the payment of the Class A Investor Interest in full,
funds will be deposited in the Principal Funding
Account in an amount equal to the applicable
Controlled Deposit Amount on each Transfer Date and
that scheduled principal will be available for
distribution to the Class A Certificateholders on the
Class A Scheduled Payment Date, no assurance can be
given in that regard. See "Maturity Assumptions"
herein and in the Prospectus.
On the Class B Scheduled Payment Date, provided that the
Class A Certificates are paid in full on the Class A
Scheduled Payment Date and the Rapid Amortization
Period has not commenced, Available Investor
Principal Collections will be used to pay the Class B
Certificateholders in respect of the Class B Investor
Interest as described herein. If the Available
Investor Principal Collections are insufficient to
pay the Class B Investor Interest in full on the
Class B Scheduled Payment Date, the Rapid
Amortization Period will commence as described below.
Although it is anticipated that scheduled principal
will be available for distribution to the Class B
Certificateholders on the Class B Scheduled Payment
Date, no assurance can be given in that regard. See
"Maturity Assumptions" herein and in the Prospectus.
If a Pay Out Event occurs during the Controlled
Accumulation Period, the Rapid Amortization Period
will commence and any amounts on deposit in the
Principal Funding Account will be paid to the Class A
Certificateholders on the Distribution Date in the
month following the commencement of the Rapid
Amortization Period.
Other Series offered by the Trust may or may not have
amortization or accumulation periods like the
Controlled Accumulation Period for the Certificates,
and such periods may have different lengths and begin
on different dates than such Controlled Accumulation
Period. Thus, certain Series may be in their
revolving periods while others are in periods during
which collections of Principal Receivables are
distributed to or held for the benefit of
certificateholders of such other Series. In addition,
other Series may allocate Principal Receivables based
upon different investor percent-
S-10
<PAGE> 11
ages. See "Description of the Certificates -- New
Issuances" in the Prospectus for a discussion of the
potential terms of any other Series.
RAPID AMORTIZATION
PERIOD..................During the period beginning on the day on which a Pay
Out Event has occurred and ending on the earlier of
(a) the payment of the Investor Interest in full and
(b) the Series 199 - Termination Date (the "Rapid
Amortization Period"), Available Investor Principal
Collections will be applied to the payment of
principal on the Certificates and will be distributed
monthly on each Distribution Date to the Class A
Certificateholders and, following payment of the
Class A Investor Interest in full, to the Class B
Certificateholders and, following payment of the
Class B Investor Interest in full, to the Collateral
Interest Holder beginning with the Distribution Date
in the month following the commencement of the Rapid
Amortization Period. See "Description of the
Certificates -- Pay Out Events" for a discussion of
the events which might lead to the commencement of
the Rapid Amortization Period and "Prospectus
Summary -- Rapid Amortization Period" in the
Prospectus for a general discussion of the purpose of
this feature and its effect on Certificateholders.
SUBORDINATION OF THE
CLASS B CERTIFICATES AND
THE COLLATERAL
INTEREST................The Class B Certificates and the Collateral Interest
will be subordinated, as described herein, to the
extent necessary to fund certain payments with
respect to the Class A Certificates as described
herein. In addition, the Collateral Interest will be
subordinated to the extent necessary to fund certain
payments with respect to the Class A Certificates and
the Class B Certificates. If the Collateral Interest
is reduced to zero, the Class B Certificateholders
will bear directly the credit and other risks
associated with their interest in the Trust and thus
will be more likely to suffer a loss. To the extent
the Class B Investor Interest is reduced, the
percentage of collections of Finance Charge
Receivables allocable to the Class B
Certificateholders in subsequent Monthly Periods will
be reduced. Such reductions of the Class B Investor
Interest will thereafter be reimbursed and the Class
B Investor Interest increased on each Transfer Date
by the amount, if any, of Excess Spread for such
Transfer Date available for that purpose. To the
extent the amount of such reduction in the Class B
Investor Interest is not reimbursed, the amount of
principal and interest distributable to the Class B
Certificateholders will be reduced. No principal will
be paid to the Class B Certificateholders until the
Class A Investor Interest is paid in full. See
"Description of the Certificates -- Subordination"
herein and "Risk Factors -- Effect of Subordination"
in the Prospectus.
ADDITIONAL AMOUNTS
AVAILABLE TO
CERTIFICATEHOLDERS......With respect to any Transfer Date, Excess Spread will be
applied to fund the Class A Required Amount and the
Class B Required Amount, if any. The "Class A
Required Amount" means the amount, if any, by which
the sum of (a) the Class A Monthly Interest due on
the related Distribution Date and any overdue Class A
Monthly Interest and Class A Additional Interest
thereon, (b) the Class A Servicing Fee for the
related Monthly Period and any overdue Class A
Servicing Fee and (c) the Class A Investor Default
Amount, if any, for the related Monthly Period
exceeds the Class A Available Funds for the related
Monthly Period. The "Class B Required
S-11
<PAGE> 12
Amount" means the amount, if any, equal to the sum of
(a) the amount, if any, by which the sum of (i) Class
B Monthly Interest due on the related Distribution
Date and any overdue Class B Monthly Interest and
Class B Additional Interest thereon and (ii) the
Class B Servicing Fee for the related Monthly Period
and any overdue Class B Servicing Fee exceeds the
Class B Available Funds for the related Monthly
Period and (b) the Class B Investor Default Amount,
if any, for the related Monthly Period. The "Required
Amount" for any Monthly Period shall mean the sum of
(a) the Class A Required Amount and (b) the Class B
Required Amount, each for such Monthly Period.
"Excess Spread" for any Transfer Date will equal the
sum of (a) the excess of (i) Class A Available Funds
for the related Monthly Period over (ii) the sum of
the amounts referred to in clauses (a), (b) and (c)
in the definition of "Class A Required Amount" above,
(b) the excess of (i) Class B Available Funds for the
related Monthly Period over (ii) the sum of the
amounts referred to in clauses (a) (i) and (a) (ii)
in the definition of "Class B Required Amount" above
and (c) Collateral Available Funds for the related
Monthly Period not used under certain circumstances
to pay the Collateral Interest Servicing Fee, as
described herein.
If, on any Transfer Date, Excess Spread is less than the
Class A Required Amount, Reallocated Principal
Collections allocable first to the Collateral
Interest and then to the Class B Investor Interest
with respect to the related Monthly Period will be
used to fund the remaining Class A Required Amount.
If Reallocated Principal Collections with respect to
such Monthly Period are insufficient to fund the
remaining Class A Required Amount for the related
Transfer Date, then the Collateral Interest (after
giving effect to reductions for any Collateral
Charge-Offs and Reallocated Principal Collections on
such Transfer Date) will be reduced by the amount of
such deficiency (but not by more than the Class A
Investor Default Amount for such Monthly Period). In
the event that such reduction would cause the
Collateral Interest to be a negative number, the
Collateral Interest will be reduced to zero, and the
Class B Investor Interest (after giving effect to
reductions for any Class B Investor Charge-Offs and
any Reallocated Class B Principal Collections on such
Transfer Date) will be reduced by the amount by which
the Collateral Interest would have been reduced below
zero (but not by more than the excess of the Class A
Investor Default Amount, if any, for such Monthly
Period over the amount of such reduction, if any, of
the Collateral Interest with respect to such Monthly
Period). In the event that such reduction would cause
the Class B Investor Interest to be a negative
number, the Class B Investor Interest will be reduced
to zero and the Class A Investor Interest will be
reduced by the amount by which the Class B Investor
Interest would have been reduced below zero (but not
by more than the excess, if any, of the Class A
Investor Default Amount for such Monthly Period over
such reductions in the Collateral Interest and the
Class B Investor Interest with respect to such
Monthly Period) (such reduction, a "Class A Investor
Charge-Off"). If the Collateral Interest and the
Class B Investor Interest are reduced to zero, the
Class A Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust. See "Description of
the Certificates -- Reallocation of Cash Flows" and
"-- Defaulted Receivables; Investor Charge-Offs."
S-12
<PAGE> 13
If, on any Transfer Date, Excess Spread not required to
pay the Class A Required Amount and to reimburse
Class A Investor Charge-Offs is less than the Class B
Required Amount, Reallocated Principal Collections
allocable to the Collateral Interest for the related
Monthly Period not required to pay the Class A
Required Amount will be used to fund the remaining
Class B Required Amount. If such remaining
Reallocated Principal Collections allocable to the
Collateral Interest with respect to such Monthly
Period are insufficient to fund the remaining Class B
Required Amount for the related Transfer Date, then
the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs,
Reallocated Principal Collections and any adjustments
made thereto for the benefit of the Class A
Certificateholders) will be reduced by the amount of
such deficiency (but not by more than the Class B
Investor Default Amount for such Monthly Period). In
the event that such reduction would cause the
Collateral Interest to be a negative number, the
Collateral Interest will be reduced to zero, and the
Class B Investor Interest will be reduced by the
amount by which the Collateral Interest would have
been reduced below zero (but not by more than the
excess, if any, of the Class B Investor Default
Amount for such Monthly Period over such reduction in
the Collateral Interest with respect to such Monthly
Period) (such reduction, a "Class B Investor
Charge-Off"). In the event of a reduction of the
Class A Investor Interest, the Class B Investor
Interest or the Collateral Interest, the amount of
principal and interest available to fund payments
with respect to the Class A Certificates and the
Class B Certificates will be decreased. See
"Description of the Certificates -- Reallocation of
Cash Flows" and "-- Defaulted Receivables; Investor
Charge-Offs."
REQUIRED COLLATERAL
INTEREST................The "Required Collateral Interest" with respect to any
Transfer Date means (a) initially, $ (the
"Initial Collateral Interest") and (b) on any
Transfer Date thereafter, an amount equal to %
of the sum of the Class A Adjusted Investor Interest
and the Class B Investor Interest on such Transfer
Date, after taking into account deposits into the
Principal Funding Account on such Transfer Date and
payments to be made on the related Distribution Date,
and the Collateral Interest on the prior Transfer
Date after any adjustments made on such Transfer
Date, but not less than $ ; provided, however,
(i) that if certain reductions in the Collateral
Interest occur or if a Pay Out Event occurs, the
Required Collateral Interest for such Transfer Date
shall equal the Required Collateral Interest for the
Transfer Date immediately preceding the occurrence of
such reduction or Pay Out Event; (ii) in no event
shall the Required Collateral Interest exceed the
unpaid principal amount of the Certificates as of the
last day of the Monthly Period preceding such
Transfer Date after taking into account payments to
be made on the related Distribution Date; and (iii)
the Required Collateral Interest may be reduced at
any time to a lesser amount if the Rating Agency
Condition is satisfied. See "Description of the
Certificates -- Required Collateral Interest."
If on any Transfer Date, the Collateral Interest is less
than the Required Collateral Interest, certain Excess
Spread amounts, if available, will be used to
increase the Collateral Interest to the extent of
such shortfall. If on any Transfer Date the
Collateral Interest equals or exceeds the Required
Collateral Interest, any such Excess Spread amounts
will first be deposited into the Reserve Account as
described herein and second, to the extent
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<PAGE> 14
available, be applied in accordance with the Loan
Agreement among the Trustee, the Transferor, the
Servicer and the Collateral Interest Holder (the
"Loan Agreement") and will not be available to the
Certificateholders.
SHARED EXCESS FINANCE
CHARGE COLLECTIONS......The Series 199 - Certificates will be the first Series
issued by the Trust, outstanding as of the Closing
Date, included in Shared Excess Finance Charge
Collections Group [One]. In the future, the
Transferor may, but will not be required to,
designate other Series that are issued by the Trust
to be included in Shared Excess Finance Charge
Collections Group [One]. There can be no assurance
that any other Series will be issued by the Trust or
designated by the Transferor to be included in Shared
Excess Finance Charge Collections Group [One].
Subject to certain limitations described under
"Description of the Certificates -- Shared Excess
Finance Charge Collections" in the Prospectus, to the
extent that collections with respect to Finance
Charge Receivables allocated to the Investor Interest
are not needed to make payments on the Investor
Interest, such collections will be allocated to cover
certain payments due to or for the benefit of
certificateholders of other Series within Shared
Excess Finance Charge Collections Group [One] or,
under certain circumstances, paid to the holder of
the Transferor Certificate. In addition, collections
of Finance Charge Receivables otherwise allocable to
other Series within Shared Excess Finance Charge
Collections Group [One], to the extent such
collections are not needed to make payments to or
deposits for the benefit of the certificateholders of
such other Series, may be applied to cover items
payable from Collections of Finance Charge
Receivables, due to or for the benefit of the holders
of the Class A Certificates and the Class B
Certificates or the Collateral Interest Holder. See
"Description of the Certificates -- Excess Spread;
Shared Excess Finance Charge Collections" and
"-- Shared Excess Finance Charge Collections" herein
and for a general discussion of the purpose of this
feature and its effect on Certificateholders, see
"Description of the Certificates -- Shared Excess
Finance Charge Collections" in the Prospectus.
SHARED EXCESS PRINCIPAL
COLLECTIONS.............The Series 199 - Certificates will be the [first]
Series issued by the Trust, outstanding as of the
Closing Date, included in the Shared Excess Principal
Collections Group. In the future, the Transferor may,
but will not be required to, designate other Series
that are issued by the Trust to be included in the
Shared Excess Principal Collections Group. There can
be no assurance that any other Series will be issued
by the Trust or designated by the Transferor to be
included in the Shared Excess Principal Collections
Group. To the extent that collections with respect to
Principal Receivables allocated to the Investor
Interest are not needed to make payments on the
Investor Interest or to be deposited in the Principal
Funding Account, such collections will be allocated
to cover certain principal payments due to or for the
benefit of certificateholders of other Series within
the Shared Excess Principal Collections Group or,
under certain circumstances, paid to the holder of
the Transferor Certificate. Any such reallocation or
deposit will not result in a reduction in the
Investor Interest with respect to Series 199 - . In
addition, collections of Principal Receivables and
certain other amounts otherwise allocable to other
Series within the Shared Excess Principal Collections
Group, to the extent such collections are not needed
to make payments to or deposits for the benefit of
the certificateholders of such other
S-14
<PAGE> 15
Series, may be applied to cover principal payments
due to or for the benefit of the holders of the Class
A Certificates and the Class B Certificates or the
Collateral Interest Holder. See "Description of the
Certificates -- Shared Excess Principal Collections"
herein and "Prospectus Summary -- Shared Excess
Principal Collections" in the Prospectus for a
general discussion of the purpose of this feature and
its effect on Certificateholders.
PAIRED SERIES...........Series 199 - may be paired with one or more other
Series (each a "Paired Series"). If a Paired Series
is issued with respect to Series 199 - , following
the issuance of such Paired Series, as the Adjusted
Investor Interest is reduced, the investor interest
of the Paired Series will increase by an equal
amount. This will have the effect of increasing the
investor interest of the Paired Series by an amount
that otherwise would have increased the Transferor
Interest. If a Pay Out Event occurs with respect to
any such Paired Series prior to the payment in full
of the Certificates, the percentages used to
determine the share of collections of Principal
Receivables allocable to the Certificates may be
reduced, which may delay the final payment of
principal to the Certificateholders. See "Maturity
Assumptions -- Paired Series," "Description of the
Certificates -- Paired Series" and "Description of
the Certificates -- Allocation Percentages."
OPTIONAL REPURCHASE.....The Investor Interest will be subject to optional
repurchase by the Transferor on any Distribution Date
on or after the Distribution Date on which the
Investor Interest is reduced to an amount less than
or equal to $ (5% of the initial Investor
Interest), if certain conditions set forth in the
Agreement are met. The repurchase price will be equal
to the sum of the Investor Interest and all accrued
and unpaid interest on the Certificates and the
Collateral Interest through the day preceding the
Distribution Date on which the repurchase occurs. See
"Description of the Certificates -- Final Payment of
Principal; Termination" in the Prospectus.
TRUSTEE................. .
TAX STATUS..............Special counsel to the Transferor will deliver its
opinion on the Closing Date that under existing law
the Certificates will be characterized as debt for
United States federal income tax purposes. Under the
Agreement, the Transferor and the Certificateholders
will agree to treat the Certificates as debt for
United States federal, state and local income tax and
franchise tax purposes. See "Federal Income Tax
Consequences" in the Prospectus for additional
information concerning the application of United
States federal income tax laws.
ERISA CONSIDERATIONS....Subject to considerations described below, the Class A
Certificates are eligible for purchase by employee
benefit plan investors. Under a regulation issued by
the Department of Labor, the Trust's assets would not
be deemed "plan assets" of an employee benefit plan
holding the Class A Certificates if certain
conditions are met, including that the Class A
Certificates must be held, upon completion of the
public offering made hereby, by at least 100
investors who are independent of the Transferor and
of one another. The Underwriters expect that the
Class A Certificates will be held by at least 100
independent investors at the conclusion of the
offering, although no assurance can be given, and no
monitoring or other measures will be taken to ensure,
that such condition will be met with respect to the
Class A Certificates. The Transferor anticipates that
the other conditions of the regulation will be met.
If the Trust's assets were deemed to be "plan assets"
S-15
<PAGE> 16
of an employee benefit plan investor (e.g., if the
100 independent investor criterion is not satisfied),
violations of the "prohibited transaction" rules of
the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), could result and generate
excise tax and other liabilities under ERISA and
section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), unless a statutory, regulatory
or administrative exemption is available. It is
uncertain whether existing exemptions from the
"prohibited transaction" rules of ERISA would apply
to all transactions involving the Trust's assets if
such assets were treated for ERISA purposes as "plan
assets" of employee benefit plan investors.
Accordingly, fiduciaries or other persons
contemplating purchasing the Certificates on behalf
or with "plan assets" of any employee benefit plan
should consult their counsel before making a
purchase. See "ERISA Considerations" in the
Prospectus.
The Underwriters currently do not expect that the Class
B Certificates will be held by at least 100 such
persons and, therefore, do not expect that such Class
B Certificates will qualify as publicly-offered
securities under the regulation referred to in the
preceding paragraph. Accordingly, the Class B
Certificates may not be acquired by (a) any employee
benefit plan that is subject to ERISA, (b) any plan
or other arrangement (including an individual
retirement account or Keogh plan) that is subject to
section 4975 of the Code or (c) any entity whose
underlying assets include "plan assets" under the
regulation by reason of any such plan's investment in
the entity. By its acceptance of a Class B
Certificate or an interest therein, each Class B
Certificateholder and Certificate Owner will be
deemed to have represented and warranted that it is
not subject to the foregoing limitation.
CLASS A CERTIFICATE
RATING It is a condition to the issuance of the Class A
Certificates that they be rated in the highest rating
category by at least one Rating Agency. The rating of
the Class A Certificates is based primarily on the
value of the Receivables and the terms of the Class B
Certificates and the Collateral Interest. See "Risk
Factors -- Scope of Certificate Rating" in the
Prospectus.
CLASS B CERTIFICATE
RATING It is a condition to the issuance of the Class B
Certificates that they be rated in one of the three
highest rating categories by at least one Rating
Agency. The rating of the Class B Certificates is
based primarily on the value of the Receivables and
the terms of the Collateral Interest. See "Risk
Factors -- Scope of Certificate Rating" in the
Prospectus.
[LISTING................Application will be made to list the Certificates on the
Luxembourg Stock Exchange.]
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<PAGE> 17
BANK OF AMERICA'S CREDIT CARD ACTIVITIES
GENERAL
The Receivables to be conveyed to the Trust by Bank of America pursuant to
the Agreement have been or will be generated from transactions made by holders
of selected MasterCard and VISA credit card accounts, including premium accounts
and standard accounts, from the Identified Pool.
BILLING, PAYMENTS AND FEES
The Accounts currently have various billing and payment characteristics,
including varying periodic rate finance charges and fees. With the December 1,
1994 transfer of the Accounts designated as of the Cut-Off Date from Bank of
America NT&SA to Bank of America, the state law governing most of such Accounts
changed from California to Arizona. Each cardholder was given the option to (a)
continue the cardholder's Account relationship automatically under Arizona law
by continuing to charge purchases and cash advances to the Account, or (b)
retain California law as the state law governing the cardmember agreement for
the Account by ceasing to use the Account for new purchases and cash advances.
Accounts that opt to retain California law are paying down their outstanding
balances. As of [ 199 ], Accounts subject to California law
represent approximately [ ]% of the Accounts in the Identified Pool and
approximately [ ]% of the Receivables.
Currently, monthly billing statements are sent by Bank of America to
cardholders with balances at the end of each billing period. With some
exceptions, cardholders must make a minimum monthly payment generally equal to
the greater of (a) 2.5% of the outstanding balance (including purchases, cash
advances, finance charges, and fees posted to the Account) plus any past due
amounts; (b) $10 plus any past due amounts; or (c) the amount of the outstanding
balance in excess of the Account credit line. If the cardholder's outstanding
balance is less than $10, the minimum monthly payment equals the amount of the
outstanding balance.
Accounts may have a different annual percentage rate for purchases and cash
advance balances. Bank of America uses variable-rate pricing based on a selected
external rate.
Accounts have a grace period which allows payment of the new balance of
purchases in full every month without incurring a finance charge. There is no
grace period on balances resulting from cash advances. There can be no assurance
that periodic-rate finance charges, fees, and other charges on Accounts will
remain at current levels.
Bank of America offers variable-rate credit card accounts. Generally, the
variable rates range from 7.4 percentage points to 9.4 percentage points above
the prime rate as published from time to time in The Wall Street Journal. Bank
of America also offers temporary promotional rates and, under certain
circumstances, the periodic finance charges on a limited number of accounts may
be less than those generally assessed by Bank of America. Although more than 90%
of the Accounts are currently priced at variable rates, some Accounts retain
fixed rates which generally range from 7.9% to 19.8%.
Bank of America assesses annual membership fees (generally $18) on certain
accounts, although under various marketing and relationship incentive programs,
these fees may be waived or rebated. For most credit card accounts, Bank of
America also assesses late and overlimit charges (generally $15) and returned
check charges (generally $15). Bank of America generally assesses a cash advance
fee, typically 2% of the cash advance amount, with a $2 minimum.
DELINQUENCY AND LOSS EXPERIENCE
An account is contractually delinquent if the minimum payment is not
received by the payment due date. An account is not treated as delinquent if the
minimum monthly payment is received by the next billing date; however, the
period of delinquency on any account is measured from the payment due date.
Collection of delinquent credit card receivables currently is performed by Bank
of America's credit card collections
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<PAGE> 18
personnel located in operations centers in Phoenix, Arizona and Pasadena,
California, or by Bank of America's agents.
Bank of America's credit card collection programs employ advanced
technology to manage risk and streamline processes. This technology includes
automated calling systems to improve collector efficiency, scoring models to
estimate the relative risk of loss exposure, and behavior analysis to prioritize
cardholder contacts. Collection activities include statement messages, telephone
calls and formal collection letters. Collectors generally initiate telephone
contact with cardholders whose accounts are 5 days or more contractually
delinquent. In the event that the initial telephone call fails to cure the
delinquency, Bank of America continues to contact the cardholder by telephone
and by mail. Bank of America may enter into arrangements with cardholders to
extend or otherwise change payment schedules as approved by one of Bank of
America's collections managers. Delinquency levels are monitored daily by Bank
of America's collection representatives with aggregate delinquency information
reported to senior management on a daily basis.
Accounts are charged off once they have become contractually past due 180
days, unless a payment has been received in an amount sufficient to bring the
account into a different delinquency category or to bring the account current.
At the time of charge-off, an evaluation is made whether to pursue further
remedies. In certain cases, outside collection agencies and law firms are
engaged. The credit evaluation, servicing and charge-off policies, and
collection practices of Bank of America, may change from time to time in
accordance with Bank of America's business judgment and applicable law. Account
balances for bankrupt cardholders are charged off as soon as practically
possible and within 30 days from the date of verifiable bankruptcy notification.
The following tables set forth the delinquency and loss experience for each
of the periods shown for the Identified Pool of credit card accounts. The Trust
Portfolio's delinquency and loss experience is comprised of segments which may,
when taken individually, have delinquency and loss characteristics different
from those of the Identified Pool of credit card accounts. As of the beginning
of the day on , 199 , the Receivables in the Trust Portfolio
represented approximately % of the Identified Pool. Because the Trust
Portfolio is only a portion of the Identified Pool, actual delinquency and loss
experience with respect to the Receivables may be different from that set forth
below for the Identified Pool. There can be no assurance that the delinquency
and loss experience for the Receivables in the future will be similar to the
historical experience of the Identified Pool set forth below.
DELINQUENCY EXPERIENCE
IDENTIFIED POOL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DELINQUENCY EXPERIENCE IDENTIFIED POOL
(DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------
AS OF , 199 1995 1994 1993
------------------------- ------------------------- ------------------------- -------------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL OF TOTAL OF TOTAL
RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receivables
Outstanding(1)... $ $ $ $
Receivables
Delinquent:
30 - 59 Days.... $ % $ % $ $ %
60 - 89 Days
90 or More
Days..........
------- ------- ------- ------- ------- ------- ------- -------
Total......... $ % $ % $ % $ %
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
- ---------------
(1) The Receivables Outstanding on the accounts consist of all amounts due from
cardholders as posted to the accounts as of the end of the period shown.
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<PAGE> 19
LOSS EXPERIENCE
IDENTIFIED POOL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
MONTHS ----------------------------
ENDED , 199 1995 1994 1993
------------------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Average Receivables Outstanding(1).......... $ $ $ $
Total Gross Charge-Offs(2)..................
Recoveries..................................
Total Net Charge Offs.....................
Total Gross Charge-Offs as a percentage of
Average Receivables Outstanding(3)........ % % % %
</TABLE>
- ---------------
(1) Average Receivables Outstanding is the average of the daily receivable
balance during the period indicated.
(2) Total Gross Charge-Offs are total principal and interest charge-offs before
recoveries and do not include the amount of any reductions in Average
Receivables Outstanding due to fraud, returned goods, customer disputes or
other miscellaneous credit adjustments.
(3) The percentage reflected for the months ended , 199 is an
annualized figure.
INTERCHANGE
The Transferor will be required, pursuant to the terms of the Agreement, to
transfer to the Trust a percentage of the Interchange attributed to cardholder
charges for goods and services in the Accounts. Interchange arising under the
Accounts will be allocated to the Certificates on the basis of the percentage
equivalent of the ratio which the amount of the Floating Investor Percentage of
cardholder charges for goods and services in the Accounts bears to the total
amount of cardholder charges for goods and services in the MasterCard and VISA
credit card accounts owned by Bank of America, as reasonably estimated by the
Transferor. MasterCard and VISA may from time to time change the amount of
Interchange reimbursed to banks issuing their credit cards. Interchange will be
treated as collections of Finance Charge Receivables for the purposes of
determining the amount of Finance Charge Receivables, allocating collections of
Finance Charge Receivables, making required monthly payments, and calculating
the Portfolio Yield. Under the circumstances described herein, Interchange will
be used to pay a portion of the Investor Servicing Fee required to be paid on
each Transfer Date. See "Description of the Certificates -- Servicing
Compensation and Payment of Expenses" herein and "Bank of America's Credit Card
Activities -- Interchange" in the Prospectus.
THE RECEIVABLES
The Receivables to be conveyed to the Trust will arise in Accounts selected
from the Identified Pool on the basis of criteria set forth in the Agreement as
applied on the Cut-Off Date and, with respect to Additional Accounts, as of the
related date of their designation (the "Trust Portfolio"). Pursuant to the
Agreement, the Transferor has the right, subject to certain limitations and
conditions set forth therein, to designate from time to time Additional Accounts
and to transfer to the Trust all Receivables of such Additional Accounts,
whether such Receivables are then existing or thereafter created. Any Additional
Accounts designated pursuant to the Agreement must be Eligible Accounts as of
the date the Transferor designates such accounts as Additional Accounts. The
Transferor will be required to designate Additional Accounts, to the extent
available, (a) to maintain the Transferor Interest so that during any period of
30 consecutive days, the Transferor Interest averaged over that period equals or
exceeds the Minimum Transferor Interest for the same period and (b) to maintain,
for so long as certificates of any Series (including the Certificates) remain
outstanding, an aggregate amount of Principal Receivables equal to or greater
than the Minimum Aggregate Principal Receivables. "Minimum Transferor Interest"
for any period means [ ]% of the average Principal Receivables; provided,
however, that the Transferor may reduce the Minimum Transferor Interest to not
less than 2% of the average
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<PAGE> 20
Principal Receivables for such period for such period upon satisfaction of the
Rating Agency Condition and certain other conditions to be set forth in the
Agreement. "Minimum Aggregate Principal Receivables" means an amount equal to
the sum of the numerators used to calculate the Investor Percentages with
respect to the allocation of collections of Principal Receivables for each
Series then outstanding; provided, that the Minimum Aggregate Principal
Receivables may be reduced to a lesser amount at any time if the Rating Agency
Condition is satisfied. Further, pursuant to the Agreement, the Transferor will
have the right (subject to certain limitations and conditions) to designate
certain Removed Accounts and to require the Trustee to reconvey all Receivables
in such Removed Accounts to the Transferor, whether such Receivables are then
existing or thereafter created. Throughout the term of the Trust, the Accounts
from which the Receivables arise will be the Accounts designated by the
Transferor on the Cut-Off Date plus any Additional Accounts minus any Removed
Accounts. As of the Cut-Off Date and, with respect to Receivables in Additional
Accounts, as of the related date of their conveyance to the Trust, and on the
date any new Receivables are created, the Transferor will represent and warrant
to the Trust that the Receivables meet the eligibility requirements specified in
the Agreement. See "Description of the Certificates -- Representations and
Warranties" in the Prospectus.
[The Receivables in the Trust Portfolio, as of the beginning of the day on
, 199 included $ of Principal Receivables and $ of
Finance Charge Receivables. The Accounts had an average Principal Receivable
balance of $ and an average credit limit of $ . The percentage
of the aggregate total Receivable balance to the aggregate total credit limit
was %. The average age of the Accounts was approximately months. As of
the beginning of the day on , 199 , cardholders whose Accounts are
included in the Trust Portfolio had billing addresses in all 50 States, the
District of Columbia and certain other United States territories and
possessions. Due to a concentration of Accounts in the state of California,
social, technological, legal and economic factors in that state may have a
disproportionate effect on the Trust Portfolio as a whole. As of the beginning
of the day on , 199 , % of the Accounts were standard accounts
and % were premium accounts, and the aggregate Principal Receivable
balances of standard accounts and premium accounts, as a percentage of the total
aggregate Principal Receivables, were % and respectively.]
The following tables summarize the Trust Portfolio by various criteria as
of the beginning of the day on , 199 . Because the future
composition of the Trust Portfolio may change over time, these tables are not
necessarily indicative of the composition of the Trust Portfolio at any
subsequent time.
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
ACCOUNT BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----------------------------------------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Credit Balance................................. % $ %
No Balance.....................................
Less than or equal to $1,500.00................
$1,500.01 -- $3,000.00.........................
$3,000.01 -- $4,500.00.........................
$4,500.01 -- $10,000.00........................
$10,000.01 or More.............................
------- --- ------- ---
TOTAL................................ % $ %
======= === ======= ===
</TABLE>
S-20
<PAGE> 21
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
CREDIT LIMIT RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----------------------------------------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Less than or equal to $1,500.00................ % $ %
$1,500.01 -- $3,000.00.........................
$3,000.01 -- $4,500.00.........................
$4,500.01 -- $10,000.00........................
$10,000.01 or More.............................
------- --- ------- ---
TOTAL................................ % $ %
======= === ======= ===
</TABLE>
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
PERIOD OF DELINQUENCY NUMBER OF NUMBER OF OF TOTAL
(DAYS CONTRACTUALLY DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----------------------------------------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Not Delinquent................................. % $ %
Over 5 Days....................................
Over 30 Days...................................
Over 60 Days...................................
Over 90 Days...................................
Over 120 Days..................................
------- --- ------- ---
TOTAL................................ % $ %
======= === ======= ===
</TABLE>
COMPOSITION BY ACCOUNT AGE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
ACCOUNT AGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----------------------------------------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Not More than 6 Months......................... % $ %
Over 6 Months to 12 Months.....................
Over 12 Months to 24 Months....................
Over 24 Months to 36 Months....................
Over 36 Months to 48 Months....................
Over 48 Months to 60 Months....................
Over 60 Months to 72 Months....................
Over 72 Months.................................
------- --- ------- ---
TOTAL................................ % $ %
======= === ======= ===
</TABLE>
S-21
<PAGE> 22
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- ----------------------------------------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Alabama........................................ % $ %
Alaska.........................................
Arizona........................................
Arkansas.......................................
California.....................................
Colorado.......................................
Connecticut....................................
Delaware.......................................
Florida........................................
Georgia........................................
Hawaii.........................................
Idaho..........................................
Illinois.......................................
Indiana........................................
Iowa...........................................
Kansas.........................................
Kentucky.......................................
Louisiana......................................
Maine..........................................
Maryland.......................................
Massachusetts..................................
Michigan.......................................
Minnesota......................................
Mississippi....................................
Missouri.......................................
Montana........................................
Nebraska.......................................
Nevada.........................................
New Hampshire..................................
New Jersey.....................................
New Mexico.....................................
New York.......................................
North Carolina.................................
North Dakota...................................
Ohio...........................................
Oklahoma.......................................
Oregon.........................................
Pennsylvania...................................
Rhode Island...................................
South Carolina.................................
South Dakota...................................
Tennessee......................................
Texas..........................................
Utah...........................................
Vermont........................................
Virginia.......................................
Washington.....................................
West Virginia..................................
Wisconsin......................................
Wyoming........................................
District of Columbia...........................
Other..........................................
------- --- ------- ---
TOTAL................................ % $ %
======= === ======= ===
</TABLE>
S-22
<PAGE> 23
MATURITY ASSUMPTIONS
The Agreement provides that Class A Certificateholders will not receive
payments of principal until the Class A Scheduled Payment Date, or earlier in
the event of a Pay Out Event which results in the commencement of the Rapid
Amortization Period. The Agreement also provides that Class B Certificateholders
will not receive payments of principal until the Class B Scheduled Payment Date,
or earlier in the event of a Pay Out Event which results in the commencement of
the Rapid Amortization Period (in the latter case, only after the Class A
Investor Interest has been paid in full). The Class B Certificateholders will
not begin to receive payments of principal until the final principal payment on
the Class A Certificates has been made.
Controlled Accumulation Period. On each Transfer Date during the Controlled
Accumulation Period prior to the payment of the Class A Investor Interest in
full, an amount equal to, for each Monthly Period, the least of (a) the
Available Investor Principal Collections, (b) the "Controlled Deposit Amount"
for such Monthly Period, which is equal to the sum of the Controlled
Accumulation Amount for such Monthly Period and the Accumulation Shortfall, if
any, for such Monthly Period and (c) the Class A Adjusted Investor Interest
prior to any deposits on such day, will be deposited in the Principal Funding
Account (the "Principal Funding Account") established by the Trustee until the
principal amount on deposit in the Principal Funding Account (the "Principal
Funding Account Balance") equals the Class A Investor Interest. After the Class
A Investor Interest has been paid in full, or following the first Transfer Date
upon which the Principal Funding Account Balance has increased to the amount of
the Class A Investor Interest, Available Investor Principal Collections, to the
extent required, will be distributed to the Class B Certificateholders on each
related Distribution Date beginning, during the Controlled Accumulation Period,
on the Class B Scheduled Payment Date, until the earlier of the date the Class B
Investor Interest has been paid in full and the Series 199 - Termination Date.
After the Class A Investor Interest and the Class B Investor Interest have each
been paid in full, Available Investor Principal Collections, to the extent
required, will be distributed to the Collateral Interest Holder on each related
Transfer Date until the earlier of the date the Collateral Interest has been
paid in full and the Series 199 - Termination Date. Amounts in the Principal
Funding Account are expected to be available to pay the Class A Investor
Interest on the Class A Scheduled Payment Date. After the payment of the Class A
Investor Interest in full, Available Investor Principal Collections are expected
to be available to pay the Class B Investor Interest on the Class B Scheduled
Payment Date. Although it is anticipated that collections of Principal
Receivables will be available on each Transfer Date during the Controlled
Accumulation Period to make a deposit of the applicable Controlled Deposit
Amount and that the Class A Investor Interest will be paid to the Class A
Certificateholders on the Class A Scheduled Payment Date and the Class B
Investor Interest will be paid to the Class B Certificateholders on the Class B
Scheduled Payment Date, respectively, no assurance can be given in this regard.
If the amount required to pay the Class A Investor Interest or the Class B
Investor Interest in full is not available on the Class A Scheduled Payment Date
or the Class B Scheduled Payment Date, respectively, a Pay Out Event will occur
and the Rapid Amortization Period will commence.
Rapid Amortization Period. If a Pay Out Event occurs, the Rapid
Amortization Period will commence and any amount on deposit in the Principal
Funding Account will be paid to the Class A Certificateholders on the
Distribution Date in the month following the commencement of the Rapid
Amortization Period. In addition, to the extent that the Class A Investor
Interest has not been paid in full, the Class A Certificateholders will be
entitled to monthly payments of principal equal to the Available Investor
Principal Collections until the earlier of the date on which the Class A
Certificates have been paid in full and the Series 199 - Termination Date.
After the Class A Certificates have been paid in full and if the Series 199 -
Termination Date has not occurred, Available Investor Principal Collections will
be paid to the Class B Certificateholders on each Distribution Date until the
earlier of the date on which the Class B Certificates have been paid in full and
the Series 199 - Termination Date.
Pay Out Events. A Pay Out Event occurs, either automatically or after
specified notice, upon (a) the failure of the Transferor to make certain
payments or transfers of funds for the benefit of the Certificateholders within
the time periods stated in the Agreement, (b) material breaches of certain
representations, warranties or covenants of the Transferor, (c) the occurrence
of certain events of insolvency, receivership or bankruptcy
S-23
<PAGE> 24
relating to the Transferor or other holder of the Transferor Certificate, (d) a
reduction in the average of the Portfolio Yields for any three consecutive
Monthly Periods to a rate that is less than the average of the Base Rates for
such period, (e) the Trust becoming an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (f) the Transferor is unable
for any reason to transfer Receivables to the Trust in accordance with the
provisions of the Agreement, (g) the occurrence of a Servicer Default which
would have a material adverse effect on the Certificateholders, (h) the deposit
of insufficient monies in the Distribution Account to pay the Class A Investor
Interest or the Class B Investor Interest in full on the Class A Scheduled
Payment Date or the Class B Scheduled Payment Date, respectively, or (i) the
failure of the Transferor to convey Receivables arising under Additional
Accounts or Participations to the Trust when required by the Agreement. See
"Description of the Certificates -- Pay Out Events." The term "Base Rate" means,
with respect to any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is the sum of the Class A Monthly Interest, the
Class B Monthly Interest and the Collateral Monthly Interest, each for the
related Interest Period, and the Certificateholder Servicing Fee and the
Servicer Interchange, each for such Monthly Period, and the denominator of which
is the Investor Interest as of the close of business on the last day of such
Monthly Period. The term "Portfolio Yield" means, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the numerator of
which is the sum of collections of Finance Charge Receivables, Principal Funding
Investment Proceeds and amounts withdrawn from the Reserve Account deposited
into the Finance Charge Account and allocable to the Certificates and the
Collateral Interest for such Monthly Period, calculated on a cash basis after
subtracting the Investor Default Amount for such Monthly Period, and the
denominator of which is the Investor Interest as of the close of business on the
last day of such Monthly Period.
Paired Series. The Seller may, at or after the time at which the Controlled
Accumulation Period commences for Series 199 - , cause the Trust to issue
another Series (or some portion thereof, to the extent that the full principal
amount of such other Series is not otherwise outstanding at such time) as a
Paired Series with respect to Series - to be used to finance the
increase in the Transferor Interest caused by the accumulation of principal in
the Principal Funding Account with respect to Series 199 - . No assurances can
be given as to whether such other Series will be issued and, if issued, the
terms thereof, since the terms of the Certificates will vary from the terms of
such other Series, the pay out events with respect to such other Series will
vary from the Pay Out Events with respect to Series 199 - and may include pay
out events which are unrelated to the status of the Transferor or the
Receivables, such as pay out events related to the continued availability and
rating of certain providers of Enhancement to such other Series. If a pay out
event does occur with respect to any such Paired Series prior to the payment in
full of the Certificates, the final payment of principal to the
Certificateholders may be delayed. See "Description of the Certificates --
Paired Series". If a Pay Out Event occurs with respect to a Series (which may be
Series 199 - ) having a Paired Series or with respect to the Paired Series when
such Series is in the Controlled Accumulation Period, the percentage used for
allocating collections of Principal Receivables for the Series (which may be
Series 199 - ) and for the Paired Series may reset as specified herein.
Payment Rates. The following table sets forth the highest and lowest
cardholder monthly payment rates for the Identified Pool during any month in the
period shown and the average cardholder monthly payment rates for all months
during the periods shown, in each case calculated as a percentage of total
ending monthly account balances during the periods shown. Payment rates shown in
the table are based on amounts which would be deemed payments of Principal
Receivables and Finance Charge Receivables with respect to the Accounts.
CARDHOLDER MONTHLY PAYMENT RATES
IDENTIFIED POOL
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------
, 199 1995 1994 1993
----------------- ---- ---- ----
<S> <C> <C> <C> <C>
Lowest Month...................... % % % %
Highest Month..................... % % % %
Monthly Average................... % % % %
</TABLE>
S-24
<PAGE> 25
Currently, with some exceptions, cardholders must make a minimum monthly
payment generally equal to the greater of (a) 2.5% of the outstanding balance
(including purchases, cash advances, finance charges, and fees posted to the
Account) plus any past due amounts; (b) $10 plus any past due amounts; or (c)
the amount of the outstanding balance in excess of the Account credit line. If
the cardholder's outstanding balance is less than $10, the minimum monthly
payment equals the amount of the outstanding balance. Payments are applied
pursuant to the terms of the credit card agreements governing the Accounts.
There can be no assurance that the cardholder monthly payment rates in the
future will be similar to the historical experience set forth above. In
addition, the amount of collections of Receivables may vary from month to month
due to seasonal variations, general economic conditions and payment habits of
individual cardholders. There can be no assurance that collections of
Receivables with respect to the Trust Portfolio will be similar to the
historical experience set forth above or that deposits into the Principal
Funding Account or the Distribution Account, as applicable, will be made in
accordance with the applicable Controlled Accumulation Amount. If a Pay Out
Event occurs, the average life of the Certificates could be significantly
reduced or increased.
Because there may be a slowdown in the payment rate below the payment rates
used to determine the Controlled Accumulation Amounts, or a Pay Out Event may
occur which would initiate the Rapid Amortization Period, there can be no
assurance that the actual number of months elapsed from the date of issuance of
the Class A Certificates and the Class B Certificates to their respective final
Distribution Dates will equal the expected number of months. As described under
"Description of the Certificates -- Postponement of Controlled Accumulation
Period," the Servicer may shorten the Controlled Accumulation Period and, in
such event, there can be no assurance that there will be sufficient time to
accumulate all amounts necessary to pay the Class A Investor Interest and the
Class B Investor Interest on the Class A Scheduled Payment Date and the Class B
Scheduled Payment Date, respectively. See "Maturity Assumptions" and "Risk
Factors -- Timing of Payments and Maturity" in the Prospectus.
RECEIVABLE YIELD CONSIDERATIONS
The gross revenues from finance charges and fees billed to accounts in the
Identified Pool for each of the three calendar years contained in the period
ended December 31, 1995 and the calendar months contained in the
period ended , 199 are set forth in the following table.
The historical yield figures in the following table are calculated on an
accrual basis. Collections of Receivables included in the Trust will be on a
cash basis and may not reflect the historical yield experience in the table.
During periods of increasing delinquencies or periodic payment deferral
programs, accrual yields may exceed cash amounts accrued and billed to
cardholders. Conversely, cash yields may exceed accrual yields as amounts
collected in a current period may include amounts accrued during prior periods.
However, the Transferor believes that during the three calendar years contained
in the period ended December 31, 1995 and the three calendar months contained in
the period ended March 31, 1996, the yield on an accrual basis closely
approximated the yield on a cash basis. The yield on both an accrual and a cash
basis will be affected by numerous factors, including the monthly periodic
finance charges on the Receivables, the amount of the annual membership fees and
other fees, changes in the delinquency rate on the Receivables and the
S-25
<PAGE> 26
percentage of cardholders who pay their balances in full each month and do not
incur monthly periodic finance charges. See "Risk Factors" in the Prospectus.
PORTFOLIO YIELD
IDENTIFIED POOL
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------
, 199 1995 1994 1993
----------------- ---- ---- ----
<S> <C> <C> <C> <C>
Average Receivables
Outstanding(1).................... $ $ $ $
Finance Charges and Fee
Revenue Billed.................... $ $ $ $
Interchange....................... $ $ $ $
Average Identified Pool........... $ $ $ $
Yield(2)(3)..................... % % % %
</TABLE>
- ---------------
(1) Average Receivables Outstanding is the average of the daily ending
receivable balance during the period indicated.
(2) Average Identified Pool Yield is the result of dividing Finance Charges and
Fee Revenue Billed by the Average Receivables Outstanding for the period and
does not include revenue attributable to Interchange or recoveries.
(3) The percentage reflected for the months ended , 199 is an
annualized figure.
The revenue for the Identified Pool of credit card accounts shown in the
above table is comprised of monthly periodic finance charges, credit card fees
and Interchange. These revenues vary for each account based on the type and
volume of activity for each account. Because the Trust Portfolio is only a
portion of the Identified Pool, actual yield with respect to Receivables may be
different from that set forth above for the Identified Pool. See "Bank of
America's Credit Card Activities" herein and "Bank of America Credit Card
Activities" in the Prospectus.
BANKAMERICA CORPORATION AND BANK OF AMERICA
BankAmerica Corporation (the "Corporation") is a multi-bank holding company
which was incorporated in Delaware in 1968. On December 31, 1995, the
Corporation's consolidated assets were approximately $232.4 billion,
consolidated liabilities were approximately $212.2 billion, and total
stockholders' equity was approximately $20.2 billion. Bank of America is a
wholly-owned subsidiary of the Corporation, which was formed as a national bank
organized under the laws of the United States in 1989 and is headquartered in
Phoenix, Arizona. On December 31, 1995, Bank of America's total assets were
approximately $7.7 billion, total liabilities were approximately $6.8 billion,
and total stockholders' equity was approximately $0.9 billion, as reported in
Bank of America's Consolidated Reports of Condition and Income (the "Call
Report") as of the same date. The Call Report is required to be prepared in
accordance with regulatory accounting principles, which differ in some respects
from generally accepted accounting principles.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the Agreement and the Series
199 - Supplement. Pursuant to the Agreement, the Transferor and the Trustee may
execute further series supplements in order to issue additional Series. The
following summary of the Certificates does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all of the
provisions of the Agreement and the Series 199 - Supplement. See "Description
of the Certificates" in the Prospectus for additional information concerning the
Certificates and the Agreement.
S-26
<PAGE> 27
GENERAL
The Certificates will represent the right to receive certain payments from
the assets of the Trust, including the right to the applicable allocation
percentage of all cardholder payments on the Receivables in the Trust to the
extent necessary to pay principal and interest on the Certificates. Each Class A
Certificate represents the right to receive interest at the Class A Certificate
Rate on the principal amount of the Class A Certificates for the related
Interest Period and payments of principal on the Class A Scheduled Payment Date
or, to the extent of the Class A Investor Interest, on each Distribution Date
during the Rapid Amortization Period, funded from collections of Finance Charge
Receivables and Principal Receivables, respectively, allocated to the Class A
Investor Interest and certain other available amounts. Each Class B Certificate
represents the right to receive payments of interest at the applicable Class B
Certificate Rate on the principal amount of the Class B Certificates for the
related Interest Period, and payments of principal on the Class B Scheduled
Payment Date or, to the extent of the Class B Investor Interest, on each
Distribution Date during the Rapid Amortization Period after the Class A
Certificates have been paid in full, funded from collections of Finance Charge
Receivables and Principal Receivables, respectively, allocated to the Class B
Investor Interest and certain other available amounts. Amounts payable to the
Class A Certificateholders may be paid from collections of Finance Charge
Receivables and Principal Receivables, from Excess Spread, funds on deposit in
the Principal Funding Account and the Reserve Account and certain investment
earnings thereon, Reallocated Principal Collections and Shared Excess Principal
Collections and certain other available amounts. Amounts payable to the Class B
Certificateholders may be paid from collections of Finance Charge Receivables
and Principal Receivables, from Excess Spread, Reallocated Collateral Principal
Collections and Shared Excess Principal Collections. Payments of interest and
principal will be made, to the extent of funds available therefor, on each
Distribution Date on which such amounts are due to Certificateholders in whose
names the Certificates were registered on the last business day of the calendar
month preceding such Distribution Date (each, a "Record Date").
The Transferor initially will own the Transferor Certificate. The
Transferor Certificate will represent the right to receive certain payments from
the assets of the Trust, including the right to a percentage (the "Transferor
Percentage") of all cardholder payments on the Receivables in the Trust equal to
100% minus the sum of the applicable Investor Percentages for all Series of
certificates then outstanding. The Transferor Certificate may be transferred in
whole or in part subject to certain limitations and conditions set forth in the
Agreement. See "Description of the Certificates -- Certain Matters Regarding the
Transferor and the Servicer" in the Prospectus.
[Application will be made to list the Certificates on the Luxembourg Stock
Exchange.]
The Class A Certificates and the Class B Certificates initially will be
represented by certificates registered in the name of Cede, as nominee of DTC.
Unless and until Definitive Certificates are issued, all references herein to
actions by Class A Certificateholders and/or Class B Certificateholders shall
refer to actions taken by DTC upon instructions from DTC Participants and all
references herein to distributions, notices, reports and statements to Class A
Certificateholders and/or Class B Certificateholders shall refer to
distributions, notices, reports and statements to DTC or Cede, as the registered
holder of the Class A Certificates and the Class B Certificates, as the case may
be, for distribution to Certificate Owners in accordance with DTC procedures.
[Certificateholders may hold their Certificates through DTC (in the United
States) or Cedel or Euroclear (in Europe) if they are participants of such
systems, or indirectly through organizations that are participants in such
systems. Cede, as nominee for DTC, will hold the global Certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities accounts
in Cedel's and Euroclear's names on the books of their respective Depositaries
which in turn will hold such positions in customers' securities accounts in the
Depositaries' names on the books of DTC. See "Description of the
Certificates -- General," "-- Book-Entry Registration" and "-- Definitive
Certificates" in the Prospectus.]
S-27
<PAGE> 28
INTEREST PAYMENTS
Interest will accrue on the Class A Certificates at the Class A Certificate
Rate and on the Class B Certificates at the Class B Certificate Rate from the
Closing Date. Interest will be distributed to Certificateholders on
, 199 and on each Distribution Date thereafter. Interest payments
on the Class A Certificates and the Class B Certificates on any Distribution
Date will be calculated on the outstanding principal balance of the Class A
Certificates and the outstanding principal balance of the Class B Certificates,
as applicable, as of the preceding Record Date, except that interest for the
first Distribution Date will accrue at the applicable Certificate Rate on the
initial outstanding principal balance of the Class A Certificates and the
initial outstanding principal balance of the Class B Certificates, as
applicable, from the Closing Date. Interest due on the Certificates but not paid
on any Distribution Date will be payable on the next succeeding Distribution
Date together with additional interest on such amount at the applicable
Certificate Rate plus 2% per annum (such amount with respect to the Class A
Certificates, the "Class A Additional Interest," and such amount with respect to
the Class B Certificates, the "Class B Additional Interest"). Additional
Interest shall accrue on the same basis as interest on the Certificates, and
shall accrue from the Distribution Date on which such overdue interest first
became due, to but excluding the Distribution Date on which such Additional
Interest is paid. Interest payments on the Class A Certificates on any
Distribution Date will be paid from Class A Available Funds for the related
Monthly Period, and to the extent such Class A Available Funds are insufficient
to pay such interest, from Excess Spread and Reallocated Principal Collections
(to the extent available) for such Monthly Period. Interest payments on the
Class B Certificates on any Distribution Date will be paid from Class B
Available Funds for the related Monthly Period, and to the extent such Class B
Available Funds are insufficient to pay such interest, from Excess Spread and
Reallocated Collateral Principal Collections (to the extent available) remaining
after certain other payments have been made with respect to the Class A
Certificates.
"Class A Available Funds" means, with respect to any Monthly Period, an
amount equal to the sum of (a) the Class A Floating Allocation of collections of
Finance Charge Receivables allocated to the Investor Interest and deposited in
the Finance Charge Account with respect to such Monthly Period (excluding the
portion of collections of Finance Charge Receivables attributable to Interchange
that is allocable to Servicer Interchange), (b) Principal Funding Investment
Proceeds, if any, with respect to the related Transfer Date and (c) amounts, if
any, to be withdrawn from the Reserve Account which are required to be included
in Class A Available Funds pursuant to the Series 199 - Supplement with respect
to such Transfer Date. "Class B Available Funds" means, with respect to any
Monthly Period, an amount equal to the Class B Floating Allocation of
collections of Finance Charge Receivables allocated to the Investor Interest and
deposited in the Finance Charge Account with respect to such Monthly Period
(excluding the portion of collections of Finance Charge Receivables attributable
to Interchange that is allocable to Servicer Interchange).
The Class A Certificates will bear interest from the Closing Date [through
, 199 , and from , 199 through , 199 and
with respect to each Interest Period thereafter,] at a rate of % per annum
[above [Index] prevailing on the related [Index] Determination Date with respect
to each such period] (the "Class A Certificate Rate"). The Class B Certificates
will bear interest from the Closing Date [through , 199 , and from
, 199 through , 199 and with respect to each Interest
Period thereafter,] at a rate of % per annum [above [Index] prevailing on
the related [Index] Determination Date with respect to each such period] (the
"Class B Certificate Rate").
[The Trustee will determine [Index] on , 199 for the period
from the Closing Date through , 199 , on , 199 for the
period from , 199 through , 199 , and for each Interest
Period thereafter, on the (each, a "[Index] Determination Date").]
["[Index]" means, as of any [Index] Determination Date, [disclosure
relating to the determination of [Index]].]
[The Class A Certificate Rate and the Class B Certificate Rate applicable
to the current and immediately preceding Interest Period may be obtained by
telephoning the Trustee at its Corporate Trust Office at ( ) - .]
S-28
<PAGE> 29
[Interest on the Certificates will be calculated on the basis of [the
actual number of days in the related Interest Period and] a 360-day year
[consisting of twelve 30-day months].]
PRINCIPAL PAYMENTS
On each Transfer Date relating to the Revolving Period (which begins on the
Closing Date and ends at the commencement of the Controlled Accumulation Period
or, if earlier, the Rapid Amortization Period), unless a reduction in the
Required Collateral Interest has occurred, collections of Principal Receivables
allocable to the Investor Interest will, subject to certain limitations,
including the allocation of any Reallocated Principal Collections with respect
to the related Monthly Period to pay the Class A Required Amount and the Class B
Required Amount, be treated as Shared Excess Principal Collections.
On each Transfer Date relating to the Controlled Accumulation Period, the
Trustee will deposit in the Principal Funding Account an amount equal to the
least of (a) Available Investor Principal Collections with respect to such
Transfer Date, (b) the applicable Controlled Deposit Amount and (c) the Class A
Adjusted Investor Interest prior to any deposits on such date. Amounts in the
Principal Funding Account will be paid to the Class A Certificateholders on the
Class A Scheduled Payment Date. After the Class A Investor Interest has been
paid in full, on each Transfer Date during the Controlled Accumulation Period,
amounts equal to the lesser of (a) Available Investor Principal Collections with
respect to such Transfer Date and (b) the Class B Investor Interest will be
deposited in the Distribution Account for distribution to the Class B
Certificateholders until the Class B Investor Interest has been paid in full.
Such amounts in the Distribution Account will be paid to the Class B
Certificateholders on the Class B Scheduled Payment Date. On each Transfer Date,
if a reduction in the Required Collateral Interest has occurred, a portion of
collections of Principal Receivables allocable to the Investor Interest will be
applied in accordance with the Loan Agreement to reduce the Collateral Interest
to the Required Collateral Interest. During the Controlled Accumulation Period
until the final principal payment to the Class B Certificateholders, the portion
of Available Investor Principal Collections not applied to Class A Monthly
Principal, Class B Monthly Principal or Collateral Monthly Principal on a
Transfer Date will generally be treated as Shared Excess Principal Collections.
"Available Investor Principal Collections" means, with respect to any
Monthly Period, an amount equal to the sum of (a) (i) collections of Principal
Receivables received during such Monthly Period and certain other amounts
allocable to the Investor Interest, as more fully described herein and in the
Series 199 Supplement, minus (ii) the amount of Reallocated Principal
Collections with respect to such Monthly Period used to fund the Required
Amount, plus (b) any Shared Excess Principal Collections with respect to other
Series in the Shared Excess Principal Collections Group that are allocated to
Series 199 .
On each Distribution Date during the Rapid Amortization Period, the Class A
Certificateholders will be entitled to receive Available Investor Principal
Collections for the related Monthly Period in an amount up to the Class A
Investor Interest until the earlier of the date the Class A Certificates are
paid in full or the Series 199 Termination Date. After payment in full of the
Class A Investor Interest, the Class B Certificateholders will be entitled to
receive on each Distribution Date during the Rapid Amortization Period Available
Investor Principal Collections until the earlier of the date the Class B
Certificates are paid in full or the Series 199 Termination Date. After payment
in full of the Class B Investor Interest, the Collateral Interest Holder will be
entitled to receive on each Transfer Date (other than the Transfer Date prior to
the Series 199 Termination Date) and on the Series 199 Termination Date,
Available Investor Principal Collections until the earlier of the date the
Collateral Interest is paid in full and the Series 199 Termination Date. See
"-- Pay Out Events" below for a discussion of events which might lead to the
commencement of the Rapid Amortization Period.
POSTPONEMENT OF CONTROLLED ACCUMULATION PERIOD
Upon written notice to the Trustee, the Transferor may elect to postpone
the commencement of the Controlled Accumulation Period, and extend the length of
the Revolving Period, subject to certain conditions including those set forth
below. The Transferor may make such election only if the Accumulation Period
Length (determined as described below) is less than twelve months. On the
Determination Date and on
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each Determination Date thereafter, until the Controlled Accumulation Period
begins, the Servicer, on behalf of the Transferor will determine the
"Accumulation Period Length," which is the number of whole months expected to be
required to fund the Principal Funding Account up to the initial outstanding
principal amount of the Class A Certificates no later than the Class A Scheduled
Payment Date, based on (a) the expected monthly collections of Principal
Receivables expected to be distributable to the Certificateholders of all Series
(excluding certain other Series), assuming a principal payment rate no greater
than the lowest monthly principal payment rate on the Receivables for the
preceding twelve months and (b) the amount of principal expected to be
distributable to Certificateholders of all Series (excluding certain other
Series) which are not expected to be in their revolving periods during the
Controlled Accumulation Period. If the Accumulation Period Length is less than
twelve months, the Servicer may, at its option, postpone the commencement of the
Controlled Accumulation Period such that the number of months included in the
Controlled Accumulation Period will be equal to or exceed the Accumulation
Period Length. The effect of the foregoing calculation is to permit the
reduction of the length of the Controlled Accumulation Period based on the
investor interest of certain other Series which are scheduled to be in their
revolving periods during the Controlled Accumulation Period and on increases in
the principal payment rate occurring after the Closing Date. The length of the
Controlled Accumulation Period will not be determined to be less than one month.
SUBORDINATION
The Class B Certificates and the Collateral Interest will be subordinated
to the extent necessary to fund certain payments with respect to the Class A
Certificates. In addition, the Collateral Interest will be subordinated to the
extent necessary to fund certain payments with respect to the Class B
Certificates. Certain principal payments otherwise allocable to the Class B
Certificateholders may be reallocated to cover amounts in respect of the Class A
Certificates and the Class B Investor Interest may be reduced if the Collateral
Interest is equal to zero. Similarly, certain principal payments allocable to
the Collateral Interest may be reallocated to cover amounts in respect of the
Class A Certificates and the Class B Certificates and the Collateral Interest
may be reduced. To the extent the Class B Investor Interest is reduced, the
percentage of collections of Finance Charge Receivables allocated to the Class B
Certificates in subsequent Monthly Periods will be reduced. Moreover, to the
extent the amount of such reduction in the Class B Investor Interest is not
reimbursed, the amount of principal distributable to, and the amounts available
to be distributed with respect to interest on, the Class B Certificateholders
will be reduced. No principal will be paid to the Class B Certificateholders
until the Class A Investor Interest is paid in full. See "-- Allocation
Percentages," "-- Reallocation of Cash Flows" and "-- Application of
Collections -- Excess Spread."
ALLOCATION PERCENTAGES
Pursuant to the Agreement, with respect to each Monthly Period the Servicer
will allocate among the Investor Interest, the investor interest for all other
Series issued and outstanding and the Transferor Interest, all amounts collected
on Finance Charge Receivables, all amounts collected on Principal Receivables
and all Default Amounts with respect to such Monthly Period.
Collections of Finance Charge Receivables and Default Amounts at any time
and collections of Principal Receivables during the Revolving Period will be
allocated to the Investor Interest based on the Floating Investor Percentage.
The "Floating Investor Percentage" means, with respect to any Monthly Period,
the percentage equivalent of a fraction, the numerator of which is the Adjusted
Investor Interest as of the close of business on the last day of the preceding
Monthly Period (or with respect to the first Monthly Period, the initial
Investor Interest) and the denominator of which is the greater of (x) 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 calendar
month in the first Monthly Period, the aggregate amount of Principal Receivables
as of the close of business on the day immediately preceding the Closing Date,
and with respect to the second calendar month in the first Monthly Period, the
aggregate amount of Principal Receivables as of the close of business on the
last day of the first calendar month in such first Monthly Period) and (y) the
sum of the numerators used to calculate the Investor Percentages for allocations
with respect to Finance Charge Receivables, Default Amounts or Principal
Receivables, as applicable, for all outstanding Series on such date of
determination;
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provided, however, that with respect to any Monthly Period in which an Addition
Date occurs or in which a Removal Date occurs 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, the
amount in clause (x) above shall be (i) the aggregate amount of Principal
Receivables in the Trust as of the close of business on the last day of the
prior Monthly Period for the period from and including the first day of such
Monthly Period to but excluding the related Addition Date or Removal Date and
(ii) the aggregate amount of Principal Receivables in the Trust as of the
beginning of the day on the related Addition Date or Removal Date after
adjusting for the aggregate amount of Principal Receivables added to or removed
from the Trust on the related Addition Date or Removal Date, as the case may be,
for the period from and including the related Addition Date or Removal Date to
and including the last day of such Monthly Period. The amounts so allocated will
be further allocated between the Class A Certificateholders, Class B
Certificateholders and the Collateral Interest Holder based on the Class A
Floating Allocation, the Class B Floating Allocation and the Collateral Floating
Allocation, respectively. The "Class A Floating Allocation" means, with respect
to any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class A
Adjusted Investor Interest as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, as of the
Closing Date) and the denominator of which is equal to the Adjusted Investor
Interest as of the close of business on such day. The "Class B Floating
Allocation" means, with respect to any Monthly Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is equal to the Class B Investor Interest as of the close of business on the
last day of the preceding Monthly Period (or with respect to the first Monthly
Period, as of the Closing Date) and the denominator of which is equal to the
Adjusted Investor Interest as of the close of business on such day. The
"Collateral Floating Allocation" means, with respect to any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is equal to the Collateral Interest as of the close of
business on the last day of the preceding Monthly Period (or with respect to the
first Monthly Period, as of the Closing Date) and the denominator of which is
equal to the Adjusted Investor Interest as of the close of business on such day.
Collections of Principal Receivables during the Controlled Accumulation
Period and Rapid Amortization Period will be allocated to the Investor Interest
based on the Fixed Investor Percentage. The "Fixed Investor Percentage" means,
with respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Investor Interest as of the close of business on the
last day of the Revolving Period and the denominator of which is the greater of
(x) the aggregate amount of Principal Receivables as of the close of business on
the last day of the prior Monthly Period and (y) the sum of the numerators used
to calculate the Investor Percentages for allocations with respect to Principal
Receivables for all outstanding Series for such Monthly Period; provided,
however, that if Series 199 is paired with a Paired Series and a Pay Out Event
occurs with respect to such Paired Series during the Controlled Accumulation
Period, the Transferor may, by written notice delivered to the Trustee and the
Servicer, designate a different numerator (provided that such numerator is not
less than the Adjusted Investor Interest (less the balance on deposit in the
Principal Account) as of the last day of the revolving period for such Paired
Series); provided, however, that with respect to any Monthly Period in which an
Addition Date occurs or in which a Removal Date occurs 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, the amount in clause (x) above shall be (i) the aggregate amount
of Principal Receivables in the Trust as of the close of business on the last
day of the prior Monthly Period for the period from and including the first day
of such Monthly Period to but excluding the related Addition Date or Removal
Date and (ii) the aggregate amount of Principal Receivables in the Trust at the
beginning of the day on the related Addition Date or Removal Date after
adjusting for the aggregate amount of Principal Receivables added to or removed
from the Trust on the related Addition Date or Removal Date, as the case may be,
for the period from and including the related Addition Date or Removal Date to
and including the last day of such Monthly Period. The amounts so allocated will
be further allocated between the Class A Certificateholders, the Class B
Certificateholders and the Collateral Interest Holder based on the Class A Fixed
Allocation, the Class B Fixed Allocation and the Collateral Fixed Allocation,
respectively. The "Class A Fixed Allocation" means, with respect to any Monthly
Period, the percentage
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equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Class A Investor Interest as of the close of
business on the last day of the Revolving Period; provided, however, that if
Series 199_ is paired with a Paired Series and a Pay Out Event occurs with
respect to such Paired Series during the Controlled Accumulation Period, the
Transferor may, by written notice delivered to the Trustee and the Servicer,
designate a different numerator (provided that such numerator is not less than
the Class A Adjusted Investor Interest (less the balance on deposit in the
Principal Account) as of the last day of the revolving period for such Paired
Series) and the denominator of which is equal to the numerator used to determine
the Fixed Investor Percentage with respect to such Monthly Period. The "Class B
Fixed Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Class B Investor Interest as of the close of
business on the last day of the Revolving Period; provided, however, that if
Series 199_ is paired with a Paired Series and a Pay Out Event occurs with
respect to such Paired Series during the Controlled Accumulation Period, the
Transferor may, by written notice delivered to the Trustee and the Servicer,
designate a different numerator (provided that such numerator is not less than
the Class B Investor Interest (less, if the Class A Fixed Allocation is zero,
the balance on deposit in the Principal Account [and the Principal Funding
Account, in each case] to the extent not subtracted in reducing the Class A
Fixed Allocation to zero) as of the last day of the revolving period for such
Paired Series) and the denominator of which is equal to the numerator used to
determine the Fixed Investor Percentage with respect to such Monthly Period. The
"Collateral Fixed Allocation" means, with respect to any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is equal to the Collateral Interest as of the close of
business on the last day of the Revolving Period; provided, however, that if
Series 199_ is paired with a Paired Series and a Pay Out Event occurs with
respect to such Paired Series during the Controlled Accumulation Period, the
Transferor may, by written notice delivered to the Trustee and the Servicer,
designate a different numerator (provided that such numerator is not less than
the Collateral Interest (less, if the Class B Fixed Allocation is zero, the
balance on deposit in the Principal Account, to the extent not subtracted in
reducing the Class B Fixed Allocation to zero) as of the last day of the
revolving period for such Paired Series) and the denominator of which is equal
to the numerator used to determine the Fixed Investor Percentage with respect to
such Monthly Period.
"Class A Investor Interest" for any date means an amount equal to (a) the
aggregate initial principal amount of the Class A Certificates, minus (b) the
aggregate amount of principal payments made to Class A Certificateholders prior
to such date, minus (c) the excess, if any, of the aggregate amount of Class A
Investor Charge-Offs for all Transfer Dates preceding such date over the
aggregate amount of any reimbursements of Class A Investor Charge-Offs for all
Transfer Dates preceding such date; provided, however, that the Class A Investor
Interest may not be reduced below zero.
"Class A Adjusted Investor Interest," for any date of determination, means
an amount equal to the then current Class A Investor Interest, minus the
Principal Funding Account Balance on such date.
"Class B Investor Interest" for any date means an amount equal to (a) the
aggregate initial principal amount of the Class B Certificates, minus (b) the
aggregate amount of principal payments made to Class B Certificateholders prior
to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for
all prior Transfer Dates, minus (d) the aggregate amount of Reallocated Class B
Principal Collections for all prior Transfer Dates for which the Collateral
Interest has not been reduced, minus (e) an amount equal to the aggregate amount
by which the Class B Investor Interest has been reduced to fund the Class A
Investor Default Amount on all prior Transfer Dates as described under
"-- Defaulted Receivables; Investor Charge-Offs," and plus (f) the aggregate
amount of Excess Spread allocated and available on all prior Transfer Dates for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c), (d) and (e); provided, however, That the Class B Investor Interest may not
be reduced below zero.
"Collateral Interest" for any date means an amount equal to (a) the Initial
Collateral 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, minus (d) the
aggregate amount of Reallocated Principal Collections for all prior Transfer
Dates, minus (e) an amount
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equal to the aggregate amount by which the Collateral Interest has been reduced
to fund the Class A Investor Default Amount and the Class B Investor Default
Amount on all prior Transfer Dates as described under "-- Defaulted Receivables;
Investor Charge-Offs," plus (f) the aggregate amount of Excess Spread allocated
and available on all prior Transfer Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
that the Collateral Interest may not be reduced below zero.
REALLOCATION OF CASH FLOWS
With respect to each Transfer Date, the Servicer will determine the amount
(the "Class A Required Amount"), which will be equal to the amount, if any, by
which the sum of (a) Class A Monthly Interest due on the related Distribution
Date and overdue Class A Monthly Interest and Class A Additional Interest
thereon, if any, (b) the Class A Servicing Fee for the related Monthly Period
and overdue Class A Servicing Fee, if any, and (c) the Class A Investor Default
Amount, if any, for the related Monthly Period exceeds the Class A Available
Funds for the related Monthly Period. If the Class A Required Amount is greater
than zero, Excess Spread allocated to Series 199 and available for such purpose
will be used to fund the Class A Required Amount with respect to such Transfer
Date. If such Excess Spread is insufficient to fund the Class A Required Amount,
first, Reallocated Collateral Principal Collections and, then, Reallocated Class
B Principal Collections will be used to fund the remaining Class A Required
Amount. If Reallocated Principal Collections with respect to the related Monthly
Period, together with Excess Spread, are insufficient to fund the remaining
Class A Required Amount for such related Monthly Period, then the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
Reallocated Principal Collections on such Transfer Date) will be reduced by the
amount of such excess (but not by more than the Class A Investor Default Amount
for such Monthly Period). In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest will be
reduced to zero, and the Class B Investor Interest (after giving effect to
reductions for any Class B Investor Charge-Offs and any Reallocated Class B
Principal Collections for which the Collateral Interest was not reduced on such
Transfer Date) will be reduced by the amount by which the Collateral Interest
would have been reduced below zero (but not by more than the excess of the Class
A Investor Default Amount, if any, for such Monthly Period over the amount of
such reduction, if any, of the Collateral Interest with respect to such Monthly
Period). In the event that such reduction would cause the Class B Investor
Interest to be a negative number, the Class B Investor Interest will be reduced
to zero and the Class A Investor Interest will be reduced by the amount by which
the Class B Investor Interest would have been reduced below zero (but not by
more than the excess, if any, of the Class A Investor Default Amount for such
Monthly Period over the amount of the reductions, if any, of the Collateral
Interest and the Class B Investor Interest with respect to such Monthly Period).
Any such reduction in the Class A Investor Interest will have the effect of
slowing or reducing the return of principal and interest to the Class A
Certificateholders. In such case, the Class A Certificateholders will bear
directly the credit and other risks associated with their interests in the
Trust. See "-- Defaulted Receivables; Investor Charge-Offs."
With respect to each Transfer Date, the Servicer will determine the amount
(the "Class B Required Amount"), which will be equal to the sum of (a) the
amount, if any, by which the sum of (i) Class B Monthly Interest due on the
related Distribution Date and overdue Class B Monthly Interest and Class B
Additional Interest thereon, if any, and (ii) the Class B Servicing Fee for the
related Monthly Period and overdue Class B Servicing Fee, if any, exceeds the
Class B Available Funds for the related Monthly Period and (b) the Class B
Investor Default Amount, if any, for the related Monthly Period. If the Class B
Required Amount is greater than zero, Excess Spread allocated to Series 199 not
required to pay the Class A Required Amount or reimburse Class A Investor
Charge-Offs will be used to fund the Class B Required Amount with respect to
such Transfer Date. If such Excess Spread is insufficient to fund the Class B
Required Amount, Reallocated Collateral Principal Collections not required to
fund the Class A Required Amount for the related Monthly Period will be used to
fund the remaining Class B Required Amount. If such Reallocated Collateral
Principal Collections with respect to the related Monthly Period are
insufficient to fund the remaining Class B Required Amount, then the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
Reallocated Principal Collections on such Transfer Date and after any
adjustments made thereto for the benefit of the Class A Certificateholders) will
be reduced by the amount of such
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deficiency (but not by more than the Class B Investor Default Amount for such
Monthly Period). In the event that such a reduction would cause the Collateral
Interest to be a negative number, the Collateral Interest will be reduced to
zero, and the Class B Investor Interest will be reduced by the amount by which
the Collateral Interest would have been reduced below zero (but not by more than
the excess of the Class B Investor Default Amount for such Monthly Period over
the amount of such reduction of the Collateral Interest). Any such reduction in
the Class B Investor Interest will have the effect of slowing or reducing the
return of principal and interest to the Class B Certificateholders. In such
case, the Class B Certificateholders will bear directly the credit and other
risks associated with their interests in the Trust. See "-- Defaulted
Receivables; Investor Charge-Offs."
Reductions of the Class A Investor Interest or Class B Investor Interest
described above shall be reimbursed by, and the Class A Investor Interest or
Class B Investor Interest increased to the extent of, Excess Spread available
for such purposes on each Transfer Date. See "-- Application of Collections
- -- Excess Spread." When such reductions of the Class A Investor Interest and
Class B Investor Interest have been fully reimbursed, reductions of the
Collateral Interest shall be reimbursed until reimbursed in full in a similar
manner.
"Reallocated Class B Principal Collections" for any Monthly Period means
collections of Principal Receivables allocable to the Class B Investor Interest
for the related Monthly Period in an amount not to exceed the amount applied to
fund the Class A Required Amount, if any; provided, however, that such amount
will not exceed the Class B Investor Interest after giving effect to any Class B
Investor Charge-Offs for the related Transfer Date.
"Reallocated Collateral Principal Collections" for any Monthly Period means
collections of Principal Receivables allocable to the Collateral Interest for
the related Monthly Period in an amount not to exceed the amount applied to fund
the Class A Required Amount and the Class B Required Amount, if any; provided,
however, that such amount will not exceed the Collateral Interest after giving
effect to any Collateral Charge-Offs for the related Transfer Date.
"Reallocated Principal Collections" for any Monthly Period means the sum of
(a) the Reallocated Class B Principal Collections for such Monthly Period, if
any, and (b) the Reallocated Collateral Principal Collections for such Monthly
Period, if any.
APPLICATION OF COLLECTIONS
Allocations. Except as otherwise provided below, the Servicer will deposit
into the Collection Account, no later than the second business day following the
date of processing, any payment collected by the Servicer on the Receivables. On
the same day as any such deposit is made, the Servicer will make the deposits
and payments to the accounts and parties as indicated below; provided, however,
that for as long as Bank of America remains the Servicer under the Agreement and
(a) (i) the Servicer provides to the Trustee a letter of credit or other credit
enhancement covering the risk of collection of the Servicer and (ii) the
Transferor shall not have received a notice from the Rating Agency that reliance
on such letter of credit or other credit enhancement would result in the
lowering of such Rating Agency's then-existing rating of any Series then
outstanding or (b) the Servicer has and maintains a certificate of deposit or
short-term deposit rating of P-1 by Moody's and of A-1 by Standard & Poor's and
deposit insurance provided by the FDIC, then the Servicer may make such deposits
and payments on the business day immediately prior to the Distribution Date (the
"Transfer Date") in an amount equal to the net amount of such deposits and
payments which would have been made had the conditions of this proviso not
applied.
With respect to the Certificates and any Monthly Period, and
notwithstanding anything in the Agreement to the contrary, whether the Servicer
is required to make monthly or daily deposits from the Collection Account into
the Finance Charge Account or the Principal Account, (i) the Servicer will only
be required to deposit Collections from the Collection Account into the Finance
Charge Account or the Principal Account up to the required amount to be
deposited into any such deposit account or, without duplication, distributed on
or prior to the related Distribution Date to Certificateholders or to the
Collateral Interest Holder and (ii) if at any time prior to such Distribution
Date the amount of Collections deposited in the Collection Account
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exceeds the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to withdraw the excess from the Collection Account.
Payment of Interest, Fees and Other Items. On each Transfer Date, the
Trustee, acting pursuant to the Servicer's instructions, will apply the Class A
Available Funds, Class B Available Funds and Collateral Available Funds in the
Finance Charge Account in the following priority:
(a) On each Transfer Date, an amount equal to the Class A Available
Funds will be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class A Monthly
Interest and Class A Additional Interest thereon, if any, will be
deposited into the Distribution Account for distribution to Class A
Certificateholders on such Distribution Date;
(ii) an amount equal to the Class A Servicing Fee for the related
Monthly Period, plus the amount of any overdue Class A Servicing Fee,
will be paid to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount, if
any, for the related Monthly Period will be treated as a portion of
Available Investor Principal Collections and deposited into the
Principal Account for such Transfer Date; and
(iv) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described under
"-- Excess Spread."
(b) On each Transfer Date, an amount equal to the Class B Available
Funds will be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class B Monthly
Interest and Class B Additional Interest thereon, if any, will be
deposited into the Distribution Account for distribution to Class B
Certificateholders on such Distribution Date;
(ii) an amount equal to the Class B Servicing Fee for the related
Monthly Period, plus the amount of any overdue Class B Servicing Fee,
will be paid to the Servicer; and
(iii) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described under
"-- Excess Spread."
(c) On each Transfer Date, an amount equal to the Collateral Available
Funds will be distributed in the following priority:
(i) if Bank of America, an affiliate thereof or an Acceptable
Successor Servicer is not the Servicer, an amount equal to the
Collateral Interest Servicing Fee for the related Monthly Period, plus
the amount of any overdue Collateral Interest Servicing Fee, will be
paid to the Servicer; and
(ii) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described under
"-- Excess Spread."
"Class A Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class A Certificate Rate for the related Interest Period,
(ii) [the actual number of days in such Interest Period divided by 360] [a
fraction, the numerator of which is one and the denominator of which is 12] and
(iii) the outstanding principal balance of the Class A Certificates as of the
related Record Date; provided, however, with respect to the first Distribution
Date, Class A Monthly Interest will be equal to the interest accrued on the
initial outstanding principal balance of the Class A Certificates at the
applicable Class A Certificate Rate for the period from the Closing Date through
, 199 .
"Class B Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class B Certificate Rate for the related Interest Period,
(ii) [the actual number of days in such Interest Period divided by 360] [a
fraction, the numerator of which is one and the denominator of which is 12] and
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(iii) the outstanding principal balance of the Class B Certificates as of the
related Record Date; provided however, with respect to the first Distribution
Date, Class B Monthly Interest will be equal to the interest accrued on the
initial outstanding principal balance of the Class B Certificates at the
applicable Class B Certificate Rate for the period from the Closing Date through
, 199 .
"Collateral Available Funds" means, with respect to any Monthly Period, an
amount equal to the Collateral Floating Allocation of collections of Finance
Charge Receivables allocated to the Investor Interest with respect to such
Monthly Period (excluding the portion of collections of Finance Charge
Receivables attributable to Interchange that is allocable to Servicer
Interchange).
"Excess Spread" means, with respect to any Transfer Date, an amount equal
to the sum of the amounts described in clause (a) (iv), clause (b) (iii) and
clause (c) (ii) above.
Excess Spread; Shared Excess Finance Charge Collections. On each Transfer
Date, the Trustee, acting pursuant to the Servicer's instructions, will apply
Excess Spread and Shared Excess Finance Charge Collections allocated to Series
199 with respect to the related Monthly Period, to make the following
distributions 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; provided, that in the event the Class A Required Amount for such
Transfer Date exceeds the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated to Series 199, such Excess Spread and Shared
Excess Finance Charge Collections allocated to Series 199 shall be applied
first to pay amounts due with respect to such Transfer Date pursuant to
clause (a)(i) above under "-- Payment of Interest, Fees and Other Items;"
second to pay amounts due with respect to such Transfer Date pursuant to
clause (a) (ii) above under "-- Payment of Interest, Fees and Other Items;"
and third to pay amounts due with respect to such Transfer Date pursuant to
clause (a) (iii) under "-- Payment of Interest, Fees and Other Items"
above;
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed (after giving effect
to the allocation on such Transfer Date of certain other amounts applied
for that purpose) will be deposited into the Principal Account and treated
as a portion of Available Investor Principal Collections for such Transfer
Date as described under "-- Payments of Principal" below;
(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; provided, that in the event the Class B Required Amount for such
Transfer Date exceeds the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated to Series 199 , such Excess Spread and Shared
Excess Finance Charge Collections allocated to Series 199 shall be applied
first to pay amounts due with respect to such Transfer Date pursuant to
clause (b)(i) above under "-- Payment of Interest, Fees and Other Items;"
second to pay amounts due with respect to such Transfer Date pursuant to
clause (b) (ii) above under "-- Payment of Interest, Fees and Other Items"
and third, the amount remaining, up to the Class B Investor Default Amount,
will be deposited into the Principal Account and treated as a portion of
Available Investor Principal Collections for such Transfer Date as
described under "-- Payments of Principal" below;
(d) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced below the initial Class B Investor
Interest for reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) will be deposited
into the Principal Account and treated as a portion of Available Investor
Principal Collections for such Transfer Date as described under
"-- Payments of Principal" below;
(e) an amount equal to the Collateral Monthly Interest for such
Transfer Date, plus the amount of any Collateral Monthly Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Transfer Date, will be distributed to the Collateral Interest Holder
for distribution in accordance with the Loan Agreement;
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(f) if Bank of America, an affiliate thereof or an Acceptable
Successor Servicer is the Servicer, an amount equal to the Collateral
Interest Servicing Fee for the related Monthly Period, plus the amount of
any overdue Collateral Interest Servicing Fee, will be paid to the
Servicer;
(g) an amount equal to the aggregate Collateral Default Amount, if
any, for such Transfer Date will be deposited into the Principal Account
and treated as a portion of Available Investor Principal Collections for
such Transfer Date as described under "-- Payments of Principal" below;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) will be deposited into the Principal
Account and treated as a portion of Available Investor Principal
Collections for such Transfer Date as described under "-- Payments of
Principal" below;
(i) on each Transfer Date from and after the Reserve Account Funding
Date, but prior to the date on which the Reserve Account terminates as
described under "-- Reserve Account," an amount up to the excess, if any,
of the Required Reserve Account Amount over the Available Reserve Account
Amount will be deposited into the Reserve Account;
(j) an amount equal to the aggregate of any other amounts then due to
the Collateral Interest Holder out of collections of Excess Spread and
Shared Excess Finance Charge Collections allocated to Series 199 - pursuant
to the Loan Agreement shall be distributed to the Collateral Interest
Holder for application in accordance with the Loan Agreement; and
(k) the balance, if any, will constitute a portion of Shared Excess
Finance Charge Collections for such Distribution Date and will be available
for allocation to other Series in Shared Excess Finance Charge Collections
Group [One] or to the holder of the Transferor Certificate as described in
"Description of the Certificates -- Shared Excess Finance Charge
Collections" in the Prospectus
"Collateral Monthly Interest" with respect to any Transfer Date will equal
the product of (a) an amount equal to plus [ ]% per annum, or such lesser
amount as may be designated in the Loan Agreement (the "Collateral Rate"), (b)
the actual number of days in the related Interest Period divided by 360 and (c)
the Collateral Interest as of the related Record Date or, with respect to the
first Transfer Date, the Initial Collateral Interest.
Payments of Principal. On each Transfer Date, the Trustee, acting pursuant
to the Servicer's instructions, will distribute Available Investor Principal
Collections (see "-- Principal Payments" above) on deposit in the Principal
Account in the following priority:
(a) on each Transfer Date with respect to the Revolving Period, all
such Available Investor Principal Collections will be distributed or
deposited in the following priority:
(i) an amount equal to the Collateral Monthly Principal will be
paid to the Collateral Interest Holder in accordance with the Loan
Agreement; and
(ii) the balance will be treated as Shared Excess Principal
Collections and applied as described under "Description of the
Certificates -- Shared Excess Principal Collections" herein and in the
Prospectus;
(b) on each Transfer Date with respect to the Controlled Accumulation
Period or the Rapid Amortization Period, all such Available Investor
Principal Collections will be distributed or deposited in the following
priority:
(i) an amount equal to Class A Monthly Principal will be deposited
in the Principal Funding Account (during the Controlled Accumulation
Period) or distributed to the Class A Certificateholders (during the
Rapid Amortization Period); and
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(ii) for each Transfer Date, after the Class A Investor Interest
has been paid in full (after taking into account payments to be made on
the related Distribution Date), an amount equal to the Class B Monthly
Principal for such Transfer Date will be distributed to the Class B
Certificateholders;
(c) on each Transfer Date with respect to the Controlled Accumulation
Period and the Rapid Amortization Period in which a reduction in the
Required Collateral Interest has occurred, Available Investor Principal
Collections not applied to Class A Monthly Principal or Class B Monthly
Principal will be applied to reduce the Collateral Interest to the Required
Collateral Interest; and
(d) on each Transfer Date with respect to the Controlled Accumulation
Period and the Rapid Amortization Period, the balance of Available Investor
Principal Collections not applied pursuant to (b) and (c) above, if any,
will be treated as Shared Excess Principal Collections and applied as
described under "Description of the Certificates -- Shared Excess Principal
Collections" herein and in the Prospectus.
"Class A Monthly Principal" with respect to any Transfer Date relating to
the Controlled Accumulation Period or the Rapid Amortization Period, prior to
the payment in full of the Class A Investor Interest, will equal 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 payment in full of
the Class A Investor Interest, and on or prior to the Class A Scheduled Payment
Date, the applicable Controlled Deposit Amount for such Transfer Date and (iii)
the Class A Adjusted Investor Interest prior to any deposits on such Transfer
Date.
"Class B Monthly Principal" with respect to any Transfer Date relating to
the Controlled Accumulation Period, beginning with the Transfer Date following
the Monthly Period in which the Class A Investor Interest has been paid in full,
or with respect to any Transfer Date relating to the Rapid Amortization Period,
beginning with the Transfer Date immediately preceding the Distribution Date on
which the Class A Certificates have been paid in full (after taking into account
payments to be made on the related Distribution Date), will equal the lesser of
(i) the Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly Principal on such
Transfer Date) and (ii) the Class B Investor Interest for such Transfer Date.
"Collateral Monthly Principal" means (a) with respect to any Transfer Date
relating to the Revolving Period following any reduction of the Required
Collateral Interest pursuant to clause (3) of the proviso in the definition
thereof an amount equal to the lesser of (i) the excess, if any, of the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and Reallocated Principal Collections on such Transfer Date and
after giving effect to any adjustments thereto for the benefit of the Class A
Certificateholders and the Class B Certificateholders on such Transfer Date)
over the Required Collateral Interest on such Transfer Date, and (ii) the
Available Investor Principal Collections on such Transfer Date or (b) with
respect to any Transfer Date relating to the Controlled Accumulation Period or
Rapid Amortization Period an amount equal to the lesser of (i) the excess, if
any, of the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and Reallocated Principal Collections on such Transfer
Date and after giving effect to any adjustments thereto for the benefit of the
Class A Certificateholders and the Class B Certificateholders on such Transfer
Date) over the Required Collateral Interest on such Transfer Date, and (ii) the
excess, if any, of (A) the Available Investor Principal Collections on such
Transfer Date over (B) the sum of the Class A Monthly Principal and the Class B
Monthly Principal for such Transfer Date.
"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 Investor Interest, $ ; provided, however, that if the
commencement of the Controlled Accumulation Period is delayed as described above
under "-- Postponement of Controlled Accumulation Period," the Controlled
Accumulation Amount may be higher than the amount stated above for each Transfer
Date with respect to the Controlled Accumulation Period and will be determined
by the Servicer in accordance with the Agreement based on the principal payment
rates for the Accounts and on the investor interests of other Series (other than
certain excluded
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Series) which are scheduled to be in their revolving periods and then scheduled
to create Shared Excess Principal Collections during the Controlled Accumulation
Period and (b) for any Transfer Date with respect to the Controlled Accumulation
Period after the payment in full of the Class A Investor Interest, an amount
equal to the Class B Investor Interest on such Transfer Date.
"Accumulation Shortfall" means (a) on the first Transfer Date with respect
to the Controlled Accumulation Period, the excess, if any, of the Controlled
Accumulation Amount for such Transfer Date over the amount distributed from the
Principal Account as Class A Monthly Principal for such Transfer Date and (b) on
each subsequent Transfer Date with respect to the Controlled Accumulation
Period, the excess, if any, of the applicable Controlled Accumulation Amount for
such subsequent Transfer Date plus any Accumulation Shortfall for the prior
Transfer Date over the amount distributed from the Principal Account as Class A
Monthly Principal for such subsequent Transfer Date.
SHARED EXCESS FINANCE CHARGE COLLECTIONS
The Series 199 -- Certificates will be the [first] Series issued by the
Trust, outstanding as of the Closing Date, included in Shared Excess Finance
Charge Collections Group [One]. In the future, the Transferor may, but will not
be required to, designate other Series that are issued by the Trust to be
included in Shared Excess Finance Charge Collections Group [One] although there
can be no assurance that any other Series will be issued by the Trust or, if
issued, will be designated by the Transferor to be included in Shared Excess
Finance Charge Collections Group [One].
Collections of Finance Charge Receivables for any Monthly Period allocated
to the Investor Interest will first be used to cover, with respect to any
Monthly Period, all amounts described under "Description of the
Certificates -- Payment of Interest. Fees and Other Items" and "-- Excess
Spread; Shares Excess Finance Charge Collections." The Servicer will then
determine (i) the amount of collections of Finance Charge Receivables for any
Monthly Period allocated to the Investor Interest remaining after covering such
required payments to the Certificateholders and (ii) any similar amounts
remaining with respect to any other Series that may in the future be designated
by the Transferor to be included in Shared Excess Finance Charge Collections
Group [One] ("Shared Excess Finance Charge Collections"). The Servicer will
allocate any Shared Excess Finance Charge Collections to cover any required
amounts payable with respect to the certificateholders for any Series in Shared
Excess Finance Charge Collections Group [One] entitled thereto which have not
been covered out of the collections of Finance Charge Receivables allocable to
such Series ("Finance Charge Shortfalls"). If Finance Charge Shortfalls exceed
Shared Excess Finance Charge Collections for any Monthly Period, Shares Excess
Finance Charge Collections will be allocated pro rata among the applicable
Series in Shared Excess Finance Charge Collections Group [One] based on the
relative amounts of Finance Charge Shortfalls. To the extent that Shared Excess
Finance Charge Collections exceed Finance Charge Shortfalls, the balance will be
paid to the holder of the Transferor Certificate. See "Description of
Certificates -- Shared Excess Finance Charge Collections" in the Prospectus for
a discussion of the limitations on the availability of Shared Finance Charge
Collections.
SHARED EXCESS PRINCIPAL COLLECTIONS
The Series 199 -- Certificates will be the [first] Series issued by the
Trust, outstanding as of the Closing Date, included in the Shared Excess
Principal Collections Group. In the future, the Transferor may, but will not be
required to, designate other Series that are issued by the Trust to be included
in the Shared Excess Principal Collections Group although there can be no
assurance that any other Series will be issued by the Trust or, if issued, will
be designated by the Transferor to be included in the Shared Excess Principal
Collections Group.
Collections of Principal Receivables for any Monthly Period allocated to
the Investor Interest will first be used to cover, with respect to any Monthly
Period during the Controlled Accumulation Period, deposits of the applicable
Controlled Deposit Amount to the Principal Funding Account or the Distribution
Account, and during the Rapid Amortization Period, payments to the
Certificateholders and then under certain circumstances payments to the
Collateral Interest Holder. The Servicer will determine the amount of
collections of
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Principal Receivables for any Monthly Period allocated to the Investor Interest
remaining after covering required payments to the Certificateholders and any
similar amount remaining for any other Series in the Shared Excess Principal
Collections Group ("Shared Excess Principal Collections"). The Servicer will
allocate the Shared Excess Principal Collections to cover any scheduled or
permitted principal distributions to certificateholders and deposits to
principal funding accounts, if any, for any Series entitled thereto which have
not been covered out of the collections of Principal Receivables allocable to
such Series and certain other amounts for such Series ("Principal Shortfalls").
Shared Excess Principal Collections will not be used to cover investor
charge-offs for any Series. If Principal Shortfalls exceed Shared Excess
Principal Collections for any Monthly Period, Shared Excess Principal
Collections will be allocated pro rata among the applicable Series in the Shared
Excess Principal Collections Group based on the relative amounts of Principal
Shortfalls. To the extent that Shared Excess Principal Collections exceed
Principal Shortfalls, the balance will, subject to certain limitations, be paid
to the holder of the Transferor Certificate.
REQUIRED COLLATERAL INTEREST
The "Required Collateral Interest" with respect to any Transfer Date means
(i) initially $ and (ii) thereafter on each Transfer Date an amount
equal to % of the sum of the Class A Adjusted Investor Interest and the
Class B Investor Interest on such Transfer Date, after taking into account
deposits into the Principal Funding Account on such Transfer Date and payments
to be made on the related Distribution Date, and the Collateral Interest on the
prior Transfer Date after any adjustments made on such Transfer Date, but not
less than $ ; provided, however, (1) that if certain reductions in the
Collateral Interest are made or if a Pay Out Event occurs, the Required
Collateral Interest for such Transfer Date shall equal the Required Collateral
Interest for the Transfer Date immediately preceding the occurrence of such
reduction or Pay Out Event, (2) in no event shall the Required Collateral
Interest exceed the unpaid principal amount of the Certificates as of the last
day of the Monthly Period preceding such Transfer Date after taking into account
payments to be made on the related Distribution Date and (3) the Required
Collateral Interest may be reduced to a lesser amount at any time if the Rating
Agency Condition is satisfied.
"Rating Agency Condition" means the notification in writing by each Rating
Agency to the Seller, the Servicer and the Trustee that a proposed action will
not result in such Rating Agency reducing or withdrawing its then existing
rating of the investor certificates of any outstanding Series or class with
respect to which it is a Rating Agency.
With respect to any Transfer Date, if the Collateral Interest is less than
the Required Collateral Interest, certain Excess Spread, if available, will be
allocated to increase the Collateral Interest to the extent of such shortfall.
Any of such Excess Spread not required to be so allocated or deposited into the
Reserve Account with respect to any Transfer Date will be applied in accordance
with the Loan Agreement. See "-- Application of Collections -- Excess Spread."
DEFAULTED RECEIVABLES; INVESTOR CHARGE-OFFS
On or before each Transfer Date, the Servicer will calculate the Investor
Default Amount for the preceding Monthly Period. The term "Investor Default
Amount" means, for any Monthly Period, the product of (a) the Floating Investor
Percentage on the day the applicable Account became a Defaulted Account and (b)
the aggregate amount of Receivables in Defaulted Accounts (the "Default Amount")
for such Monthly Period. A portion of the Investor Default Amount will be
allocated to the Class A Certificateholders (the "Class A Investor Default
Amount") on each Transfer Date in an amount equal to the product of the Class A
Floating Allocation applicable during the related Monthly Period and the
Investor Default Amount for such Monthly Period. A portion of the Investor
Default Amount will be allocated to the Class B Certificateholders (the "Class B
Investor Default Amount") on each Transfer Date in an amount equal to the
product of the Class B Floating Allocation applicable during the related Monthly
Period and the Investor Default Amount for such Monthly Period. A portion of the
Investor Default Amount will be allocated to the Collateral Interest Holder (the
"Collateral Default Amount") on each Transfer Date in an amount equal to the
product of the Collateral Floating Allocation applicable during the related
Monthly Period and the Investor Default Amount for such Monthly Period.
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On each Transfer Date, if the Class A Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Reallocated Principal
Collections available to fund such amount with respect to the Monthly Period
immediately preceding such Transfer Date as described under "-- Application of
Collections -- Excess Spread," 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 more than the lesser of the Class A Investor Default Amount and the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer Date) for
such Transfer Date. In the event that such reduction would cause the Collateral
Interest to be a negative number, the Collateral Interest will be reduced to
zero, and the Class B Investor Interest (after giving effect to reductions for
any Class B Investor Charge-Offs and any Reallocated Class B Principal
Collections on such Transfer Date) will be reduced by the amount by which the
Collateral Interest would have been reduced below zero. In the event that such
reduction would cause the Class B Investor Interest to be a negative number, the
Class B Investor Interest will be reduced to zero, and the Class A Investor
Interest will be reduced by the amount by which the Class B Investor Interest
would have been reduced below zero, but not more than the Class A Investor
Default Amount for such Transfer Date (a "Class A Investor Charge-Off"), which
will have the effect of slowing or reducing the return of principal and interest
to the Class A Certificateholders. If the Class A Investor Interest has been
reduced by the amount of any Class A Investor Charge-Offs, it will be reimbursed
on any Transfer Date (but not by an amount in excess of the aggregate Class A
Investor Charge-Offs) by the amount of Excess Spread allocated and available for
such purpose as described under "-- Application of Collections -- Excess
Spread."
On each Transfer Date, if the Class B Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Reallocated Collateral
Principal Collections which are allocated and available to fund such amount with
respect to the Monthly Period preceding such Transfer Date, the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Principal Collections on such Transfer Date and after giving
effect to any adjustments with respect thereto as described in the preceding
paragraph) will be reduced by the amount of such excess but not more than the
lesser of the Class B Investor Default Amount and the Collateral Interest (after
giving effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and after giving effect to any
adjustments with respect thereto as described in the preceding paragraph) for
such Transfer Date. In the event that such reduction would cause the Collateral
Interest to be a negative number, the Collateral Interest will be reduced to
zero and the Class B Investor Interest will be reduced by the amount by which
the Collateral Interest would have been reduced below zero, but not more than
the Class B Investor Default Amount for such Transfer Date (a "Class B Investor
Charge-Off"). The Class B Investor Interest will also be reduced by the amount
of Reallocated Class B Principal Collections in excess of the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Collateral Principal Collections on such Transfer Date) and the
amount of any portion of the Class B Investor Interest allocated to the Class A
Certificates to avoid a reduction in the Class A Investor Interest. The Class B
Investor Interest will thereafter be reimbursed (but not 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 "-- Application of Collections -- Excess Spread."
On each Transfer Date, if the Collateral Default Amount for such Transfer
Date exceeds the amount of Excess Spread which is allocated and available to
fund such amount as described under "-- Application of Collections -- Excess
Spread," the Collateral Interest will be reduced by the amount of such excess
but not more than the lesser of the Collateral Default Amount and the Collateral
Interest for such Transfer Date (a "Collateral Charge-Off"). The Collateral
Interest will also be reduced by the amount of Reallocated Principal Collections
and the amount of any portion of the Collateral Interest allocated to the Class
A Certificates to avoid a reduction in the Class A Investor Interest or to the
Class B Certificates to avoid a reduction in the Class B Investor Interest. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by the
amount of Excess Spread allocated and available for that purpose as described
under "-- Application of Collections -- Excess Spread."
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PRINCIPAL FUNDING ACCOUNT
Pursuant to the Series 199 - Supplement, the Trustee will establish and
maintain with a Qualified Institution a segregated trust account held for the
benefit of the Certificateholders (the "Principal Funding Account"). During the
Controlled Accumulation Period, the Trustee at the direction of the Servicer
will transfer collections in respect of Principal Receivables (other than
Reallocated Principal Collections) and Shared Excess Principal Collections from
other Series, if any, allocated to Series 199 - from the Principal Account to
the Principal Funding Account as described under "-- Application of
Collections." Such collections will be retained in the Principal Funding Account
and ultimately used to pay principal of the Class A Certificates on the Class A
Scheduled Payment Date or the Distribution Date after the commencement of the
Rapid Amortization Period, whichever occurs earlier.
Funds on deposit in the Principal Funding Account shall be invested at the
direction of the Servicer by the Trustee in Permitted Investments evidencing
obligations of any of the Corporation or of any Affiliate thereof; provided,
however, that if no obligations of the Corporation or of any Affiliate thereof
shall qualify as Permitted Investments, notwithstanding the preceding, the funds
on deposit in the Principal Funding Account shall be invested by the Trustee in
Permitted Investments. Investment earnings (net of investment losses and
expenses) on funds on deposit in the Principal Funding Account (the "Principal
Funding Investment Proceeds") will be applied on each Transfer Date as Class A
Available Funds. If, on any Transfer Date, the Principal Funding Investment
Proceeds for the related Interest Period are less than the Covered Amount, the
amount of such Principal Funding Investment Shortfall shall be paid, to the
extent available, from the Reserve Account and, if necessary, from Excess
Spread, Shared Excess Finance Charge Collections and Reallocated Principal
Collections.
RESERVE ACCOUNT
Pursuant to the Series 199 - Supplement, the Trustee will establish and
maintain with a Qualified Institution a segregated trust account held for the
benefit of the Certificateholders (the "Reserve Account"). The Reserve Account
is established to assist with the subsequent distribution of interest on the
Certificates during the Controlled Accumulation Period. On each Transfer Date
from and after the Reserve Account Funding Date, but prior to the termination of
the Reserve Account, the Trustee, acting pursuant to the Servicer's
instructions, will apply Excess Spread allocated to the Certificates (to the
extent described above under "-- Application of Collections -- Excess Spread")
to increase the amount on deposit in the Reserve Account (to the extent such
amount is less than the Required Reserve Account Amount). The "Reserve Account
Funding Date" will be the Transfer Date with respect to the Monthly Period which
commences no later than three months prior to the commencement of the Controlled
Accumulation Period, or such earlier date as may be required by the Agreement.
The "Required Reserve Account Amount" for any Transfer Date on or after the
Reserve Account Funding Date will be equal to (a) [ ]% of the outstanding
principal balance of the Class A Certificates or (b) any other amount designated
by the Transferor; provided, that if such designation is of a lesser amount, the
Transferor shall have provided the Servicer, the Collateral Interest Holder and
the Trustee with evidence that the Rating Agency Condition has been satisfied
and the Transferor shall have delivered to the Trustee a certificate of an
authorized officer to the effect that, based on the facts known to such officer
at such time, in the reasonable belief of the Transferor, such designation will
not cause a Pay Out Event or an event that, after the giving of notice or the
lapse of time, would cause a Pay Out Event to occur with respect to Series 199 -
. On each Transfer Date, after giving effect to any deposit to be made to, and
any withdrawal to be made from, the Reserve Account on such Transfer Date, the
Trustee will withdraw from the Reserve Account an amount equal to the excess, if
any, of the amount on deposit in the Reserve Account over the Required Reserve
Account Amount and distribute such excess to the Collateral Interest Holder for
application in accordance with the terms of the Loan Agreement.
Provided that the Reserve Account has not terminated as described below,
funds on deposit in the Reserve Account shall be invested at the direction of
the Servicer by the Trustee in Permitted Investments evidencing obligations of
any of the Corporation or of any Affiliate thereof; provided, however, that if
no obligations of the Corporation or of any Affiliate thereof shall qualify as
Permitted Investments, notwithstanding the preceding, the funds on deposit in
the Reserve Account shall be invested by the Trustee in Permitted
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Investments. The interest and other investment income (net of investment
expenses and losses) earned on such investments will be retained in the Reserve
Account (to the extent the amount on deposit is less than the Required Reserve
Account Amount) or deposited in the Finance Charge Account and treated as Class
A Available Funds.
On or before each Transfer Date with respect to the Controlled Accumulation
Period and on the first Transfer Date with respect to the Rapid Amortization
Period, a withdrawal will be made from the Reserve Account, and the amount of
such withdrawal will be deposited in the Finance Charge Account and included in
collections of Finance Charge Receivables to be applied to the payment of the
Class A Monthly Interest for such Transfer Date in an amount equal to the lesser
of (a) the Available Reserve Account Amount with respect to such Transfer Date
and (b) the Principal Funding Investment Shortfall with respect to such Transfer
Date; provided, that the amount of such withdrawal shall be reduced to the
extent that funds otherwise would be available to be deposited in the Reserve
Account on such Transfer Date. On each Transfer Date, the amount available to be
withdrawn from the Reserve Account (the "Available Reserve Account Amount") will
be equal to the lesser of the amount on deposit in the Reserve Account (before
giving effect to any deposit to be made to the Reserve Account on such Transfer
Date) and the Required Reserve Account Amount for such Transfer Date.
The Reserve Account will be terminated upon the earlier to occur of (a) the
termination of the Trust pursuant to the Pooling and Servicing Agreement and (b)
if the Controlled Accumulation Period has not
commenced, the first Transfer Date with respect to the Rapid Amortization Period
or, if the Controlled Accumulation Period has commenced, the earlier to occur of
(i) the first Transfer Date with respect to the Rapid Amortization Period and
(ii) the Transfer Date immediately preceding the Class A Scheduled Payment Date.
Upon the termination of the Reserve Account, all amounts on deposit therein
(after giving effect to any withdrawal from the Reserve Account on such date as
described above) will be distributed to the Collateral Interest Holder for
application in accordance with the terms of the Loan Agreement. Any amounts
withdrawn from the Reserve Account and distributed to the Collateral Interest
Holder as described above will not be available for distribution to the
Certificateholders.
PAY OUT EVENTS
As described above, the Revolving Period will continue through (unless such
date is postponed as described under "-- Postponement of Controlled Accumulation
Period"), unless a Pay Out Event occurs prior to such date. A "Pay Out Event"
refers to any of the following events:
(a) failure on the part of the Transferor (i) to make any payment or
deposit on the date required under the Agreement (or within the applicable
grace period which shall not exceed five days) or (ii) to
observe or perform in any material respect any other covenants or
agreements of the Transferor set forth in the Agreement, which failure has
a material adverse effect on the Certificateholders (which determination
shall be made without reference to the amount of the Collateral Interest)
and which continues unremedied for a period of 60 days after written notice
and continues to materially and adversely affect the interests of the
Certificateholders (which determination shall be made without regard to the
amount of the Collateral Interest) for such period;
(b) any representation or warranty made by the Transferor in the
Agreement, or any information required to be given by the Transferor to the
Trustee to identify the Accounts proves to have been incorrect in any
material respect when made or when delivered and which continues to be
incorrect in any material respect for a period of 60 days after written
notice and as a result of which the interests of the Certificateholders are
materially and adversely affected (which determination shall be made
without reference to the amount of the Collateral Interest) and continue to
be materially and adversely affected for such period; provided, however,
that a Pay Out Event pursuant to this subparagraph (b) shall not be deemed
to occur thereunder if the Transferor has accepted reassignment of the
related Receivable or all such Receivables, if applicable, during such
period in accordance with the provisions of the Agreement;
(c) the average of the Portfolio Yields for any three consecutive
Monthly Periods is reduced to a rate which is less than the average of the
Base Rates for such period;
S-43
<PAGE> 44
(d) a failure by the Transferor to convey Receivables arising under
Additional Accounts, or Participations, to the Trust when required by the
Agreement;
(e) any Servicer Default occurs which would have a material adverse
effect on the Certificateholders;
(f) the Class A Investor Interest is not paid in full on the Class A
Scheduled Payment Date or the Class B Investor Interest is not paid in full
on the Class B Scheduled Payment Date;
(g) certain events of insolvency, receivership or bankruptcy relating
to the Transferor or other holder of the Transferor Certificate;
(h) the Transferor becomes unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of the
Agreement; or
(i) the Trust becomes an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
In the case of any event described in clause (a), (b) or (e) above, a Pay
Out Event will be deemed to have occurred with respect to the Certificates only
if, after any applicable grace period, either the Trustee or Certificateholders
and the Collateral Interest Holder evidencing undivided interests aggregating
not less than 50% of the Investor Interest, by written notice to the Transferor
and the Servicer (and to the Trustee if given by the Certificateholders) declare
that a Pay Out Event has occurred with respect to the Certificates as of the
date of such notice. In the case of any event described in clause (g), (h) or
(i), a Pay Out Event with respect to all Series then outstanding, and in the
case of any event described in clause (c), (d) or (f), a Pay Out Event with
respect to only the Certificates, will be deemed to have occurred without any
notice or other action on the part of the Trustee or the Certificateholders, the
Collateral Interest Holder or all certificateholders, as appropriate,
immediately upon the occurrence of such event. On the date on which a Pay Out
Event is deemed to have occurred, the Rapid Amortization Period will commence.
In such event, distributions of principal to the Certificateholders will begin
on the first Distribution Date following the month in which such Pay Out Event
occurred. If, because of the occurrence of a Pay Out Event, the Rapid
Amortization Period begins on or prior to , ,
Certificateholders may begin receiving distributions of principal earlier than
they otherwise would have, which may shorten the average life of the
Certificates.
See "Description of the Certificates -- Pay Out Events" in the Prospectus
for an additional discussion of the consequences of an insolvency,
conservatorship or receivership of the Transferor.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The share of the Servicing Fee allocable to the Investor Interest with
respect to any Transfer Date (the "Investor Servicing Fee") shall be equal to
one-twelfth of the product of (a) % and (b) the Adjusted Investor Interest as
of the last day of the Monthly Period preceding such Transfer Date; provided,
however, with respect to the first Transfer Date, the Investor Servicing Fee
shall be equal to $ . On each Transfer Date, but only if Bank of
America, an affiliate thereof, or another successor servicer
acceptable to the Rating Agency (an "Acceptable Successor Servicer") is the
Servicer, Servicer Interchange with respect to the related Monthly Period that
is on deposit in the Finance Charge Account shall be withdrawn from the Finance
Charge Account and paid to the Servicer in payment of a portion of the Investor
Servicing Fee with respect to such Monthly Period. The "Servicer Interchange"
for any Monthly Period for which Bank of America, an affiliate thereof or an
Acceptable Successor Servicer is the servicer will be an amount equal to the
portion of collections of Finance Charge Receivables allocated to the Investor
Interest with respect to such Monthly Period that is attributable to
Interchange; provided, however, that Servicer Interchange for a Monthly Period
shall not exceed one-twelfth of the product of (i) the Adjusted Investor
Interest, as of the last day of such Monthly Period and (ii) %. In the case of
any insufficiency of Servicer Interchange on deposit in the Finance Charge
Account, a portion of the Investor Servicing Fee with respect to such Monthly
Period will not be paid to the extent of such insufficiency and in no event
shall the Trust, the Trustee, the Certificateholders or the Collateral Interest
Holder be liable for the share of the Servicing Fee to be paid out of Servicer
Interchange.
S-44
<PAGE> 45
The share of the Investor Servicing Fee allocable to the Class A
Certificateholders with respect to any Transfer Date (the "Class A Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Class A Floating
Allocation, (b) %, or if Bank of America, an affiliate thereof or an
Acceptable Successor Servicer is not the Servicer, % (the "Net Servicing Fee
Rate") and (c) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date; provided, however, that with respect to the
first Transfer Date, the Class A Servicing Fee shall be equal to $ .
The share of the Investor Servicing Fee allocable to the Class B
Certificateholders with respect to any Transfer Date (the "Class B Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Class B Floating
Allocation, (b) the Net Servicing Fee Rate and (c) the Adjusted Investor
Interest as of the last day of the Monthly Period preceding such Transfer Date;
provided, however, that with respect to the first Transfer Date, the Class B
Servicing Fee shall be equal to $ . The share of the Investor Servicing
Fee allocable to the Collateral Interest Holder with respect to any Transfer
Date (the "Collateral Interest Servicing Fee", together with the Class A
Servicing Fee and the Class B Servicing Fee, the "Certificateholder Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Collateral
Floating Allocation, (b) the Net Servicing Fee Rate and (c) the Adjusted
Investor Interest as of the last day of the Monthly Period preceding such
Transfer Date; provided, however, that with respect to the first Transfer Date,
the Collateral Interest Servicing Fee shall be equal to $ . The
remainder of the Servicing Fee shall be paid by the holder of the Transferor
Certificate or other Series (as provided in the related Series Supplements) or,
to the extent of any insufficiency of Servicer Interchange as described above,
not be paid. In no event shall the Trust, the Trustee, the Certificateholders or
the Collateral Interest Holder be liable for the share of the Servicing Fee to
be paid out of Servicer Interchange. The Class A Servicing Fee and the Class B
Servicing Fee shall be payable to the Servicer solely to the extent amounts are
available for distribution in respect thereof as described under "-- Application
of Collections -- Payment of Interest, Fees and Other Items."
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables including, without
limitation, payment of the fees and disbursements of the Trustee and independent
certified public accountants and other fees which are not expressly stated in
the Agreement to be payable by the Trust or the Certificateholders other than
any tax imposed on or measured by income, including United States federal, state
and local income and franchise taxes, if any, of the Trust or the
Certificateholders.
PAIRED SERIES
The Transferor may cause the Trust to issue another Series as a Paired
Series with respect to Series 199 - . Although no assurance can be given as to
whether such other Series will be issued and, if issued, the specific terms
thereof, the outstanding principal amount of such Series may vary from time to
time whether or not a Pay Out Event occurs with respect to Series 199 - , and
the interest rate with respect to certificates of such other Series will be
established on the date of issuance of such Series and may be reset
periodically. Further, the pay out events with respect to such other Series may
vary from the Pay Out Events with respect to the Series 199 - and may include
pay out events which are unrelated to the status of the Transferor, the Servicer
or the Receivables, such as events related to the continued availability and
rating of certain providers of Enhancement to such other Series. If a Pay Out
Event does occur with respect to any such Paired Series prior to the payment in
full of the Certificates, the final payment of principal to the Holders may be
delayed. In particular, the numerator of the Fixed Allocation Percentage may be
changed upon the occurrence of a pay out event with respect to a Paired Series
resulting in a possible reduction of the percentage of collections of Principal
Receivables allocated to the Certificateholders and a possible delay in payments
to such Certificateholders. See "Allocation Percentages" and "-- Paired Series."
REPORTS TO CERTIFICATEHOLDERS
On each Transfer Date, the Trustee will forward to each Certificateholder
of record, a statement prepared by the Servicer setting forth the items
described in "Description of the Certificates -- Reports to Certificateholders"
in the Prospectus. In addition, such statement will include certain information
regarding the Principal Funding Account and the Collateral Interest, if any, for
such Transfer Date.
S-45
<PAGE> 46
UNDERWRITING
Subject to the terms and conditions set forth in the Class A Underwriting
Agreement (the "Class A Underwriting Agreement") between the Transferor and the
Class A Underwriters named below (the "Class A Underwriters"), and the terms and
conditions set forth in the Class B Underwriting Agreement (the "Class B
Underwriting Agreement," and together with the Class A Underwriting Agreement,
the "Underwriting Agreement") between the Transferor and the Class B
Underwriters named below (the "Class B Underwriters," and together with the
Class A Underwriters, the "Underwriters"), the Transferor has agreed to sell to
the Underwriters, and each of the Underwriters has severally agreed to purchase,
the principal amount of the Certificates set forth opposite its name:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
CLASS A UNDERWRITERS CLASS A CERTIFICATES
------------------------------------------------------------ ---------------------
<S> <C>
............................................................ $
............................................................
Total.....................................................
==============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
CLASS B UNDERWRITERS CLASS B CERTIFICATES
------------------------------------------------------------ ---------------------
<S> <C>
............................................................ $
............................................................
-----------
Total.....................................................
==============
</TABLE>
In the Class A Underwriting Agreement, the Class A Underwriters have
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Class A Certificates offered hereby if any of the Class A Certificates
are purchased. In the Class B Underwriting Agreement, the Class B Underwriters
have agreed, subject to the terms and conditions set forth therein, to purchase
all of the Class B Certificates offered hereby if any of the Class B
Certificates are purchased. [The Underwriters have agreed to reimburse the
Transferor for certain expenses of the issuance and distribution of the
Certificates.]
The Class A Underwriters propose initially to offer the Class A
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of % of the
principal amount of the Class A Certificates. The Class A Underwriters may
allow, and such dealers may reallow, concessions not in excess of % of the
principal amount of the Class A Certificates to certain brokers and dealers.
After the initial public offering, the public offering price and other selling
terms may be changed by the Class A Underwriters.
The Class B Underwriters propose initially to offer the Class B
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of % of the
principal amount of the Class B Certificates. The Class B Underwriters may
allow, and such dealers may reallow, concessions not in excess of % of the
principal amount of the Class B Certificates to certain brokers and dealers.
After the initial public offering, the public offering price and other selling
terms may be changed by the Class B Underwriters.
Each Underwriter has represented and agreed that (a) it has not offered or
sold, and will not offer or sell any 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, (b) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 of
Great Britain with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom and (c) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document in connection with the issue of the Certificates to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
S-46
<PAGE> 47
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom the
document may otherwise lawfully be issued or passed on.
The Transferor will indemnify the Underwriters against liabilities relating
to the adequacy of disclosure to investors, including liabilities under the
Securities Act, or contribute to payments the Underwriters may be required to
make in respect thereof.
BA Securities, Inc., an Underwriter, is an affiliate of the Transferor, the
Servicer and the Corporation.
This Prospectus Supplement and the related Prospectus may be used by BA
Securities, Inc., an affiliate of the Transferor and Servicer, in connection
with offers and sales related to market-making transactions in the Certificates.
BA Securities, Inc. may act as principal or agent in such transactions. Such
sales will be made at prices related to prevailing market prices at the time of
sale or otherwise.
The Underwriters or agents and their associates may be customers of
(including borrowers from), engage in transactions with, and/or perform services
for, the Transferor, the Servicer, or the Corporation, their respective
affiliates and the Trustee, in the ordinary course of business.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Transferor by Andrea B. Sudmann, Senior Counsel at the
Corporation, and by Orrick, Herrington & Sutcliffe, San Francisco, California,
special counsel to the Transferor. Certain legal matters relating to the federal
tax consequences of the issuance of the Certificates will be passed upon for the
Transferor by Orrick, Herrington & Sutcliffe, San Francisco, California, special
tax counsel to the Transferor. Certain legal matters relating to the issuance of
the Certificates will be passed upon for the Underwriters by , .
S-47
<PAGE> 48
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
TERM PAGE
- --------------------------------------------------------------------------- ----------------
<S> <C>
Acceptable Successor Servicer.............................................. S-44
Accounts................................................................... S-1, S-4
Accumulation Period Length................................................. S-30
Accumulation Shortfall..................................................... S-9, S-39
Additional Interest........................................................ S-8
Adjusted Investor Interest................................................. S-6
Agreement.................................................................. S-4
Available Investor Principal Collections................................... S-29
Available Reserve Account Amount........................................... S-42
Bank....................................................................... S-4
Bank of America............................................................ S-1, S-4
Base Rate.................................................................. S-24
Call Report................................................................ S-26
Certificateholder Servicing Fee............................................ S-45
Certificateholders......................................................... S-4
Certificates............................................................... S-1, S-3
Class A Additional Interest................................................ S-28
Class A Adjusted Investor Interest......................................... S-6, S-32
Class A Available Funds.................................................... S-28
Class A Certificate Rate................................................... S-2, S-5, S-28
Class A Certificateholders................................................. S-4
Class A Certificates....................................................... S-1, S-3
Class A Fixed Allocation................................................... S-31
Class A Floating Allocation................................................ S-31
Class A Investor Charge-Off................................................ S-12, S-41
Class A Investor Default Amount............................................ S-40
Class A Investor Interest.................................................. S-5, S-32
Class A Monthly Interest................................................... S-35
Class A Monthly Principal.................................................. S-38
Class A Required Amount.................................................... S-11, S-12, S-33
Class A Scheduled Payment Date............................................. S-2
Class A Servicing Fee...................................................... S-45
Class A Underwriters....................................................... S-46
Class A Underwriting Agreement............................................. S-46
</TABLE>
<TABLE>
<S> <C>
Class B Additional Interest................................................ S-28
Class B Available Funds.................................................... S-28
Class B Certificate Rate................................................... S-2, S-5, S-28
Class B Certificateholders................................................. S-4
Class B Certificates....................................................... S-1, S-3
Class B Fixed Allocation................................................... S-32
Class B Floating Allocation................................................ S-31
Class B Investor Charge-Off................................................ S-13, S-41
Class B Investor Default Amount............................................ S-40
Class B Investor Interest.................................................. S-5, S-32
Class B Monthly Interest................................................... S-35
Class B Monthly Principal.................................................. S-38
</TABLE>
S-48
<PAGE> 49
<TABLE>
<CAPTION>
TERM PAGE
- --------------------------------------------------------------------------- ----------------
<S> <C>
Class B Required Amount.................................................... S-11, S-12, S-33
Class B Scheduled Payment Date............................................. S-2
Class B Servicing Fee...................................................... S-44
Class B Underwriters....................................................... S-46
Class B Underwriting Agreement............................................. S-46
Closing Date............................................................... S-2, S-5
Code....................................................................... S-16
Collateral Available Funds................................................. S-36
Collateral Charge-Off...................................................... S-41
Collateral Default Amount.................................................. S-40
Collateral Fixed Allocation................................................ S-32
Collateral Floating Allocation............................................. S-31
Collateral Interest........................................................ S-5, S-32
Collateral Interest Holder................................................. S-5
Collateral Interest Servicing Fee.......................................... S-45
Collateral Monthly Interest................................................ S-37
Collateral Monthly Principal............................................... S-38
Collateral Rate............................................................ S-37
Controlled Accumulation Amount............................................. S-38
Controlled Accumulation Period............................................. S-8
Controlled Deposit Amount.................................................. S-9, S-23
Corporation................................................................ S-26
Covered Amount............................................................. S-10
Cut-Off Date............................................................... S-4
Default Amount............................................................. S-40
Distribution Date.......................................................... S-2
ERISA...................................................................... S-16
Excess Spread.............................................................. S-12, S-36
Finance Charge Shortfalls.................................................. S-39
Fixed Investor Percentage.................................................. S-31
Floating Investor Percentage............................................... S-30
Identified Pool............................................................ S-4
[Index] Determination Date................................................. S-28
Initial Collateral Interest................................................ S-13
Interest Period............................................................ S-8
Investor Default Amount.................................................... S-40
Investor Interest.......................................................... S-5
Investor Servicing Fee..................................................... S-44
Loan Agreement............................................................. S-14
Minimum Aggregate Principal Receivables.................................... S-20
Minimum Transferor Interest................................................ S-19
Monthly Period............................................................. S-6
Net Servicing Fee Rate..................................................... S-45
Paired Series.............................................................. S-15
Pay Out Event.............................................................. S-43
Portfolio Yield............................................................ S-24
Principal Funding Account.................................................. S-9, S-23, S-41
Principal Funding Account Balance.......................................... S-23
</TABLE>
S-49
<PAGE> 50
<TABLE>
<CAPTION>
TERM PAGE
- --------------------------------------------------------------------------- ----------------
<S> <C>
Principal Funding Investment Proceeds...................................... S-10, S-41
Principal Funding Investment Shortfall..................................... S-10
Principal Shortfalls....................................................... S-39
Rapid Amortization Period.................................................. S-11
Rating Agency Condition.................................................... S-39
Reallocated Class B Principal Collections.................................. S-34
Reallocated Collateral Principal Collections............................... S-34
Reallocated Principal Collections.......................................... S-34
Receivables................................................................ S-1, S-4
Record Date................................................................ S-27
Required Amount............................................................ S-12
Required Collateral Interest............................................... S-13, S-39
Required Reserve Account Amount............................................ S-42
Reserve Account............................................................ S-42
Reserve Account Funding Date............................................... S-42
Revolving Period........................................................... S-8
Series 199 ................................................................ S-4
Series 199 Supplement...................................................... S-4
Series 199 Termination Date................................................ S-7
Servicer Interchange....................................................... S-44
Shared Excess Finance Charge Collections................................... S-39
Shared Excess Principal Collections........................................ S-39
Transfer Date.............................................................. S-34
Transferor................................................................. S-4
Transferor Certificate..................................................... S-6
Transferor Interest........................................................ S-5
Transferor Percentage...................................................... S-27
Trust...................................................................... S-1, S-4
Trust Portfolio............................................................ S-19
Trustee.................................................................... S-4
Underwriters............................................................... S-46
Underwriting Agreement..................................................... S-46
</TABLE>
S-50
<PAGE> 51
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE TRANSFEROR OR ANY OF THE AGENTS OR UNDERWRITERS.
NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS CONSTITUTES
AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE TRANSFEROR OR THE RECEIVABLES OR THE
ACCOUNTS SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED
BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Summary of Terms................................ S-3
Bank of America's Credit Card Activities........ S-17
The Receivables................................. S-19
Maturity Assumptions............................ S-23
Receivable Yield Considerations................. S-25
BankAmerica Corporation and Bank of America..... S-26
Description of the Certificates................. S-26
Underwriting.................................... S-46
Legal Matters................................... S-47
Index of Terms for Prospectus Supplement........ S-48
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Prospectus Supplement........................... 2
Reports to Certificateholders................... 2
Available Information........................... 2
Incorporation of Certain Documents by
Reference..................................... 3
Prospectus Summary.............................. 5
Risk Factors.................................... 19
The Trust....................................... 25
Bank of America's Credit Card Activities........ 26
The Receivables................................. 28
Maturity Assumptions............................ 28
Use of Proceeds................................. 29
Bankamerica Corporation and Bank of America
National Association.......................... 29
Description of the Certificates................. 29
Credit Enhancement and Enhancement.............. 54
Certain Legal Aspects of the Receivables........ 58
Federal Income Tax Consequences................. 60
ERISA Considerations............................ 66
Plan of Distribution............................ 67
Legal Matters................................... 68
Index of Terms for Prospectus................... 69
Annex I: Global Clearance, Settlement and Tax
Documentation Procedures................ A-1
</TABLE>
------------------------
UNTIL , 199 , ALL DEALERS EFFECTING TRANSACTIONS IN THE CERTIFICATES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS SUPPLEMENT AND A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
BA MASTER CREDIT CARD TRUST
$ CLASS A
[FLOATING-RATE] [ %]
ASSET BACKED
CERTIFICATES, SERIES 199
$ CLASS B
[FLOATING-RATE] [ %]
ASSET BACKED
CERTIFICATES, SERIES 199
BANK OF AMERICA NATIONAL ASSOCIATION
TRANSFEROR AND SERVICER
------------------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------------------
UNDERWRITERS OF THE CLASS A CERTIFICATES
[ ]
[ ]
UNDERWRITERS OF THE CLASS B CERTIFICATES
[ ]
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 1
[ORRICK, HERRINGTON & SUTCLIFFE LETTERHEAD]
Exhibit 8.1
July 3, 1996
Bank of America National Association
555 California Street
San Francisco, California 94104
RE: BA MASTER CREDIT CARD TRUST
ASSET BACKED CERTIFICATES
BANK OF AMERICA NATIONAL ASSOCIATION (TRANSFEROR)
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel for Bank of America National Association, a
national banking association (the "Transferor"), in connection with the
preparation of the Registration Statement on Form S-3 (the "Registration
Statement"), which has been filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), for the registration
under the Act of series (each, a "Series") of Asset Backed Certificates
(collectively, the "Certificates"), each such series representing an undivided
interest in a specified BA Master Credit Card Trust (each, a "Trust"). Each
Series of Certificates will be issued pursuant to a pooling and servicing
agreement (each a, "Pooling and Servicing Agreement"), between the
Transferor and a trustee to be named. The form of Pooling and Servicing
Agreement relating to the Trusts to be formed by the Transferor and the form of
Series Supplement relating to Series of Certificates to be issued by such Trusts
have been filed as Exhibits 4.1 and 4.2 to the Registration Statement.
We hereby confirm that the statements set forth in the prospectus
(the "Prospectus") forming a part of the Registration Statement under the
heading "Federal Income Tax Consequences" and the statements set forth in the
form of prospectus supplement, filed as Exhibit 4.3 to the Registration
Statement, relating to the Certificates (the "Prospectus Supplement") forming a
part of the Registration Statement under the heading "Summary of Terms - Tax
Status," which statements have been prepared by us, constitute our opinion as to
the material federal income tax consequences relating to the Certificates and
are correct in all material respects.
<PAGE> 2
Bank of America National Association
July 3, 1996
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Orrick, Herrington &
Sutcliffe under the captions "Legal Matters" and "Federal Income Tax
Consequences" in the Prospectus. In giving such consent, we do not admit that we
are "experts," within the meaning of the term used in the Act or the rules and
regulations of the Securities and Exchange Commission issued thereunder, with
respect to any part of the Registration Statement, including this opinion as an
exhibit or otherwise.
Very truly yours,
/s/ Orrick, Herrington & Sutcliffe
ORRICK, HERRINGTON & SUTCLIFFE
